Which Social Media Sites Should Your Business Focus On?

Everywhere you turn, social media is being touted as the best way to attract new customers and grow your business, but setting up multiple accounts and maintaining them can quickly become overwhelming. With social media sites Social-Media-Advertisingranging from personal to strictly business-related, there should only be a select few sites your brand should regularly use. A high level of engagement on one or two sitesrather than a feeble attempt at the top fivewill yield a more substantial return. Pick a couple, and interact with them on a daily basis. The varying sites can be better-suited for certain industries over others, and by knowing which ones could work best for your business, you can leverage your time more effectively.

Types of Social Media Sites

The right social media site will make all the difference for your business. It will allow the public to interact and become familiar with your brand and its offerings. Potential customers will also be able to easily look up your business on their device of choice, allowing your company to be at the top of customers’ minds no matter where they are.

Facebook

With over a billion active usersFacebook is one of the most popular social media sites on the web. It can be used in a variety of ways, but the best way for a brand to leverage the site is to set up a business account. These pages can be public and moderated, which allows you to control its tone and its content. The majority of the population has a Facebook page and is aware of how to navigate the site, making it the first stop for many when attempting to gain information about a company. Your business’ Facebook page should havepictures, updates, reviews and contact information. Facebook should be seen as a casual way to introduce your business to the world, so you can utilize it to show your brand’s personal side. They will enjoy seeing pictures of new products, participating in fun contests and even sharing their own experiences. If you only choose one social media site, Facebook isn’t a bad choice.

Google+

Google+ is not as popular as Facebook, but it does have certain features that can benefit your business. Users can interact with others in the broadest sense of the term, as you can take advantage of Google+ Hangouts and Parties to set up video calls that let you talk with customers face-to-face. These Hangouts can be a great way to introduce a new product or to explain how one of your services or products works. Not only will your customers be able to see and hear you, but they can also ask questions and give you feedback. Google+ will link your online profile with the reviews, maps and information that appears when users search for your business online. By completing your Google+ profile, your business information will have a greater chance of appearing at the top of Google searches, which can be invaluable for a company that’s trying to boost its market reach.

Pinterest

Pinterest is an image-centric social media site that can be beneficial to certain types of businesses, especially those that specialize in retail and physical products or creative services. Users “pin” and “repin” pictures and ideas they like and want to share, so photos of your products can circulate the network within hours. It is an ideal way to showcase unique ideas and designs made by your company. Businesses can create Pinboards that showcase their offerings, tag physical locations and interact with a unique group of people, which can go a long way to personalize and grow a brand.

Twitter

Twitter is a short and sweet way to interact with others on a large scale and on different levels. It can be strictly professional or more personal and casual. People from all over the world use Twitter on an hourly basis. It is a smart way to quickly promote a new item using 140 characters or less. The biggest mistake businesses make on Twitter is to not respond when others tweet about their company, whether good or bad. By ignoring the tweet or neglecting it, companies show a lack of concern for their customers. Properly using and attending to Twitter can be time-intensive but extremely effective. If your business can handle the demand of quick interaction, it can be a great way to communicate with the public. But if you are constantly behind on tweets, it won’t be the best use of time.

LinkedIn

As a professional site, LinkedIn is ideal for the social side of business. From important and interesting articles regarding new trends, new companies and even new hires, it can be the best resource for business leaders who want to connect with others in their field. The basic rule of LinkedIn is to keep your profiles professional, whether they’re being used for personal and/or business purposes. To increase your engagement, promote articles and information that showcase your knowledge and network in the field. Businesses can connect with their clients, team members and even prospective job candidates, but keep in mind that most interaction is done either through first-tier connections or through professional introductions. The site also features professionalrecommendations, which can be made from one connection to another and show up on a LinkedIn Profile. But perhaps the best feature is that the site allows potential employers to view the employment history and abilities of a candidate. Because of this, LinkedIn is an invaluable resource for both employers and employees.

