It’s true that many successful businesses start with one individual’s passion, and it’s understandable that you want to be that business person with a dream. The reality is that bringing that dream to fruition means that you’ll have to make many hard choices along the way. Most of the choices you’ll make won’t be simple or easy and might not even make sense to you.
The first choice is universal. Eddie Wildsmith makes custom vintage tailgate benches. He loves doing this, but has a single important question that must be answered before he begins: Can he actually make a living doing this?
Fortunately for Eddie, he did his research and found out that he could. This initial step is more important than you know. If you don’t know how to get online and gather reliable information, you might be heading down the wrong pathway. Just because the cost of selling something online is relatively low, that doesn’t mean you will be able to get sales.
Here’s more to keep in mind:
1. What kind of person will want what I am selling and what price will get the most sales?
I recently read some advice online that claimed you could do your research by talking to friends and family and finding out if they would be interested in buying it and for what price. Once you have that information, the writer went on to say, find a stranger, offer the item to them at that price, and see if they are interested.
This is NOT good advice. You can’t set up a pricing structure for your business based on what the people you know plus a random stranger have to say. Instead, you should find out how much similar items are priced. This is a much better way to gauge the market for your product.
Most successful businesses make their profit from selling large numbers of items with lower priced tags. While they may have a few expensive items in their lines, sales of these don’t make up the bulk of the profit.
This is what I am talking about. I pass by a used car lot in a nearby town on a frequent basis. It’s a small lot with only 20 or so vehicles. However, every time I pass by there is a completely new set of vehicles sitting there. You might be wondering why his cars move so quickly. His secret is simple: The dealer keeps his prices low. Selling ten vehicles a week and making $500 on each sale is much better than selling just three a week and making $1,000 per vehicle.
2. Marketing does cost money and it must be done.
You have to decide how much you want to spend on advertising. It’s best to test the waters with a small campaign, and jump into a larger and more expensive one after you’ve discovered the right formula. At one point in the past, it cost me $20 in advertising for every single one of the 2,000 porch swings that I sold each year. The advertising costs totaled $40,000 on an annual basis. Some years, I even spent more than that.
That might seem like a lot of money to you, but keep in mind that you won’t have to start that big. You can make a huge difference just by investing $100 in a small ad campaign, as long as you choose the right venue. Think about your targeted customers and advertise in places that they are likely to visit.
3. Begin your business on a part-time basis.
Don’t jump the gun and quit your job before you start seeing actual sales. Sure, your idea may be a great one, but even good ideas take time to get started. Work your regular job and spend time developing your business in your spare time. In the end, you will have a more secure footing when you are finally able to quit your job and work for yourself.