Where in the world do I start??

opieopie Posts: 15subscriber
edited November 2006 in Business Planning
You know how everyone says if you love what you do, you never work a day in your life?  Well, I have found something I love to do, something I create, that I would love to get into high-end children`s stores.  This is something beautiful, that I know will sell well.  I have shown them to girls of all ages, and they all love them and have asked their moms to buy them one. 
Here is my question - I know nothing about what I need to do to get my business off the ground.  Where do I start, and what do I need to do from there?  Right now I am in the stage where I`m making enough to actually sell, and I`m thinking of my company name.  Do I need a business liscence, and if so, how do I go about getting one, and what would one cost (cost is currently an issue).  Any and all info would be greatly appreciated.  Also, if anyone can think of a helpful book on the subject of starting a business such as mine, that would be fabulous.  Thanks!opie2006-11-26 7:45:51

Comments

  • stevesteve Posts: 14subscriber
    A good starting point is the 10 Steps to Open For Business. I presume you want to take this beyond a home craft business.

    There are lots of things to consider pretty much all at once. Other
    people will surely bring up those I miss. The first thing that crossed
    my mind is liability and risk. I have no idea what you`re making but
    every product involves some risk. What would happen if your young
    customer`s baby sister got her hands on your product? Incorporation, or
    an LLC along with insurance need to be high on your list of priorities.


    Putting together a startup business is like building a house of cards.
    If you`re careful you can build a beautiful thing. If you`re careless
    it can all come tumbling down at any time.

    How long can you make these products yourself? When you exceed that
    level you`ll have to pay someone else to make them or hire people
    yourself and setup a factory or cottage industry network. The price you
    set today needs to be high enough to absorb that cost when it comes.
    Besides the product cost you also need to consider costs of packaging,
    marketing, distribution (more than one level?), and retail markup. I`m
    not trying to discourage you; just trying to make sure you`re going
    into this with your eyes wide open. There are more hidden costs than
    you can even imagine. Include your own labor to make and sell at fair
    market rates plus taxes, workers comp, etc. Don`t forget to include
    your own profit in the equation. If you`re not going to make a profit,
    why bother?

    Only after including all these expenses can you arrive at a retail
    price to begin market testing. Also, people saying "I would buy that
    for $$$" is not market testing. People (who don`t know you personally)
    actually laying out $$$ in exchange for your product is real market
    research. Only then do you know what people will pay. Rent a kiosk at a
    mall to gauge interest.

    Aside from all that, it`s a piece of cake.


    Don`t forget, if you do this right, this will be the first of many
    products you make. Don`t worry; the rest will come with time. A totally
    different business, but listen to Sarah Blakely`s story of starting up. Before starting up I listened to every radio show in the StartupNation archives several times. Time very well spent.

    This may or may not be what you were looking for. I speak from my own
    experience, in the middle of a start-up, about to go full time, working
    along side my wife as equal partners and having the time of our life
    with our latest excellent adventure.
  • williamwilliam Posts: 2subscriber
    You know how everyone says if you love what you do, you never work a day in your life?  Well, I have found something I love to do, something I create, that I would love to get into high-end children`s stores.  This is something beautiful, that I know will sell well.  I have shown them to girls of all ages, and they all love them and have asked their moms to buy them one. 
    Here is my question - I know nothing about what I need to do to get my business off the ground.  Where do I start, and what do I need to do from there?  Right now I am in the stage where I`m making enough to actually sell, and I`m thinking of my company name.  Do I need a business liscence, and if so, how do I go about getting one, and what would one cost (cost is currently an issue).  Any and all info would be greatly appreciated.  Also, if anyone can think of a helpful book on the subject of starting a business such as mine, that would be fabulous.  Thanks!The sba.com, firstgov.gov and entrepreneur.com provide outstanding information and plenty of training resources.  Good luck.
  • stevesteve Posts: 14subscriber
    But if they had tested their ideas, products or services before
    spending thousand or wasting time, they would have found the idea was
    no good to begin with.No bash here. I could not agree more.

