Launching or starting a new business sounds like a great idea that many of us have heard before and some of us would love to sink our teeth into. For first-timers, it is understandable to be a little apprehensive and unsure of how to make a reasonable go of it. However no one should let that stop him or her. It is very doable at a basic level, but I realize it can SEEM overwhelming for those who have never attempted it.
Let me show you how I take an idea I have for a small service business and make it into a business. I will turn it into a case study for this blog; I’m going to launch this business and just let you watch and hopefully learn from the steps I follow. It IS something the beginner can realistically do, and do relatively well with a little proper planning and a few good instincts. This business is not something I expect to grow into a huge business, but I feel reasonable in my expectation that it will certainly make a few thousand dollars each month.
This is going to essentially be a marketing service that delivers faxes to primary care doctors in Ontario, and will eventually expand to all across Canada if successful.
Our target market will include other primary care doctors, specialists, research arms, and other allied health services.
After defining the business concept and the target market, I moved on to researching who my competitors are in this market, as well as what possible alternatives exist to this service. After a quick inspection of our friendly neighborhood search engine, Google, I can say with confidence, that my idea pretty well stands alone, as nothing like this exists in the market today. Just being armed with that tangibly powerful piece of market knowledge convinces me even further that this is going to work out at whatever level I decide to take it to.
We will charge $0.50 cents per fax for the first page, and then $0.15 per additional page in the fax – all the while our costs will remain very low at perhaps $0.02 per page.
Because my startup costs are fairly low (less than $1000) and my profit per job will be fairly high, I can already see this will be a viable business model. This, it would be fair to say, can take the edge off someone who is just starting out and who might be hesitant when they begin to examine the nitty gritty.
This business’ ultimate success will come down to how quickly I can find customers for this service, and how much it costs me to find each paying customer.
Assume my average customer sends out 4 fax blasts a year at an average cost of $150. My costs on those faxes would be $10-$15. So considering they are doing this 4 times a year, I can earn $540 to $560 per customer I acquire. Not bad at all considering there is not a tremendous amount of legwork to do to facilitate the process and put it into motion.
How much will it cost me to find new customers? That is the ultimate key to growing this business. Can I find paying customers for less than $135 each? If I make approximately $135 on each sell, and if I can spend less to find a paying customer than I make on the first sale, I can continue to scale my business.
So in the interest of just testing out this idea, I thought I would simply give it a shot. Glad you’re along for the ride.
Here are the steps I followed:
- I picked out a URL and registered it. I decided on MarketToDoctors.ca and registered it at Godaddy for $10.
- I purchased some web space to host my new site at Hawkhost for $25 for the year.
- I used a graphics designer I know to make the logo and layout for the website. This cost me approximately $100.
- I had a web designer build this simple site for $100.
- I put together the script for the video myself and had a marketing friend put it together for less than $50.
So I, in all fact, built my working prototype for $285. This is not a lot of startup money by any reasonable comparison or standard, especially if this business ends up making me a few thousand dollars a month. A quick visit to the site will show you it is just a quick prototype, but if it works, we will then clean it up, streamline it, and make it more professional. Then: watch it grow.
I plan on investing another $500 in to marketing to see if my service will work. So I am prepared to invest up to $780 to see if this business is viable.
Of course, when you are thinking about setting up your own company, you also have to think about how you will deliver the service you are offering. In my case I have a process in place to manage the work as it comes in.
I expect to have this site up and ready to launch by the end of next week. I have a marketing strategy I will use to contact our target market and see if they have a need for this service.
I will post an update in a week or two on the blog. Can’t wait to share it with you and show you how exciting and promising it can be.
Hopefully, this inspires you to take some action on YOUR business ideas. Remember, everyone started out as a beginner once, myself included. Now, I’m glad to share the process with you. Feel free to leave a comment below, I will respond to all questions.