No matter how much you learn about starting a business, there's really only one factor that will make or break the enterprise: Your passion to do it. You need to love what you do.
Next, be realistic. "Whatever your pro forma business plan says, everything will take longer and cost more than you thought," says entrepreneur Adrian Grundy, in the pure voice of experience (you'll hear more about that below).
You must be clear-eyed about how you will get money, how you will spend money and how you will sustain the business plan.
Typically, investors look for three basics:
1. What is your product? Is it viable? Does it exist? Can you sell it?
2. What's your management team? Do you have serious and relevant authority?
3. Is the plan convincing? Can the financial results be achieved?
With that in mind, here's a trio of opportunities sparked by current trends and markets. Take inspiration from the fast-growing businesses profiled here or cherry-pick among these economic trends to form your own plan.
1. Touch customers where they live
In recent years, as telemarketing and cheap e-mail marketing skyrocketed, direct mail suffered something of a dinosaur reputation. But lately, e-mail spam blocks, the Can-Spam Act and Do Not Call registries, as well as consumer worry about online privacy, have re-focused attention on direct mail outlets. As advertisers revert to the tried-and-true, the $55 billion direct mail marketing industry is seeing a growth spurt.
That's certainly the case at Money Mailer. Headquartered in Garden Grove, Calif., and founded in 1979, Money Mailer franchise operations send out large-sized envelopes filled with local retail, restaurant and professional services ads and offers to consumer homes, mostly in suburban areas. "We now have 300 franchises in 35 states," says Jeffrey Loudin, Money Mailer's eastern regional manager. "A typical franchise has five zones with 10,000 homes each or a reach of 50,000 residences."
Now in his mid-40s, Loudin began as a franchisee in the Philadelphia area at age 30. In 2003, he joined the corporate staff, selling his several Money Mailer franchises for, he says, a whopping 800% return. "It's a great business because you have no overhead, no inventory, no storefront. It also gave me a great lifestyle," he continues. "I never missed any of my son or daughter's activities while they were growing up."
Money Mailer says you need an initial capital investment of $55,000. It supports owners with sales training and production services. "If you work hard, average income can reach about $115,000 a year," says Loudin.
If direct mail interests you, mailer franchising is only one option. Consider opportunities all along the route from concept to consumer mailbox, including design services, market research, copywriting, selling, printing, distribution and so on. To help you focus, try a marketing course at a community college or business school or set up a free appointment with an advisor at one of the SBA's Small Business Development Centers.
2. Feed the need for health and nutrition
Why eat only to ease hunger when you can multi-task? Now, you can choose "functional foods" that also keep you healthy.
These are foods and drinks fortified with vitamins, minerals or other nutritional components to provide proven health benefits or reduced risks of chronic diseases. Old examples were "calcium-enriched" bread. Nouveau versions are way more fashion forward. For example, New York company Glaceau, founded in 1995, has racked up millions selling flavored fitness waters.
Increased awareness of the link between health and good nutrition, plus the aging population and frightful rise in healthcare costs are driving explosive growth in healthy foods and beverages. Functional foods and "nutraceuticals," or nutritional components in dosage form, now account for $72 billion of the global $192 billion nutrition industry, according to the "Nutrition Business Journal," a trade publication.
At Woodstock Water Buffalo, based in Vermont, Adrian Grundy began by making domestic buffalo milk mozzarella. Buffalo milk has higher calcium and protein as well as lower cholesterol than cow milk and has traditionally been used by Italian cheese makers. So from the start, at least by American standards, Grundy was producing a "functional food." Along the way, he and majority partner David Muller also began producing buffalo milk yogurt. The company marketed its products by touting the milk's special benefits via word of mouth and boutique advertising and media stories.
Woodstock Water Buffalo really got on the map after the Whole Foods chain began stocking its yogurt. "With food distribution, you need to get into a well recognized and well respected retailer early," says Grundy, citing triple digit annual growth for the yogurt. "Whole Foods was our springboard to national distribution." After two years of planning and negotiations, national distribution of Woodstock yogurt began in 2006.
The newest innovation is a buffalo milk yogurt fortified with Omega-3, a nutrient shown to enhance health at every age, including for babies, pregnant women and seniors. "The uptake of our Omega yogurt is 50% higher than our other products," says Grundy. "It's part of the trend in grab-it-and-go breakfasts that are still healthy."
If you want to get into the healthy food market, Grundy advises:
• Make sure your product has a high degree of value. You need a good margin of profit on such products.
• Reliable, speedy supply chains are critical. If your products don't move off the shelves, distributors will give their refrigerated space to other vendors.
• You must jump through a lot of hoops to get national distribution in place. Be prepared.
• Don't underestimate funding. This is a capital intensive business.
To learn more about the market, check out industry publications, including "Functional Foods & Nutraceuticals" magazine and "Nutritional Business Journal."
3. Advise parents about educating their kids
A tutor broker since 2001, Laurie Hurley is founder of Bright Apple Tutoring Service, based in Ventura County in southern California. She matches qualified tutors with students of any grade or age. By now, she has personally matched over 1,000 students and tutors. Hurley has also launched a consulting business to advise people about how to start their own tutor brokerages.
If you're dismissing this niche as too narrow, better go back to school.
Private tutoring services now generate about $2 billion in annual revenue, according to Eduventures, a Boston researcher that tracks education businesses. That figure doesn't even include the entire test preparation industry. In addition, the No Child Left Behind Act, signed into law in 2002, has earmarked millions of dollars for tutoring services to help states meet the guidelines. So tutoring services can tap into both private and public funding.
Traditional learning centers like Sylvan and Huntington are growing as well, of course. But often, says Hurley, "parents don't want to waste time taking their children back and forth somewhere after school." Plus, learning centers often rely on their own curriculum rather than a student's particular schoolwork or textbooks.
All of that makes in-home tutoring, while more expensive, presumably more time- and cost-effective. "Tutoring in the student's home provides freedom from peer pressure and allows a dedicated, professional tutor to work one-on-one," says Hurley.
"A tutor broker screens all tutors, conducts extensive background and reference checks and can feel comfortable that the tutor selected for their child will be just the right match," says Hurley. She typically charges a commission that's 50% of the tutoring fee. You're also responsible for recruiting clients, marketing the services and keeping on top of paperwork and finances.
Like Hurley, you can recruit a network of in-home tutors among local teachers looking to supplement their income. With so many educational systems shrinking and cutting back, most areas offer a good choice. Or, you can research and then buy one of the home-tutoring franchises that are springing up. Make sure to check out the firms carefully before putting down your dollars.
If you're ready to run your own show, there are lots of funding and advisory services just waiting to help. Just don't forget — love what you do.
Article Resource: http://www.microsoft.com/smallbusiness/