Other Sites

While there are other social media sites on the web, the ones highlighted above are the major players in the online world of social interaction. It is important to choose at least one or two, and stay current with your updates and information. There is no need to choose all the platforms and struggle to continue creating and updating content for each; the best way to optimize your social media strategy is to focus on where your target customers are and to create a thriving place for social interaction with them.

But Which One Is Right for My Business?

The ultimate decision is up to you. Like many worthwhile investments, finding the right social media outlet(s) for your business may take some trial and error. While there isn’t a single choice that’s ideal for every business, you can still take a look at the overall functionality, audience and presentation style of each medium to find what works best for your brand.

Financial Considerations When Starting Your Own Small Business

Start Your BusinessIf you’re thinking about starting a small business, it’s important to look carefully before you leap. Owning a small business can be very rewarding, but it can also require a lot of time, energy and funds long-term. Taking the right steps upfront can help you increase your chance of success and maximize your start-up dollars. Begin by:

• Using the resources that are available to you — There are several free online resources that can help guide you through the steps of starting your own business. One of the most comprehensive is the U.S. Small Business Administration site at http://www.sba.gov. It offers detailed information on how to plan, implement or sell a small business and more. You may also consider meeting with other small business owners and professional consultants.

• Determining equipment needs and costs — Make a list of all the items you’ll need to purchase or lease to get a true sense of your start-up and operating costs. Will you need big ticket items such as business or office space, manufacturing and computer equipment? What about smaller purchases like office supplies and software? It’s beneficial to have a detailed list of your needs when making a plan and figuring out your costs.

• Adding up the other costs you may incur — If you plan on hiring any personnel, factor in the costs of any employee benefits, such as healthcare or dental insurance, that you may be required to provide your employees. Also consider any wages that you’ll pay and the fees for any legal, financial or tax advice or special licenses or permits if they apply to your business needs.

• Determining how much financing is needed — After you identify your start-up and operating costs, you can assess whether you need outside financing. Keep in mind that these sources may require a contribution from you as the owner of roughly 25 percent or more, depending on the type of business.

• Establishing an advisory team — Before you make major financial commitments or sign complicated agreements, seriously consider consulting with a financial professional, an accountant and an attorney. Treat your business financial plan and personal plan with the importance they deserve by putting them in writing. Not only will this hold you accountable, it will also give you something to refer to when difficult and inevitable choices arise.

• Setting up your financial accounts — After you have established the type of business entity you need, talk with your advisors about what kind of banking and credit services you may need. Shop around to see who offers the services and pricing that best meet your needs.

• Implementing a business insurance policy — Depending on your business, you may have special or additional insurance requirements and considerations. A business insurance policy helps you protect your investment by minimizing the financial risks associated with unexpected events, like the death of a partner, an injured employee, a lawsuit or natural disaster. Your state government determines the insurance requirements for businesses. Your financial lender or investors may also require you to maintain certain types of insurance to protect their investment. After implementing the coverage you need, annually meet with your financial professional to discuss changes in your business and whether or not they alter your coverage needs.

• Assessing your household budget — It’s easy for this “To Do” to get lost in the excitement of starting a new venture, but it’s critical to closely and regularly review your household balance sheet. Because of the income uncertainty that can occur when you branch out on your own, it’s even more important if you are leaving a stable paid position. Staying on top of how your new business venture impacts your personal finances can help you remain realistic about what you can and cannot afford for both your personal and business needs and wants.

Taking the time to carefully consider the viability of a small business venture and to create a business and financial strategy can help you feel more confident about your endeavor. It can also provide you with the information you need to make sound decisions that will more likely lead to greater success in your business and personal lives.

HOW TO MAKE YOUR STOREFRONT STAND OUT

small-business-efficiencySmall retailers may eye e-commerce,but brick-and-mortar retail locations still bring in the bulk of the revenue.

