Archive for the ‘innovation in small businesses’ Category

Lots of people love handmade jewelry. There’ll be numerous opportunities for your small business.

Thanks to the innate desire to decorate ourselves, humans have worn jewelry for eons.

In fact, evidence of adornment goes back so much further than the organized jewelry production in the ancient civilizations of Egypt and Mesopotamia; there is evidence of Nassarius shells beadwork made 100,000 years ago!

If you therefore are one of those creative types that love to tinker with stuff only to turn it into a catchy item of jewelry moments later, you’re rightfully taking your place in the long line of craftsmen that have every now and then been inspiring awe in the rest of us.

Well, how about inspiring awe and earning money while doing it?

There’s certainly plenty of motivation to do so, in addition to turning what you have a genuine passion for into an entrepreneurial pursuit.

Statistics indicate that this is an industry on the rise.

According to the U.S. Commerce Department’s Bureau of Economic Analysis, total spend on jewelry and watches in 2016 was a record $85.4 billion, up 6% from the 2015 spend of $80.6 billion.

In perspective, the 2016 global spend on jewelry was $316 billion, further cementing the U.S. as the most mature jewelry market.

Internet jewelry retail sales in 2016 totaled $19 billion, a very significant rise from the $9 billion made in 2011.

It’s worth noting that these figures represent fine jewelry and fashion/costume jewelry; the latter is what you’ll be making.

Analysts predict that the costume jewelry global market will be worth $41.7 billion by 2022, spurred by a timeless penchant for personal adornment and an increasing preference for stylish affordable jewelry. Here are 10 reasons why this forecast can become a reality.

In terms of U.S. jewelry sales, this 2015 chart will help show the category your business will fall under:

Source

These charts from a 2012 survey of Etsy shoppers should also provide important insights:

Source

In my opinion the outlook and prospects are quite positive.

As such, despite the industry being crowded, chances are that your handmade jewelry small business can find a spot and thrive.

So, how do you get started?

The need to preserve valuable family heirlooms gave rise to costume jewelry

1. Understand what you’ll be making

The sort of handmade adornments you’ll be making will be either costume jewelry or fashion jewelry or both. The two are essentially similar but differ by time period and use.

Costume jewelry came to prominence in the 1930s when women commissioned jewelers to create replicas of their pricey heirlooms. It was obviously less risky to wear these replicas.

With time this creation of faux jewelry rose in popularity as it gave women the ability to diversify their jewelry collections at an affordable cost. This was also an opportunity for less moneyed women to own pieces of their own. Back then women bought and wore jewelry to accessorize individual outfits.

Fashion jewelry was popularized by the young women of the 1980s. These pieces are more outgoing than their predecessors and are used for multiple outfits. Also, unlike costume jewelry, their designs change constantly in response to new trends. Their affordability ensures that ladies can spend money on pieces that will only be fashionable for two seasons at most.

Some of the materials used to make costume and fashion jewelry include plated metals, pewter, aluminum, nickel, rhinestones, colored glass, plastic beads, acrylic beads, non-precious stones, cubic zirconia and Swarovski crystals.

A third category would be the sort of jewelry made from mixing items (such as metal, textile, 3D printing, wood, etc.), pieces matching the definition of art, and pieces produced through skilled craftsmanship. These are generally uniquely designed one-of-a-kind pieces.

The lady definitely loves matching her jewelry!

2. Define your ideal customer

It’s vital to carve out a niche for your jewelry; trying to be everything to everyone is ineffective because you’ll be spreading yourself too thin – a mistake you want to avoid.

Knowing the following about different types of jewelry-wearing personalities will be vital in identifying your ideal customers:

  • Down-to-earth – These are generally nature-loving people. They are drawn to pieces inspired by nature and themes like recycling. They love jewelry with earthy tones like brown, ocean blue, forest green and beige.
  • Fun-loving – These are typically cheery, bubbly and socially-active persons who other people tend to be drawn to at parties. Their choice of jewelry includes big hoop earrings, ornate rings and thick statement necklaces.
  • Classic elegance – These are more or less traditionalists, focused on family, and whose idea of a night out is a quiet gathering of close friends. For jewelry they love simple but elegant pieces like pearl necklaces and earrings.
  • Best of the best – For these people everything is chosen carefully and with much attention to detail. They are very specific about what they want and will rarely deviate or settle for alternatives.
  • Color-coordinated / matchy-matchy people – When buying jewelry these people intend it to match pieces they already own and/or match it with specific outfits and shoes.
  • Trendsetters – Their choice of jewelry stands out for its rarity and uniqueness; current trends and brand names are the least of their concern.
  • Wash and wear – They have an active lifestyle and they therefore go for jewelry that matches their energy such as tennis bracelets and necklaces with light pendants.

In terms of age, research shows that jewelry spend peaks during two periods of life: the mid-20s to mid-30s and between age 55 and 64 i.e. marriage age and maximum earning power respectively. Nevertheless, jewelry is purchased by consumers of all ages; age is therefore not an accurate predictor of expenditure.

Formal event jewelry is classy

3. Define the occasions when your jewelry can be worn

Jewelry is also defined by its suitability for different occasions as follows:

  • Casual jewelry – These are easy-to-wear and mildly flashy pieces ideal for casual occasions like brunch, weekends and outdoor activities
  • Work jewelry – By being subtle and refined these pieces will complement the professional appearance ideal for the workplace, job interviews and lunch dates
  • Party jewelry – These are typically flashy and chunky pieces that are used to jazz up the stylish outfits worn at cocktail and dinner parties
  • Formal event jewelry – Such are timeless classics reserved for special occasions, like weddings and galas, when a lady needs to look stunning
  • Drawer essentials – The emphasis here is on jewelry that is simple and versatile enough to be adequate for both daily use and different occasions in the year

Your target customer/s will want to know which of their jewelry requirements you can be relied on to satisfy. You will therefore need to decide what to focus on; will you be a specialist or will you cater to multiple preferences?

Mother Nature is really good at providing inspiration for new ideas

4. Find sources of inspiration for designing your pieces

As a new entrant into the market your chances of success will heavily depend on your ability to launch a product collection that has its own identity and aesthetic. Achieving this sort of uniqueness will be instrumental in helping you to develop your brand.

So, what are the possible sources of inspiration for your jewelry?

Well, ideas are to be found just about everywhere you look. Nevertheless, singling something out from this very vast abundance can be rather difficult for newbies.

Don’t worry though; you’ll be in good company. Even successful seasoned designers, like Boodle’s head of design Rebecca Hawkins, often find inspiration when they least expect it.

This series of articles by Susanne Kathol describes how you can use seven principles of design (balance, emphasis, movement, proportion, contrast, unity and harmony) to find jewelry-making inspiration.

Keeping an eye on the top brands is one way of studying jewelry trends

5. Keep things fresh by observing industry trends

Even if your handmade jewelry is focused on classic elegance, or based on personal style, it’ll be important for your collections to constantly evolve. Costume jewelry has an estimated in-fashion period of 4-6 months; you have to keep bringing new stuff to your displays.

Keeping up with the trends isn’t about copying but leveraging and capitalizing on them to get ideas for new creations.

For example, this list of the 10 best jewelry trends for 2017 can give you a handful of ideas.

To stay on top of upcoming trends your options include:

  • Following fashion forecasters online
  • Following industry news and attending trade events
  • Checking out consumer magazines and media
  • Getting inspiration from trendsetters and influencers
  • Getting inspiration from top brands

Perhaps the black wrap is the jeweler’s signature?

6. Defining your overall signature

In the early days you’ll most probably be churning out pieces that have an assortment of influences simply because you are trying to apply everything you’ve learned. At this stage it’s quite possible that you won’t be able to identify jewelry you’ve made.

As time goes by though, the onus will be on you to define your work by creating a signature for it.

A look at the work of famous establishments like Van Cleef & Arpels, Harry Winston and Bvlgari will reveal particular elements that help to distinguish them from others. Away from the jewelry scene you may think about the red soles on every pair of Christian Louboutin heels.

It is these signatures that customers relate to; they know what to expect every time they make a purchase.

Of note is the fact that all these brands developed their signatures early. You’ll therefore need to start thinking about it soon; you’ve got a brand to develop and it will take time.

There are various way to go about creating your signature, including punching your initials on metal jewelry tags or always threading an identical bead at the same place on your jewelry. The choice is yours; it all depends on your creativity.

Here are five approaches to signature creation you may want to consider.

7. Start defining your brand

Steps 1-6 above are the foundation for this important stage of your handmade jewelry small business’ journey.

Branding is so much more than the logos, icons and ads that we associate with successful brands; branding expert Pamela Wilson defines it succinctly: it’s what people think (and feel) about a business.

From this statement you should realize that defining your brand will take into account every manner in which your business interacts with customers, including products and quality, customer service and marketing efforts.

This will obviously require an intense effort over a long period of time.

