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Jun 21, 2011 - 3 minute read - Comments - entrepreneurship

I Have A Business Idea, Now What?

Through working with prospective small business entrepreneurs, I find that many of them don’t know what the next step is after coming up with their idea for a business. I hear many questions about how much it will cost to start this or that type of business. Unfortunately, there is no easy standard answer to a question like this. Someone who has opened a similar type of business in your area might be able to give you an indication but the costs of everything have likely changed with time. At this point, it is up to the small business entrepreneur to do some research and come up with the answers. If your business model has been proven, then the research is fairly straight forward. If you have a new business model that has not been proven before, you should start taking the preliminary steps towards a feasibility study. For those of you with a proven business model:

  • Think about possible locations for your business. This will vary depending on your business type. Some businesses can be operated out of your house, others will need a commercial location.

  • Start getting a rough idea of the cost to start the business. Talk to real estate agents and property management firms about lease rates. Talk to equipment vendors to get an idea of what the necessary equipment will cost.

  • Inquire about what licenses and approvals will be needed to start the business. Find out about the time to obtain these and the cost of getting them.

  • Have a preliminary look at your competitors. How difficult will it be for you to enter the marketplace and compete? Generally speaking, the more competitive a marketplace is, the more cash it will take to compete effectively.

  • Make an assessment of the demand for your product or service. Are there enough people who are willing to pay an amount that will provide a good return on your investment?

The data discussed above will be in very rough form but this lack of precision will allow you to collect it quickly. Now it’s decision time. Based on what you’ve learned during this initial investigation, does the idea warrant moving forward? If it does, you would start to create a detailed business plan to demonstrate how the business idea will be implemented and how the business will operate. This preliminary investigation isn’t something you should pay someone to do. You need to get an idea, for yourself, of what it is going to take to start a business based on your idea and what it will be like to run it. If this seems like too much work, you should probably abandon the idea of starting a business outright. What I’ve described above are just the initial steps, the real hard work is yet to come.

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