What should I sell? Quickly, right off the bat, most people reply, “Sell what you love.” But the quickest answer is not the best answer. You should sell what people want to buy. Sell what people are desperate to own. Sell what they will buy regardless of cost. Sell something to solve a serious problem. Sell what people can’t resist buying. Sell what people crave.

Is there such a product? There are many products and services like these. When you are sick, medical services are an urgent necessity. When your car dies on you, replacing it is an immediate preoccupation. For your first prom, nothing is more important than the perfect outfit. If your roof leaks,you’ll be in the market for a roofer.

Do you need ideas about what to sell or what service to provide? Browsethe telephone yellow pages for ideas. Look at what’s selling on eBay. Read thenewspapers and the Internet business news. Watch the businesses in yourneighborhood. Which ones are expanding and which ones are closing their doors?Study franchise businesses for clues to what succeeds. Then consider your ownexperience, skills, knowledge, contacts and interest.

MarketAnalysis for a Small Business Startup

Analyze the Market. Talk to people in your target market, either informally orwith a scientific marketing research program. Who will use your product orservice? Will you sell wholesale or retail? How old are your customers? Arethey male or female? What is their income level? Where do they live? What’s thebest way to reach them?

Analyze the Marketplace. Who are your competitors? What are theyselling? Where are they selling it? How do they sell? Are they making money inthe business? What is the advantage or edge their business has? Is there roomfor your product in the marketplace, or is it already too crowded? Is there anunmet demand that you can fill? Contact professional associations and tradegroups to find people who are already in the business and talk to them.

BusinessAnalysis for a Small Business Startup

Analyze Your Business. A business plan will help get you on track. How much doesit cost to provide your product or service? Can you price your product to coverits costs? Can you buy the produce wholesale and resell it? Will youmanufacture it in house or using a contract manufacturer? What are the costs ofmaterials, labor, overhead, storage, shipping, and packaging for your product?What suppliers will you use for raw materials and services? Is labor easilyavailable with the required skills for the business? Are supplies readilyavailable? Will you use outside distributors or in-house salespeople to sellyour products? Can you draw on the advice and experience of others? Do youalready have experience in the field?

FinancialAnalysis for a Small Business Startup

Analyze the Finances. With many businesses, you can start out small and learnwhile you grow. Others businesses require an immediate large-scale commitmentof capital and resources. Do you have enough money to support yourself duringthe startup? Will you keep your day job in the meantime?

Create a spreadsheet for your business with expected sales, costs andprofit month by month. A spreadsheet of cash flows from the business will beuseful to show how much additional investment the business will require. As thebusiness grows, will it generate enough cash for the expansion? Will youreinvest the profits in the business for more equipment, inventory andadvertising? How much capital will you raise by borrowing and how much capitalwill you raise by selling an interest in the business? Where will you getadditional money, from friends and family, the local bank, venture capitalists?Will you ask for extended terms from suppliers? Will your customers pay at thetime of the sale, or will you carry accounts receivable? Will you factor yourreceivables? How many units must be sold every day, week and month to cover thecosts of the business? Will you sell by catalog, telemarketing, Internet store,bricks and mortar store, outside sales force, wholesalers?

Risk Analysis for a Small Business Startup

Analyze the Risks. Will the product be salable two years from now, or will interest die out quickly. Can others copy your product easily and compete against you in your market? Is your product safe to use and well-designed? Will changes in technology affect your product? Do others own trademarks or patentsfor similar products? Will you be locked into using one supplier or one wholesaler for any reason? Will you rely on a few customers for most of your business? How will economic changes affect your business? Is it easy to buy more inventory? Are prices for raw materials stable, or fluctuating? Is creditfreely available? If sales aren’t as good as expected, what is your contingencyplan? How does inflation affect your business plan? Does your product need tobe updated frequently? Are your competitors making money? Are your competitors consolidating into a few big-name or big-box companies? Are friends and family enthusiastic about the idea, or must you go it alone?

Success Story for a Small Business Start up