There are many different kinds of entrepreneurs. Some are drawn to a business just because of an innate passion for what they are doing, some are bred into it and others discovered a problem and want to create a solution for that problem in the marketplace. For those who want to start a business in the small-town communities — how can you make sure you do it right?
Step 1: Create your list
Identifying a gap in a small town is as simple as a Google search followed by taking a walk.
If you live in town, simply walk around. Check out the local businesses and see what their offerings are. When you are there, pay close attention and think about something that you would enjoy but cannot seem to find.
If you don’t live in town but you’re thinking of, spend a weekend there. During your time there, start asking the same question: What would I like to see there?
There might be restaurants, a hardware store and a beauty shop, but what else would you be interested in having there? If you’re looking at a town that has a direct transit connection to a major city, what business could attract people from that city? Is the town located near natural resources that people haven’t thought to use for business yet?
For example, are there hiking trails, mountains, rivers or lakes? If you have a train connection from the city to some hiking trails, what could a possible business be? Maybe there are a lot of urbanites who would love to go hiking, but they don’t want to drive or lug their equipment on a train. Maybe an equipment rental store could provide them with all of their equipment, or maybe even a guide service would be a good business to set up.
Step 2: Create a list from others
So you have your list, but that’s one perspective. That brings us to the next step: Ask the town what it needs. Ask the people of the town what it needs or what are some things people wish they had. Do they have to drive out of town to go to a dry cleaner, for certain entertainment or go to the gym? Don’t just ask a select few people; ask as many people as you can.
Find the high traffic areas around town and spend a couple of hours asking and recording answers, identifying which ones keep popping up. Ask people who work for the town, ask organizations around town, ask business owners, ask people at random, just keep asking and you will start to hear the same ideas repeat.
A great resource to ask is the local Chamber of Commerce. The local chamber likely keeps a running tab of business ideas. In addition to keeping a running tab of businesses, they will be an amazing connection to have as time goes on in this business process — which brings us to a bonus point.
Bonus: By simply asking a lot of people questions, you will be able to start building connections and relationships that might come in handy and help speed up the process should you decide to launch your business.
By the end of this gap refinement process, you will have a list of businesses you created and a list of businesses that other people mentioned as well. It’s time to sit down and compare the two — there will be a couple of businesses that overlap from these tests, focus on those.
Step 3: Figuring out which gap is best for you
Are there any businesses on that list that make sense for you? Is there a gap that made you think “Wow, I already have everything I need to fill that”?
For example: Have you worked in a bakery? How about a pastry shop? Both in terms of production and retail? Do you bake on the weekends? Have you created your own recipes? Have you distributed baked goods? Did you start a baking club?
Is it time to open a bakery? It might be, it might not be — the question then becomes is that something you want to do.
If you know that you don’t want to open a bakery even with your love of pastries, that’s fine — cross it off the list. The objective should be to find something that fits the following 3 criteria:
- What does the town need?
- What am I good at — if I don’t know, what do I enjoy doing?
- What do I want to do?
Align these 3 things and you’re on your way.
Step 4: Protect your downside and hedge your bets
By now we have asked a lot of questions that helped build a foundation and identify a business we would like to start. Now, it is time to ask the structural questions to validate the idea.
Figure out how to address challenges before launching a business by using these questions:
- Will this business not work because there wouldn’t be enough customers to generate an ROI?
- Will this business not work because you don’t have certain knowledge you’ll need?
- Will this business not work because your product or service is not good enough?
Analyzing questions like this will allow you to fill a market gap in the strongest possible way — giving us the highest likelihood of success.
Is there a way for you to pour your resources into filling that gap slowly? Doing it this way ensures the business strengthens correctly as opposed to filling the gap only to realize that it will soon break.
So, can you start on a smaller scale? Can you sublet some square footage in a commercial space instead of taking over an entire spot yourself? Can you get customers to sign up ahead of time? If you live in town, can you start it out of your home? Or how about, filling a smaller part of the gap to start?
If you find that there there are more challenges than you’re comfortable with taking on, that means one of two things. Either it’s time to start creating a better solution or head back to your list to find another gap. If you have found your gap, addressed why it wouldn’t work and you’re still ready to move forward, that brings us to the next step.
Step 5: Business plan and beyond
You have decided to move forward with your business idea, which means it’s time for a full business plan. The good news is that with all the work you have already done, this can come together fairly quickly.
Iron out the business plan and remember it is a dynamic document. You don’t need to follow it to a T as it is meant to serve as a guide. You might find the skills you developed in this process lead you to a better solution or that you could branch out into other gaps – those are all types of possibilities we travel down as entrepreneurs.
Find the gaps, refine the gaps, figure out what’s best for you, manage downside risk, plan and execute.