Should I invest 100,000 + in new business to make it look good and be professionally acceptable, or should I invest the minimum just to test the market but then I may get hit by bad reviews for my service. The Service I intend to offer is laser hair removal
I agree with the answer above on test first. Also, David's advice to have a business strategy is key.
I'd start from user needs. Do people need (ok, want) this service in the area you might provide it? As a woman and a cosmetics designer, I can attest that most women want this service, but you need to check the following: Is the climate warm enough to sustain your business though the year? If not, what do you do in winter/off time? Think about diversifying your offer. Since this is a localized service, how about HHI (household income) in your town/city? For those within a middle income bracket, this kind of procedure is a luxury service.
Finally, if you're to really stand out among competitors, user experience should be your primary concern. For something as personal as laser hair removal, you will build your business on referrals (personal and digital via review sites like Yelp). Make sure every visit is impeccable. If you'd like to talk more, I'd be happy to dig in with you on crafting the ideal experience.
Can't you find a way to partner with qualified clinics who have capacity, and then market to clients who would want to pay for one? After all, even if you go all in, you're in the business of selling/marketing the products, not servicing the products. You may as well test that first before you commit further (buying out businesses, increasing capacities, etc.).
Test the market not for the quality of service you intend to offer, but to gauge the demand for your service. You need to have a customer, in first hand, to be able to survive and grow. One mistake may make your investment transform into expense, followed with becoming a liability.
Only go all if if you need to. (And chances are... you don't need to.)
I will say - from personal experience in offline service based businesses - you might be surprised at how little you need to invest to look "professionally acceptable".
This of course depends on your market and their expectations... However you might find that what YOU think is important to "look good" isn't important to them.
Remember that it's all about them. They don't know (or care) how much you invest in your business. They don't even care if you make any money. They care about what's important to THEM.
My advice is to have a plan (aka business strategy). In business you aren't investing if you have no plan... you are speculating - And that means you will be taking on much more risk than you need to.
And by the way... if you are providing amazing service then the reviews will be good ones.
Let me know if I can be of assistance. In any case I wish you the best of luck!
In his book 'The Lean Start-up', Eric Reis talks about the concept of 'minimum viable product'. Launching with the minimum viable product, can be a good way to test the market for a product without investing lots of money. However - to your point - you need to be careful, especially in a service business. Even your basic offering still can't turn off customers. My suggestion is you find other ways to figure out if there's market for your service. For lots less than $100,000 you could even engage someone to do the market research for you.
Based on my past experience as a market strategist, I believe even for the best of services, understanding your market is important, no matter how much fund you have. From your question, it seems you are that sure of your service quality and if that's the case, things might not go the way are expecting. So, as a statistician, I suggest you to test the market (small sample) and for that you need a specialist market research firm. You can try Market Quotient (www.marketquotient.com) who would not only suggest the current market demand and future expectations but also offer you go-to-market strategy in terms of business and marketing plan.
With a proper understanding. I am sure you can go a long way and achieve what you want to. Good luck.
Happy to help always.
Test the waters first.
Incidentally, I happen to own Lasered.com. If you like that domain / brand for a laser hair removal service, then you can lease it month-to-month with the option to buy later if the business takes off.
Test the market for sure. I've been at companies that went all in, pivoted several times and kept releasing new products -- none of them got any traction at all. They then said products 1 and 2 were to test the market and prove it so that product 3 would succeed. I think this is one of the stages of grief right? Bargaining?
I don't know anything about laser hair removal, but I'm going to assume you can find some people to survey or provide samples? of some sort? Consultation in exchange for opinions? Either way, if you have the ability to test and research something - do it. Could save you a lot of headaches no matter what you're getting into.
If you ask me, I will give you advice to go all in but with caution. Let us look at the caution you must take:
1. Make a business plan: Having an idea is one thing but having a legitimate business plan is another story. Of people who start companies with a completed business plan:
a. 36% obtained a loan.
b. 36% received investment capital.
c. 64% grew their business.
Of the people without a business plan:
a. 18% obtained a loan.
b. 18% received investment capital.
c. 43% grew their business.
A proper business plan gives you a significant advantage. In simple terms, a business plan is the written description of your company’s future. You outline what you want to do and how you are planning to do it. Typically, these plans outline the first 3 to 5 years of your business strategy.
