Ah, this is yet another important step in the process. Some people really dislike planning out all of the minute details while some (like myself) think that it's one of the best parts about starting a business. Well, whether you enjoy it or not, it's necessary to devote quite a bit of time to doing this. That way when you get the business rolling, you'll have an idea of what you're doing, how much money you'll have to spend on each expense, etc...
Okay, it's time to start putting on those thinking caps and get out something to write with so we can start ironing out the details. In fact, now might be the time to pick up a stack of legal pads at the local Staples or something. Okay, here are some questions you will need to answer:
What exactly is my product?
If you've gotten to this step, you probably already know what your product/service is going to be. But this is the time for you to start giving a lot of thought to it. Is this something that you have a chance of building well? You don't want a product that sounds good in theory but is quite unappealing to look at when you have the finished product. What makes this product/service unique? Am I qualified to be an "expert" in this area? If you're going to be running a business, you should be absolutely certain that you know as much as possible about what you're doing.
Who is my target market?
Okay, imagine that you're the person that you're trying to make a sale to. How old are you? What do you look like? Are you a teenager with money burning a hole in his pocket or are you a conservative adult? Are you a male or a female? It's time for you to start thinking about who exactly you're trying to sell to. This is important because it'll help you decide what approach you'll take to make the sale. If you're selling to kids, you can probably be more informal. But if you're selling to adults and want them to take you seriously, you might have to be a little more formal. So if you've got a shirt and a tie sitting around the house, you might need to put it on to impress them.
What is it costing me and what am I selling it for?
This was mentioned in the last step but it is still very important so we're reiterating the fact that you should go over this. Write down all the different costs you'll have for your business. Figure out what the materials cost if you're manufacturing something. If you're mailing your product to people, be sure to include shipping costs. If you'll be on the phone a lot more, you might want to account for your phone bill.
Once you figure out how much it will cost to run the business, you'll need to start getting idea of what you will charge people for it. Don't ever charge anything more than what you yourself would be willing to pay for it. Figure out a price that is reasonable for your target market. If they're teenagers, you might want to keep the price low.
Now that you have an idea of what it's going to cost and how much you're selling it for, figure out how many you'll need to sell to generate a decent profit. If it's out of reach, you might want to reconsider your idea or simply find a few ways to cut costs.
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