What does it take to get a new product from your workshop or kitchen into a buyer’s hands?
“Lots of time, patience and attention to detail,” says a provincial new-venture specialist.
The first step is to do a self-assessment, said Elaine Stenbraaten.
“Are you an entrepreneur? Understand that with a business you start, you assume the risk of profit or loss. It’s important to decide if you have the personality, skills, family, and lifestyle to run a business. Are you and your family prepared for what it takes to run a business full time?”
If the answers are yes, then evaluate your idea and do some market research.
“Although it’s always good to listen to your friends and family, it’s also important to get people who are not tied personally to you to evaluate your idea as well as your product,” she said. “A feasibility assessment includes who your customer is, where the market is, what your cost to produce the product is, what the cost to market will be, as well as other considerations. This step is critical to your success. Can you make the product, deliver it to your customer for prices they are willing to pay and still have room for profit?”
Understanding who your customer is and who buys your product makes for more effective marketing at a lower cost, she said.
“An inexpensive way to test market your product is to sell your product at an Alberta Approved Farmers’ Market,” she said. “It can also verify your market and gives you the opportunity to tweak the product based on your customer’s direct input. It’s a great way to see if the product is accepted by the market and customers.”
A proper business plan is also critical.
“Business plans allow you to develop a working plan to carry you to profitability. It also allows you to review how to minimize your risks and what you’ll do to limit the impact.”
All of those factors are important to lenders, she added.
There are also other business considerations to keep in mind.
“You may need to consider how your business is structured, how it is regulated, and what permits and business licences you may need. Determine a business structure that will work for you. You may want to consider how you will set your business up so you can easily leave it. An exit strategy for the business is something that should be considered at the start.”
Finally, seek out advisers and mentors, she said.
“There are three important skills in a business — finance, marketing, and production. While most of us can’t be good at all three skills, we’re usually good at two of the three. Consider hiring for what you’re not good at. Listen to advice from advisers and mentors, but trust your instincts. If you’ve done your homework, and researched the idea and market, you’ll be the expert.
“If you’ve taken these steps, developed your idea and business plan, and ensured financing is in place, you’re on the road to success.”