A business plan question

[electricmonk]

I have a business idea and in doing the preliminary reasearch and reading some of the advice the authors say to ask other business owners in your chosen field and area about their sales, market, etc. What I don't get is why would my potential competion give me an honest answer and if my idea is unigue enough what keeps them from grabbing my idea and putting me out of business before I even get a loan.

So far I'm playing everything very close to the chest because in a market area of close to half a million people there is no store selling the product lines I'm looking at so I would hate to give away too much info before I even have my business plan complete.

[ccinamon]

1. I've read several books and attended seminars

And most of them suggest contacting a similar business like you are planning several hundered miles away and/or several states from where you -- that way they won't see you as competition and chances are if they do happen to guess your complete idea/strategy and use it, it won't hurt you.

[bliss_eternal]

3. Great suggestion!

:)

[bliss_eternal]

2. Another suggestion for you...

When I was researching a business idea in my area, this is what I did:

1. Checked the yellow pages for similar businesses, took down their information.

2. Checked the yellow pages for businesses RELATED to that business, for example--let's say you want to be a wedding dj. Take down the names and numbers of wedding and party planners. Also make note of restaurants and hotels that offer their facilities for wedding receptions, or those that even cater. Later, you'll call those places and ask them for the name of their "special event coordinator."

3. Then I got a pad or notebook with paper and a pen and started making calls.

You're right in that some people aren't all that friendly or welcoming when they think you're going to be a competitor, I was worried about the same thing. Know what I did? I pretended to be a potential client. Yep. I picked up the phone and pretended to be someone seeking their services to find out what they had to offer. Most of the time, people were open to telling me what I needed to know, you just have to know how to phrase it so you really sound like a customer and not a potential competitor.

So, in the case of wanting to be a wedding dj--Call some of the other wedding dj's ask them the following:
1. how far in advance do they generally book?
2. What kind of deposit do they require for a booking (10%, etc.)?
3. Do they offer any extras (games, dancers, lights, karaoke, etc.?

Go back to your list and call those businesses related to your business. In the case of the example of wedding dj's, call the restaurant special events coordinators. Find out how many dj's they presently offer referrals to? Ask them if in their opinion the area/market could support another vendor (you)? Find out if there's anything the other dj's aren't offering that maybe clients are clamoring for (a niche--or way you may be able to make your business special and stand out from the rest of the competition)?

The general idea is checking the going rate and to get a sense of how busy the other businesses (like the one you want to start) are at present. This will help you to determine if your area could support another such business.

Don't be discouraged if you open the phone book (or check the internet)and there are others doing what you want to do. If the market can support them, it's likely it can support you too, depending on the type of business you are considering and how many others are active.

Sometimes when making calls, some will be tight lipped and not want to quote you any information over the phone. They want to see you in person so they can give you their pitch. In such cases, you may not be able to get any information from them.

Other ways to research your local market, without giving up your ideas or revealing yourself as a competitor--
1. Check the internet. Many businesses have websites these days, and some even offer their prices on their websites. In such cases, you can sometimes e-mail them and make the same sort of queries as I spoke of above.

2. Check the internet for other businesses like the one you are considering.
3. Check the internet for professional associations for the business you are considering. Let's use the wedding dj as an example again...find out the dj associations. Give them a call, let them know that you are interested in doing some market research and find out who the best person to talk to would be. Once you find out, ask that person how many members are in your area? They may be able to tell you how busy those members are, maybe not... but a pro. association could give you information that a competitor may not want to offer.

Hmmmm... I can't think of anything else. I hope this is helpful. If I brought up anything that wasn't clear, don't hesitate to ask, and I'll try to clarify. If I can't answer, I may be able to refer you to a decent book or resource.

Good luck and keep us posted!

bliss :)

[electricmonk]

4. Thanks!!!

Some great ideas and info there.

At the early stage I'm in I have 3 possible routes to opening my store. 1: Open a small store totally self financed with my retirement money. 2: Open a larger store using my retirement money for collateral for a bank loan with some assistance from family members but not actually having to touch my retirement money. 3: Keep my current job and open a very small store in a less than ideal location or as a kiosk in the mall and then hopefully grow and expand as money allows.

I just wish my credit didn't suck due to lots of bad decisions earlier in my life but there's nothing I can do about that now other than keep on improving it.

Oh well, I'll figure it all out eventually. I would like to be open by February. I just know that there is no way in hell I can stay in my current job much longer it's figuratively and literally killing me.

[bliss_eternal]

5. Hi electricmonk...!

Sorry I am seeing this so late. :hi: Good for you considering other options. So many people stay in jobs/careers that are "literally killing them" but deny and dismiss the damage. I knew of a woman that was diagnosed with cancer, after many years of feeling put upon by her stressful work environment. She frequently shared about the co-workers that were being diagnosed with life threatening health conditions all around her--some of which decided it was a wake-up call and decided to leave her field permanently. Those that didn't have life threatening diseases, were taking lengthy leave of absences (or stress leaves). :scared:

Instead of looking around for other possibilities, or taking small steps toward changing her life and situation, she continued to make excuses for why she "needed to stay there." :eyes:

I know that opening a brick and mortar (physical retail store) can be costly, and think it's smart that you are weighing all your options. :thumbsup:

Have you considered possibly creating an on-line store? That could allow you to test your items on a smaller scale without rent, leases, furnishings, fixtures and all the other things that a retail store requires.

Best of luck to you!
bliss :)

[electricmonk]

6. Hi bliss

That's ok, I'm late responding too. :hi: Keep forgetting about my own threads.

I currently work in a plastics molding factory. If everything worked right the exposure to fumes and vapors would be minuscule but of course that never happens. There have been way too many times that after getting a face full of smoke and fumes I was like well there's another 6 months off my life expectancy. So yeah I need to get out of there.

Due to a variety of reasons finances being of course being the main one option number 3 seems to be my most likely plan. On online presence is definitely in the plans.

[RetroLounge]

7. 2 suggestions

1) SBA - Small business Admin. - Good Seminars

2) SCORE - Service Corps of Retired Execs. - Get a mentor!

RL