Bruce Freeman writes The Small Business Professor column for Scripps Howard News Service. This week he’s responding to a question from a new college graduate about starting on a showstring.
Before you launch, it’s important to make sure that your business idea has legs, meaning it has enough market appeal to be profitable.
So do your homework: zero in on your target market and learn about pricing. Talk to experienced entrepreneurs and reach out to your college for business support in marketing and strategy.
To keep your costs down, Karin Abarbanel, a small-business expert and co-author of “Birthing the Elephant: The Woman’s Go-For-It” guide to overcoming the big challenges of launching a business has these suggestions:
Tap your network: Friends and family are the key funding sources for small-business start-ups, especially for women-owned ventures. If you go this route, create a business plan so people will take you seriously. You can also mine your personal contacts for non-financial help: legal advice, for example, or customer introductions.
Connect with vendors: If your product has promise, you may be able to persuade a vendor to give you a small line of credit or advance you some materials so you can get up and running. Be sure to have any agreement you make checked out by a professional.
Barter early and often: Smart start-ups use creativity instead of cash. If you need a Web site for example, why not offer to make some of your bags for a Web designer and her friends in return for technical help? If you’re a social media whiz, you might trade your expertise with a seasoned public relations pro that will help you come up with a start-up story that gets your new business some print or online exposure. Or you might offer to donate your products to a local non-profit agency for a fund-raising event in return for coverage in a press release that announces your gift to local news outlets. The possibilities are endless!
Keep your overhead low: Investing in a glitzy Web site with lots of bells and whistles or buying an expensive new computer to track your orders can be major cash drains. Invest in product development, not image. Focus on satisfying your customers and building a reputation for great service and timely delivery.
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