There’s one exclusive advantage that you have over every other business out there though – you and your product are unique. It follows that only you can create the brand you want and make a success of it.

There are a number of things you must do to achieve this and they’re described here; notice that with the exception of coming up with a brand name and brand story everything else has been covered in steps 1-6.

In addition, you definitely need to read successful jeweler Tracy Matthews’ post about the seven qualities all thriving jewelry brands share.

Jewelry design ideas can be communicated better with sketches and drawings

8. Get comfortable with product design

There are a slew of reasons why you need to be able to draw your own jewelry designs.

Perhaps a prospective customer really loves your work but wants you to create something unique for her. Regardless of how well she describes her dream piece you’ll have nothing much to go on except the concept in your imagination.

Perhaps the best you can do in this situation is actually creating the piece and then have the client critique it. At the end the two of you may have to settle for a compromise; not so rewarding.

And don’t even get started about the time and expenses that will have been involved.

Alternatively, your business may find success early and in a bid to service all your orders you are compelled to hire a team.

For both situations accurate sketches of your designs will make your work so much easier.

Product design using pencil and paper is only the beginning. From here you can graduate to jewelry design templates and bead design boards. Later you can start rendering your designs with 2D or 3D design software.

In this article the three elements of proper jewelry design drawing i.e. perspective, scale and proportions, and wearability and comfort, are discussed. Jewelry rendering using pencils and paint has been superbly described in this guide.

This is one of the tools you’ll be seeing a lot…

9. Actual production of your handmade jewelry

For the purposes of this post the emphasis is on creating both fashion jewelry and costume jewelry.

Just about anyone can do this; no special training is required. Once you have gathered the supplies and the required tools you are good to go. It’s all about assembling different pieces in the best way you can; only your creativity and imagination will set you apart from the next jeweler.

This WikiHow post pretty much covers everything you’ll be doing when you get started as does this 4-part handmade jewelry-making guide.

As the business grows and demand for your handmade jewelry increases you may want to consider concentrating on the design aspects of your business and have the manufacturing done elsewhere.

Outsourcing will prove to be cost-effective if you have bulky orders; the challenge is to find a company that can produce the quality of work you desire.

You have two options here – local manufacturing OR overseas manufacturing – and each has its pros and cons.

Jewelry-making supplies are everywhere; do you know where to buy them though?

10. Where and how to buy your supplies

Knowing where to buy materials and supplies is crucially important for two reasons: you need a wide range of high quality supplies and they have to fit in your pricing strategy.

Like for any other business, you can’t rely on a single supplier; you always have to keep looking for the best bargains.

Perhaps the first thing you need to do is ensure that your handmade jewelry business has a sales tax license. With this, and an ability to meet a wholesale store’s minimum order amount, you’ll be able to purchase your supplies at wholesale prices – greatly improving your hopes of breaking even and becoming profitable.

Visiting bead shows and expos is another option worth considering – if only just to sample the amazing variety of materials the different vendors will be selling.

Flea markets, estate sales and thrift stores can also be the source of some interesting supplies, and where you’ll have the added advantage of paying secondhand prices.

On the other hand, you can opt to make your purchases online and enjoy the convenience of doing so. Some of the more prominent suppliers include: Beads.US, Alibaba, Rio Grande, Fire Mountain Gems and Wholesale Jewelry Supply Co.

Lorelei Eurto has put together a superb post listing various vendors of packaging supplies, business cards, wire, tools, brass findings, and beads and supplies. You can also go here for a guide to buying charms.

Last but not least, always reach out to other designers to find out where they buy their supplies.

NB: When buying tools prioritize the following: round-nosed pliers, half-round (flat-nosed) pliers, side cutters, multipliers, crimping pliers, memory wire cutters and snippers. Learn more here.

The threads you must become familiar with include: leather thong, Nymo loom thread, Super Ion D, Wildfire, cotton thong (aka bootlace or veggie leather), silk thread, nylon thread, waxed thread, and beading wires e.g. Beadalon and Tigertail. Learn more here.

Good ventilation and lighting are vital for all jewelry studios

11. Setting up your jewelry studio/workshop

In the initial stages of your small business, your first studio can be really minimal – all you need is some space, a tray, and a table or desk. This should suffice for your beadwork, wirework and tools storage.

Once things really get going you’ll obviously need to find a bigger space to accommodate the team and replicate your initial setup multiple times. This will be an opportune time to invest in suitable containers and storage for your various supplies and tools to ensure that everything is well organized.

Other investments you may have to consider include a bench that’s sturdy enough for hammering and clamping purposes. In case the bench will also be used for soldering work it will be prudent to place a fire-proof surface under the solder board thereby protecting the bench from damage.

Overall, there are six requirements that your jewelry studio has to comply with i.e. proper ventilation, lighting, furniture, maneuverability, safety and storage. Read more about these here and here.

12. Considerations for hiring

When entrepreneurs launch their startups they are usually in charge of every aspect of the business. With success comes the need to hire extra hands.

In this article, Megan Auman discusses how to go about hiring your first employee.

Basically, you first need to determine the employee’s job description. The idea here is to identify the tasks you are comfortable delegating and the ones you know require your personal attention. It’s likely that you’ll delegate production in order to concentrate on design ideas.

Megan further highlights the need to be sure you can afford to hire, as well as the importance of having cash reserves just in case your sales targets won’t be achieved for a few months.

Instead of employees you can opt for virtual assistants. They are ideal for handling routine tasks that would otherwise keep you from achieving optimal productivity.

Using a white background is preferable when photographing jewelry for your online store

13. Take jewelry product photography very seriously

One of the prerequisites for successfully selling your handmade jewelry online is to go for stellar photography.

In the early days it’s understandable that you may not have enough money. Fortunately, all you’ll need to take great photos is your iPhone and the right DIY technique.

Later on it’s advisable to hire a professional setup including photographer, lighting, models, and even makeup artists and stylists.

Learn more about product photography here and then discover common photography mistakes you must avoid here.

Wire wrapping is one of the many skills you can learn

14. Diversifying your set of skills

Taking time to learn new jewelry-making skills will ensure that your small business can offer its customers more variety, or at least distinctly unique costume/fashion jewelry.

Some of the new areas you can explore include: wax carving, wood jewelry, fabric jewelry, silver jewelry, stone setting and wire wrapping.

You can also opt to learn about how to create jewelry using Perspex, fused glass, resin, polymer clay and metal clay.

An online search will provide details of online classes, tutorials and resources that’ll help to get you started. Alternatively, you can register for local training programs and workshops.

You must invest in good displays for selling jewelry offline

15. The art of selling jewelry

As an ambitious handmade jewelry small business owner you are most likely very drawn to the thought of selling your stuff online. This is understandable – we are in the e-commerce age.

Nevertheless, if you are one of those to whom growing small and constantly validating your ideas make sense, there are other options you may consider exploring first well before making your online debut.

  • A car boot sale – While this may seem unglamorous it is a time-proven way to get eyeballs on your merchandise across the country. Your participation in these sales shouldn’t necessarily be about making money but validation and learning.
  • Jewelry home parties – Find out how you can get invited to one or make arrangements with a party organizer to have one hosted in your house. Either way you’ll have access to a captive audience, a good number of who will feel obligated to buy. Don’t expect too much in profit. This is a perfect place to impress, get people talking (word-of-mouth), and hand out business cards.
  • Fairs, events and festivals – At these venues you can hire a stall or spread out a fold-up table or two and display your jewelry. People attending these events are usually prepared to spend some money so you can expect to make some sales. You however need to ensure that the demographic there matches your ideal customer’s profile.
  • Pop Up Shops – These are a great way to generate buzz for your handmade jewelry and validate your concepts.
  • Market selling – After getting some much needed exposure (and some money) at car boot sales and fairs you can now take your game to the markets. Expect to make good sales here.

Fully confident that your handmade jewelry small business can thrive, and with systems that work already in place, you can now try taking your merchandise online.

Getting started is easy and there are many places to do so.

This excellent guide details the steps you’ll take when setting your online store at Shopify. Helpful insights from the success story of Biko founder Corrine Anestopoulos and tips from Hawkly founder Gillian Johnson are provided.

For incredible advice about starting your jewelry business you really must read this detailed guide. Just about everything you need to know is covered here; the author has 20+ years experience in the industry and this guide makes for really good reading.

 

 

 

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During an economic downturn or recession like the one we experienced a few years ago our survival instincts urge us to cut down on spending. This in turn impacts negatively on business owners, some to a greater extent than others.

Those businesses that somehow keep thriving during such times can be described as being recession-proof.

While there are some obvious examples, looking at the situation from another perspective can help you to identify even more ideas for your startup.

Think about the new lifestyle changes that people adopt in order to cope with salary cuts, loss of employment, change of work status from full-time employee to independent contractor, and so on.

Generally, there are four traits that can help you to identify a recession-proof job or business idea.

