So You Want to Start a Business Series – What Are You Selling?

What Are You Selling?

This post is part of the “So You Want to Start a Business” series featuring blog posts aimed at helping the complete novice start their own business. This week’s blog post focuses on product-oriented questions to answer before starting your business. 

A couple weeks ago, I asked you to sit down and answer a series of questions about starting your own business. This week, we are going to look more closely at the product (or service!) you want to offer and what you should consider before starting your business.

What problem are you solving?

This is considered one of the most important questions to ask yourself before starting a business. A lot of people have ideas – some of which are hilarious, creative, or ingenious – but people only buy into ideas if the product or service solves a problem.

This might be an unpopular opinion, but I think the more important question is what follows: why is your product the best way to solve that problem?

Ask yourself what the world (or environment, community, marketplace, etc.) would look like if you solved the problem. For example, a problem might be that customers believe pizza takes too long to be delivered. One solution might be faster delivery. Another solution might involve adjusting customer expectations for pizza delivery. A third solution might be to distract customers altogether (with an in-app interactive activity, for example).

Keep in mind that when you are answering this question, you don’t have to solve a problem in a way that is novel to the industry. After all, this is how healthy competition develops in any industry.

What do you need to create your product or service?

What items or skills do you absolutely need to start your business? If you are creating a product, what is the cost of materials? If you are offering a service, will you need to physically appear (e.g. electrical work on a residential home, or a landscape designer)? If so, do you need to factor in the cost of tools, transportation, etc.? If you are offering a remote service that requires software (e.g. photoshop), do you need to pay for the cost of software upfront or annually?

Do you need to rent space to create your product, or can you do it in your kitchen or workshop? How much does it cost to set up at a farmer’s market? Can you partner with a local small business to sell your products in their store? If you are predominantly selling online, should you use Etsy or Shopify as a platform for your online store? Are there any upfront costs associated with the online platform you choose?

If you find that you have a great idea or product in mind, but you have nothing of what you need to get started, you may need to ask yourself additional questions. Where can you obtain the items you need to get started? Can you purchase any of those items wholesale or at a discount (e.g. secondhand on Craigslist or eBay, or at a thrift store)? If you are offering a service – do you need to have a portfolio available of similar work or projects you have completed?

What does your product/service cost?

If you are selling a product to a customer, this is your opportunity to assess everything you listed in the previous question, research prices, and breakdown the cost per item.

If you are selling a service to a customer, this is where you may need to think more broadly about what the end “cost” is. Not only should you factor in flat costs like the cost of software or a trade license, but you should estimate the cost of your time. With respect to service-based businesses, it can be hard to draw the line between direct costs (e.g. direct labor or materials) and indirect, tangential costs (e.g. marketing, gas/mileage, equipment maintenance, or insurance). You should also consider whether you will charge per project if you are confident about the amount of time it will take you to complete a project. If you aren’t confident, or if there are too many variables involved in your service, you may want to charge hourly.

How will you market your product/service?

In the pre-internet era, marketing your products or services may have looked like physical storefront on Main Street, ads on the radio, and putting a blurb in the community newspaper. Nowadays, there are endless platforms on which you can advertise your business. Some are free (e.g. social media), some have different cost tiers (e.g. websites), and some have a higher upfront cost (e.g. storefront).

One helpful factor that can help you determine how best to market your product or services is knowing your target demographic – what does your ideal customer look like? I will address this topic in greater detail in next week’s blog post. However, if you start with your target audience and work backward from that, you may find creative ways to market your product or service effectively.

If you don’t know what your target audience looks like, think about what your goals for your business look like. Last week’s blog post asked you to describe your business goals. This is one area where the goals you set can help you narrow down the best ways to market your goods or services. If your goal is to be active on all major social media platforms, then that is where you want to focus your advertising efforts. If your goal is to have your product sold in all major retailers, then you may want to consider what other strategies you need to employ to help you get there.

What are other similar products/services on the market?

Entirely brand-new ideas are incredibly rare. This is why game changers like UberEats, Birchbox, and Kickstarter are such well-known names even outside of their respective industries. What most entrepreneurs will find is that their idea, while not entirely “new,” provides a unique enough quality to differentiate itself from what competitors can offer.

Make a list of similar products of services that will function are competitors to your own. What is their price point? What value are they offering to the consumer? Are they serving the same or a similar customer base? If your competitor is successful – what are they doing right? More importantly, can you capitalize on areas where your competition is falling short? What do customer reviews say?

While this question isn’t meant to prompt a full competitive analysis of every similar business in your industry, it is meant to help you see where there is room for your own business and how you can learn from their successes (and mistakes!).

If You Still Have Questions

If you still find yourself struggling to answer some of these questions, then your next step is to schedule a consultation. I’m here to help you, every step of the way. Next week, we will tackle the questions you need to be answering about your business or industry.

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