Online shopping may have boomed in recent years, but according to the United States Census Bureau, fewer than 6 percent of purchases were made online in 2013. Brick-and-mortar locations are still king, so small business owners need to make sure their storefrontsstand out for all the right reasons, says Danaria Farris McCoy.

As general manager of Freedom Crossing at Fort Bliss in Texas—the first privately operated open-air shopping center on a U.S. military base—and marketing director for ServiceStar Development Company in Greenwood Village, Colo., McCoy has seen many successful and unsuccessful storefronts, ranging from local retailers to restaurants. Here, she offers advice to small business owners on how to attract customers with their storefronts.

Do your research. 

It’s easy to get caught up in ideas on paper or online, but how much time have you actually spent observing your business? McCoy recommends standing outside your store for a day and watching your potential customers. Take notes on if they notice your signage and where their eyes go when passing by or looking at your store. Once they walk inside the store, note the areas they check out first. Then, do the same at the locations of your two biggest competitors and create a spreadsheet of the differences. This will show you what good ideas you can implement in your own business.

Keep it legal.

Before you splurge on any new storefront materials, complete the due diligence with your landlord and/or the city to find out if what you propose is permissible. “The best way to eliminate confusion,” says McCoy, “is to show a detailed plan and ask for feedback.” If you own your building, show the plans to your city’s planning, zoning, building and code enforcement department. If you lease your business location, check with both your landlord and lease agreement and the city for applicable guidelines.

Remember, less is more. 

“The old adage couldn’t be more applicable to a storefront,” McCoy says. “Competing for attention does not mean filling up every inch of glass. The simplest designs almost always get the most effective attention.” In most cases, passersby should be able to clearly see into your store.

Be SLICK. 

As you design or modify your storefront, McCoy recommends keeping the acronym SLICK in mind. Signage, lighting, imagery, and color should be welcoming and reflect your brand. Also, your storefront should always be well-kempt—the K in SLICK. “The cleanliness of your storefront speaks directly to the quality of your business,” McCoy says.

Leverage technology.

According to the Mobile Future Institute, cell phone penetration in the United States is 106 percent, which means there are more phones than people—many of whom use their phones to research your business. “Your storefront now extends far beyond your front door,” McCoy says. She recommends that business owners regularly check Yelp reviews, Google Maps and directory information to ensure that details such as store hours are accurate.

Also, consider using your storefront to promote your Facebook page or website, either with signage or new augmented reality technologies such as Layar. This technology allows small business owners to blur real storefronts with computer-generated images. The results can be rather surprising for shoppers.

Some Small Business News Out of DC

congressMy choice for “Paper of Record” is the Washington Post. While others may prefer the NY Times or the LA Times, my preference to the Post is probably influenced by my focus on government contracting in the small business arena. Washington DC is the center of gravity for business policy effecting small businesses, such as the implementation of health care reform, veterans business issues, et al.

Allow me to share some interesting news from an article, Small business weekly. Small business owners and veterans may find some of these trends and current events at least topical if not actually impacting your business now.

Suddenly small: The Small Business Administration last week announced that it would adjust its small-business size-standards for inflation, lifting the cap on either receipts or assets for 487 industries. Consequently, roughly 8,400 previously large companies can now apply for resources restricted to small businesses.

Supporting more soldiers: The SBA also announced plans to expand its post-military entrepreneurship training program, known as Boots to Business, opening up the course to any interested veteran, not just returning troops. The rollout will start with classes in a dozen cities around the country, starting in Washington, D.C. on July 11.

Catching a break: The House last week easily approved legislation that would make permanent a tax break allowing small businesses to write off up to a half million dollars in equipment purchases. However, the bill faces an uphill battle in the Senate, where Democrats have pushed back against tackling tax reform one small piece at a time.

Upbeat on Main Street: Optimism among small business owners jumped last month to the highest level since 2007, according to the latest report by the National Federation of Independent Business. It marks the third straight month of improvement, a sign that small employers may accelerate hiring and investments in the second half of the year.

