Enjoy Your Life! Build Your Business! Have Your Way!
The First Three Things To Do When Starting A Business
Hi Everyone!
There are so many things that need to be done when starting a business.
One thing that makes it a challenge for Indies is the fact that most of us do not actually start out with the idea that we'll start a business. What usually happens is that we are tooling along enjoying life when suddenly, we discover something that we enjoy doing more than anything else.
Not long after that, we find other people doing it, and many of them are making money at it.
Then, we decide that we can too.
Sound familiar?
So, where do you go from there? What's the first thing you do after that?
It's tempting to simply buy some supplies and start making stuff. Then add some stuff to etsy or a free website and start showing things off and maybe selling an item or two now and then.
That's nice, and if you don't want to have a business, it's also a great thing to do as long as you are using safe ingredients and manufacturing methods.
But once you actually decide to launch a business, you really do have one thing that must be done first and that's familiarize yourself with the industry.
Let me repeat that: familiarize yourself with the industry. Lots of people confuse becoming familiar with the industry with become familiar with the people in the industry. There's a big difference. Familiarizing yourself with the industry will help you launch your business on the right foot. Familiarizing yourself with the people in the industry is a necessary (and fun) add-on, but it's not the core. If you're just starting a business and you're spending more time socializing with people than you are actually familiarizing yourself with the industry so you can be successful at it, then you're making a big mistake.
You must do both, but most of your time needs to be invested in the former, not spent on the latter.
How To Familiarize Yourself With An Industry
There are several ways to do this, but if you want to have a business, you have to be intentional about it. Otherwise, you'll be reading stuff forever just because it's interesting. A business leader has to focus her efforts on what's most important, and when you're starting a business, the most important thing you can do is become familiar with the industry and the laws that apply to it.
1. Is your industry regulated by federal and/or state law? It's easy to find this out using Google. Many people here make cosmetics and other consumer products. All 3 of these things are regulated by 3 main federal agencies: the Food & Drug Administration, the Federal Trade Commission and the Consumer Product Safety Commission.
Details are far beyond the scope of this post, but if you click on those sites, you will quickly learn whether and how your particular product is regulated at the federal level. Some states also regulate particular industries. In most cases, the law closely tracks federal law, but there are increasing numbers of exceptions to this. Google your state for small business issues and you will find a ton of resources online to help you.
It's great to connect with people on line at social networking sites like this one, and I encourage that. But the truth is that, you will get the best and most reliable information first hand from the regulators themselves. Do your research and use sites like this one to discuss and clarify what you learn, and to connect with people who are going through the same things you are.
Doing your main research at the source will save you tons of time and money down the road. In addition, it will make you a mini-authority in your industry and that is a great selling point in the minds of your customers. It will also qualify you better for media opportunities if you are knowledgeable about the industry you sell products in.
2. What do consumers like about the products you plan to sell? This is the fun part. It's all about finding out what people are buying and why. Check out as much of the competition as you can. What sells? What doesn't sell? How do other small companies market the products you want to market?
You don't have to reinvent the wheel so see what other people are doing and then rinse and repeat.
3. Launch your business with one product. If you're not stuck yet, you'll get stuck here if for no other reason than that your are so excited to make everything you see.
Do. Not. Do. That.
Focus your efforts on launching with one item in a few different varieties. Analyze the heck out of the cost to manufacture and what you should charge. This will not make you a millionaire in a day, but it will educate you about how to make money.
Making products is about fun.
Making a profit is about business.
As an Indie, you will integrate the two so you enjoy what you are doing, yet remain serious enough about it to generate the cash you need to be successful and expand.
Continue to experiment as you go and you can add on more products. But the last thing you want is 50 fragrances on a shelf when your customers are only buying 3 of them in enough quantity to generate a profit for you.
Only The Beginning
I know this is just the tip of the iceberg, but all things start with a beginning. If you are already in business but you're wondering why you are not making any real money yet, consider whether you need to go back to the basics in this post. If you have not started yet, begin with these things.
Know your industry.
Know your customers.
Know your profit margin.
These are the very basics of any business. Take the time to start with them. You won't regret it.
Question: What do you think? Does this make sense? Can any seasoned business owners add anything? I'd love to hear from everyone on this!
There are so many things that need to be done when starting a business.
One thing that makes it a challenge for Indies is the fact that most of us do not actually start out with the idea that we'll start a business. What usually happens is that we are tooling along enjoying life when suddenly, we discover something that we enjoy doing more than anything else.
Not long after that, we find other people doing it, and many of them are making money at it.
Then, we decide that we can too.
Sound familiar?
So, where do you go from there? What's the first thing you do after that?
It's tempting to simply buy some supplies and start making stuff. Then add some stuff to etsy or a free website and start showing things off and maybe selling an item or two now and then.
That's nice, and if you don't want to have a business, it's also a great thing to do as long as you are using safe ingredients and manufacturing methods.
