Startup Hookup Part II

If starting a business were like playing Dominoes, studying long would be studying wrong. Fortunately, it’s not. If you are going to start a business, you have to hit the books. We’ve already covered the Dream Phase where you let your mind run free. Creativity and ‘outside the box’ thinking were the topics of choice. Don’t lose those. Simply put them in your back pocket. To win the game, you have to know all the rules and opponents while executing a strategy to come out on top.

Is Starting a Business Like Playing Dominoes?

Research the Industry

There are a number of resources you can utilize to analyze the specific industry you are considering entering. The North American Industry Classification System (NAICS) classifies and compiles statistics for every industry in North America. This Census Bureau related organization should be the starting point for your research. Other business research organizations include Dun & Bradstreet and Hoovers.

Many businesses now have national trade organizations that help disseminate information to its members and provide resources for the members to grow. For example, if you were interested in starting a deli, you could contact the National Restaurant Association. If you had dreams of starting an electrical company, you would contact the National Electrical Contractors Association. You can pretty much put “National” in front of any industry, Google it, and you will be taken to the home page of that organization.

Competitors

What better way to get on the ground info on potential competitors than to get on the ground? Visit their websites, talk to people who use their products, and look up their records with the Better Business Bureau. If they are a retail organization, go to their store. If they manufacture products, then buy those products. This will help you see how they do business and, more importantly, how you can do it better!

Potential Partnerships

Get to know those potential partners that are upstream and downstream from you. In Laymens terms, know who is supplying and distributing your goods/services. If you are a potential clothing designer, know who produces the best fabrics and know where you want to have your clothes sold. The better you know their industries, the more leverage you have in negotiating prices. Ya dig?

Someone that has been or is currently in business

The best way to get info is straight from the horse’s mouth. If you do not have any contacts in the area of your choice, speak to someone at your local Chamber of Commerce. There are usually mentor programs set up with old sages that can give you the rundown on every industry.

Your banker

Chances are, the business lender at your bank has seen it all when it comes to possible business ideas. The Good, the Bad and Definitely the Ugly. It is key to develop a relationship with your banker. They can give you tips/advice and more importantly, they hold the keys to unlocking the doors to finances. A good portion of business loan underwriting is objective, but there are subjective issues that come into play. It can’t hurt your chances of getting a loan if your banker sees you as completely informed of the industry and demonstrating a zeal to be the best at it.

Be on the lookout for the next chapter: Compiling a Business Plan

Editor’s Note: This is a guest post from the folks over at MoLifeney. For more info check out www.molifeney.com.