Azeroth wrote:I'm currently a full time engineering student graduating in a year time. I am very keen in starting my own business but directionless.
I tried reading up own books on how to start a small business, but there are just too much things to find out.
For example if i wanna venture into F&B industry, how should i start off? Some people told me to do research, but research on what?
Please Help! Thanx!
If you want to start you own business, then you must have some idea of the product or service you want to sell. If you don't then there is no point in starting a business. You never start a business and then decide what it will do.
If you do have an idea for a product or service, then your research begins with analyzing demand for your potential product. There is nothing more useless, or hard to sell, than a solution for which there is no matching problem. Lots of people get great ideas; they just don't fulfill a need for anyone.
Begin by making an analysis of how much it costs to provide you product. You need to look at both prototype and start up costs, which are amortized into the product life cycle, as well as per unit costs. Don't forget items such as shipping and packaging. It is not unusual for the retail price of a product to be 5 times actual manufacturing cost, and wholesale 3 times the manufacturing cost.
At the same time analyze your target market, or more correctly, your market segment. Don't make the mistake of looking at the market too broadly. Example: You create a new toothbrush. You figure that since most everyone brushes their teeth, you have a target market of 4 billion people. Wrong. What are the characteristics of the market that would want to buy your new toothbrush? Are they gadget freaks? People with one hand? Your actual market segment will be much smaller than people with teeth.
Next, it is time to do a competitive analysis. Who is already selling your product or something similar that fulfills the same need? Are you in an industry that is fragmented, with many small players (where you have a better chance to grow your business), or are you entering a mature market that has 2 or 3 dominant players? Really, selling a new brand of underarm deodorant against the likes of Proctor & Gamble is an uphill battle. What are the strengths and weaknesses of your competitors? What niche will you occupy to gain a foothold?
If you've gotten this far, you now have some idea of what your product will cost to make, how many people will buy it, and what the competition is like. You now have a decision to make. Can you sell into your target market at the prices dictated by the market and make money?
If you think the answer is yes, then you begin your business plan. The plan is a as complete as possible analysis of your startup costs, income, expenses, and hopefully profits. You must be rigourous in developing the plan for you are only lying to yourself if you make overly optimistic sales projections or underestimate the costs of getting the product into the hands of consumers. There are thousands of websites and books about creating business plans... you need to learn all the elements that go into the plan.
Now, you need to secure funding. If it's a low cost startup, you can do it yourself. If you need lots of capital, you have a problem because no bank will lend you money. You might find an angel investor if your idea and pro forma financial statements are really good and well supported.
This is a rather elementary list of things to do. One big part of your research is to understand how to research markets, competitors, and other factors that affect your product. You need also to become aware of the differences between selling... say... $2 million yachts to rich people versus selling pet rocks to the population at large for $3 a piece (by the way, your target market here is not the people who buy the rocks, it is the gift shops that are looking for items to peddle). You need also to analyze the difference between service businesses and product oriented businesses.
Finally, you are an engineer. You need to learn as much as possible about accounting, finance, management practice, sales, and relationship management.
Good luck. It's work, and it's fun.
PS: If there are already "just too much things to find out", then do not start a business. There will always be too many things to find out, no matter how long you own/run your business.
