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Tuesday, September 25, 2007

Starting a Business: Step 2

I changed the title of this tract from "Starting a Consultancy" to "Starting a Business" because the general principles are the same, and you might not want to be a consultant!

I have many friends with an IT background who have started everything from a flower shop to a cheerleader academy. Many of these entrepreneurs have more than one revenue stream, thus diversifying their incomes.

Step two in building your enterprise is to do your market research. This is the due diligence phase that requires you to step back from the intoxicating idea of your killer business and evaluate it from all angles. You need to know what your market saturation is, who your competition is and what they charge, how they source leads, where they get raw materials and so on. Ultimately, you need to know what you can charge for your products or services and be competitive while still earning a profit.

Creation of a business plan will be helpful, although it's a daunting exercise to go through, especially when using software to create it. I ran a consultancy for years without one; although in retrospect, it would have been helpful in understanding my business early on.

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