Setting up your own company

One must make a number of critical choices after one has decided to go into business for oneself. You want to be your own boss, but you have no idea where to start. This question may be approached in two distinct ways, both of which are valid.

Doing Business According to the "Production Model"

The "production model" is a company approach that many of us use when we first start out. Everybody has the ability to do some things, such as cutting hair or preparing meals. We then set out to offer these services. How do we feel about it? What options do I have available to me at this point? Firstly, "What are my talents?" and secondly, "How can I market my talents?" With these abilities, what things can I create? "

In the minds of many, the production model represents the only viable business model available. When Kevin Costner remarked, "If you build it, they will come" in "Field of Dreams," many people felt he was articulating an essential truth. They just alter the word order a little:

People will come to my restaurant if I open it.

As one retailer put it, "If I start making birdhouses, customers will come running."

Neighbors will purchase some if I put up a lemonade stand.

"I'm confident I'll find work if I become an airline pilot."

In general, this is effective. As a result of their education, many people end up becoming dentists, engineers, and teachers, as well as other professionals. Some individuals, however, have a passion for cooking or crafting birdhouses, and as a result, they open restaurants and craft businesses that, by some miracle, are a financial success.

A new business's marketing strategy is complicated, and this is an oversimplification of the process that distorts what really takes place "on the ground."

The number of dentists graduating each year is closely limited to ensure that only a certain number of dentists are able to open their own offices each year.

As examples of businesses that have done well, we may refer to restaurants and birdhouse manufacturers. All the failed restaurants, building projects, and real estate development companies? The proprietors of these establishments presumably had the same level of culinary expertise as the rest of us and took great pleasure in providing food and service to the general public. Despite the fact that they created it, not enough people attended.

"If you build it, they will come" doesn't hold true when it comes to starting a company. There are things we can't change and things we can't see coming. To begin seeking an alternative to the "production model," once we accept this, we are compelled to.

A Case Study from the Real World

Here's an additional illustration to illustrate what I mean. I had a customer who worked in the music industry many years ago, before the internet even existed. Although this firm had been in existence for many years, it was now one of the country's leading publishers of niche music items. Sheet music, children's music, and specialty record albums showcasing a stable of relatively obscure performers were all directed towards the music-in-schools sector.

To meet the needs of the market, this company, like many others, had established a set of "skills" and particular goods and services. Only one issue remained. Since the market had shifted, the business was now in the red. Increasing sales of the company's goods was my responsibility.

Being an "outsider" isn't always a positive thing. When I saw how the marketplace was changing and how sales of the old trusted items were destined to fall rather than rise, I knew the long-term solution to their dilemma lay in creating new products that met the needs of the market as a whole. It was difficult for me to trust in the company's long-term success as a "true believer." I had the impression that we were on the verge of surrendering.

This was, of course, the beginning of the end of our relationship. As I've previously said, my objective was to assist them sell products, not to restructure their business. There is a great deal of difficulty in changing gears in most businesses, and they definitely don't want to hear about it from someone who has no idea what they're talking about. We didn't have access to the account for more than a few months. It was compelled to reduce its workforce by around a quarter of its former size when the previous customer filed bankruptcy a year ago.

In my experience, this isn't out of the ordinary. Many firms, maybe most, have a period of prosperity followed by a period of decline. The point I'm making is that the "production model" ultimately breaks down, and we're left with no choice but to explore other options.

The "marketing model" is the most obvious alternative.

When confronted with these simple truths of commercial life, marketers tend to revert to the dogma they learned in Marketing 101."You must first do a thorough market study to establish what your customers want, and then build items to meet their needs."

To put it another way, the marketing guru (predictably) proposes an inversion of the marketing and manufacturing processes. In order to establish which items are likely to be successful in the market, marketing should be employed before the horse has left the barn. Marketing, not manufacturing, should come first in the production process. Don't be concerned about your lack of experience. It's possible to rent or buy the skills you need. Do your research on the kinds of goods you can sell. Determine the process of making them.

Internet marketing is the most effective use of the marketing paradigm today. In the Site Build It guidebook, for example, Ken Evoy explains how to choose a "niche" for your marketing efforts. Basically, it works like this:

1. Make a list of four or five potential areas of interest. 2. Your "website idea" prospects are those companies that you should think about entering into.

For each of these website idea options, assess their traffic potential, the number of things they might offer, and so on.

3.0 Pick the one with the greatest potential for commercial success.

This seems to be a decent method. However, for most non-marketing folks, this is a major shift. A group of individuals are being instructed not to begin "production" before making crucial judgments on what people are likely to purchase. In a nutshell, this is how the "marketing model" looks.

The marketing model has a number of issues.

Marketing in its purest form has one glaring flaw. It presumes that we are all consultants with endless alternatives and infallible knowledge about all of them, sitting around a table. In the model, it seems that we can just input the information into our decision-making machine and expect a response to the question "What should I do?" to come out of the other end.

Even the most ardent of marketers are aware that this isn't how things operate. Everyone and every business has their own unique set of preferences and dislikes, as well as strengths and weaknesses in various areas of expertise. According to Ken Evoy's method, "Be sure to select something you are enthusiastic about." This is an important consideration. His advice should include the following:"... and make sure you're competent at it as well."

similar to a food processing plant, where ingredients are fed into a funnel at the top, and finished goods are spewed out the other end. Our own tastes, abilities, habits, and experiences are only some of the data we enter into our business idea processor.

Furthermore, the proportions of all substances coming into the machine's chamber must be strictly adhered to. It's not just about what customers will pay for, however. Not only does what we are excellent at and what we love play a role in this, At the same time, it's about all of these things.