  • A business that provides essential/critical products and services – Here you can think about healthcare provision, pharmaceuticals, education and tuition, plumbing services, etc.
  • A business that is clearly positioned – Here the focus is on businesses that have a strong competitive edge over others in their industry niche. Such competitive edges may be based on effective pricing, excellent customer service, superior expertise, etc.
  • A business that keeps abreast with technological and social trends – The most obvious of such businesses are the ones that provide IT solutions, communications and access services, etc.
  • Businesses that will always sell despite the economySuch businesses don’t really feel the pinch because what they offer is essential. Restaurants, liquor stores, debt collectors, and the like, fall into this category.

Now therefore, what are some of the recession-proof business ideas you can start making money with?

NB: For some of these business ideas selling online is now the way to go; here are some handy tips about how to go about doing this.

1. Internet marketing

Thanks to the internet, virtually every product and service you require is just several clicks away.

Thanks to the internet, virtually every product and service you require is just several clicks away.

Thanks to widespread and ever-increasing internet accessibility, more and more business opportunities suited for entrepreneurs and solopreneurs aka webpreneurs are being created.

Reading the profiles of some of the blogging industry’s most iconic names you might be surprised to know what these guys were doing before they became big.

Before getting started you’ll want to get acquainted with web traffic optimization. You can then proceed to earn money by doing what you love, say running a fashion advice blog or offering content writing services.

There are indeed a slew of jobs available online for freelance specialists and you can make good money offering some of these in-demand services.

2. Food and beverages

People will always appreciate the taste of a fine meal regardless of the times.

People will always appreciate the taste of a fine meal regardless of the times.

Not surprisingly, people kept eating and drink during the recession years…hey, was there an option?

Nevertheless, your decision to start an eatery must be carefully conceived and implemented. After all, just like in any other business, there are plenty of risks to consider.

Making your restaurant’s theme a fit for today’s healthy lifestyles may be a good place to start. A restaurant that promotes healthy eating can do well in recession times because people will identify with the need to reduce consumption, stay healthy, and cut down on unimportant purchases. The “stay healthy” theme will also work well for a restaurant that serves organic food products or another that targets vegetarians.

If you don’t fancy running a restaurant then you might as well consider starting a food catering business.

3. Selling cosmetics

Ladies have and will always want to look beautiful.

Ladies will always want to look amazing.

Regardless of the poor state of the economy you can bet that every lady will always try her best to look gorgeous. A man will grumble and mumble about how unnecessary spending on beauty products is but the mere memory of how beautiful the woman he loves looked during an unforgettable date will be enough reason to make his thin wallet a tad poorer.

The impressive sales volumes of nail polish and mascara in recession-hit 2009 is an apt example of a cosmetic business’ viability.

4. Providing laundry services

Our need for clean clothes is really second nature.

Our need for clean clothes is really second nature.

To avoid looking shabby and unkempt people will always want to wear clean clothes. This is why starting a laundry business is an idea that makes so much sense and cents.

It’s hardly complicated.

You just need washing machines, dryers, pressing irons, detergent, a good team and effective word-of-mouth advertising.

5. Candy store business

M&Ms were first sold in 1941...

M&Ms were first sold in 1941…

Thanks to the Great Depression of the 1930s we now enjoy tasty treats like Snickers and Three Musketeers.

Somehow, our liking for candy surges during economic recessions. Not surprisingly, Nestle and Cadbury reported 11% and 30% profit rises respectively in 2008.

6. Alternative healthcare services

There are plenty of business opportunities in the health sector - even for entrepreneurs who don't have a medical background.

There are plenty of business opportunities in the health sector – even for entrepreneurs who don’t have a medical background.

People interested in the healthcare business but lacking the requisite credentials to offer primary healthcare services, say opening a general medicine practice, can still make good money in alternative healthcare.

There are plenty of other options too. How about designing healthcare software, supplying medical equipment to practices, repairing and maintaining medical equipment, etc?

7. Provision of wedding services

A catalog of different wedding services jointly help to make such a day brilliant and memorable.

A catalog of different wedding services jointly help to make such a day brilliant and memorable.

However gloomy the times are, a nicely organized wedding will always help to ease people’s worries, albeit for several days.

The scope of business ideas in this niche is quite varied. You can think about becoming a wedding and honeymoon planner, offering wedding photography and video recording services, designing customized wedding invitation materials, designing bride and bridal party gowns, offering wedding catering services, etc.

8. Selling baby products

Perhaps it needs a fresh diaper or medical attention...new babies bring new business.

Perhaps it needs a fresh diaper or medical attention…new babies bring new business.

Babies will always be born; baby products will therefore always be in demand.

Whether you decide to sell baby wear, toys and gear, baby products like oils and powders, etc, the potential for profitability will always exist.

You can also opt to offer allied services like babysitting (and daycare services later on).

9. Running a funeral parlor or offering funeral-related services

The entire process of laying the dead to rest ensures that several entrepreneurs will get paid.

The entire process of laying the dead to rest ensures that several entrepreneurs will get paid.

Successful undertakers are a unique breed. For them special days like holidays and anniversaries don’t really exist.

Why, you ask.

It’s quite simple.

Everyday people are always dealing with the demise of family members and friends.

As the proprietor of a funeral parlor you will need to respond to the requirements of bereaved people day and night and get the job done; all this while maintaining the desired quality of service and empathy.

Providing this service definitely makes for a viable idea – the industry was worth $15.9 billion in 2013.

Apart from being an undertaker, there’s also money to be made in funeral-associated jobs including providing cremation services, making caskets and coffins, designing epitaphic tombstones, etc.

10. Selling beer, wine and liquor

During happy or depressing times you can always expect bars and pubs to enjoy good business.

During happy or depressing times you can always expect bars and pubs to enjoy good business.

Don’t expect people to stop drinking when times get tough. They’ll simply ignore the pricier options and guzzle down the affordable stuff.

During the recession some interesting observations were made in support of this stance. In 2009 bar revenues and restaurant sales of wine by the bottle dipped drastically. Nevertheless, wholesalers of beer, wine and liquor enjoyed good business. Restaurants also saw a rise in sales of wine by the glass.

11. Property staging

Can you make a house look worth its price tag? Real estate agents and house sellers will readily pay for your expertise.

Can you make a house look worth its price tag? Real estate agents and house sellers will readily pay for your expertise.

The work of a property stager is to ensure that a house which is to be sold off looks the part. Basically, you, as a property stager, need to advice the seller on how best the things in the property must be arranged and presented in order to maximize the likelihood of making a good sale.

For starters, you need to have a keen sense for style, décor and detail. Next, you need to make a name for yourself. Making acquaintances with real estate agents and independent sellers is a good place to start.

This business can really thrive in recession times. We can all recall the many property sales that characterized the aftermath of the property market’s fluctuation.

12. Virtual assistance

Reputable virtual assistants are almost always in demand all year round.

Reputable virtual assistants are almost always in demand all year round.

Becoming a virtual assistant is yet another viable business idea that has resulted from increased internet access. This will be a worthwhile option for you if competent administration and organizational acumen are your forte.

Opportunities abound for such persons considering that many companies, in a bid to cut down on operational costs, are retrenching conventional assistants and instead outsourcing the position to qualified persons around the world.

If you are one of those who have been retrenched then making the switch shouldn’t be too hard. After working with several clients you may even think of training and then hiring others with the aim of expanding your business.

13. Tutoring and coaching

Skills are passed down successive generations hence the need for tutors and coaches services.

Skills are passed down successive generations hence the need for tutors and coaches services.

This is especially applicable for people who excel at teaching or instructing others, be it in academia or other skills e.g. playing the piano. If you also can coach/train players in soccer, tennis, baseball, or indeed any other sport, there is money to be made by turning your skills into a business.

Despite poor economic times learning, music, acting and sports always thrive.

14. Pet care services

Pet lovers don't hesitate to spend good money on excellent pet care service providers.

Pet lovers don’t hesitate to spend good money on excellent pet care service providers.

The love that people have for their pets doesn’t wane even when the times get tough. The reason is simple – for some people, having a pet helps to soothe them through hard times.

Accordingly, pet care service providers enjoyed soaring business during the recession years. Additionally, the low cost of business setup was a boon for service providers, as was the large target market – estimated at at 65% of Americans.

Veterinary service providers also enjoy good business from pet owners. Industry estimates for 2014 put the figures at $15.3 billion.

15. Tax accounting

Expert accounting services are especially sought after during lean times because business owners are keener to save more money.

Expert accounting services are especially sought after during lean times because business owners are keener to save more money.

You’d be wrong to assume that during recession business owners’ start doing their own bookkeeping in an attempt to lower operational costs.

It was business as usual for tax accountants during the recent economic slump. The reason is quite interesting – business owners were keen to get maximum refunds while avoiding any errors that would prove costly.

16. Thrift stores

Flea markets and thrift stores will always exist because we all love a good bargain.

