One idea recently spoken is a concept that I call “business test”. At first we talked of starting a small business , because the first business is the most difficult, and it is better to be small (low inventory, low investment, staffing minimum) Irlo slowly developing.
The test means that business will invest as little as possible to determine whether there is a demand for the product and the business can succeed. That is, with minimal inventory, with minimal staff and minimal investment in the packaging business, sell the product or service and see how much we sell, to whom, and whether it can be a successful business.
There are two ways that can be applied:
One way to test the market to determine if demand exists, is creating an online business , whether selling online, whether on eBay, a website or an ecommerce site.
Physical store, this includes:
a. Renting a short-term local (it is recommended such as a mall kiosk, sublease space in an already established local or rent a place with a lease for 3 months);
b. Condition the local minimum,
c. Buy minimum inventory (even if its cost is higher, is used to determine which products are sold),
d. Hiring staff to a minimum (if possible, include the family to reduce costs)
e. Investing in smart marketing (flashy ad out of business, business cards, product price table)
With this, make sure before investing the rest of his capital, the business is in demand, if there are buyers, its price and the product is correct.
Measure the profitability
After a short period of time (can be 2 or 3 months), you need to see the results of their actions and determine whether a business is profitable or not. Profitability means in simple terms, you are earning what they spent working. Each project has its different level of expected return. For example, if you put a coffee vending machines, you might win $ 1000 pesos a month will make it attractive, since it spends little work. Instead, copies a business where work is ongoing and must be active 12 hours, generating $ 5000 pesos a month of use, make it unprofitable.
I recommend you read the article in business profitable to study this aspect. Remember, the value of numbers (vs. utility. Investment and labor) and the personal value (invested x hours of work, work hard or easy, stress and personal wear) are 2 steps to consider whether it is worth continuing or not the business .
How to start a business : Administration
Finally, if you want to continue analyzing the business will move from the perspective of the entrepreneur ‘s perspective to the administrator . You should consider new business items, issues such as suppliers, costs, investment in advertising and promotion, recruitment, local conditioning, taxes, customer service, policies, etc..