Home sweet home: Small business owners in Idaho, Texas, Utah and Virginia give their states the highest ratings in overall friendliness to small businesses, according to a new study released by Thumbtack and the Kauffman Foundation. Meanwhile, owners were far less pleased in California, Illinois and Rhode Island.

From The Washington Post article “On Small Business; Small Business Weekly: Health care, tax breaks and veteran entrepreneurs” written by J.D. Harrison, June 16, 2014.

Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program

DBEThe DBE program helps level the playing field for minority and woman owned small businesses with TxDOT and other agencies that receive federal funds from the US DOT. The focus of this program is on those business owners who can attest to having been socially and/or economically disadvantaged in their business pursuits.

Per the Corpus Christi Regional Transportation Authority’s web site,

The goals of the program are to remedy past and current discrimination against disadvantaged business enterprises, ensure a “level playing field” in which DBEs can compete fairly for DOT-assisted contracts, improve the flexibility and efficiency of the DBE program, and reduce burdens on small businesses.

Any transportation related project, including aviation, highway, or public transportation, which is supported in whole or in part by federal funding, must include an opportunity for DBE participation.”

Benefits of the DBE program:

Applicants need only apply once for DBE certification that will be honored by all recipients in the state. Reciprocity with other Texas Unified Certification Program (TUCP) members includes Texas Department of Transportation, City of Houston, North Central Texas Regional Certification Agency, and South Central Texas Regional Certification Agency.

  • Registers your business with Texas Department of Transportation’s statewide DBE Directory
  • DBE Certification enables qualified vendors to bid not only on CCRTA projects, but the opportunity to bid statewide for all DOT transportation modes, including Aviation, Highways, and Public Transportation.

DBE Certification also provides your company with numerous other benefits such as contract information, referrals, technical assistance, and referrals to prime contractors.

Eligibility Criteria:

  • A business must be 51% owned, controlled, and managed by one or more socially and economically disadvantaged individuals.
  • A business must be a small business as defined Small Business Administration (SBA) size standards. The firm’s average annual gross receipts over the previous three fiscal years must not exceed U.S. DOT’s cap of $22.41 million.
  • Effective February 28, 2011, the Personal Net Worth (PNW) of each socially and economically disadvantaged owner must not exceed $1,320,000. Items excluded from disadvantaged owner’s net worth calculation are his/her personal residence and ownership interest in the applicant firm.
  • Only U.S. citizen or lawfully admitted permanent residents are eligible for certification.

If you would like to learn more about this certification program or would like to apply for it, you may call the Procurement Technical Assistance Center (PTAC) at Del Mar College at 361-698-1021 for more information.

Source: http://ccrta.org/dbe-certification.html

DBE

Negotiate With Finesse, Style and Success

Business NegotiationsFor many people, just the sound of the word negotiation makes them cringe. Some immediately break out in a cold sweat at the thought of having to step up and negotiate for the things they want and need.

While some people have no problem advocating for others, when it comes to pushing for their own needs (negotiating for a raise, obtaining the best price on a purchase or standing up for what they want in a partnership), they stumble.

 These four steps can help any person reframe the art of negotiation to achieve greater success and happiness in all aspects of life and business:

1. Reframe thoughts about the meaning of the word negotiation. Instead of viewing it as the inevitable conflict and adversity scenario, see negotiation for what it truly is: a great opportunity to collaborate, problem solve and arrive at solutions that satisfy all parties involved.

Do this while paying close attention to what is being said, as well as what’s not said. Listen for hidden assumptions and unrealistic expectations and pay attention to any personality traits of the other party that may affect the end result. Approach time at the negotiation table with a positive, engaged mind-set.

2. Be clear about desires. No hemming and hawing and “I don’t know” allowed. It turns out the old adage is true: If you don’t ask, you don’t get. Research from Carnegie Mellon University suggests that a gender gap persists — with men making more than women — because women just don’t ask for higher salaries. Even in personal relationships, women often do not speak up about what they want directly and instead turn complaints inward to negative self-talk or outward to friends in a complaint fest.