Flea markets and thrift stores will always exist because we all love a good bargain.

People will carry on shopping during an economic recession but instead of doing it at elite shops like Nordstrom they will opt for thrift stores.

The numbers tell the story. In 2008 just 14% of Americans shopped at thrift stores on a regular basis; this rose to 20% in 2012. The country’s premier thrift store company, Goodwill, reported a 10% rise in sales volumes annually between 2007 and 2011.

So, do you have a passion for selling secondhand goods at affordable prices? Why not set up now? You may be just in time for the next recession – they do say we expect one roughly every six years or ten years, right?

17. Security services

The need to feel safe and secure always necessitates the hiring of security personnel.

The need to feel safe and secure always necessitates the hiring of security personnel.

When times get tough many people become desperate and frustrated. Eager to make quick bucks, many people resort to various forms of crime. Burglary is especially prevalent in these circumstances; with the exception of unexpected benefits.

In response to the threats posed by perpetrators of the vice, homeowners and proprietors of valuable establishments, commercial or otherwise, hire the services of security firms. Of course, these services are always in demand even when the economy is thriving.

18. Garbage and/or waste collection

Without garbage collection services our homes, offices and streets would be a mess.

Without garbage collection services our homes, offices and streets would be a mess.

Keeping your house free of garbage and waste remains a priority every day of the year.

This is therefore a business idea you can implement – if you don’t mind the dirt, variety of unpleasant aromas, and the typical low regard many people have for this job. No worry, no one will look down on a garbage collection firm successful CEO.

19. The sale of contraceptives

To enjoy safe sex people will always need pills and condoms...

To enjoy safe sex people will always need pills and condoms…

Having sex is a natural urge that must be fulfilled.

Procreation is not always the agenda though. For this reason people will always purchase contraceptives, be they couples, young adults or teenagers.

As the owner of such a business an economic recession will be the least of your worries.

20. Repair services provision

The constant need for repair services at home, in the office, etc, means that handymen will always be in demand.

The constant need for repair services at home, in the office, etc, means that handymen will always be in demand.

Whatever the economy looks like there will always be business opportunities for repair experts.

However much you hold off on having your broken window panes replaced, your leaking roof re-tiled, your car’s gearbox replaced, or your blocked pipes and/or sinks unclogged, you’ll eventually have to pay someone to make things right.

If you have the training, skills and equipment required for offering repair services in or more niches you might as well set up shop now. Using word-of-mouth you should soon get a few clients; make a good reputation by offering top-notch services and then keep growing.

In conclusion:

There are lots of other recession-proof ideas. How about some suggestions from you?

Every role that an entrepreneur needs to play requires proactive thinking. Do you have what it takes?

Every role that an entrepreneur needs to play requires proactive thinking. Do you have what it takes?

You’ve now launched your own business.

A long-cherished dream has finally seen the light of day.

Deep within you truly desire to succeed.

You’ve read about what legendary entrepreneurs have and are doing to ensure that they are always at the top.

You know that being an entrepreneur means you are responsible for making your vision of success a reality.

You also understand that this responsibility will require you to play a number of roles. Well, here are some of the different hats you’ll have to wear.

You certainly don’t need to be good at all these roles to be a successful entrepreneur. What you aren’t good at – at the onset – can always be improved upon with time.

 

1. Head of new customer acquisition

You’ll need clients for your products/services.

Unfortunately, they won’t start coming to your premises automatically; you’ll need to attract and then convince them to start spending their money on what you have to offer.

At this point in time you already know who your ideal target customers are. You just need to find the best message that will strike a chord with them.

Reaching out to your target customers appropriately will bring them in droves...

Reaching out to your target customers appropriately will bring them in droves…

Marketing your business will be a continuous effort moving forward.

You’ll always need to create relevance for your business in order to keep drawing in new clients.

2. Customer experience and service architect

Once customers have started trickling in, it’s upon you to ensure that all their interactions with your business are top-notch.

Customers should be assured of satisfaction whatever their engagement with your business involves.

This is what superb customer experience is all about – and it starts right from your mission statement which you always have to live up to.

Top entrepreneurs understand that keeping their customers satisfied is absolutely vital.

Top entrepreneurs understand that keeping their customers satisfied is absolutely vital.

Your customer experience strategy will need to be complemented by exemplary customer service which involves all the things a business needs to do to make a customer feel valued and important.

3. Chief salesman

Making sales is the only way your business is going to earn revenue. Ideally, the healthier your sales volumes, the higher your revenues and profits will be.

Ensuring that your product/service gets out there and convincing people to spend money on it is an art that you must perfect. Even if you have a sales team it is clear that they will look up to you for inspiration and direction.

Simply put, if you lack passion for your product/service don’t expect the sales team to work miracles on the ground.

Self-explanatory.

Self-explanatory.

Selling is an aspect of business where your input on the front lines is really required Steve Jobs-style.

Interactions with your customers will reveal many pointers and ideas that you can take advantage of in order to make your sales effort more precise and focused.

4. Minding the business’ coffers

It’s quite ironic that for many entrepreneurs the sight of a healthy bottom line is what causes them to grin widest yet they are stubbornly hesitant to learn about how to prepare balance sheets, profit and loss statements and cash flow statements.

While finding and paying fine accountants and bookkeepers to handle these matters on your behalf is undeniably convenient, the truth of the matter is that entrepreneurs who are personally involved in their business’ financial matters are best placed to lead their ventures to long-term success.

Successful entrepreneurs are involved with the money right from the get go...

Successful entrepreneurs are involved with the money right from the get go…

Being in charge of the financials will enable you to among other things know your business’ health, be sure of its tax compliance, and be able to monitor trends such that you can plan ahead based on facts rather than assumptions.

5. Undisputed team leader

As the business owner you also have the distinction of being employee #1. This means that even if your business does not hire other people you’ll be responsible for leading yourself.

Being team leader means that you’ll have to espouse all the qualities of an efficient team and lead from the front.

There can be no other way for entrepreneurs to lead - it must be from the front

There can be no other way for entrepreneurs to lead – it must be from the front

Running a business successfully is no walk in the park – it requires dedication, commitment, zeal and focus from everyone involved. The team will eagerly play ball if they see you doing your part with vim and then some.

6. Head visionary and strategist

How big do you wish to grow your business?

Does your vision portend success?

To achieve mega growth you will need to have a solid strategy for the future.

Indeed the most successful entrepreneurs have all grown from the ground up because one eye is firmly fixed on the big picture.

Successful entrepreneurs look at the big picture and strategize on how to get there...

Successful entrepreneurs look at the big picture and strategize on how to get there…

As such, even as you are engaged in the day to day running of your nascent business’ operations, you should ensure that all the present effort is essentially about preparing the groundwork for future growth and success.

Long-term vision is imperative.

7. Head of creativity and innovation

Unless you are dealing with something quite unique that virtually nobody else can offer e.g. corks then constantly wearing your thinking cap is not an option.

Why?

You need to ensure that your business will always remain relevant and competitive.

New and relevant ideas will be key for your business'success...

New and relevant ideas will be key for your business’ success…

Businesses often reinvent themselves after their previous brilliant offerings become obsolete.

Reinvention is about progressively providing new offerings that can satisfy the needs of your customers.

Reinventing is actually an investment of time, money and brain cells. Done well, you’ll certainly reap handsomely moving forward.

8. Chief perceiver of opportunity

Your ability to utilize the entrepreneurial qualities of foresight, instinct and alertness will definitely contribute to your business success.

Given the dynamic nature of societal trends, new opportunities and possibilities are constantly being revealed. Only the entrepreneurial eye can identify these opportunities and only the entrepreneurial mind can come up with a blueprint of how to harness them profitably.

As an entrepreneur you need the ability to sense opportunity...

As an entrepreneur you need the ability to sense opportunity…

You therefore always need to keep an eye on trends. Specifically, you need to be aware of changing needs and requirements with the aim of providing innovative solutions.

9. Informed calculating risk-taker

This role is ideally connected to that on opportunity perception described in the previous point.

Entrepreneurial calculated risk-taking describes the willingness to perform the actions required to harness an identified business opportunity knowing full well that the actions could result in profit or loss.

...as well as the skill and capacity to make a profitable swoop

…as well as the skill and capacity to make a profitable swoop

As such, considering the unknowable nature of the result you expect, your actions in this regard will need to be based on informed assumptions.

It is for this reason that many successful entrepreneurs have on several occasions invested time and money in seemingly profitable opportunities only to have their fingers burnt. On most occasions though, these entrepreneurs’ achievements can justly be described as legendary.

10. Motivation guru

The rigors of running a business are such that you’ll always need steady hands to steer the vessel forward towards success. Even so, the exertion will regularly take a toll on you and the team hence the need for everyone to enjoy some down time for purposes of re-energizing.

