Is there a market for your product?
Dear Karen: You told a reader to find out whether there was a viable market for his products. Are there companies that help establish if there is a market for a new product?
Answer: Marketing or product development agencies can evaluate your product’s sales potential. You can help by determining whether your product fits into an existing product category, said Jeff Williams, chief executive of Chicago-based BizStarters.
“Most small-business owners cannot afford to push a totally new product concept into the marketplace,” Williams said. “Your product should fit someplace in the marketplace, so start your market research on the Web.”
Put yourself in the role of a potential buyer looking for a product that solves the problem your product solves. Then enter the keywords you would use into Google and at e-commerce sites such as Yahoo Stores, Amazon and EBay.
“If you find the product category but few or no competitors offering the same solution your product offers, you’re on a good track to enjoy success,” Williams said.
Start-up tips carved in stone
Dear Karen: I would like to open a home-based architectural stone-carving business. What do I need to know about starting this company?
Answer: There are several areas to think through before you start your company. Meet with an accountant and get tax and strategic advice about business structure, capitalization and insurance coverage, as well as whether you’ll need a business license. Buy general business insurance that covers working at home with heavy objects and installing pieces on customers’ property.
“Cost everything out. Does this fulfill a personal passion or does it make for a viable business?” asked Jonathan Goldhill of Growth Coach in Woodland Hills. “You need to figure out who’s your market and how you’ll get the word out to them.”
He suggested you consider partnering with a contractor, architect or landscape designer serving high-end residential or commercial projects.
“You might market through those people’s showrooms or display with them at trade shows,” he said. “Mastering sales and marketing skills makes the difference between a successful business owner and a hobbyist.”
Selling a business in a tight market
Dear Karen: I’m one of those business owners who had hoped to sell out this year. Now I worry that my business won’t yield the money I’m counting on. What do I do?
Answer: Many entrepreneurs whose wealth is tied up in their businesses find their nest eggs at the mercy of the economy. If that’s your situation, and you have some flexibility in timing your retirement, you might want to postpone your sale, said Mark Rittmanic, chief executive of Forte, a Chicago consulting firm that helps businesses prepare for sale.
The tight credit market means that financing will be tougher to find for business sales because banks are so risk-averse.
“The implications of that means that sellers are likely to receive less for their businesses than they would in a climate that is more robust,” Rittmanic said.
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Got a question about running or starting a small enterprise? E-mail it to ke.klein@latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