    Meatloaf Cake? Cartess, stop, you`re killing me!
    Steve2006-11-26 14:53:14
  • opieopie Posts: 15subscriber
    Okay, pardon my ignorance, but does a warning on the label protect you from a lawsuit?  The product I create is quite difficult to break, but there are small beads on this product, and say worst case scenario, little sibling gets a hold of it and with the strength of 100 men breaks it and chokes on a bead.  I would have a warning on the label that says it is not intended for children 3 or under, and to wear responsibly.  Is that any kind of legal protection, that you provided warning?  Like I say, I am completely new to all of this, and have about a gazillion questions that to you probably seem like no-brainers, but I freely admit I know basically nothing here and have MUCH learning to do.  Does anyone here know about legal aspects of business?  opie2006-11-27 7:0:30
  • stevesteve Posts: 14subscriber
    Opie, no such thing as a "no brainer". We`re all learning as we go
    along. Some learn by watching others, some have to experience the pain
    themselves. This is a good place to get a gazillion questions answered.

    As for the value of a label, that`s the kind of thing you need to ask your own attorney.

    I wasn`t trying to scare or discourage you, just to raise some
    questions you might not have thought of yet and to make sure you
    include all types of expenses in your business plan calculations.

    Good luck.
  • opieopie Posts: 15subscriber
    Okay, if there are no no brainers, then I have another question (boy, are you going to get sick of me!)  Why would I not be able to just get my website up, with photos of my lovely items, contact the stores and give them my sales pitch, "You simply cannot live without these, customers will flock from near and far to purchase them, this is my wholesale price, you could most certainly double it," etc.  I would have insurance to protect me from potential lawsuits, but does this really have to be as complicated as some of you imply?  LLC, for instance.  I assume that is some kind of corporation, but why is it important to me?  I would just like to keep things as simple and as inexpensive as possible, but I need to know if this really can be simple and inexpensive before I really pursue this further.  In the end, I just want to make my items and sell them to stores.  opie2006-11-27 8:25:17
  • txbassguytxbassguy Posts: 0subscriber
    a few ideas, suggestions, etc.I would certainly get your website up and start promoting it everywhere. It would be tough to get into stores. The problem would be finding the buyer responsible for products. Not sure which stores you`d be trying to get into, but you could try smaller stores local in your area.Would the items be made by you in your home, by someone else, etc. What about shipping costs, distribution costs, marketing costs, the store will also want to know what you`ll do to help promote the product in the store - posters, signs, etc.LLC is a limited liability company and provides protection and limited liability. The owners assets are separate from the business. More info can be found on the web.my 2cents
  • stevesteve Posts: 14subscriber
    Check out step four for benefits of each type of structure. 
  • BlakemanBlakeman Posts: 1subscriber
    My three cents.  Keep it simple - you`re on the right track.  Almost ALL business models are built for and by big business, and then small business adopts them because they think it`s the only way, and we get buried in trying to mimic what we think is good business practices (for a Fortune 5000 company).    Spend time  ONLY on a very few critical success factors:1)The purpose of a business is to acquire and retain customers.  There is no other purpose.  Your first step should be to see if you can acquire customers.  You love your product, and maybe so do some people who you`ve showed it to.  But can you get someone to buy it?  90+% of the Big Business Plan is trying to get you to figure out what the depreciation on a water cooler will be five years from now.  It won`t matter if you can`t sell your product easily without doing it yourself (if it only sells when you personally sell it then they are buying you, not your product - other people won`t be able to sell it - can somebody besides you sell it easily?).2) The purpose of a business is to acquire and retain customers.  There is no other purpose.  Your second step should be to figure out how you can get repeat business - retaining loyal customers.  The Big Business Plan will only give you theories and possibilities as to how other folks are doing with something similar.  Get a customer, then see if they buy again, and ask them why they bought again.  Get a couple more and see if you can find a simple pattern of why people come back for more.  If you see a clear pattern emerging (the product is unique, you`re easy to buy from, the price is right, it is shipped quickly, etc.), now you have something you can replicate and build on to retain customers.3) The purpose of owning a business (different than the purpose of a business itself) is to create the lifestyle we want for ourselves and our family.  If you can find customers and then retain them, can you find a way to manufacture this product that doesn`t cost you your life doing it yourself or managing others who do it?  If not, your dream will become a millstone around your neck.4) Forget revenue projections - they are meaningless.  Focus only on profit projections.  