Being clear means coming prepared. Do research, expect possible adversity and prepare possible solutions. Taking personal responsibility for success requires preparation.

No one can advocate better for a desired end than the person who’s directly affected. Sure this may be scary at the outset, but the confidence gained while standing up and speaking out will be worth it.

3. Fake it till making it. Confidence starts from within, but sometimes a little behavior modification is required to arrive at the right state of mind. Think of the athlete who’s getting ready for the big game. Those who are successful always include mental preparation as a huge part of the pregame plan. Start by visualizing the process of negotiation with a positive result.

Remember negotiation is not the same as confrontation. Advocating for one’s self is true leadership at its finest.

Always embrace communication with those on the other side of the table with confidence and a smile, knowing that having clear goals and the right intention will lead to the best end result.

4. Start with the positive by building bridges and finding commonality. Whether seeking a raise or trying to have needs met in other areas of life, use words like “we” and “us” versus “I” pronoun. Studies have shown that deals are most often won using language that builds bridges and that demonstrates mutual benefit. Using communal bridge-building language does not devalue a person’s strengths; it actually extols them. The best deal is one in which all parties are heard and their values honored.

Kate McKay is a transformational speaker, coach, fitness guru and entrepreneur whose passion is to spread her message of living a life of abundance. She founded  Gold Siena/Gold Party New England and Kate McKay LLC, headquartered in Newburyport, Mass.

 

Government On Pace to Meet Small Business Contracting Goal — But Will the Bar Get Higher?

It appears the federal government has fulfilled its annual contracting promise to small businesses for the first time in seven years — and perhaps just in the nick of time, as lawmakers are looking to raise the bar going forward.

Government data available online currently show that federal agencies spent $83.2 billion at small companies last fiscal year, representing slightly more than 23 percent of the $355 billion in prime federal contracts officials consider viable for small firms. If so, it will mark the first time since 2006 that the government has met its statutory goal of spending at least 23 percent of all federal contracting dollars at small businesses.

More than a quarter of the contracts were awarded by the Defense Department, while the SBA, Federal Communications Commission and Interior Department each spent most of their contracting dollars at small businesses, according to the federal government’s online small business dashboard, which tracks government spending by agency.

SBA officials, who compile the data, declined to comment on the current numbers, saying they could change and the agency will issue an official tally later this year.

Some have questioned whether their data accurately represent the percentage of contracts funneled to small firms. Our own reporting last year revealed that some work labeled as small-business contracts actually went to very large companies, and that the SBA excludes from its calculations about a fifth of all federal contracts, many of which its own watchdog group has advised should be included when assessing small-business contracting participation.

In order to combat some of the problems, the agency has started running a computerized “anomaly” process to identify errors in the federal data system.

In a statement concerning the government’s performance last year (when only 22.25 percent of prime contracting dollars went to small firms), John Shokora, the SBA’s associate administrator for government contracting, said the department “continues to focus on a number of initiatives to help the government meet the 23 percent goal” — and it appears those efforts have paid off this year.

However, some lawmakers think the government should up the ante and commit even more of its contracting dollars to small businesses.

House Small Business Committee Chairman Sam Graves (R-Mo.) on Wednesday introduced legislation that would raise the federal government’s annual small-business contracting goal to 25 percent — a modest lift at first glance, but one that, if met, would deliver an additional $10 billion in revenue to the nation’s smallest firms every year.

In addition, agency officials would have to try to steer 40 percent of their prime’s contractors’ subcontracting dollars to small businesses, up from 35.9 percent.

“The federal government spends nearly half a trillion dollars on contracted goods and services,” Graves said in a statement, adding that “we must ensure that the money is being spent efficiently, and small businesses have proven that they can do quality work cheaper and often faster.”

Graves has also authored a second bill that would address some of the concerns with the way small-business contracting statistics are reported. Specifically, the proposal world required department heads to take steps to explain why and notify the contracting community when several projects have been bundled together or consolidated, which generally makes them harder for small firms to win.

