Starting a business can be exciting, but also immensely challenging. According to the Bureau of Labor Statistics, fewer than half of the small businesses started in the U.S. will survive the first five years. Doing some basic research about small business operation could mean the difference between success and early failure. In order to build a successful business, you need to have a viable concept, an idea of your target market, a valid business plan, financing and a positive mindset for networking. Still up for the challenge?
The first step is to come up with a great idea. This doesn’t necessarily mean coming up with something that no one has ever done before. Stay away from areas that are oversaturated already or dominated by a few mammoth companies. Look for an under-served market. What needs are out there that aren’t being met or that you think could use improvement? Get input from people you trust. Look for people who will tell you the truth. Someone who will give you an honest opinion, even if it is unfavorable, is doing you a favor. Before you put all your time, effort and hard-earned money into this idea, make sure it’s a good one.
Once you’ve got your idea, it is important to identify your target market. Your targeted audience needs to be specific. It is difficult to do many things and still be good at them. Some careful market research should guide your decisions. Investigate the current environment in which you propose to start your business, evaluate potential opportunities and estimate the cost versus the profit.
All of this research you’ve been doing should be leading up to a solid business plan, which is a written summary of your business goals, plans and methods. It should consist of three main parts, beginning with a section summarizing your business concept, then a marketplace section that explains how you intend to promote your business and, finally, a financial section that lists the financial requirements of your business.
There are many resources out there to help you write a respectable business plan. One such resource is the Small Business Development Center (SBDC) at the University of North Florida.
You won’t be able to get your idea off the ground without funding. There are many potential sources of financial assistance out there, including angel investors, federal and private loans and personal funding. Angel investors and venture capitalists invest in emerging businesses in exchange for equity or royalties. The Florida Venture Forum is a nonprofit organization that strives to connect venture capitalists and entrepreneurs. Small business loans are another source of funding. The U.S. Small Business Administration provides a number of financial assistance measures. A third source of financing might actually be found at home in the form of friends, family or even yourself. Many sources of venture capital won’t take you seriously if you yourself aren’t invested in your business.
Once your business is off the ground, it’s important to get the word out. This is one way that networking can help grow your business. Networking is also useful for finding people further along in business who are willing to advise you. Find a mentor who is either knowledgeable about your field or one who is talented at networking and follow their advice. Networking groups are helpful for making contacts in your field, getting referrals, asking for advice and simply making friends who will have your back in the gritty world of business.
Melissa Pampalone, founder of Network in Jax, as well as three other companies here in Jacksonville, has been in the entrepreneurial world for about a decade. She mentors a lot of people who are trying to get started in small business, and the first piece of advice she always gives them is this, “If you have a dream for something and you have the skills to accomplish it, you have to keep up the optimism.” She encourages entrepreneurs to persevere in the face of rejection. “Every day is going to be harder and harder because you’re going to have to work harder to get the one sale. You’re going to get a lot of noes, and you have to be able to get past those noes and just basically see the light at the end of the tunnel. Sometimes it doesn’t seem like there is one, but you have to keep going.”