But once you actually decide to launch a business, you really do have one thing that must be done first and that's familiarize yourself with the industry.
Let me repeat that: familiarize yourself with the industry. Lots of people confuse becoming familiar with the industry with become familiar with the people in the industry. There's a big difference. Familiarizing yourself with the industry will help you launch your business on the right foot. Familiarizing yourself with the people in the industry is a necessary (and fun) add-on, but it's not the core. If you're just starting a business and you're spending more time socializing with people than you are actually familiarizing yourself with the industry so you can be successful at it, then you're making a big mistake.
You must do both, but most of your time needs to be invested in the former, not spent on the latter.
How To Familiarize Yourself With An Industry
There are several ways to do this, but if you want to have a business, you have to be intentional about it. Otherwise, you'll be reading stuff forever just because it's interesting. A business leader has to focus her efforts on what's most important, and when you're starting a business, the most important thing you can do is become familiar with the industry and the laws that apply to it.
1. Is your industry regulated by federal and/or state law? It's easy to find this out using Google. Many people here make cosmetics and other consumer products. All 3 of these things are regulated by 3 main federal agencies: the Food & Drug Administration, the Federal Trade Commission and the Consumer Product Safety Commission.
Details are far beyond the scope of this post, but if you click on those sites, you will quickly learn whether and how your particular product is regulated at the federal level. Some states also regulate particular industries. In most cases, the law closely tracks federal law, but there are increasing numbers of exceptions to this. Google your state for small business issues and you will find a ton of resources online to help you.
It's great to connect with people on line at social networking sites like this one, and I encourage that. But the truth is that, you will get the best and most reliable information first hand from the regulators themselves. Do your research and use sites like this one to discuss and clarify what you learn, and to connect with people who are going through the same things you are.
Doing your main research at the source will save you tons of time and money down the road. In addition, it will make you a mini-authority in your industry and that is a great selling point in the minds of your customers. It will also qualify you better for media opportunities if you are knowledgeable about the industry you sell products in.
2. What do consumers like about the products you plan to sell? This is the fun part. It's all about finding out what people are buying and why. Check out as much of the competition as you can. What sells? What doesn't sell? How do other small companies market the products you want to market?
You don't have to reinvent the wheel so see what other people are doing and then rinse and repeat.
3. Launch your business with one product. If you're not stuck yet, you'll get stuck here if for no other reason than that your are so excited to make everything you see.
Do. Not. Do. That.
Focus your efforts on launching with one item in a few different varieties. Analyze the heck out of the cost to manufacture and what you should charge. This will not make you a millionaire in a day, but it will educate you about how to make money.
Making products is about fun.
Making a profit is about business.
As an Indie, you will integrate the two so you enjoy what you are doing, yet remain serious enough about it to generate the cash you need to be successful and expand.
Continue to experiment as you go and you can add on more products. But the last thing you want is 50 fragrances on a shelf when your customers are only buying 3 of them in enough quantity to generate a profit for you.
Only The Beginning
I know this is just the tip of the iceberg, but all things start with a beginning. If you are already in business but you're wondering why you are not making any real money yet, consider whether you need to go back to the basics in this post. If you have not started yet, begin with these things.
Know your industry.
Know your customers.
Know your profit margin.
These are the very basics of any business. Take the time to start with them. You won't regret it.
Question: What do you think? Does this make sense? Can any seasoned business owners add anything? I'd love to hear from everyone on this!
Tags: startup
Views: 76
Replies to This Discussion
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Permalink Reply by Terry on -
Thanks for this article DM....this is exactly the kind of information I am looking for in starting my business. Thanks for sharing your business knowledge with the newbies!
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Permalink Reply by Yetunde Rodriguez on -
This makes sense. I must admit I'm guilty of wanting to make a million different things in a million different fragrances. Isn't it also important to have different options and choices? It seems counterintuitive to have just one thing, especially in the beauty industry where people want choices. I will also admit it gets confusing having different options especially with labels, etc. So where's the balance between providing choices and options and keeping it simple in the beginning? Great post as always.
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Permalink Reply by dM, CEO on -
Yetunde:
Yes, it's great to have options, but if you have options but you're not making a profit, it may be because you can't handle all of the options.
Only you know what works and doesn't work with your specific business, but the bottom line is that, while customers like options, if the infrastructure of your business cannot deliver them, then you will not be a profitable business.
How many supplies do you have that you are simply not using? How many bottles of fragrance oils are sitting on a shelf waiting for that one customer a quarter to ask for it? If there's a lot of that going on, then you have tons of sunken costs without any return.
If you spend $30 on a 16 oz. bottle of fragrance oil and it takes you an entire year to make that money back because demand for that oil is not high, then you are shooting yourself in the foot.