It would also require the SBA to work with its fellow agencies to develop a data quality improvement plan to promote greater accuracy, transparency and accountability in contact reporting.

“These two pieces of legislation will go a long way towards increasing opportunities for small companies who want to grow and create jobs by doing business with the federal government,” Graves said.

By J.D. Harrison Follow J.D. Harrison and On Small Business on Twitter.

© The Washington Post Company

SBA’s 8(a) Certification Program Explained

8a-certification-programDid you know that the SBA has a program designed to help small, disadvantaged businesses compete in the federal marketplace? If you’re interested in government contracting, the 8(a) Business Development (BD) Program offers a broad scope of assistance to small businesses for which you might be eligible.

The 8(a) BD Program has been essential for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Ultimately, the program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.

Am I eligible?

Generally, to be approved into the 8(a) BD program and become certified, your small business must be owned and controlled at least 51% by socially and economically disadvantaged individuals who are American citizens.

You should also be able to demonstrate potential for business success and possess good character. You can read more details about eligibility requirements by visiting this page on our site.

What are the benefits?

So, how can the program help you? Once certified, you can take advantage of specialized business training, counseling, marketing assistance and high-level executive development provided by the SBA and our resource partners. You may also be eligible for assistance in obtaining access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance for being involved in the program. You can receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

8(a) businesses can also receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

In addition, 8(a) businesses can form joint ventures and teams to bid on contracts. This enhances your ability to successfully compete for and perform larger prime contracts. You can also participate in the 8(a) BD Mentor-Protégé Program which allows companies to learn the ropes from other more experienced businesses.

What else should I know?

Participation in the 8(a) BD Program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage; the overall goal of which is to graduate 8(a) businesses that will go on to thrive in a competitive business environment.

While participating in the program, you’ll have to maintain a balance between your commercial and government business. There’s also a $100 million (or five times the value of your primary NAICS code) limit on the total dollar value of sole-source contracts that you can receive while in the program.

To make sure you stay on track to accomplish goals and follow requirements, the SBA district officesmonitor and measure the progress of participants through annual reviews, business planning and systematic evaluations.

Common Mistakes Made by New Businesses

mistakeWhen starting a business, there is a great deal that one needs to know and understand in order to thrive.  One of the first things to recognize is that most successful entrepreneurs make mistakes along the way and learn from their challenges and failures.  Some of the common mistakes made by new business owners involve choosing the wrong people, not understanding technology, poor pricing and marketing strategies, and not having a good attorney.  How comfortable are you with your knowledge in all of these areas and how they relate to your business?

Picking the wrong people for your team. This is one of the most common and costliest mistakes made by small business owners.  Oftentimes new business owners hire based on existing relationships (with their inherent assumptions), or they hire for what they think they can afford.  The more important considerations when building your team is to identify if your employees share your core values and believe in the mission of your business.  Have you identified what these are and communicated them to your staff? Another determination would be whether or not your team members will perform well under stress.  It is a new business, after all. “In the absence of a clear vision, people tend to re-create their past.” –James Newton

Basing pricing on “the marketplace”.  Many new business owners make assumptions that their pricing should be the same as their competitors, or double their cost of goods.  They may not have identified all the costs and time involved in providing their service or goods. The true measure of pricing is what a customer perceives as the value of the good or service, so pricing based on differentiating your product value, or carefully illustrating the value from the costs and time involved, can impact your profit. Watch this TED talk and consider your pricing strategy: http://www.youtube.com/watch?v=u4ZoJKF_VuA. “People don’t buy what you do.  They buy why you do it.” –Simon Sinek

Having the right attorney.  Although this goes back to choosing the right people to have on your team, there is something very essential to having the right attorney if you want to succeed in your new business.  Unless you are an attorney, and familiar with contract law, business law, and employment law, chances are you do not understand all aspects of the law.  Choosing the right attorney involves finding an attorney who understands your business and can offer guidance.  Because the costs of not having proper legal knowledge can be expensive, this is an area where you don’t want to skimp. It might cost you your business. “Do you know the difference between education and experience? Education is when you read the fine print; experience is what you get when you don’t.” –Pete Seeger

Source: 6 Common Mistakes People Make When Starting a Business by Lorie A. Parch, April 17, 2014.  Retrieved on April 21, 2014 from http://www.entrepreneur.com/article/232240

How to Choose the Right Business For You

Business IdeasIf you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: Start a venture you know intimately.

