Start Your Own Business (15 page)

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Authors: Inc The Staff of Entrepreneur Media

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Here are some tips to make your mission statement the best it can be:
•
Involve those connected to your business.
Even if you are a sole proprietor, it helps to get at least one other person’s ideas for your mission statement. Other people can help you see strengths, weaknesses and voids you might miss. If you have no partners or investors to include, consider knowledgeable family members and close friends, employees or accountants. Be sure, however, to pick only positive, supportive people who truly want you to succeed.
•
Set aside several hours—a full day, if possible—to work on your statement.
Mission statements are short—typically more than one sentence but rarely exceeding a page. Still, writing one is not a short process. It takes time to come up with language that simultaneously describes an organization’s heart and soul and serves as an inspirational beacon to everyone involved in the business. Large corporations often spend an entire weekend crafting a statement.
•
Plan a date.
Set aside time to meet with the people who’ll be helping you. Write a list of topics to discuss or think about. Find a quiet, comfortable place away from phones and interruptions.
•
Be prepared.
If you have several people involved, be equipped with refreshments, extra lists of topics, paper and pencils. Because not everyone understands what a mission statement is about, explain its meaning and purpose before you begin.
•
Brainstorm.
Consider every idea, no matter how silly it sounds. Stimulate ideas by looking at sample mission statements and thinking about or discussing the 10 questions starting on page 84. If you’re working with a group, use a flip chart to record responses so everyone can see them. Once you’ve finished brainstorming, ask everyone to write individual mission statements for your business. Read the statements, select the best bits and pieces, and fit them together.
•
Use “radiant words.”
Once you have the basic idea in writing, polish the language of your mission statement. “Every word counts,” says Abrams. The statement should create dynamic, visual images and inspire action. Use offbeat, colorful verbs and adjectives to spice up your statement. Don’t hesitate to drop in words like “kaleidoscope,” “sizzle,” “cheer,” “outrageous” and “marvel” to add zest. If you want customers to “boast” about your goods and services, say so—along with the reasons why. Some businesses include a glossary that defines the terms used in the statement.
 
TIP
 
Once you’ve drafted your mission statement, you should periodically review and possibly revise it to make sure it accurately reflects your goals as your company and the business and economic climates evolve. To do this, simply ask yourself if the statement still correctly describes what you’re doing.
Once your mission statement is complete, start spreading the word! You need to convey your mission statement to others inside and outside the business to tell everyone you know where you are going and why. Post it in your office, where you, employees and visitors can see it every day. Print it on company materials, such as your brochures and your business plan or even on the back of your business cards.
When you’re launching a new business, you can’t afford to lose sight of your objectives. By always keeping your mission statement in front of you, you’ll keep your goals in mind—and ensure smooth sailing.
chapter 7
 
IF YOU BUILD IT, WILL THEY COME?
 
Conducting Market Research
 
 
 
 
 
S
o you have a great idea for a product—something that’s bound to capture the hearts and minds (and wallets) of consumers everywhere. Or perhaps you have stumbled on a service that isn’t being offered by anyone else—one that is desperately needed. This is your opportunity! Don’t hesitate ... don’t look back ... jump right into it and ...
Wait! Before you shift into high gear, you must determine whether there really is a market for your product or service. Not only that, you need to ascertain what—if any—fine-tuning is needed. Quite simply, you must conduct market research.
Many business owners neglect this crucial step in product development for the sole reason that they don’t want to hear any negative feedback. They are convinced their product or service is perfect just the way it is, and they don’t want to risk tampering with it.
Other entrepreneurs bypass market research because they fear it will be too expensive. With all the other startup costs you’re facing, it’s not easy to justify spending money on research that will only prove what you knew all along: Your product is a winner.
“There’s only one
boss—the customer.”
-SAM WALTON, FOUNDER
OF WALMART
 
 
GOOD QUESTION
 
W
hether you hire a professional market research firm or take on the task yourself, your market research should clearly answer the following questions:
• Who will buy my product or service?
• Why will they buy it?
• Where will they buy it—specialty shops, department stores, mail order?
• What do I need to charge to make a healthy profit?
• What products or services will mine be competing with?
• Am I positioning my product or service correctly? (In other words, if there’s a lot of competition, look for a specialized market niche.)
• What government regulations will my product or service be subject to?
 