Most successful Indies start with one thing (maybe two or three) in a limited number of varieties and grow from there. A goo example is Barcelona Bath & Body. She started off with soap only, added candles, then room sprays, then fragrance sachets. She offers 6 scent options. That's a grand total of 24 products.
Rachel debuted her product line for the first time in 2005, and she's profitable.
After 4 years in business, she still offers 24 products. She also offers gifts sets, so technically, she has more than 24 SKUs, but the bottom line is that she has 6 scents and 4 products. She has focused her efforts on building a brand and not just making a buncha fun stuff. (Although her stuff really is fun and she loves what she does!)
Rachel is a good example of what I'm talking about.
Do you see where I'm going with this?
dM
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Permalink Reply by Yetunde Rodriguez on
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Thanks! I hadn't looked at it like that. I will definitely check out the business you mentioned. Thanks for always giving us the great info. One of these days I WILL be profitable enough to take advantage of the full membership, lol.
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Permalink Reply by Nashonta M on -
Great article
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Permalink Reply by Charlene Deloatch on -
Thank you so much for these important tips.
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Permalink Reply by Valaura Sinor on -
As a new business owener, this is great info! I do not have any mentor and am teaching myself as I go. I am competely overwhelmed sometimes with all the information there is to take in and adhere to. I LOVE the info and helpful tips I read about on your site and others from suppliers like Bramble Berry, Wholesale, Elements and more. You all help remind me to keep my feet on the ground andd just tackle things, one step at a time!
Thanks
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Permalink Reply by Katrina on -
I have been working at creating my business for over a year now. I feel good about what I'm doing unitl I suddenly recieve more info ie. have you done this or have you checked into that? I am not letting it get me down or off track I just feel like the other bath and body businesses must know something I don't and what could I offer that someone else already doesn't? Then I go on to think "well the more natural body products out there the better it is for our industry"!
Mind you all those thoughts happen in a matter of a few seconds. Anyone else feel the same?
Then another thing I think about is that I am only willing to work with essential oils. I know that there are people who are sensitve to some eo's more than others but I also think that the same goes for frangrance oils. Fragrance oils are synthetically made with some added eo's in them (which makes for the skin to absorb some of those chemicals more easily), and I don't feel right even saying my products are natural even if everything is but the (synthetic and chemically made) fragrance. If we want consumers and the world to be more conscious of chemicals, organic and natural products shouldn't we ( even if the FDA, etc. states it's fine) provide the real thing to them?
I am by no means getting down on anyone. Please see that this is in MY way of moving forward with my business. I have five scents or eo blends that I will start off with. I know working my business this way will get tricky as people will want more ie. frangrances. My question is "Do I hold onto my convictions (I have not purchased any product with frangrance in over two years) or should I keep an open mind and offer FO's becuase I will possibly make a better profit and have a larger customer base?" Know that I do want to make a substantial profit one day.
I know what is in my heart, but would love love love to hear from everyone on my issue. I have never had the courage to let anyone know my struggles (even though this is what this type of networking is about and helpful for).
Once again please know this comment is not about what is right or wrong about eo's/fo's but what is keeping me from jumping in and getting my business out to the world.
I encourage your honest thoughts,
Katrina
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Permalink Reply by IBN Member Jim DeBetta on -
When starting a business, you must consider this:
- Are you emotionally ready for the ups and downs (and they will occur!)?
- Are you financially "fit" and understand how to budget, how sales/profits work, and how much it cost to run a business?
- Are you in it for the long haul?
- Do you have some or full support from family and friends?
When I started, I knew what I wanted and how to get it...but getting it was the hard part :) I spent time learning about my industry, who the players were, and then I made my move. It is never easy even when you are enjoying success...but doing what you love and making a living at it is a constant effort - just like the care and effort you put into your family!
Great thoughts everyone...just be objective and keep a level head and go out and choose to be successful!!
Jim
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Permalink Reply by IBN Member Tracie Nichols on -
Hi Katrina,
I respect your convictions, and your position on offering products which are transparently natural and organic. I know I feel much the same way. I'd have a hard time promoting products which I'm not 100% passionate about -- so maybe that's one thing to factor into your decision about offering FO's.
Good Luck!
Tracie Nichols - TTN Therapeutics
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Permalink Reply by IBN Member Michaela Boldy - Michaela Boldy Aromatherapy on -
Thanks for all this info but my main issue right now is insurance. I have had my product tested by customers last year with 100% no problems. Yet because it is aromatherapy I can not get it insured.
The insurance broker says this morning that no company will insure it lower than 7K. It is only a relaxing massage oil with only minimal conc of essential oils that are the non irritant oils. So I would be interested where other companies get there insurance if making products with essential oils? I see stretchmark oils etc on your site.
Their concerns are not because it is an abnormal product, just general concerns for products with essential oils such as a child drinking essential oil products and allergic skin reactions.
Thanks,
Michaela.
Bramble Berry
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