Starting A Business With No Experience

1. Find a business idea

Finding a business idea is something you can approach systematically by relying on time-tested approaches that have worked for other entrepreneurs. No matter whether you’re looking to start a low-investment business on the side or you’d prefer to go all-in on your idea, the best way to find a product to sell starts with asking questions:

A. What’s the potential opportunity size?

Entrepreneurs are often too dismissive of small markets. Yes, the market size should match your ambitions from the business, but the opportunity size of a specific niche is determined by a few other dimensions. For example, if a product category has relatively few active customers, but the price of the product is relatively high and requires repurchase, that’s an attractive opportunity that founders focused on market size might miss.

That said, the costs to acquire any customer isn’t exactly cheap these days. The best opportunities will come from product areas where you can encourage repeat purchases, either in the form of a subscription or by (eventually) upselling and cross-selling customers complementary products. That can come later, but keep the potential in mind as you explore opportunities.

B. Is it a trend, fad, or growing market?

The trajectory of a market matters more than its current state. If you want your business to go the distance, remember it’s not only critical to understand the demand for a category today but to know how it might trend in the future. Does your product or niche fall into a fad, trend, stable, or growing market?

  • Fad. A fad is something that grows in popularity for a brief period of time and fades out just as quickly. A fad can be lucrative if your entry into the market and exit are timed perfectly, but this can be difficult to predict and a recipe for disaster.
  • Trend. A trend is a longer-term direction that the market for a product appears to be taking. It doesn’t grow as quickly as a fad, it lasts longer and, generally, it doesn’t decline nearly as fast.
  • Stable. A stable market is one that is immune to shocks and bumps. It is neither declining nor growing but maintains itself over long periods of time.
  • Growing. A growing market is one that has seen consistent growth and shows signs of a long-term or permanent market shift.

C. What’s your competition?

What does the competitive landscape look like for your product? Are there many competitors, or very few? If there are a lot of competing businesses in your niche, it’s often a sign that the market is well established; that good for ensuring demand exists, but it will also require you to differentiate what you offer (to some degree) in order to attract customer attention and build market share.

D. Will there be restrictions and/or regulations?

Before diving into a product category, make sure you understand the regulations or restrictions that will apply. Certain chemical products, food products, and cosmetics can carry restrictions by not only the country you are importing your goods into but also the countries you are shipping your product to.

2. Choose a business name

What’s in a name? For starters, your business name is a universal facet of your marketing; it shows up everywhere you do. Word of mouth is hard enough to earn, so there’s no reason to make life harder with a dull, confusing, or irrelevant business name.

That said, the early days of starting a business are fluid, with very little being set in stone. Whatever name you come up with now isn’t the one you have to live with forever. Keep things simple and focused: find a name for your business that makes it clear what you do, that’s short and memorable, and that aligns with your mission and vision statement. This isn’t an effortless task, but it’s very achievable with a bit of ingenuity.

Name generators can help you come up with an initial set of ideas—the rest is up to you. If you’re starting from scratch, there are also a few time-tested practices to lean on for direction. A fitting and memorable name often has the following characteristics:

  • Short and simple. A good tripwire here is if you’ve spoken about your business idea before and people frequently ask you to repeat the name. Don’t make customers work to remember your brand. One or two words is ideal, although three to four short words can also work if they form a concrete phrase. (E.g., Storq, Star Cadet)
  • Different. If your market research shows that everyone in your industry seems to have similar names or relies on similar elements, consider avoiding these tropes and veering in a completely different direction; many brands underestimate the marketing upside of wild originality. You can always amend your name with your product category to blend clever with clear, too. (E.g., Deathwish Coffee, Beefcake Swimwear)
  • Original. You’ll need to ensure your business name isn’t in use by another business, especially a competitor. To do that, run a free trademark search in the countries you’ll be doing business in, and make sure to check Google and social media sites, too. The same goes for URLs, so run a quick domain name search before you register anything. (If you’re still unsure, it’s best to consult independent legal counsel for advice specific to your business.)

3. Validate your product idea

Until people pay you, all you have is a list of assumptions. Market research, surveys, and feedback from friends and family can point you in the right direction, but the calling card of real product validation is the sound of the cash register ringing. So, the first and arguably best way to validate your product is to make a few initial sales.