Every team member needs to feel fully appreciated and involved in order to be optimally productive

Every team member needs to feel fully appreciated and involved in order to be optimally productive

Keeping the team well motivated is essential and there are many ways to do this besides paying competitive salaries. You can start by making the workplace atmosphere and culture truly conducive to productivity.

It is also vital to make the team part of your vision; you can really use some of the bright ideas and suggestions your team can offer. Rewarding effort and goal achievement is also imperative.

Your choice of product packaging tells customers a lot about what they should expect from you...

Your choice of product packaging tells customers a lot about what they should expect from your brand…

However superb your product may be, its success to a large extent depends on your choice of packaging.

There’s no doubt that a product’s performance is more important than its packaging.

Nevertheless, the fact that prospective customers can only make an assessment of a product via its packaging means that you have no choice but to get inspired about this aspect of your product.

Effective product packaging should play the following roles:

  • Function – The packaging should be able to protect your product during transit and as it is displayed on store shelves
  • Attraction – The packaging should be able to entice potential buyers to choose, pick and buy your product from amongst all the options available on the shelves
  • Promotion and facilitating the decision to purchase – The packaging should effectively provide relevant information about your product and which may include source, ingredients used, directions for use, etc. This information is vital in helping potential customers to decide whether or not to buy.
  • Differentiation – Your product’s packaging should be adequately unique to enable customers to identify it easily

Adhering to the pointers below will give you success with product packaging:

1. Keeping it simple

Effective product packaging is all about making a potential buyer’s decision-making process as simple as possible.

Immediately customers reach the section where your product is displayed they should be able to easily identify it from amongst the rest.

There is nothing excessive about effective packaging

There is nothing excessive about effective packaging…

Simplicity is also vital in case it is a new product or you are launching in a new market.

Your product’s name, brand name, package and description should be easy for the eyes thus facilitating and encouraging potential customers to pick and buy.

2. Describing the product for what it is

In an attempt to boost sales you may be tempted to exaggerate the abilities of your product.

Don’t.

Simply state the facts and promise potential users attainable expectations based on your product testing results. If you have a good product you can be sure that sales volumes will gradually increase thanks to the positive feedback and reviews that satisfied users will offer.

Confidently state what your product offers; the consumers verdict will soon be out...

Confidently state what your product offers; the consumers’ verdict will soon be out…

Exaggeration, on the other hand, will ultimately hurt your product’s sales potential as you’ll have to deal with disappointed, dissatisfied and skeptical customers.

3. Being audience-specific

If your product is designed for a specific market audience you must ensure that its packaging plays the part. Just like the product, packaging cannot be universal.

This also applies for products that target the same core audience.

For example, different men prefer different cologne fragrances. As such, the packaging for the different colognes cannot be the same.

Audience-specific packaging helps to facilitate easy decision-making.

4. Standing out from the competition

Prior to launching your product you should scour the market in a bid to, among other reasons, find out what the competition has to offer.

Based on what you see you should be able to come up with a packaging design that will enable your product to stand out.

The packaging immediately tells you that this is a brand of chocolate may be worth trying...

The packaging immediately tells you that this brand of chocolate may be worth trying…

Your aim should be to create product packaging that is unique, a huge improvement on the competition’s effort, and relevant.

5. Using high quality materials

Product packaging is indeed a substantial aspect of product development; it does require a considerable chunk of money.

This notwithstanding, the need to use high quality packaging cannot be overemphasized.

Your product's packaging design needs to match your core audience's expectations...

Your product’s packaging design needs to match your core audience’s expectations…

Your product’s packaging needs to be good enough to make a strong first impression in the mind of a prospective buyer.

As such, you cannot afford to compromise on quality.

Get the best of what is available as per your budget.

6. Enhancing user convenience

This particularly applies for products whose packaging affects the manner in which they are used.

In this case the packaging design needs to be handy.

Knowing the contents, this product's packaging design is definitely handy...

Knowing the contents, this product’s packaging design is definitely handy…

For example, Harpic’s toilet cleaner is packaged in a suitably designed squeezable plastic bottle with a bent neck and a nozzle, two features that help to get the cleaner under the toilet bowl’s rim.

7. Factoring in future product varieties

After successfully launching the flagship product for your brand you might think of following up on this success by introducing several other product varieties. In most cases your marketing task will be easier if the new varieties will be similarly packaged.

The original Harpic toilet cleaner bottle is black in color. Subsequent varieties are similarly packaged but the bottles colors are different.

8. Ensuring the text’s legibility

All the text on your product’s packaging should be clearly legible.

A prospective buyer should rapidly be able to scan through your product’s descriptions provided on its front and back. This is crucial for decision-making especially if the product is new or use-specific.

The text definitely needs to be legible in this case...

The text definitely needs to be legible in this case…

Proper text legibility is enhanced by several factors including font type, size and color, and overall packaging color scheme.

Additionally, only the most important information should be printed on the front. Reserve the back for ancillary information.

9. Vetting multiple packaging designs

Before you settle on a particular design it is advisable to seek other people’s opinions.

The idea is to present different packaging design options to several objective persons for evaluation and letting them pinpoint the design they think will be most appropriate for your product.

You, of course need to brief them about what need the product aims to address and the section of the market you are targeting.

Chances are that their feedback will provide you with some insights that you had overlooked; perhaps the design you had in mind may after all not be as suitable as you may have thought.

10. Keeping up with the times – packaging redesign

What makes for a great packaging design now may not work when the next generation of your target market emerges. For this reason you need to spruce up your product’s packaging every once in a while.

This is real; top brands do it all the time. Just think of how many times Coca-Cola has changed the shape of its bottles.

The trick is to retain your product’s original charm but to package it for the present.

Some products' classic packaging charm always remains fashionable though...

Some products’ classic packaging charm always remains fashionable though…

The don’ts…

11. Targeting everyone instead of the target market

Borrowing from the old adage “You can’t be all things to all people”, you should realize that your product just cannot work for every other consumer.

This is true, even for universal products like table salt and drinking water.

Although this product's use is well understood, the target audience is unspecified...

Although this product’s use is well understood, the target audience is unspecified…

So, forget about universal packaging; go for what will work for your core audience.

In the same way that you have developed a product for this target market, come up with a fitting packaging design.

12. Using hard-to-open-and-use sort of packaging

If customers find it difficult to open your product’s packaging and/or find that using the product is inconvenient, chances are that they will explore other options the next time round.

As such, don’t go for a packaging design that will require users to learn specialist skills in order to use the product.

Opening and using your product should be quite easy...

Opening and using your product should be quite easy…

There are plenty of design options that you can employ to enhance convenience and prevent wrap rage e.g. perforated openings, flip caps, shrink-wrapping, ribbed bottles, etc.

13. Failing to freshen up your packaging

Very few products can retain their original packaging designs for eons and still sell well e.g. nails, sewing needles, etc.

Even so, manufacturers may regularly have to renew their logos, and so on.

Generally, updating your product’s packaging regularly will contribute to its success moving forward. A snazzy look is a selling look.

14. Assuming that words and terms mean the same thing everywhere

While your product’s name may sound amazing where you come from, the word/s may have a totally different meaning elsewhere.

This is a crucial consideration if you intend to sell your product to a target market that is spread across different tribes, nationalities, cultures and/or religions.

It is for this reason that certain products are sold under different brand names in different markets.

15. Failing to communicate your product’s unique attributes

It is foolhardy to assume that your product will do well even though its packaging bears only a scanty description of the contents.

What information will prospective customers use to make a buying decision?

This is a no-brainer.

16. Failing to provide different package sizes

For some products you just have to provide different package sizes.

Even for regularly used products like cooking oil and detergents, selling a single package size won’t do.

The realization that different types of consumers love and use your product is vital for success.

The realization that different types of consumers love and use your product is vital for success.

Customers make their purchasing decisions based on various factors including price, use frequency, shelf life, sell by date, personal lifestyle, and so on.

Ignoring such concerns won’t augur well for your product’s commercial success.

17. Omitting crucial product label details

All consumers, you included, have a habit of trying to find out all about the various products that they use regularly.

This will naturally start with a scrutiny of these products labels. The scrutiny is typically more intense after a product has been bought, say after the customer is back home after shopping.

A label-less product is a suspicious product. Consumers need details.

A label-less product is a suspicious product. Consumers need details.

Consumers will be more reassured if your product bears all the typical label information they are used to e.g. environmental concerns, product security, sell-by dates, etc.

If your product lacks any of these details it is likely to be treated with suspicion.

Infographic:

The influence of product packaging on consumers’ buying decisions

The Influence of Product Packaging in ConsumerYou can also find more infographics at Visualistan

With some inspiration you can come up with an amazing business idea

With some inspiration you can come up with an amazing business idea

In their quest to find out how organizations come up with new ideas and convert these ideas into successful new products, services, businesses and solutions, researchers from New York’s Rensselaer Polytechnic Institute arrived at an interesting conclusion. They discovered that most of the novel ideas behind successful projects were the result of “happy accidents” rather than formal idea-generation processes.

