Put Pillow to the Test in Market

Question: I have designed a Tooth Fairy pillow for children. Should I file something with the county clerk’s office? Do I need to advertise or try to get it into catalogs? What is my next step?

Answer: It sounds like you’ve created a product but have no idea what to do with it. If you want to start your own company, you need to follow an organized start-up process. This begins with a market analysis that will help you determine whether you have a practical business idea.

Start by researching some questions: Who is your ideal customer? How can you reach that customer, and what will it cost? What will motivate customers to buy your product as opposed to others like it already on the market? How much will customers pay for your product? Try to answer as specifically as you can.

The most important question: Can you sell enough product at a price that allows you to turn a profit? Make sure you factor in your overhead, materials, marketing, distribution and other expenses.

Test your market by taking pillow samples to craft fairs, bazaars and street festivals. See how many sales you make, and ask buyers and those who decide not to buy for their honest assessment of your products. (If people are reluctant to criticize, assure them that you want honest feedback.)

If the feedback is fantastic and you calculate that you can make a profit on this item, you need to write a business plan.

“A business plan serves as a guide for the lifetime of your business,” said Linda Pinson, a Tustin-based business plan consultant and author of “Anatomy of a Business Plan.” “It’s mandatory to have one if you need to borrow money or do business internationally.”

The marketing section of your plan will be particularly important, she said.

“Advertising and direct mail are very costly, and if your retail price isn’t very high and your production is limited, you probably will have trouble selling enough to make a profit,” Pinson said.

Distributing your product through catalogs or over the Internet might work better, but your business plan will need to address manufacturing and production volume. Getting into a popular catalog may result in so many orders that you will have trouble filling them promptly.

Learning the Ropes Is

Part of Parts Business

Q: I want to sell aftermarket auto parts. The distributors I’ve contacted require me to get business licenses and certificates that I’m not familiar with. I’ve tried just about everything. What do I do?

A: There are myriad books, websites and other resources available for start-up entrepreneurs. But finding information and advice is the easy part.

Here’s the tougher reality: Starting a business involves a steep, mandatory learning curve. If you’re going to succeed, you’ll need extraordinary persistence and drive. The U.S. Small Business Administration offers lots of information to aspiring business owners, including a look at common entrepreneurial personality traits (www.sba.gov/starting_business).

It’s no surprise that you’re frustrated, but starting a business involves learning to research, network, ask questions and form relationships with people who’ve been where you are. You can typically get in-person help from your bank, the business development office operated by your city or county, one of the SBA’s Small Business Development Centers (for a list, go to www.sba.gov/sbdc) or a counselor with the nonprofit Service Corps of Retired Executives (www.score.org).

If you’re interested in networking and learning the ropes simultaneously, attend a chamber of commerce meeting. Make connections with some entrepreneurs and take them out for a meal, during which you can ask for advice and referrals.

It will take some hard work on your part, but the good news is that by pushing ahead and muddling your way through the process, you’ll also be finding out whether you have the persistence and smarts you’ll need to run a successful company.

Got a question about running or starting a small enterprise? E-mail it to karen.e.klein@ latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012