The polish sausage vendor buys his sausages for $1.00, sells them for $.99 but feels he`s doing okay because he is selling so many of them he knows he`ll make it up in volume.    If your profit is only theoretically available down the road, chances are you won`t every see any.  Plans that take two-three years (or even one) to become profitable are REALLY high risk.  And a lot of times they only take that long to become profitable because the Big Business Plan tells them to spend all kinds of money up front on fancy websites, brick/mortar, expensive advertising, infrastructure and other things only big businesses can afford.   Can you be profitable, and how quickly?  (A friend of mine actually cut a customer`s revenue from $850,000 a year to $300,000 a year and increased their profit from $35,000 a year to over $150,000 a year - profit matters, revenue doesn`t).5) Forget advertising and marketing until you have money to burn.  Instead, find gatekeepers.  These are the people who know how to get your product into the stores, catalogs, and websites so you can make money.    Let those stores, catalogs, and websites be your advertising for now.  It`s a lot less expensive for you to make 100 phone calls and 25 visits to coffee shops to meet people than to do some advertising.  And it will be a lot more effective.  Many of us hide behind marketing because we don`t want to do the hard work to build our business, so we throw money at mailboxes and hope we can sit and watch the cash flow back in.  Do the hard work to find the gatekeepers.6) Do the Ten Steps to start a business that these guys promote on this site (no I`m not advertising for them, I just stumbled onto this site a month ago).  I went through them and found them very effective.  FYI - If it takes you more than 10-60 work hours to complete the whole thing, you`re likely building the Big Business Plan that you only need for Step 8 below.7) If you need funding, don`t go to the bank or the SBA - they only fund businesses that don`t need money.  Find an angel or some other investor (after you`ve proven it will sell and you can build a loyal customer base it won`t be hard).  Find one who will accept a better than average interest rate (don`t give away ownership) - guarantee the loan with your personal assets (after all, you`ve already proven it works).8) If you`re only recourse is to borrow money from a bank or the SBA, ignore the seven steps above, then spend countless agonizing hours putting together an excruciatingly (thick) detailed business plan and hope they don`t turn you down because you don`t already have all the assets in your business to more than cover the loan.If you can 1) sell your product and 2) retain repeat buyers 3) for a profit, then all the rest of it starts to matter (websites, incorporation, bank relationships, 3 year projections, etc.)    Until you can acquire and retain customers for a profit, the rest of it is just a lot of hard office work.Be profitable!Chuck
  • edobedoedobedo Posts: 0subscriber
    I agree. Find out if you can make money with your product first. Everybody has great ideas-but will they sell? When you get ready to find stores to sell your product, contact me. I built a small website for a high-end baby/kids store in Jacksonville, and I will give them your contact information!
  • jmcauljmcaul Posts: 1subscriber
    A freind of mine is assisting her daughter with a process like this. The daughter has designed a high end piece of baby gear. She found a regional manufacturer to make 50 pieces. Now she is shopping it around to specialty (high-end) baby boutiques in the area. She also somehow landed a meeting with the buyer for the Nordstrom baby department (they are headquartered nearby).
    You should have a local/regional parents type magazine. Upscale specialty shops usually advertise in these as they are aimed towards more affluent parents. Hope this helps.
  • jmcauljmcaul Posts: 1subscriber
    One more idea: once you have located local specialty retailers, depending on your budget, you could offer to split the cost of a display ad (approx. 3"x5")running in the local parents magazine/newspaper with them. Your display ad would of course be for your product, but would include something like: "Now available at such-and-such store". Offering to help defray the cost of advertising that will help them get more customers in the door could be your ticket to getting your item on their shelves.
  • opieopie Posts: 15subscriber
    Okay.  So how does this sound?  I get insurance (how do I know how much I need, by the way?), I trademark the business name, I get a website up and going.  Will I then be ready to start contacting businesses?  What else am I forgetting? 
    By the way, I just wanted to thank all of you who are taking the time to answer my questions.  It is very much appreciated - every one of you.  I`m lucky to have found a site with such intelligent, successful people.  Thanks!
  • stevesteve Posts: 14subscriber
    Some people start small and want to stay small. There`s nothing wrong
    with that. It`s just not what I want. I`m starting small with a clear
    (to me) path to big. Of course I feel like I walked into a once in a
    lifetime opportunity. That doesn`t hurt either. I think it ties in with
    what we`re reading in the book club.
  • newbiesecuritynewbiesecurity Posts: 1subscriber
    I don`t believe I have seen this resource mentioned on this particular thread, but checkout http://www.score.org  You can search for a business counselor with experience in the area that you are interested.Good luck!
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