What you need to consider when starting a product based business!!

Posted on Wednesday 20th of August 2014 by
Manish Khanna

To own a business and become your own boss is most entrepreneurs dream. But what does it take for an entrepreneur to transform an idea into a successful source of revenue generation? Is it just the Idea and the Finance alone that the budding businessman needs to set up a business? No, certainly not. More than investing money, it’s the planning and research that counts for an intelligent businessman to kick start a ‘product based businesses’.

1. Survey If the Market is Ready For Your Product

A skilful business person will study his business needs and plan ahead. Know if the market is ready for your product or if your market needs your product. Don’t jump in without the proper research etc. Take into account the product itself, is it seasonal, does it have a specific age range and so on. A businessman needs to be very careful when choosing the product he wishes to sell and where he wishes to sell.

Plan your business strategy and ask yourself these questions;

· What’s your target when you start selling your product?

· Does the market have demand for your product?

  • Is your product seasonal?

· What demographics would you target with this product?

· Will the product benefit the community?

Consider these essential factors before and examine the market thoroughly before you set up your product based business.

2. Online or Retail Outlet

Starting up a product based business does require a decent amount of investment before you can start profiting from it so before you put your hand to the plough, look for a location that fits your business well. Before finalizing a retail outlet for your business, assess all the pros and cons.

Ask yourself;

· Will this location help promote the sales of my product?

· Is this location suitable for the product I wish to sell?

· Is there demand for my product in this area?

· Are my distributors and suppliers within reach?

· Will the location be receptive to my product?

Many business owners also consider talking to local councils to get statistics of how well the business can perform in the area. It is also important for a business owner to figure out how much they are willing to spend on a retail outlet, therefore depending on the budget and your business requirement, decide whether you would like to lease or purchase a retail outlet location. Check out business.gov.au to run a market research for the location before you invest in a business store.

3. Register Your Business

When starting a business there is a lot of legislation and legal requirements of the Business Owner. It is their responsibility to register the business in the very beginning. They will also need to obtain:

  • an Australian Business Number (ABN)
  • the Goods and Services Tax (GST)
  • a Tax File Number (TFN)
  • Pay as you go (PAYG) withholding.

Further information about business registration can be found on the business.gov.au website. (Link)

4. Marketing Strategies and Expense

Selling a product means that you need to promote your product in order for people to want to buy it. Every product in the market takes time to catch on and reach the public. So, to spread the word and make the product popular you will need to implement a relevant promotion and advertising strategy.

Figure out how you plan to promote your product so that you can drive customers to your store to buy your product.

5. Production Plans

Running a product based business means that a product will be analysed by tens of thousands of customers which is why it is essential for a business person to invest in manufacturing a quality product.

The analysis by customer’s may include the tiniest of details such as the packaging of the product which it is best to thoroughly research before finalizing suppliers and distributors.

6. Legal Liabilities

To own a product based business in Australia you will need to obtain an Australian business license, get a business tax structure in place, and keep an account of all the investors, distributors and suppliers.

Not to forget that if you hire employees then you are bound by legal liabilities that pertains to them as well. For information regarding to your business needs refer to Australian Business Licence & Information Service (ABLIS).

7. Trademark Your Product

Every business owner wishes to own a unique and special product; the one that no other company has ever provided. To avoid any copyright issues, a business owner will need to protect the product by licensing/trademarking it. The same goes for your business name as well.

8. Business Insurance

The more possessions you have, the more security you will need. The same goes in this scenario. Since we are talking about product based business, it would require a business owner to acquire insurance which will help protect the business in case of theft, loss or damage.

These were some of the basic aspects to start up a product based business. By taking these into consideration and doing further research your Start Up business will be able to run smoothly and according to legislation. Good Luck!