Regardless of the reason, failing to do market research can amount to a death sentence for your product. “A lot of companies skim over the important background information because they’re so interested in getting their product to market,” says Donna Barson, president and owner of Barson Marketing Inc., a marketing, advertising and public relations consulting firm. “But the companies that do the best are the ones that do their homework.”
Consider market research an investment in your future. If you make the necessary adjustments to your product or service now, you’ll save money in the long run.
What It Is, What It Does
 
What exactly is market research? Simply put, it’s a way of collecting information you can use to solve or avoid marketing problems. Good market research gives you the data you need to develop a marketing plan that really works for you. It enables you to identify the specific segments within a market that you want to target and to create an identity for your product or service that separates it from your competitors. Market research can also help you choose the best geographic location in which to launch your new business.
Before you start your market research, it’s a good idea to meet with a consultant, talk to a business or marketing professor at a local college or university, or contact your local SBA district office. These sources can offer guidance and help you with the first step in market research: deciding exactly what information you need to gather.
As a rule of thumb, market research should provide you with information about three critical areas: the industry, the consumer and the competition.
1.
Industry information
. In researching the industry, look for the latest trends. Compare the statistics and growth in the industry. What areas of the industry appear to be expanding, and what areas are declining? Is the industry catering to new types of customers? What technological developments are affecting the industry? How can you use them to your advantage? A thriving, stable industry is key; you don’t want to start a new business in a field that is on the decline.
 
TIP
 
When doing any type of survey, whether it is a focus group, a questionnaire or a phone survey, pay attention to customers who complain or give you negative feedback. You don’t need to worry about the customers who love your product or service, but the ones who tell you where you’re going wrong provide valuable information to help you improve.
2.
Consumer close-up
. On the consumer side, your market research should begin with a market survey. A thorough market survey will help you make a reasonable sales forecast for your new business. To do a market survey, you first need to determine the market limits or physical boundaries of the area to which your business sells. Next, study the spending characteristics of the population within this location.
Estimate the location’s purchasing power, based on its percapita income, its median income level, the unemployment rate, population and other demographic factors. Determine the current sales volume in the area for the type of product or service you will sell.
Finally, estimate how much of the total sales volume you can reasonably obtain. (This last step is extremely important. Opening your new business in a given community won’t necessarily generate additional business volume; it may simply redistribute the business that’s already there.)
3.
Competition close-up
. Based on a combination of industry research and consumer research, a clearer picture of your competition will emerge. Do not underestimate the number of competitors out there. Keep an eye out for potential future competitors as well as current ones.
Examine the number of competitors on a local and, if relevant, national scale. Study their strategies and operations. Your analysis should supply a clear picture of potential threats, opportunities, and the weaknesses and strengths of the competition facing your new business.
When looking at the competition, try to see what trends have been established in the industry and whether there’s an opportunity or advantage for your business. Use the library, the internet and other secondary research sources described later in this chapter to research competitors. Read as many articles as you can on the companies you will be competing with. If you are researching publicly owned companies, contact them and obtain copies of their annual reports. These often show not only how successful a company is, but also what products or services it plans to emphasize in the future.
KNOW THY ENEMY
 
T
here are two ways to define competitors. One is by strategic groups—competitors who use similar marketing strategies, sell similar products or have similar skills. Under this definition, you might group Toyota and Nissan as competitors within the car industry.
 
 
The second, less obvious way to group competitors is by customer—how strongly do they compete for the same customers’ dollar? Using this method gives you a wider view of your competitors and the challenges they could pose to your new business.
 
Suppose you’re considering opening a family entertainment center. If there are no other family entertainment centers in the area, you might think you have no competitors. Wrong! Any type of business that competes for customers’ leisure time and entertainment dollars is a competitor. That means children’s play centers, amusement parks and arcades are all your competitors. So are businesses that, on the surface, don’t appear similar, like movie theaters, bookstores and shopping malls. You could even face competition from nonprofit entities, like public parks, libraries and beaches. In short, anything that families might do in their leisure time is your “competition.”
 
Don’t limit yourself to the obvious definitions of competition. Start thinking out of the box ... and you will be less likely to get sideswiped by an unexpected competitor.

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