One of the two questions that is asked of me the most is, "What do I need to do to start a business?" Ninety-nine percent of the time, what the person wants to know is how to register a name, set up an LLC or corporation, etc. What I answer surprises them. My answer is "You need to (1) find out if there is a market for your product or service and then (2) determine how you are going to get that market to choose you instead of your competitors."
One of the frequent mistakes I see is people starting a business without knowing anything about the market. The novice assumes that since she likes the product that she intends to sell, there are enough others who like it as well. Have you ever been to dinner with someone who says, "My meal is wonderful. Here, try some. You'll like it." That person assumes that you will like the entree because she likes the entree. Many people make that assumption when starting a business. Furthermore, she assumes that her hard work will be enough to get people to buy from her instead of her competitors. I wish it was that simple.
I always advise clients that before they do anything to start a business, they need to do market research to determine (1) whether a market exists and (2) whether or not the market is growing, stagnant, or shrinking. I often have people tell me, "Of course there is a market. All of my friends and relatives say they will buy from me." First of all, I know from experience that they will not live up to that and secondly, your business won't survive by just having your friends and relatives as customers. Without a market, there is no business.
Once you have done the research and determined that there is a market, you need a marketing program that will convince that market (or a good percentage of that market) to buy from you. Just because you make it, does not mean they will come. There have been many businesses that made wonderful products, high quality products, low priced products, or made the first product in their industry, but are no longer in business. Just running an ad that says you are the best, biggest, fastest, cheapest, or whatever, is not a marketing program.
If you do not know how to develop a good marketing program, hire an expert. Marketing brings people to your business who are interested in buying your product. If you don't market properly, no one will come to your door. If you invest in a good marketing program, you will receive a good return. The key word is "good." Therefore, let me repeat. If you do not know how to develop a good marketing program, hire an expert.
So before you worry about a name for your business or how to register it, before you decide whether to be an LLC or S-Corporation, before you start shopping for office furniture and computers ......... determine if there is a market for your product and how you are going to get a big enough percentage of that market to buy from YOU.
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