Know the ins and outs of the business

Don’t fall into the trap of starting a particular business just because someone tells you, “It’s a sure thing.” Potential customers will part with their hard-earned money only if you convince them that they’re getting their money’s worth, so you’ll need to know what you’re doing, no matter what the task.

Choosing a business you know

Starting a business in which you already have experience has many advantages. You can use your knowledge about the industry, your training and skills, and your network of contacts, who might help you find financing, suppliers and customers.

If you’re interested in turning something you know and love into a business, talk to people you have worked with about what it takes to run that kind of business. Learn all you can about start-up costs, overhead and expenses and how much revenue you can expect to make.  If you have several interests but aren’t sure which would make the best business, consider how you can translate your strengths, education and skills into business opportunities, and research the marketplace to see which types of business are presently needed in your area.

Starting a business in an unfamiliar industry

Unfortunately, the lure of quick profits convinces many people to start businesses in areas they know little or nothing about. This is a sure recipe for failure.  If you don’t know much about the business you want to start, but are set on it, be prepared to spend enough time learning it before you begin.

Research and Evaluate Your Business Idea

Here’s a step-by-step guide to evaluating whether you and your chosen business are a good fit.

  1. Try it out. Before you start a business of your own, get some experience in the industry or profession that interests you—even if you work for free. Learn everything you can about every aspect of the business. For example, if you want to start a pasta shop, but don’t know ravioli from cannelloni, go out and get a job with a pasta maker. After a few months, you should be an expert in every aspect of pasta prep, from mixing eggs and flour to flattening the dough and slicing it into strips.
  2. Talk to entrepreneurs in the same field. If you’re not familiar with the business you want to start and you’re unable to find work in the field, talk with others who provide the product or service that interests you. To increase your chances of getting interviews and reliable answers to your questions, it’s best to do this in a different locale from the one in which you plan to locate. Small business owners are often quite willing to share their knowledge once they are sure you will not compete with them.
  3. Evaluate whether you enjoy the work and excel at it. If not, find a new venture. It’s a lot harder to make a success of a business you don’t like, and it’s unlikely you’ll like something you’re not good at. If you enjoyed the work and determined you were skilled enough to base your own business on it, go on to the next step.
  4. Judge your ability and desire to handle every aspect of the business. If you don’t want to or can’t pitch in wherever and whenever something needs to be done—whether it involves manufacturing a product, dealing with customers or keeping the books—you should think twice about starting that kind of business.
  5. Determine whether the business has a solid chance of turning a profit. After working in the field for a few months, you should have a good idea of whether the business is a potential moneymaker. To be sure, you should analyze your market and conduct a break-even analysis, a preliminary financial projection that shows you the amount of revenue you’ll need to bring in to cover your expenses (this amount is called your break-even point). If you’re able to bring in more revenues than your break-even point, you’ll be in the black (that is, you’ll make a profit).
  6. Evaluate the risk this particular business requires. Even the best-laid plans can sour if you pick an unusually risky business. For instance, the following businesses have higher than average failure rates:
    • computer stores
    • laundries and dry cleaners
    • florists
    • used car dealerships
    • gas stations
    • trucking firms
    • restaurants
    • infant clothing stores
    • bakeries, and
    • grocery and meat stores

If your business idea is on this list, don’t despair—it doesn’t mean you should automatically abandon it. However, you’ll need to be more critical and careful with the numbers when preparing your business plan