Choose Your Business, Product or Service
By: Source: AARP.org Date Posted: 2004-06-14 10:39:48
A business is all about selling. Of course, we think. What else would a business be about?
As we focus on our great business idea, though, we may forget to think enough about marketability and selling. We need to choose a product or service that people will buy.
In our past jobs, the relationship between our work and selling may have been indirect. Even if we worked in a small business, someone else may have been responsible for finding and dealing with customers. Other people may have handled finances.
In nonprofit organizations, someone funds the organization to provide services to clients. But we may not think to use sales language to describe those services.
As you choose a product or service to sell, think through two key questions.
- How familiar are you with what you will sell, and how will you learn more about it?
- Who will you sell to?
Your answers will help you get ready to explore selling methods, write a business plan, and get started.
How Familiar Are You With What You Will Sell?
Thinking through this question will help you decide how to divide your time - between learning about your service or product and learning about operating a business.
There are three kinds of products or services to sell in your business.
- You can sell something that you have done in previous jobs.
Service example: You are a retired heating and air-conditioning repairperson. You sell your expertise on an on-call basis, as an independent contractor, to local heating businesses. They sometimes need extra help responding to customer calls. Or, you produced newsletters at your job. When you leave, you set up desktop publishing equipment and software at home. You get contracts to produce newsletters for local businesses.
Product example: You have a wholesale contact with a company that sells herbal supplements. For years now, as a side job, you've bought these wholesale and sold them retail to your friends and coworkers. You already know a lot about the products.
Tip You're familiar with the service or product for your new business. You have to keep learning what's new, of course. But you don't need to learn from scratch about what you will sell. You can invest most of your preparation time in learning how to operate or expand your business. - You can sell something related to a hobby.
Service example: You enjoy refinishing wood furniture for your family. You're good at it. After you retire, neighbors and friends keep asking if you have time to refinish their furniture. Or, you've studied meditation and taken a lot of aerobic exercise classes. You have an idea for turning these interests into an anti-stress workshop.
Product example: You create hand-made lotion from natural ingredients. Every time you give some as a gift, someone asks if you ever sell your lotion.
Tip You know how to make your product or do your service. But you haven't sold what you make or do. What changes will you need to make in order to earn money from what you make or do? You'll have to spend some time on making your product or service suitable for sale. But you'll spend most of your preparation time learning about business operations. - You can sell something not related to your previous work or hobbies. This can be an idea you've been curious about, something new that grabs your attention, or a franchise business.
Service example: You organize your mother's move into assisted living. You meet other families whose parents' moves are difficult. You think they could hire you to make it easier. Or, you meet someone who bought a franchise for a small photocopy and printing business. Their first year was a great success. You're fascinated.
Product example: You and your neighbor get outdoor lighting installed along a dark sidewalk between your houses. You discover that the business you hire is a franchise. The more you talk, the more interested you are in such a business for yourself.
Tip You'll need to find out everything you can about the new service or product. And you need to learn all about business operations. Plan for a lot of preparation time to learn both.
Who Will You Sell To?
What kind of customers do you have in mind? There are many ways to describe your target buyers. Before you go deeper, though, know which of these two categories your customers fit into:
- You can sell your product or service directly to "end users" - the last people in the buying and selling chain. For example, co-workers who buy the herbal supplements that you sell are end users. So are people who sign up for your anti-stress workshop when you advertise it.
- Or you can sell your product or service to someone else in the buying and selling chain. This could be someone who does sell directly to the end user. For example, you sell your lotion to local stores. They, in turn, sell to the end user. You sell your furnace repair expertise to local heating companies, who sell repair services to end users. You sell your anti-stress workshop to employers, who then offer it to their employees, the end users.
Once you know what kind of customer you want, you'll be able to figure out their needs. Only than can you show your customers how buying from you will meet their needs.
The difference in approaching an end user or another type of customer can be subtle. But it's essential to tailor your approach. For example, if you sell your lotion directly to end users, you'll emphasize how their skin will feel different if they use the lotion. But say you sell the lotion to local stores. Then, you'll focus on how displaying this luxury product will draw in customers with money to spend.
Say you sell your furnace repair expertise to local heating companies. Of course, you'll give evidence of the results of your work - like furnace problems diagnosed and repaired right. But you'll focus on how you can help solve the problems of the business you are selling to. For example, you are available with one-hour notice to the heating businesses, or 24 hours a day.
Additional Resources
Deciding on a Business
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SCORE - Counselors to American's Small Business
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Home Business Magazine Online
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Beware of Business Opportunity Scams
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