Passion Plus Research: A Small Business Formula for Success

  •    Sluser is the CEO of bizHUMM.com, which helps entrepreneurs, freelancers, and startups with the tools and information they need. Laurie is the author of a free guide, How to Start a Business.

Yes, passion is a critical starting point for your small business. Simply put you should be excited about your idea. Whether you are starting a new online business, offering your expertise as a freelancer, or opening a local coffee shop, when you describe it to a friend you should naturally communicate it with genuine energy and enthusiasm.

But this is not enough. You need to do your research. A little effort at the front end will answer many of your questions as well as save your valuable time and money.

Here are 5 important elements to cover and think about as you get going:

1. Google, Read, Repeat
2. Pricing
3. Competition
4. Business Plan Outline
5. Partnerships

1. Google and Read, Read, Read

This is the beginning of doing your homework. Google your idea in different ways, using different keywords and see what has been written. If you plan to sell chocolate chip cookies online what have others said about packaging and shipping? Minimum orders? Quality of ingredients? Read everything you can find. Start your day by reading one or two articles. Weebly’s Blog and Inspiration Center are also great resources for entrepreneurs. Your knowledge will grow quickly and old questions will be answered. With that your self-confidence will grow as well.

2. Pricing

You need to own these numbers. You must know the cost of each part or ingredient of your product. When you have your total cost nailed down then you need to understand how much to markup this total to arrive at your selling price. 100% is common but you may want to markup your costs more or less. Your gross margin (Sales Price – Cost) is vital. This is the amount you will have left to pay your operating expenses and salaries.

3. Competition

Know your competition. If you are starting to offer your graphic design services find out what is being offered in your local market as well as nationally (or even internationally). Determine your strengths and create easy to communicate language that describes these positive selling features to your marketplace.

4. Business Plan Outline

Ok breathe. I know many of you don’t like to write let alone write a Business Plan. All I’m suggesting here is that you start by writing up a 1-2 page summary of your idea. Describe the product or service; how you are going to deliver it to your customers; competitive strengths; pricing etc. This will help you get your thoughts in order. Share it with friends with business experience and discuss the idea with them.

5. Partnerships

I am often asked, “Should I work with a partner?”. The answer: “are you easy to get along with”. Alright seriously, working with a partner is highly personal. If you prefer to work by yourself and have both the specific product knowledge related to your business and broad business expertise then you can think of starting on your own. You can always add key skills by hiring new employees or consultants later on. However, if you work better in a team environment or need someone to complement your skills then consider a partnership. Just be sure to work with someone that shares your passion and always communicate and compromise when working together.

You have the passion to get going, you can do this, just remember to also do your research. The more thorough you are at the beginning the fewer mistakes you will encounter down the road. And the sooner you will realize your success!