Looking at some of the most revolutionary, creative and enduringly successful business ideas there are around, you can’t help but concur that there is something fluky about them.

Perhaps this is why such ideas are not too common.

Nevertheless, because the entrepreneur in you is determined to succeed, nothing can or should stop you from creating your own luck.

Coming up with a winning concept is the first step.

To get there though, you need to start looking in the right places. Examples of these idea sources are discussed below:

1. Answering the question “What’s next?”

While thinking about current trends and technologies, and then employing entrepreneurial foresight, you can try to anticipate future needs and requirements.

Someday your idea can become reality...

Someday your idea can become reality…

In doing so you may come up with a concept(s) for products and/or services that will cater to these needs. There are indeed plenty of successful businesses that have flourished because the entrepreneurs concerned foresaw future opportunities.

2. Earning money from your hobby

Many people have found entrepreneurial success by transforming their hobbies into businesses.

For instance, many food catering businesses are owned by persons who decided to monetize their love for cooking. Similarly, many people have found success in photography, fashion design, jewelry making, etc.

Who knows? Your photos may soon start earning you good money...

Who knows? Your photos may soon start earning you good money…

This article suggests hobbies that can make you a better entrepreneur.

3. Getting rid of a particularly bothersome problem

All of us have to contend with various niggling bothers and pain points in our daily lives. Some problems can be ignored but some are clearly very difficult to overlook.

Business opportunity, anyone?

Business opportunity, anyone?

Think about one bother that makes you go bonkers. Most probably there are lots of other people in the same situation who are itching for a solution.

Marion Donovan, a Westport housewife, must have had enough of cloth diapers, enough to be inspired to design the first model of a disposable diaper.

Can you think of a solution that can double up as a business idea?

4. Identifying an untapped/new market niche

For a given industry, think about the various products and/or services that currently exist. What are the various requirements that are hitherto being catered to unsatisfactorily? Spotting and monetizing such opportunities typically requires some imagination.

Candles need not be plain - there's more money in decorative ones...

Candles need not be plain – there’s more money in decorative ones…

For example, many of us couldn’t think beyond bottled mineral water. Some imaginative entrepreneurs did. Now we have carbonated mineral water and flavored mineral water.

5. Visiting exhibitions

Attending trade fairs and exhibitions, at home and overseas, and especially those featuring participants from other countries, can really help to broaden your scope of thinking.

At these events you will be able to interact with foreign entrepreneurs from whom you might learn several ideas that are yet to be exploited as business opportunities in your country.

Trade fairs and exhibitions will expose you to new ideas and concepts

Trade fairs and exhibitions will expose you to new ideas and concepts

Apart from inventors and entrepreneurs you might also want to engage with product distributors, sales reps, franchisers and wholesalers.

They are obviously interested in expanding their business to your country – who knows, you may end up running the sole local dealership for one of these companies.

6. Transferring your skills to an entirely new area

Imagine using your skills to create a new product or service that is a marked departure from what you are used to doing. The result could be a business idea whose success may exceed your own expectations.

Apart from water tumblers a glass-worker can also make various attractive collectibles...

Apart from water tumblers a glass-worker can also make various attractive collectibles…

In the movie “The Illusionist” the lead actor, a carpenter’s apprentice, uses his woodworking skills to create a lovely imaginative locket for the girl he loved. Such custom-made keepsakes tend to sell well.

7. Exploiting a market niche where innovations are scarce

There are markets where successive innovations are far in between. A creative entrepreneur can make the most of the situation by providing a product that users are likely to hail as being revolutionary.

The chainsaw rendered handsaws and axes virtually obsolete...

The chainsaw rendered handsaws and axes virtually obsolete…

For instance, scissors and manual clippers were for a long time barbers’ instruments of choice. The introduction of the electric shaver by Jacob Schick changed all that and ideally helped to revolutionize the concept of male grooming.

8. Launching a cheaper version of an existing product/service

This approach is really effective for startups hoping to compete in industries dominated by big household-name players.

Provided that your proposed product/service has proven that it can deliver, customers will definitely want to give it a try. It is for this reason that many industries are characterized by product differentiation and price discrimination.

Is this the real thing?

Is this the real thing?

For example, a man who cannot afford to buy a diamond necklace for his lady can always purchase one made with cubic zirconia gems.

9. Engaging with a product or service’s users

As a matter of fact, it is the users of a product or service who can provide the best feedback about it and also suggest whatever improvements they would like to become available in the market.

Seek customers advice about how you can improve a product and then launch one that meets these requirements

Seek customers advice about how you can improve a product and then launch one that meets these requirements

You can therefore decide to interact with people who buy a certain product that you are capable of improving upon and from these discussions find out what your  new version of the product should feature and/or offer.

Sportswear giant Nike started out by making improvements to running shoes.

10. Scouring mass media for opportunities

The mass media is a treasure trove of information and ideas from which business opportunities can be created.

Wherever you look, be it on the Internet, television, newspapers, magazines, and so on, there is always information about the latest trends in this or that facet of our daily lives. Ads of virtually every description are always aplenty.

Mass media is a rich source of potential business ideas and opportunities

Mass media is a rich source of potential business ideas and opportunities

You can directly respond to potential business opportunities. You can also go a step further and visualize a new concept that you can package as a viable business solution.

 

A business that offers diverse products/services is almost always doing business

A business that offers diverse products/services is almost always doing business

After successfully steering your small business from existence and through survival, you are now at the success stage. It is now beyond doubt that your business idea was a winner right from inception –the naysayers are now eating lots of humble pie.

You are now thinking about the next stage of growth for your business enterprise and are considering two options:

  1. Whether you should take the current business to the next level OR
  2. Whether you should venture out in a new direction while using the current business as your support.

If no.2 is what’s on your mind then you are basically planning to diversify your business.

Business diversification does make a lot of sense. After all, we all concur with the old adage “Don’t put all your eggs in one basket”.

Like for many other critical business decisions, you need to approach and implement diversification from an informed point of view. Whatever the proposed implementation will involve, there is a single rule: Your core business should remain as it is.

Why does diversification make so much business sense today?

Even if you are living in a utopia you most certainly have a clue about today’s state of affairs. The need to always expect the unexpected can hardly be overstated.

What does this imply for small business owners?

It’s quite simple.

However much your business may be thriving currently, there is always need to ask “what if”.

Business diversification will in this context help you to:

1. Avoid becoming too dependent on a single customer

There are many small (and large) businesses whose entire operations are more or less based on serving a single very profitable customer.

Things are typically very smooth for as long as this symbiotic business relationship exists, so much so that these business hardly see the need to source for other clients.

What will you do if your only client is suddenly no longer available for business?

What will you do if your only client is suddenly no longer available for business?

If your business fits this description you need to start imagining what would happen if for some reason your client is no longer available for business. You would definitely need to find new clients, the failure of which would likely compel you to wind down your operations.

Start making hay while the sun shines. Seek out alternative clients or make sure that substantial sums of your income are being saved for the proverbial rainy day.

2. Avoid becoming too dependent on a single supplier

Similar to having a single customer, there are many positives that come with having a single supplier, more so when the business relationship is mutually beneficial.

Likewise, the negatives of such a relationship can have a crippling effect on your business.

What will happen if the only source of your raw material is shut down?

What will happen if the only source of your raw material is shut down?

What happens if your supplier can no longer provide the raw material you need for production? In case you can’t find an alternative supplier you’ll have no choice but to halt operations and think about introducing a new product altogether.

3. Ensure you have multiple revenue streams

Ideally, if ¾ of your current business revenue is generated by a single product/service, you should start thinking about additional revenue streams.

Why, you ask?

Well, if your cash cow takes a hit, your revenues will most likely dip severely, at least in the short-term. In the worst case scenario you may have to start an entirely new business.

Multiple sources of income will add more stability to your business...

Multiple sources of income will add more stability to your business…

Diversification in this case can be done through the introduction of new products/services that are complementary to your cash cow.

For example, if you run a bread bakery, you may want to introduce complements like superior quality peanut butter, jams or honey etc.

Doing this will also help you to have an extra edge on the competition.

4. Avoid depending on a single distribution channel

If your business has just a single channel of getting things to the marketplace, or a single way of making sales, you need to start thinking fast.

What will happen if your current distributor is suddenly acquired? What if your door-to-door sales technique is blacklisted by the government in the wake of terror threats?

What if the authorities start enforcing this ban strictly?

What if the authorities start enforcing this ban strictly?

In both scenarios it is likely that a completely new approach will have to be thought up and implemented. Knowing just how much time such new approaches may require before becoming effective (if ever) these are scenarios you don’t want for your small business.

What are the motivations for small business diversification?

5. The need to reduce financial risk

Some of these will most likely break or crack...

Some of these will most likely break or at the very least crack…

Many business owners resort to diversification in order to secure their financial assets.

