http://en.wikipedia.org/wiki/Guerrilla_marketingCarol your post nailed it all in one. Wish i could be as concise as you are.
Mike makes a very very important point that i think way too few spend time to think on.
We live in a free market economy. That means you need to accept that you will only earn for a product what the market is prepared to pay you for it. Regardless of what it cost you. Now think about this.
Just because you can make a great cabinet out of great plywood does not mean it will be cost competitive.
But then read Carols words again when she says "There are customers for everything and at every price point" realize what this means. You have to be prepared to accept that the area you live in might not have customers in it that are willing able or want to pay what you want for your product. So you need to adapt your ideas to your market or move.
Both the above points bring up the aspect of doing realistic and thorough research. And you have to do that research without rose colored glasses. That means you might like a specific idea but when you look into it and determine its viability then you see its got potential problems and reliant on some elements that are just too thin to go with. Be prepared then to ditch the idea. Dont blindly continue thinking you going to change the status quo. You not.
Recognise you starting a business at a time when you have no income and no matter what, businesses require capital. Shortage of capital is one of the key elements for small business failure. So my first rule is dont spend a penny unless you absolutely have to.
You see guys go out build a shop, buy machines and then say ok now i am going to open my woodworking business. Yeah and who you selling to and what you making. AT this stage they got no money for marketing or product development or even raw materials. The logic we apply to a hobby is very different to what you apply to a business. In my hobby i have loads of things i have spent money on that i dont need but wanted. Not the same in my business.
So before you do a thing.
Learn some basics on the financial side of a business. Do a budget.
Create what is called a pro forma Profit and Loss statement with a spread sheet. This is just the same as learning google sketchup in order to do a drawing.
Learn to make up a basic profit and loss statement. Forget for the moment the balance sheet.
Just start out with sales, cost of sales, gross profit, overhead, and profit before tax and interest.
Use an excel spreadsheet and if you dont have...Excel or if you dont have MS office download the free
open office suite from here. All the open office suite files can be opened by MS office etc.
Take the time to do a little what if planning.
The best venture capitalists in the world that i have dealt always look to loads of details in the sales/income section of the P&L and i learnt with darn good reason too.
Work out on a sheet within your spreadsheet a page for sales. On it list all the items you gonna sell. Then next to each item list all the costs you will have to make or buy that item or deliver that service.
Then put down what you believe from your research you can sell that item for. Note. YOu should be thinking here of perhaps 3 prices for the item. What i like to call the good the bad and the ugly.
Dont get fixed on a set price you may end up finding that you need to cut a deal and if you set your yourself no wiggle room mentally then it becomes hard to allow yourself to wiggle.
Now guestimate how many of the various widgets you think in your market you can sell. Again market research is something you need to have done before hand.
With these basics you can then put together a plan the more conservative you make it and the more realistic you make it the more likely you will succeed.
Add in to the basic budget the overhead costs you will have. Things like insurance telephone hydro etc. But dont forget marketing costs.
Carol mentioned the issue of customers and them not knowing you exist. This in my view is the single most important aspect to get to grips with in your new business. Its the least understood.
Most have a pretty good technical knowlege, so making or sourcing a product or service no problem.
But getting it out there i see companies who waste tons of money on ineffective marketing.
Your market research element should have you get to grips with exactly who these people are that are going to buy and pay for your product. You need to get out of your shoes and put yourself in their shoes as much as you can.
This is not easily done when you are without a steady income. Its hard to see the world from anothers perspective. So you need to avoid using your current mindset to examine your products.
Next learn something about selling. You may have been brought up in a very frugal manner and be a person or family that is very utilitarian in their purchases. Try to realise that the bulk of consumers are not.
Consider for a moment the whole "kitchen refurb project". A utilitarian person will say i have a kitchen or i dont have a kitchen therefore i need a kitchen.
But a kitchen refurb is not being undertaken because the person needs a kitchen. They have one. Their motives and reasons for buying a refurb have nothing to do with "needing a kitchen". Their need has everything to do with how they percieve their current kitchen. They may be a person who will never ever cook in their kitchen. Yeah hard for some of us to fathom logic like that but its real it exists. So you need to learn to get used to understanding on a individual and then group basis why the person considers they have a need for a new kitchen. For if you can make the best cabinets in the world, at the cheapest price, you will still not sell them to that person when you have not addressed their needs.
This same logic applies to each product or service you may offer.
As a new business spend some money on a few books for your marketing rather than spend money on a flyer. You are not a corporation and you need to become a
guerrilla marketer. This term has become generic with getting your marketing for zero dollars or as close to it as possible. You can start at your local public library for the books but later on you will find just like woodworking ones some you want to keep and refer to more often.
Consider getting your paws on
one of these there is a series of them and second hand will always do. remember the aim is to be frugal.
Like woodworking ask questions if you dont know. Heck i learnt a great deal here about woodworking i am more than willing to impart what i have learnt in my business career. Just remember though you dont learn by only reading you need to also get doing.
Go out and talk to people about what you want to make sell or provide. Just remember the old story .........THE CUSTOMER IS KING and THE CUSTOMER IS ALWAYS RIGHT.
even when they wrong.
Its also easier to abandon an idea when its still on paper. Its more difficult to do when you have committed all your resources to it.
Also go see your local SBA unit. You will find folks that are very willing to help and give you loads of free resources.