Tuesday, October 23, 2007

The hardest thing is making the product, not fund raising

The hardest thing to start a business is making the product
When putting together a business plan, things usually look great on paper. You can have a terrific idea, great numbers, and market segment growth in the hundreds. However, there are two key parts that are significantly harder to execute, than to think about them: Funding and Sourcing/Manufacturing.
Funding is usually the most popular. How are you going to get the money to get the business started? You need to pay employees every month, and you need to pay the bills. Even if it is a small home business, you need seed money. Most people is familiar with how to overcome that. In a nutshell, there is venture funding, angel investors, equity loans, and even family and friends.
The second most difficult thing is the actual manufacturing of the good. Unless your business is about a service that you can provide on your own, you most likely have an idea that materializes somehow. If your business is about baby goods, you need to fabricate them somehow. Even if you are in the Web 2.0 entrepreneurial trend, you will have to find the people that would design, build, host and maintain the site.
If your product requires physical fabrication, then China is a good place to start. It is an inexpensive place to build things. You can also turn into other places like Latin America or Africa, where labor is cheap. You need to facto in, shipping costs and import fees.
Where to look for those places is a little bit harder. Of course you have Google and the rest of the web. You also have friends that know friends that know people that import from other places. Finally, you have business publications that report about successful start-ups. They usually list the company names and contact information; they are always eager to help fellow entrepreneurs.
In summary, if you want to start a business, but you don’t even know what it is about. Think about the two hardest things in the initial stages. That is, how to pay the bills and how to make the product. Therefore, if you are looking to start a small home-business, and you are not clear about your idea, look for inexpensive ideas and those that are easy to make.

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