There are, however, a number of ways to validate your would-be idea as you’re developing it. Most focus on a single essential action: commitment. Let early customers commit in some form or fashion to show that, yes, people really are interested in buying this product and they aren’t just telling you what you want to hear.

This bias toward speed and experimentation can save you from costly mistakes down the line. It’s advice so simple and obvious it too often gets dismissed: make sure you’re selling something people want. Here are a few ways to test the waters before diving in.

  • Set up a store to take pre-orders. Imagine having product validation before developing your product. Pre-orders make it possible. Over the years, customers have become more accustomed to and comfortable with paying for a product today that they’ll receive later. Describe and sell what you’re building, honor your promises, and cast your net before placing that initial inventory order.
  • Launch a crowdfunding campaign. Kick starters aren’t the cure-all tonic to your financing woes, but they are still an advantageous way to get funding from the best possible source: customers. Kickstarter isn’t the only game in town, either, which is helpful for brands working outside of the platform’s most prominent product categories. Browse our list of sites and see if one works for you.
  • Sell products in person. For certain products, like homemade goods, local fairs and markets offer the ideal way to test a product: by creating an initial batch and selling to customers in person. When Nimi Kular and her family’s business, Jaswant’s Kitchen, first started selling their homemade recipes, they found this approach indispensable. “Selling in person at a craft show or local pop-up is a great way to share your story, get feedback, and explain the benefits of your product to potential customers,” says Nimi.

There are other ways to validate your product ideas, but when in doubt, start selling as quickly as possible. There are downsides to moving too fast—if you rush and try to sell a product before it’s ready, all you’ll learn is that people don’t like bad products. But, our experience is that most entrepreneurs wait too long to start validating their ideas.

Consider this: if you’re customer-driven, then trust your potential customers to guide you to the right product. No matter how clever you are, there’s no substitute for direct, pointed feedback from a paying customer.

4. Write your business plan

Writing a business plan helps formalize your idea and can streamline the business-creation process by getting you to sit down and think things through methodically.

And, yes, plans are (often) worthless, but planning is everything. Many entrepreneurs say they rarely look at their plan once they’ve launched—but they’ll also tell you there’s value in thinking through and researching your idea; writing a business plan is the perfect canvas for this exercise.

At the very least, you’ll quickly figure out what questions you don’t have answers to. Having a firm grasp of your “known unknowns” is important because all it means is that you’re actively not prioritizing finding a solution right now; that’s a lot better than being unprepared or caught off guard, especially if you struggle to answer these questions while seeking funding.

There are other ways to validate your product ideas, but when in doubt, start selling as quickly as possible. There are downsides to moving too fast—if you rush and try to sell a product before it’s ready, all you’ll learn is that people don’t like bad products. But, our experience is that most entrepreneurs wait too long to start validating their ideas.

Consider this: if you’re customer-driven, then trust your potential customers to guide you to the right product. No matter how clever you are, there’s no substitute for direct, pointed feedback from a paying customer.

5. Get your finances in order

The goal of any business is to make money. Otherwise, you just have a hobby (which is also OK!). But if your goal is to run a business, knowing what you’ll need to start up and how to manage cash flow once you have it will be integral to your success. Although it’s hard to get a definitive list of reasons as to why most businesses fail, cash flow and insufficient capital are frequent culprits.

There are two sides to this coin: financial literacy and securing funding (if it’s needed). Let’s start with the first one. There are plenty of businesses you can start with minimal startup costs, but others will require money for inventory, equipment, or physical space. A clear view of your total investment—before you spend a cent—is a must for helping to make important projections, like when you’ll break even.

Where the money ends up going will largely be determined by your business, but our research shows that for most businesses, product and inventory costs represent a large share of spend in Year 1. If those calculations show you’ll need more funding than you can afford to spend out of pocket, you can look at options like a small business loan, a Shopify Capital offer (for those qualified), or a crowdfunding campaign. Read more on how to get a business loan and the different types of loans you can apply for.

by Desirae Odjick culled from shopify.com

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