This week begins the tale of my recent foray into the world of brick and mortar and the startup lessons learned there from.
Over the next few weeks I'll be detailing the exact steps that I took to launch my retail business and bring it to profitability within the first 30 days.
The lessons to come are many, and not just for those milling around in the brick and mortar crowd.
Whether you're starting a retail business in a strip mall or building a virtual business online, many of the fundamentals are the same and the principles for a successful startup apply.
You must begin with what I call a "Startup Plan."
A Startup Plan is basically the list of everything that must happen to get the business up and running from the initial idea to scouting locations to securing vendors to getting licenses to stocking the shelves to opening the doors to marketing and advertising to managing growth and on and on.
A Startup Plan is not as detailed as a business plan. It is essentially the "to do" list for starting a business, though it is every bit as important as a business plan because the Startup Plan serves as the blueprint for getting the business up and running.
Trying to launch a business without a Startup Plan is like taking a trip along a curvy, mountain road without a map, driving at high speeds, while wearing a blindfold.
You will eventually arrive at some destination, but it's likely to not be the destination you had in mind and your trip will be anything but smooth.
I always create my Startup Plans with a simple spreadsheet and build out from there.
Start by simply listing everything that you can think of that must be done to launch the business. Once you have the list break down each task into individual action items, assign each item to a responsible party and set a target completion date. A task without a deadline will not get done.
For example, your Startup Plan for a brick and mortar business may include:
- conduct market research to validate the business idea;
- conduct industry research to gauge the viability of the industry;
- conduct a feasibility study to gauge the odds of success of locating this particular business in this particular marketplace in this particular economy;
- write the business plan;
- write the marketing plan;
- secure funding;
- establish relationships with vendors;
- create inventory list;
- scout and secure a location;
- finalize the lease;
- get plans and permits for building out the space;
- find a contractor to do the build-out;
- get the required city, county, and state licenses;
- find and hire employees;
- place orders with vendors;
- stock the shelves with inventory;
- get marketing and advertising in place for grand opening; etc.
Your Startup Plan may be different from the above (depending on your product or service and expertise) and you may prioritize the tasks in a different order.
You'll also work many of these tasks simultaneously, not just as they are listed. Once you start working through your Startup Plan the tasks tend to prioritize themselves. Just be flexible and realistic.
Now that you have your Startup Plan go to each task and flesh it out by listing the subtasks that must be completed, who will perform or manage these tasks, and the target completion date (be realistic about completion dates; nothing ever happens on schedule).
For example, #1 on any Startup Plan should always be "conduct market research to validate the business idea." This is the most important task you will complete because the results of your market research will tell you whether to "go or no go" on the business idea. We'll discuss this in greater detail next week. For now, let's break market research down into subtasks.
To complete your market research you must decide who will conduct the research and by what date will their findings be ready for your review. Will you conduct the research yourself, assign it to an employee or partner, or have a research firm do it for you?
Fortunately, doing market research has never been easier thanks to the Internet and the numerous organizations and associations who will provide you with much of the data you need to make a sound decision. More on that in next week's column.
Another example would be #16: find and hire employees. How will you go about finding employees and who will complete this step? Will you run ads in the newspaper or use an employment firm or try to hire away employees from competitors? Will you be doing the interviewing and hiring or will someone else?
Once employees are hired will you use a payroll service or do it in-house? Will you set up a payroll tax account with the state yourself or will your accountant handle that for you? By what date will all employees be onboard and fully trained?
As with most steps on your Startup Plan there can be a number of subtasks that must be taken care of before you can mark a task off your list. Managing these tasks to completion is the key to a successful startup.
The Startup Plan is not only a great way to keep up with everything that must be done to start a business, but also to remind yourself of the little things that might fall through the crack.
Next week we look at the most important point on any startup list and that is conducting market research, a step many entrepreneurs fail to complete.