2. Secure appropriate funding: You will need adequate capital to get yourself off the ground. There is no magic number that applies to all businesses. The start-up costs will obviously vary from industry to industry, so your company may require funding depending on the situation. For a small, part-time start-up with no equipment, employee salaries, or overhead to worry about, it may only cost you less than $10,000. Other ventures may cost millions. What is the primary source of this funding? 22% of business loans go to small businesses. Most business loans are for large companies that are already established. So, if you cannot get money from a bank, or if you can only find a bank that is offering you an outrageous interest rate, what other options do you have? Find investors. Investors can be:
a. Friends
b. Family
c. Angel investors
d. Venture capitalists
Proceed carefully because you do not want to start giving away significant equity in your company before you even get started.
3. Surround yourself with the right people: You are going to need some help while launching your start-up company. Certain people often get overlooked when entrepreneurs are getting their business started. Sure, you may realize that you will need some staff and a manager to help run your company. Is that it? How many people do you need? It depends on the industry. Before you do anything, you need to register your business name. Once your business gets registered, you’ll need to get a federal tax ID number, as well, from the IRS. The IRS lets you submit your business information online to get your employer identification number (EIN).
You also need to consult with a:
a) Lawyer
b) Accountant
c) Financial advisor
Unless you are an expert in law, finances, and accounting, these three people can help save your business some money in the long run.
They can explain the legal requirements and tax obligations based on how you structure your business.
a. Sole proprietorship
b. Partnership
c. Corporation
d. Limited liability company
While your lawyer, accountant, and financial advisors are not necessarily employees on your payroll, they are still important people to surround yourself with. Do not forget about insurance. Shop around and find an insurance agent who can get you plenty of coverage at an affordable rate. Now you can start hiring people within your organization
4. Find a location and build a website: Your start-up company needs a physical address and a web address. Whether it is offices, retail space, or a manufacturing location, you need to buy or lease a property to operate your business. You should strategize for this in your business plan. Try to secure enough funding so that you can afford to buy property. It is worth the investment and will save you money in the long run. You also need to create a website. Do not wait until the day your business officially launches to get your website off the ground. It is never too early to start promoting your business. If customers are searching online for a service in your industry, you want them to know that you exist, even if you are not quite open for business yet. You can even start generating some income through your website. If it is applicable, start taking some pre-orders and scheduling appointments. Today, your company cannot survive without an online presence. It may sound like a tough task, but it is not that difficult. Once your website is up and running, you need to expand your digital presence. Utilize social media platforms like:
a) Facebook
b) Twitter
c) Instagram
d) Snapchat
Your prospective customers are using these platforms, so you need to be on them, as well.
5. Become a marketing expert: If you are not a marketing expert, you need to become one. You might have the best product or service in the world, but if nobody knows about it, then your start-up cannot succeed.
Learn how to use digital marketing techniques like:
a. Content marketing
b. Affiliate marketing
c. Email marketing
d. Search engine optimization (SEO)
e. Social media marketing (SMM)
f. Search engine marketing (SEM)
g. Pay-per-click advertising (PPC)
If you are starting a small business in a local community, you can take advantage of some older and conventional methods such as:
a. Print advertising
b. Radio advertisements
c. Television
d. Billboards
While these methods can be productive, outbound marketing efforts are not as effective as they used to be. Your marketing efforts will be one of the most important, if not the most important, components of launching your start-up business. Allocate a marketing budget. Determine how you are going to distribute this money across different channels. Have a plan and try to maximize your return on investment for each campaign.
6. Build a customer base: Starting a website, growing your digital presence, and becoming an effective marketer are all steps in the right direction. But now it is time to put these efforts to the test. Open your doors (or website) for business. Getting a customer to make a purchase is the first step. But this is not nearly enough. You need to keep your customers coming back. The customer needs to be your main priority. They are the lifelines of your business, and they need to be treated accordingly. Once you establish a steady customer base, you can use it to your advantage. You will get more money from your existing customers than from new ones.
7. Prepare for anything: Expect the unexpected. Launching your start-up company will not be easy, and you need to plan for some hurdles along the way. Do not let these speed bumps become roadblocks. You cannot get discouraged when something goes wrong. Preserve and push through it. The difficulties that you will face while launching your start-up company will help prepare you for the tough road ahead. Even after your business is up and running, it will not necessarily be smooth sailing for the entire lifecycle of your company. You will face peaks and valleys while your company operates. Mistakes and setbacks happen. Some of these things will be out of your control, like a natural disaster or a crisis with the nation’s economy. Employees will come and go. You will face tough decisions and crossroads. Sometimes, you will even make the wrong decision. That is OK. Part of being an entrepreneur is learning from your mistakes. It is important to recognize when you have done something wrong, move forward, and try your best to make sure it does not happen again.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
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