Business, the final frontier.
You’ve had a hobby, you’ve had a side hustle, you’ve even made a little money, but a business? Are you ready for that? The very thought of it might feel like staring into a black hole, but if they put a man on the moon, you can start an out of this world business! Like anything else, this venture will be less daunting if it’s broken down into smaller steps, so before we get into the nitty gritty of your new business, let’s look at what to start considering before you boldly go where your hustle hasn’t been before.
Mindset
Just because you’ve flown in a plane, doesn’t mean you’re ready to captain a spaceship. Besides the physical adjustments you would have to make, there would be a definite mindset shift to get ready for something you’ve only ever heard about. While there will always be situations you can’t predict, it’s better to consider and prepare for the ones you can before you get out into space. In the same way, there are definite differences between your side hustle and a full-fledged business. Here are a few things to consider as you contemplate your new situation:
Consider why you want to start a business: While entrepreneurship may seem appealing from the outside, if you’ve read any of our Babe’s interviews, you know it can be very involved. If you’re just looking for a change, it may be better to look into a different form of employment or expanding your side hustle in another way.
It’s tough out there!: According to the Bureau of Labor Statistics, “About two-thirds of businesses with employees survive at least 2 years and about half survive at least 5 years.” It gets better after that but it will definitely take some tenacity on your part.
It won’t happen overnight: This seems like common sense, but it may be a while before you see a return on your investment. Especially when money’s involved this may be a shock.
The Idea
After you’ve considered some of the risks, think about your product or service. You believe in it enough to overcome these hurdles and now you just need to get other people on board. That’s where your USP comes in. If the term seems a little alien, let’s break it down.
Entrepreneur.com defines Unique Selling Proposition as, “The factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition.”
In other words, yes, we’re all stars but what makes yours shine a little brighter? While it may seem compelling to label your offering as a soup to nuts savior for your customer’s needs, often times it’s more effective to boil things down to something specific. It may help to consider the 4 P’s of marketing to help you narrow things down. Where do you excel in terms of product characteristics, price point, placement (location, accessibility to customers), and promotion? These are the areas you can set yourself apart!
Consider, you probably have a favorite brand or establishment you frequent. In all likelihood, you could go somewhere else to meet this need, but you choose this business. When you think about why, you’ll probably get to the bottom of that business’ USP.
Research & Feedback
A great product is nothing without customers. As you’re solidifying your offering, it’s important to do some research to make sure you’re meeting a need in the market and the specific needs of your ideal customer. Take a moment to get into their head. Who are they and what problem does your product or service solve? How does it make them feel? The answers may not be what you initially suspected, or there may a deeper need that your offering addresses. You may sell clothing, but what your customer is really buying is confidence.
There are resources you can use to conduct surveys of the market you want to reach. Don’t underestimate the resources around you either. If you have a side hustle with a social media following, leverage that group and ask them questions. The more information you have about your target audience the better. It also helps to look at your competition and contemporaries. When you have an understanding of what the rest of the market is doing you can have a better understanding of where you stand and how to set yourself apart.
Business Plans & Counting the Cost
At this point, it’s probably a good idea to start consolidating some of these ideas. A business plan can help keep you on track going forward and act as an easy way to explain to collaborators and potential investors what your goals are and what to expect from you. A business plan generally consists of 3 parts:
Business Concept (about your company/product and your strategy)
Marketplace Section (analysis of customers, competitors, USP)
Financial section (costs, funding, breakeven analysis, financial projections )
If you’ve been working through your idea and doing your research, you basically have the first two sections covered.
Make a list of your expected expenses and their estimated costs. Some will be ongoing monthly expenses, like supplies or rent and utilities if you’re a brick & mortar and other expenses will just be initial costs of starting up, like licenses or branding. When you have those numbers it may be helpful to do a breakeven analysis to estimate how long and what it might take for your business to make back the cost of your investments.
3, 2, 1 - Blast Off!
The meteoric rise of your business has just begun! While it may seem like a lot to consider, when you really break it down into steps you may find that you are more than ready to shine. Get ready to shoot for the moon Babe, you’re already a star!