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| MINDING
YOUR BUSINESS Filling an untapped niche offers best shot at success Defining business vital to planning |
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Ann Meyer Special to the Tribune Published February 23, 2004 Copyright 2004 by the Chicago Tribune |
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Craig Neal's knack for solving computer problems has made him a popular
guy in his neighborhood. "In every social exchange, it seemed, every other day, someone was talking about their computer problems," he said. Most didn't want to disconnect their hardware and take it into a shop, but they didn't know of an alternative until they found Neal. "I became the go-to guy," he said. Along the way, a light bulb went on over Neal's head. If his friends and neighbors needed at-home computer help, didn't others? Could he parlay his computer handiwork into a full-fledged business? Neal began researching the idea last spring and before long quit his full-time job as a financial reporting manager for Illinois Tool Works Inc. to launch The PC Refinery LLC, a Deerfield-based computer consulting firm aimed at the residential market that's on track to pull in $200,000 this year, he said. |
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While some entrepreneurs struggle for years to come up with a solid business concept, others stumble onto an opportunity that seems too good to pass up. Starting with a clear definition makes it easier to plan, market and grow your business, experts say. Plus, companies with a distinct niche in the marketplace often stand out. "You have to differentiate yourself somehow from your competitors, or you'll get lost in the crowd," said Alice Magos, a senior writer and analyst for Riverwoods-based CCH Business Owner's Toolkit, an online resource for entrepreneurs. "The trouble many people have starting out is they don't have a lot of clarity." Without a clear definition of what your business does, charting a winning path won't be easy. If you can't boil down your business description to 25 words or less, you're going to have trouble pitching it effectively, Magos said. One way to carve a niche is to look for hidden trends or anomalies in the marketplace, Magos said. Ask yourself, what do people want that's not available? A technical support department that will come to a computer user's home is the answer Neal came up with. But he didn't base it only on his own experience. Further research confirmed that as more people own computers, have home offices or operate businesses too small to justify an information technology staff, they are creating greater demand for repair and installation technicians who make house calls. Although some companies have tapped this market already, Neal found there was room for another. "The numbers and the need out there is what gave me the belief this would be a viable opportunity," he said. It takes more than a good idea to make a successful business, but Neal's extensive research and planning, as well as ongoing management, can only help, said George Krafcisin, a business consultant and counselor with the SCORE program at the College of Lake County in Grayslake and Waukegan who has worked with Neal. "There is a niche he has carved out," Krafcisin said. "Now he's got to put in the time and effort and keep plugging away to get those customers in." Charging about $75 an hour, Neal is confident he can make it work. After a slow December, business has picked up dramatically, he said. He has hired several independent contractors to keep up with demand and is expanding the company's office space. "It's a dream come true," he said. Once you have a good idea, the next step is investigating the market, competition and industry trends, Magos said. You can do this through formal research, such as government data, as well as informally by talking to friends, relatives and other business owners. You'll also need to make financial projections based on estimated costs, pricing, productivity, capacity and cash flow. Then pull together the information you uncover, along with a detailed business description, in a business plan, which will be necessary if you seek a loan. Even if you are self-financing your start-up, a business plan is a good way to organize your thoughts, track your progress and identify potential problems, Magos said. For example, it's better to know early if your marketing strategy is falling short, so you can adjust. To help you get started, she recommends Business Plan Pro, a $99 software program by Palo Alto Software Inc., which guides you through the process. It's also the program Neal used. Neal put in several hundred hours of upfront legwork--from researching the market to crunching the numbers, developing a Web site and scouting for office space--before he launched The PC Refinery in September. Competition rising Still, Neal's concept is hardly unique. Small PC consulting firms are starting up all over as laid-off IT workers look for ways to parlay their expertise. Growing competition could present a challenge, Krafcisin said. Many start-ups don't last, said John Rickey, who with his wife, Jean, owns CTResources, an 8-year-old Tinley Park computer consulting firm aimed at small businesses and individuals. "I can count on two hands the number who have sprung up and within a year or two are out of business," he said. Rickey's own recipe for success involves putting clients' needs first. "It's that relationship you build with your client which is the most important ingredient for success," Rickey said, noting that the company's sales have grown year after year. Helen Gallagher, owner of 7-year-old Computer Clarity, a Glenview-based computer consulting firm, agreed. "It's helpful to focus on what other people need rather than what you have to offer," she said. Business evolution By listening to what her customers want, Gallagher reshapes her business as needed. "The business evolves as technology evolves," she said. "People are so much more skilled today that it's allowed me to grow the services I offer." In addition to her core goal of providing software consulting and training to small-business owners for about $90 an hour, she draws on her prior 30 years of corporate experience to provide advice on how to boost productivity, improve organizational management or manage business from a laptop while you're out of town. "There's definitely a need for more people who go beyond the technical side and will sit down and figure out the best way to help people get their work done," she said. Rickey takes a similar flexible approach, asking clients what specifically they're looking for before he trains them. "I don't just show them Microsoft Word. I show them how they can use Word to improve productivity and cut time. I try to customize it to their situation," he said. Rickey's company, originally called Computer Training Resources, with a focus on applications training, has expanded its services over the years to better serve customers' needs. Now, as CTResources, it also provides Web hosting, design and some bookkeeping services. "We are always re-evaluating who we are, and what services we provide," he said. Fees range from about $75 to $95 an hour, he said. But before Rickey pursues a new direction, he consults his business plan. "You have to have a plan to succeed," said Rickey. "If you don't, you just set yourself up for disappointment or difficult times." Keep in mind that the best-laid business plans aren't set in stone, Magos said. "You have to view it as a dynamic document, because it's changing every day," she said. "As you're learning, it's changing." |
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Copyright 2007 The PC Refinery |