Step 1: Identify your skill.
“When it comes to starting a business, I always recommend people start with a skill-based side business. It’s the quickest way to get going with almost no overhead and everybody has something that they’re good at,” says DiPiazza. “The most important thing to realize is that you don’t need to be a world-class expert in order to find a skill or business idea that somebody is willing to pay you for.”
Things you’ve done for work in the past: For instance, DiPiazza worked for Kaplan Test Prep, so his first business was an SAT/ACT consulting firm.
Skills or hobbies that you already have: Are you bilingual? Are you a kitchen whiz? Can you build an app? People will pay for those skills!
Problems people are constantly asking you to solve: Are you the friend that always gets called for advice in a certain area of expertise? Maybe there’s the kernel of an idea there.
Once you choose which idea you’d like to run with, now it’s time to make sure your idea has legs. For this part of the process, DiPiazza recommends you use what he has dubbed “Three Question Validation” to make sure that your idea is fail-proof before you ever begin. If you can answer yes to these three questions, your idea has promise!Question #1: “Is there competition?”
Contrary to popular belief, DiPiazza quips, you want your market to have a little bit of competition. Why? Because pioneers return with arrows in their backs! Those who are first to market often have to spend a great deal of time testing what works, figuring out who their customers are and what sells.
Question #2: “Is my competition making money?”
Sometimes the market is crowded, but businesses are fighting over scraps. You want to make sure that there’s enough to go around. It’s time for you to do some research to see how your competitors run business.
Take a look at Yelp! Reviews or other forums. Google them for recent news articles. Give them a call or stop into their store if your competition is local. Start getting a feel for how much business they are getting, whether customers are happy and what the market size is like.
“If you can see that your competitors are occupied taking care of their customers — and their customers seem to be pretty happy, this is another good sign! You want a market that’s happy to pay. Because soon, they’ll be paying you!” DiPiazza said.Question #3: “How can I do it differently or better?”
This is where you really get to shine.
Now, it’s clear that there is a market and a need for your product or service. It’s time to think about how you can be different or better than your competition. This will catch the eye of potential clients and create a contrast between your business and others in your field.
“Standing out is a big sticking point for most people, so I’m constantly talking about this on my blog, Rich20Something.com. Yes, of course you can compete on price. But that’s a war of attrition. Everybody does that, and it hurts the entire market. Why not switch it up?
You can have better variety, better customer service, a better guarantee, or simply better craftsmanship. Most of the time, it’s just about meeting the customer’s needs more completely. If you’re a personal trainer, rather than having your client come to you, you could go to them and train them at their house. Boom, now you have a unique angle.”