The business journey is different for everyone and every product. However, there are many common steps along the way. The information provided is a compilation and analysis of years worth of discussions between business owners and inventors in private Mompact groups and extensive research done as a result of questions asked. Where possible, author credit or information source is included.
Always verify information and carefully consider how it fits with YOUR specific business. Information provided is not intended as legal or financial advice. Mompact™ and the site owners and its contributors take no responsibility for legal or financial consequences that result from using any of this information or the resources provided.
Scroll down to read about the different sections of resources on Mompact.com or visit one now by clicking the link.
One: Before You Start Your Business
Two: Getting Started
Three: Basic Business Set-Up and Operations
Four: Product Development and Management
Five: Sales, Marketing and STRATEGY
Six: Closing, Selling or Doubling Down on Your Business
Section One Overview: Before You Start Your Business
I know you want to skip this section, but please don’t! Even if you have been in business for years, I encourage you to READ THIS FIRST. Business is not easy – especially when your business involves bringing a new product to market. After interviewing over a hundred businesses owners, I’ve learned how different reality is from expectations:
- All those “million dollar ideas” are not worth anything unless you build a business that proves the value.
- A successful business is a LOT of work and takes a long time to build.
- Your personal strengths and weaknesses play a huge part in the success of the business. You need to be an entrepreneur at heart to survive the ups and downs. Know what risks you are willing to take, what you are willing to sacrifice, and how serious you are about it.
- You will need money. Some businesses can grow organically with minimal investment, but most need real fuel to get off the ground. Investors and loans don’t come easily. Understand your short and long term finances before you start.
Visit Section One.
Section Two: Getting Started
You’ve decided you have what it takes to do this. Great! Before you start printing pretty business cards and naming your product, get business-savvy. You don’t need an MBA to start a business, but you do need common sense and an an open mind. If you are on this site, you likely have a product idea, prototype, or even a product that you are trying to sell. It’s never too late to learn more, but you will significantly increase your potential for success if you do your research before you get in too deep.
Google is your new best friend. Research everything, understand how business works, and always consider the source:
- Research your product or product idea thoroughly. Know if it exists and if anyone owns the idea already. Understand the USPTO and how big companies have big advantages.
- Validate your idea. Be sure people will BUY it (not just like it), and that they will pay for it at a price that makes you a profit. Learn where and how customers would expect to buy the product and where it fits or doesn’t fit with existing products.
- Understand margins, manufacturing costs, and all the other expenses that will affect profitability. This includes understanding the true costs of putting a product on a retail shelf from manufacturing, product testing and packaging costs to marketing fees, distributor commissions, chargebacks, EDI systems, and liability insurance. Know what you will need to pay for as a business owner including taxes, licenses, business registration, patent and trademark legal fees, storage, fulfillment, software, graphic designers, website consultants, and everything else. Be sure you know the true “cost of acquisition” of a new customer and what kind of marketing budget you will need to be successful.
- Know which legal and IP (Intellectual Property) strategy is right for you and your product. File the appropriate applications if applicable.
- Explore licensing options. Could a big company take this product to market better and faster than you can? What are the advantages and disadvantages financially?
- Create a business plan based on realistic financial information. Know if you will have cash flow challenges, when you will see a profit, and whether you should draw a salary as your business grows. Understand the long-term objectives and your exit strategy.
Visit Section Two.
Section Three: Basic Business Set-Up and Operations
Some entrepreneurs love the business details, others avoid them at all cost. But, every business has some basic needs needs. If you prefer creative development or thrive on making sales, you may need to find some low-cost help to navigate and manage all the must-do stuff. All of this work can be outsourced, but I strongly recommend having at least a basic understanding of all aspects of your business and doing as much of it as you can in the beginning while understanding your limitations. For example, if you don’t have an eye for good design, don’t create your own logo. If you are terrible at managing spreadsheets or tracking expenses, get help with accounting.
With the recent growth in number of small businesses, many service providers are vying for your business. Avoid overpaying by learning from those who have navigated the process before you. Know what each service should cost, what you should expect if you outsource, and what you should definitely do yourself to save time and money. Common requirements to consider:
- Establishing your business entity. Should you create an LLC or a corporation? What do yo need to do to register a business and file with local, state and federal agencies?
- Setting up headquarters. You can look professional even if you work from a small home office using free and low cost tools like business phone numbers, post office boxes, a variety of web services. Will you be taking possession of your inventory or shipping directly to retailers? Will you need storage or a fulfillment center?
- Developing your brand. Often the “fun” part, a solid and appropriate brand is about more than a logo and and color palette. Know what your business stands for and then get the graphic work you need to reinforce that: logos, web page designs, templates, social media banners, etc.
- Operating to grow. Invest as little as you can now, but select software and operational processes that are designed to grow with you. Accounting, contact management systems, and inventory control are low priority initially, but become critical as you grow. Start smart.
- Creating and managing your online presence. You need a website. Understand what capabilities your site should have. Will it be your main ecommerce site? Is it consumer or retailer focused? Do you need a blog for SEO optimization? Will customers want to communicate with you on Facebook, Twitter, Pinterest, Instagram and other social sites?
Visit Section Three.
Section Four: Product Development and Management
One of the amazing things about starting a product business is how you become an expert in things you never heard of before. Get educated:
- Be prepared for crash courses in subjects like molds used for manufacturing plastics. Hear the tough lessons learned in maintaining quality with mass producing sewn products. Join the debate over “Made in the USA”.
- You’ll see your entire vocabulary change when you experience the process of shipping products from overseas, getting them through customs, and into your possession.
- Avoid costly mistakes by learning that product packaging in an art. It involves understanding exactly how and where your product will be sold and what the requirements are for your product category. Size matters. So does storage plans, inner packs, disclosures, country requirements, UPC codes, and a bunch of other stuff.
Visit Section Four.
Section Five: Sales, Marketing and STRATEGY
You can have a fantastic product, gorgeous website, and every patent and trademark possible, but they are nothing without the right strategy and execution. Learn what it takes to grow your business whether you plan to stay small or grow big:
- How to pick the right marketing opportunities including
- exhibiting at trade shows
- investing in print, google, Facebook and Amazon ads
- executing email and newsletter campaigns
- avoiding TV ad scams
- evaluating the appropriateness of specialty marketing like celebrity gifting
- leveraging appearances on local and national TV shows
- building communities and brand advocates
- Picking the right channel(s). Should you hire a sales rep, have a showroom, target boutiques and create displays to sell with your products? Or, are you “all in” for big box retail and need to understand how distribution systems work? Or, is direct-to-consumer the real value for you? Do you become an Amazon vendor, select Amazon FBA, or stay away?
- Copycats or counterfeit? What do you do when you see your product made by someone else?
- How do the choices you make now affect your long-term strategy? Should you be your own knock-off?
Visit Section Five.
Section Six: Closing, Selling or Doubling Down on Your Business
It’s BIG decision time. Who do you turn to and how do make the right decision? Sometimes this can be more difficult than the decision to start one in the first place. There are emotional issues as well as financial impact.
Visit Section Six.