Thinking of starting your own business? Consider these steps
My Life Coaching clients start all kinds of interesting discussions. Here is a recent one.
Dear Penny. I feel really unfulfilled in my job. In my spare time, I make scarves and my friends and family seem to like them. I’d like to see if I can make a go of this for a living. Where should I start? Ms P.
Dear Ms P. Well done to you! You have identified a skill that you have and would like to turn it to your advantage.
When I work with clients who are looking to change career, I find a good place to start is their economic situation. Simply put, how much do you need to make to get by? Completing a budgeting exercise gives you complete clarity as to whether you can afford to give up paid employment. Do you have savings, could you work part-time, can you take out a friends-and-family loan, can you rent out a room? Do you have a mortgage, expensive bills, a car to run? Do you have a partner who can cover the bills? There are good budgeting tools widely available, or I can provide one. Be sure to take into account large annual expenses, like car service and tax, as well as monthly expenses. You also need to include any significant start-up costs for your scarf making, fabric or machinery for example. This is a common mistake. Depending on the business line, I would aim to have a 6 to 12 month financial cushion to enable you to focus on your new venture without too many sleepless nights or relationship bust-ups.
The next step is to look at the quality of your product, and the demand for it. Too many budding entrepreneurs are looking to be the next big thing and this is not strictly necessary to launch a business. But equally, there needs to be a market for what you have to sell. Its great that friends and family like your output but now its time to get some wider feedback. Try taking a few samples to some small boutiques and asking their opinion. People love to give their views, especially if you are not trying to sell anything. You may be able to get a stall at a local craft market for a small outlay. Ask a friend to host drinks for a group of potential buyers. Buying Directors for department stores are notoriously tricky to pin down but the sales teams in the accessories departments may give you their opinion. We don’t have the time to cover a whole sales and marketing strategy here but four or five short exercises should help to tell you what you need to know:
• Is there demand for your product?
• Are there strong competitors?
• What kind of price point are you looking at?
• How many could you sell a month?
This basic analysis should give you some help with making the basic decision of whether you should give up, or scale back on your paid employment. And remember the golden rule which is to leave your job with good grace, should you decide to do so. It would be nice to sell some scarves to your former colleagues! Good luck, Ms P, and please let me know if you’d like to work on a more detailed business plan.
If you have a question that you would like Penny to answer, please get in touch.