Borrowing from “Don’t put all your eggs in one basket” you may find it prudent to put your money into different pursuits. This is done in the hope that should some pursuits flop, others will thrive.

6. The need to harness new market opportunities 

If your idea feels viable then go ahead and test it...who knows what may come of it?

If your idea feels viable then go ahead and test it…who knows what may come of it?

Every once in a while you may discover a new market opportunity that you feel is potentially profitable and therefore worth exploring.

Whether or not this proves worthwhile, your focus should always be on your core business. Ensure that the distractions of your new pursuit won’t result in the demise of your primary source of revenue.

7. To create more appeal amongst current and potential customers

Business diversification results in customer base diversification.

Introducing new products/services into your business portfolio will firstly allow you to earn more revenue from additional sales to your current clientele. Secondly, the new products/services will help you to break into a new market segment thus adding to your overall customer base.

Expanding on an original idea will most likely make your business more relevant to your target market...

Expanding on an original idea will most likely make your business more relevant to your target market…

There is immense risk in undertaking such diversification; a sober-minded approach is required considering that a new product/service may either do well or flop. In case it flops you will have to contend with the effects of losing substantial cash flow.

8. To improve your business’ profile and appeal for potential buyers

A diversified business makes for a more valuable proposition for potential buyers

A diversified business makes for a more valuable proposition for potential buyers

Perhaps you are considering selling off your business at some point in the future. Businesses that have diversified portfolios tend to have an edge with regards to potential buyers.

Such buyers would love to know that their financial risk will be spread out across multiple market segments. You will therefore have additional bargaining clout when a buyout arrangement materializes.

What should you consider before embarking on business diversification?

9. Ensure that your new product/service has a value proposition for the customer

How about this for a new business idea?

How about this for a new business idea?

Your diversification efforts are guaranteed to achieve success if customers perceive the new product/service you are offering to be relevant and valuable.

Creating a new product/service that customers need to use very regularly is a good way to approach diversification.

10. Have expertise in your proposed area of diversification

Success will almost certainly be guaranteed if you have the expertise and know-how required for providing the new product/service. Ensure that the relevant systems and personnel required to deliver your new product/service to customers are in place.

It’s also a good idea if your new business direction is a fit with your overall business model thereby ensuring that you won’t be entering into completely uncharted territory. This way it will be easier for you to penetrate and expand within the new market segment.

Diversification tends to be more successful if the entrepreneur is knowledgeable about the proposed idea...

Diversification tends to be more successful if the entrepreneur is knowledgeable about the proposed idea…

11. Leverage on your business’ strengths

If you are thinking about diversification it means that you already have a successful business model in place.

Using this as the scaffolding for your next stage of business growth will make it easier to explore and implement the new ideas you have in mind. Of course you must be thoroughly knowledgeable about the ins and outs of the proposed business field.

Indeed, according to Peter Drucker, “attempts to diversify without either a foundation in common market or in common technology are doomed to frustration.”

12. Find the right people for the job

You must ensure that you have a competent team in place before you implement the proposed transition.

You’ll most likely be required to hire personnel that have the required skills, as well as train the current team to ensure that everyone is on board with the new direction the business will be taking.

Introducing a new offering may require you to engage a skilled team - ensure that everyone is competent

Introducing a new offering may require you to engage a skilled team – ensure that everyone is competent

Creating passion about the new direction amongst your employees is guaranteed to make implementation far much easier and more successful.

What types of diversification can you consider for your current product/service?

13. Adaptation

Adaptation will involve tweaking and/or adjusting your product/service so that it can become useful to a new type of clients.

The same product or service can be adapted to suit new and different types of clients

The same product or service can be adapted to suit new and different types of clients

For example, if you create top-notch premium-priced anti-virus software you may think of introducing two new versions of the software, say basic and advanced, that will cost cheaper and attract two new categories of consumers. This is an example of a diversified sales strategy.

14. Introducing complementary products/services

Here you will be introducing a new line of product/service that is related to what you offer, but that your customers currently have to purchase from a different vendor or competitor.

For example, if you manufacture pencils, you may decide to introduce erasers and pencil sharpeners. This is an example of related and/or concentric diversification.

You can diversify your business by offering a portfolio of related products or services...

You can diversify your business by offering a portfolio of related products or services…

Some of these approaches may require you to purchase a company that produces the sort of product/service you wish to introduce. This typically results in a diversified business portfolio and the elimination of a potential competitor from the market.

15. Introducing an integrated product/service lineup

Quite similar to the previous strategy, this is about finding out what more your business can offer the market with regards to its current offerings.

The pencil manufacturer can think about adding color pencils, crayons, ballpoint pens and fountain pens to its product portfolio. This is an example of horizontal diversification.

...or by offering an integrated portfolio of products or services

…or by offering an integrated portfolio of products or services

16. Strategic partnerships

It may be the case that there are viable opportunities to be accrued by partnering with another company that has little or no synergy with your business.

The pencil manufacturer can perhaps partner with a toiletries manufacturer resulting in a win-win alliance.

This is an example of unrelated and/or conglomerate diversification.

17. Anticipating future market requirements

The last thing you would want for your business is to be rendered obscure as a result of failing to keep up with industry advancements.

As a proactive business owner you always want to be among the early adopters as this will allow you to earn significant returns on investment before the rest of the market catches up.

18. Launching new stores

This is the conventional way of reaching more of your target customers. You can invest in opening a new store/s in another town(s) or state(s). This is described as geographical diversification.

It doesn’t have to stop there. Venturing to neighboring countries and other continents is a possibility you can pursue in future.

Establishing new stores and venturing into e-commerce is an effective way to reach more of your target customers

Establishing new stores and venturing into e-commerce is an effective way to reach more of your target customers

19. Embracing e-commerce

The online marketplace is where big and small players are doing splendid business. Make a point of taking your product/service online if you aren’t there yet.

Considering that people are increasingly embracing the conveniences of online shopping, your business will definitely expand its reach by targeting a global audience.

Again, considering how expansive the online marketplace is, who says you can’t open multiple stores?

This is a good example of market diversification.

In conclusion:

While you may as a small business owner feel the natural inclination to maintain your business’ current status quo (and enjoy the risk-free and safety advantages of doing so), it is worth appreciating that sudden events can result in the stalling or complete demise of your enterprise.

Business diversification is a proactive way to forestall such eventualities. It is also an effective way of growing your business and adding to your revenue.

In what ways have you diversified your operations? If you haven’t done this yet, what are some of the ideas you may consider implementing?

If you can do this for family and friends then why not start a food catering business?

If you can prepare this for family and friends then why not start a catering business?

You are perhaps the go-to person when family and friends need help with cooking for events such as parties, anniversaries and weddings.

You know as much, and that’s why you’ve recently started charging a small fee for the service – you now get paid whenever your excellent culinary skills are hired.

So, have you thought about starting your own food catering business?

No!?

Why not?

After all, it’s virtually impossible that people will stop eating at get-togethers, events and corporate functions.

And, this is one of those businesses where talent really counts.

Nothing quite lingers in the memory like the taste of a delicious meal; all it takes is one opportunity to delight attendees’ taste buds. Do this well and everyone, from the kids to the adults, will make comments about your delicious food part of their conversations for a long time.

If it's tasty they'll definitely talk about it!

If it’s tasty they’ll definitely talk about it!

The National Association of Catering Executives estimates that this industry generates an estimated $7.1 billion annually. Events – including corporate functions, weddings, holiday parties and funerals are responsible for most of this revenue.

While demand for the service typically dips during economic slumps, the necessity of the service makes this a recession-proof business.

The country has an estimated 10000 catering businesses, each hiring an average of 11 persons. Given that the industry is highly fragmented i.e. most of these are small local businesses which don’t control large portions of the market share, being unique can really work to your advantage.

You want to be based in a densely populated location, e.g. a large city, where demand is typically higher.

Who knows? Perhaps your business will be doing this in the future...

Who knows? Perhaps your business will be doing this in the future…

1. Catering service prerequisites

Your core operation as the owner of a catering small business will be to provide food service at events.

You will typically prepare this food at your premises and then deliver it to the event location. In addition to the food you may also be required to provide drinks, cutlery, crockery, glassware, decorations and staff.

Will you cater to private clients...

Will you cater to private clients…

You will need to decide what sector of the business you will engage in; will your service target social event clients (mostly consisting of social occasions e.g. parties, weddings and funerals) or corporate events? There are some caterers who cover both.

...or corporate clients...

…or corporate clients…

The ability to prepare an extensive range of dishes or multiple types of food service is a crucial prerequisite considering the scope of people who may wish to hire your service. While some may have conventional preferences, others may have more sophisticated requirements.

Versatility and creativity with regards to your offerings will therefore enable you to appropriately cater to a varied description of clients.

...or perhaps specialize in weddings?

…or perhaps specialize in weddings?

Being successful as a caterer will require you to combine your passion for food with some business acumen.

