If you’re looking to make some extra money on the side by starting your own business (even while working another job), don’t get caught up in all the hype about developing an elaborate, complicated business plan. While a writing a small business plan can certainly help, it’s no guarantee of success. Making your small business work really boils down to identifying and focusing on these 3 simple elements:
1. Your Product or Service
The first thing you need to clarify before starting your own business is what product or service you’re offering. It doesn’t have to be an amazing new technology or service that no one else is providing. Those things can work well in some cases, but it’s also possible that the reason no one is offering the product or service you’re thinking of is because there is no demand for it!
Think about your strengths, skills, and hobbies. What are you good at right now? These skills might be related to your current job, but they don’t have to be. If you plan on capitalizing on these skills, they should be something you actually enjoy doing because you’ll be giving quite a bit of free time to your side business. If you make yourself miserable doing something you hate, you’re not likely to stick with it for long. However, if you just need the extra money for a short time, loving the idea isn’t a necessity – it just needs to be something for which people will pay you.
Need some ideas? Look around at the successful businesses in your area. If someone else is making money on a certain product or service, chances are good that you can too. Why? Because you already know there are paying customers out there! You can then focus on offering a better version of that product or service or offering it for a lower price (or both!). For a side business, keep it simple – tax preparation, child care, pet care, or anything else you can find in your local yellow pages.
2. Your Target Customers
The next thing you need to figure out is who your customers are. Who are the people that (1) need your service or product and (2) are willing to pay for it? This requires some thinking and research on your part, but it’s absolutely essential to your success earning extra money from a small home business. Plus, you don’t want to waste time chasing down the wrong customers. Zoning in on your target customers makes sure you’re using your time and resources wisely and increases your chances for success.
In determining your target customers, it’s helpful to start by thinking about your particular competitive edge (quality, price, convenience). This will help you further zero in on the people most likely to buy from you – those who may be looking for a better, cheaper, or more convenient version of the product or service you will be offering.
Next, take some time to talk to people you think fit your target. Ask them what they want or need, and then adjust and refine your ideas to match your potential customers’ responses. You can also discuss pricing and marketing ideas with them if it seems appropriate.
3. How You’ll Reach Your Target Customers (a.k.a. Marketing)
Finally, you need to figure out how you’re going to let your target customers know you’re in business, what you’re offering, and why they should choose you instead of the competition. This is marketing – essentially, getting the word out to the people who are most likely to buy from you.
The easiest place to start is with people you already know need your product or service – particularly if you know that they’re unhappy with their current source. Give them a call, take them out to lunch, or send them a well-crafted email offering your help. Remember to focus on what you can do for them and the benefits they’ll receive, not vice versa.
If you don’t have a lot of capital to finance your startup, consider low-cost or no-cost methods of marketing your business. A website can be useful but isn’t always necessary. Volunteering in the community or in organizations related to your business can be a great way to get some exposure. Attractive, well-placed fliers can work for some types of businesses and they cost next to nothing. And there’s always Facebook and Craigslist to get the word out for free.
Finally, don’t forget about traditional media outlets. Radio, newspapers, television, and online advertisements are all possibilities depending on your business model and product or service (and budget, of course). But don’t just throw money at a lot of different types of advertising in hopes that something will work. Think about your target customers again and the most likely ways they would seek your service or come across your ads. Test your ideas to figure out what works and quit approaches that don’t.
By focusing on these three basic aspects of your business plan, you can exponentially increase your chances and degree of success. It’s easy to get caught up in a bunch of nit-picky, time-wasting activities and busywork as you seek to become a home business entrepreneur. Instead, concentrate on figuring out a business idea that works for you and for which you have the skills, target a specific set of customers, and then find the best ways to reach those customers and get paid. It’s a simple formula, but it works.
(photo credit: Yodel Anecdotal)