Running a profitable venture will need you to be knowledgeable about effective pricing strategies, controlling costs, sourcing and business marketing. Having organizational and event management skills will also be crucial for the success of your operations.

Last but not least, you will need to be a self-motivated entrepreneurial individual, and especially good at inspiring teamwork in your employees. Remember, you’ll be working when everyone else is having a good time.

2. Deciding on an appropriate business structure

In choosing an appropriate business structure for your food catering business there are basically two considerations:

Industry experts agree on the need to prioritize liability, and consequently advise business owners to opt for incorporation.

Why?

Corporations and liability companies insulate business owners from business liabilities, unlike sole proprietorships and partnerships. Simply, a corporate structure will provide limited liability for your business.

This certainly makes a lot of sense seeing as the catering business is quite risk-prone. There are quite a number of things that can go wrong; employees can suffer injury, people may fall ill after eating your food, etc. In case you are sued, the incorporated structure will ensure that your personal assets won’t be attached to the lawsuit.

You should at this juncture also find a reputable accountant who’ll demystify the tax implications of running your catering business.

3. Selecting the best form of insurance coverage

The food catering business is typically hazard-prone. For this reason you’ll need a suitable insurance cover, one that will cover every potential eventuality.

A suitable insurance package will ensure that your business is well covered when disaster strikes...

A suitable insurance package will ensure that your business is well covered when disaster strikes…

Get in touch with insurance brokers who are well reputed amongst commercial food production business owners; they should be able to advice you on the best coverage.

You can also consult with other food catering business owners to find out what coverage they have. Going for a general $1 million liability policy is quite advisable.

4. You must have the required licenses

Your business will need to be licensed by the state; make sure you select the right license. You may also require a city business license.

Additionally, find out about the various food-serving and liquor licenses you will require depending on each event venue’s location.

5. You will need an appropriate kitchen

It is unlikely that state authorities will allow you to use your home kitchen for your food catering business

It is unlikely that state authorities will allow you to use your home kitchen for your catering business

In many states your food catering business will need to operate from a commercial kitchen that has been inspected and approved by the local health department.

Building such a kitchen is typically quite expensive though.

Some of the options you may therefore resort to include:

  • renting a local commercial kitchen that has subleasing arrangements for freelance caterers
  • renting out a bar’s commercial kitchen, and
  • retrofitting your home kitchen to commercial standards

6. Some of the equipment you will require

Starting a food catering business will require an investment in various kitchen appliances and equipment

Starting a catering business will require an investment in various kitchen appliances and equipment

Depending on the type of your operation you are most probable going to need the following equipment

  • Commercial refrigeration
  • Kitchen work tables
  • Commercial dishwashers
  • Basic kitchen supplies
  • Steam table pans
  • Disposable catering supplies
  • Food carriers
  • A fryer
  • Convection oven
  • Range
  • Chafing dishes
  • Catering display
  • Event tents

When setting up it is advisable to adhere to the Golden Triangle of kitchen design.

7. Commercial kitchen health and building codes

Given that your catering business is liable for food consumption you will need to comply with a host of food handling, inspection and commercial kitchen rules and regulations.

Seasoned caterers therefore recommend that startups hire consultants who’ll advise them about:

  • the appropriate premises and equipment,
  • employee training, and
  • structuring code-compliant business operations

8. Basic requirements for your commercial kitchen and premises

The following requirements must be adhered to at your catering business’ premises:

  • Hand-washing facilities and toilets – An adequate number of washbasins must be available for hand-washing, complete with hot and cold running water, cleaning accessories, and hygienic drying facilities. (Food and utensils should be washed in separate sinks). The number of toilets should also be adequate and they must not directly lead into food preparation areas.
  • Changing facilities must be provided for the staff
  • Adequate ventilation, drainage and lighting is required at the premises
Base your operations in an inspected, compliant and approved commercial kitchen

Base your operations in an inspected, compliant and approved commercial kitchen

For the food preparation area the following requirements must be complied with:

  • The floors and walls must be smooth and hard-wearing, well maintained, and easy to clean and disinfect
  • Ceilings should be in good condition, smooth, easy to clean, with no flaking paint or plaster
  • Windows and doors should open to the outside, and be easy to clean and disinfect. Where necessary the windows should be fitted with insect-proof screens that can easily be removed to allow for cleaning
  • All surfaces, especially those that are touched by food, must be easy to clean and disinfect
  • Facilities for cleaning, disinfecting and storing utensils and equipment must be provided, and these facilities should have an adequate supply of hot and cold water
  • Facilities for washing food must be available, and must have an adequate supply of hot and/or cold drinking-quality water. The facilities must always be kept clean and should be disinfected whenever necessary
  • Waste (including food waste and other rubbish) must be promptly disposed of
  • Employee health and safety, and fire safety precautions must be adhered to

9. Food production and food safety regulations

There are various food preparation, food safety, product packaging and labeling regulations that you’ll need to comply with. To know about these you’ll need to consult with your local Public Health Department.

You must comply with all the food preparation and safety guidelines - don't ignore any!

You must comply with all the food preparation and safety guidelines – don’t ignore any!

In case you’ll be producing a food product that will be shipped across state boundaries then you’ll be well advised to find out what the Department of Agriculture and FDA compliance guidelines require.

More about the catering industry’s federal regulations can be reviewed at www.foodsafety.gov. You can also learn more about food safety management here.

10. Marketing the business and finding clients

Your new business will need clients; finding them is going to cost you money. Marketing costs will perhaps take the lion’s share of your initial budget – until you build a solid reputation.

The "homemade cooking" theme may actually suit your catering business' marketing efforts

The “homemade cooking” theme may actually suit your catering business’ marketing efforts

Some of the promotional activities you can invest in include:

  • Creating a social media presence. Note that online marketing needs to adhere to several legal requirements which you can learn about here.
  • Printing business cards and promotional brochures
  • Joining the NFIB, your local chamber of commerce, and other relevant organizations
  • Charging discounted rates for several of your initial gigs can also be helpful
  • Making the most of your home-based profile – marketing your business as one that delivers “homemade” food can really work. Some of the slogans you can use are “good ole’ home cooking” and “homemade food – just like mom used to make”. Indeed some new clients may be won over by your homey appeal rather than the conventionality of a corporate caterer.
  • Offering tastings – Taking food samples to potential clients is an even more practical. After describing your offerings over the phone or via email, you can take samples of the food to them and cater to them just as you would have done for an actual event. If your hot and delicious food impresses them you just may land a contract.

11. Drafting a customer’s contract

A written contract won’t be necessary if you’ll be providing your catering service within a year from the date of your agreement with the client. Nevertheless, it’s prudent to draft a catering contract with each customer of your service.

Draft each contract carefully, ensuring that all potential legal issues that may arise in the event that something goes wrong are covered.

Your contracts should feature the following:

  • Details of the services to be offered
  • How payment for the services will be made, and when this will be done
  • Actual figures – explicitly mention the exact amount the customer will be required to pay
  • A description of the venue. Indicate who will be contracting the venue (your business or the customer) and who’ll be responsible for any damages. Also, find out any rules about the venue that the customer has consented to and which may affect your business
  • It is also prudent to confirm whether the state laws allow food catering business customers additional damages

12. Staffing issues

You are most likely going to need extra hands – mostly servers and preparers. An administrative assistant may also be required.

Staffing is the most significant expense for a food catering business

Staffing is the most significant expense for a catering business

Industry experts advise business owners to hire independent contractors.

To determine your labor cost you should consider a specific event’s requirements (i.e. the amount of food, type of food, transportation costs, number of guests, etc). This cost must then be factored into the customer’s price.

Given that staffing will be one of your most significant expenses, it is (wherever possible) advisable to start as a family business or husband-and-wife team.

13. Qualities of a good caterer

Why would people want to hire your catering service and not the next one?

Why would people want to hire your catering service and not the next one?

These are some of the qualities that customers and potential clients will be looking for in your catering service:

  • Your cooking skills – The food must taste good. You must also display lots of cooking versatility and awareness with regards to recipe substitutions, menu planning, and the logistics of preparing, transporting and reheating food.
  • Attention to detail – As concerns every aspect of an event including table arrangements, décor, food presentation, serving, and clearing the venue
  • Adherence to food safety rules and regulations
  • Exemplary customer service – Including good communication and people skills, courtesy, tact, diplomacy, all which help to achieve customer satisfaction
  • Flexibility and creativity – You must show imagination and adaptability, say if recipes need to be altered to suit various religious, health and personal preferences
  • Leadership – This applies to how well you manage your team
  • Self-motivation, enthusiasm, positivity and stamina
  • Business management acumen – How well you handle various crucial aspects of your business including pricing, employee management, accounting, taxes, sourcing and ordering food, budgeting, scheduling, etc
  • Marketing skills – How well you promote your business, and how well connected you are e.g. with venue organizers, event planners, florists, etc.