Launching A Business In A New Industry? 15 Important Things To Do First
Members of Forbes Business Council outline tips for entrepreneurs considering starting a business in a new industry.
PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS.
Starting any business is often just as challenging as it is rewarding. This is especially true when the new business is in a new or unfamiliar industry. Before making that leap, it’s crucial to keep in mind several important factors.
The members of Forbes Business Council share 15 things leaders should do when considering launching their next venture in a new industry. Follow these steps to prepare your new startup for success.
1. Conduct Thorough Research
It all comes down to research. It’s critical to take note of the companies currently operating in the market, their market share, how large the target market is and what the trends are for market demand. All of these are strong signals about the state of the industry, which will inform the best approach for your entrance and prepare you for potential pivots. - Rick Luebbe, Group14 Technologies
2. Perform A Gut Check
Do a gut check. Figure out what this drive is for, what appeals about investing in it and assess your intention in addition to its practicality. - Mollie Eliasof
3. Minimize Disruptions To Your Current Business
Leaders need to ensure that there is little disruption to their ongoing business. While focusing on the new business venture, it is also critical to put in the right team to continue operations in their current works. - Qifen Wang, SEVENTY2
4. Ensure The Market Exists
According to CB Insights, the No. 1 reason (corporate) startups fail is "no market need." Focus on the market and customer needs, not the technology and get evidence that the market exists by launching a "minimum loveable" product or service first. - Joost Van De Velde, ktc
5. Study Your Competition And Total Addressable Market
The first thing I search for when launching a new business in a new industry is competition and the total addressable market. I want to be sure that there are competitors who are succeeding in the market and also how much market share I can take from this market. - Johan Hajji, UpperKey
6. Seek Out Investors
A new business venture in a new industry often falls under a high-risk, high reward bucket. Hence this is not the ideal business where leaders should try and bootstrap the initiative. Instead, I would recommend that leaders seek out investors who have prior experience in successfully launching new ventures in new industries and are willing to help the company grow and build its brand. - Biju Chandrasekharan, ByteWave Digital Inc.
7. Look For Oversaturation
Leaders should ensure that the market that they are entering is not over-saturated. What they are offering should have a unique value proposition that differentiates it from the rest of the existing competition. - Salvador Ordorica, The Spanish Group LLC
8. Test Your Concept
Conduct market research and test, test, test! You’ll want to ensure there is demand for what you have to offer and identify your target consumer audience before going to market. Testing allows you to prove that a concept works and sets you up for a successful launch. A/B testing is the lifeblood of experimentation and refining your methods and techniques. - Kelley Higney, Bug Bite Thing
9. Prepare Your Team For Constant Change
Make sure you and your team are ready for constant changes that might take place in this new environment. Organizational structure needs to be flexible and able to take quick actions. Besides that, with limited knowledge and expertise in a new industry, it would be wise to partner and network with others already in the industry to minimize learning costs. - Steve Suryadinata, Mata Investments
10. Develop A Research-Backed Business Plan
The first thing leaders need to do when launching a new business is do their research. This is integral to creating a solid business plan. Once the business plan is in place, it is important to hire professionals with expertise that you don’t have. Finding people who can fill in any gaps your company may have makes sure that you can run a successful and efficient business. - Reid Rubenstein, RefiJet
11. Think Through Your Sales Process
Leaders should test the market to ensure there is a buying market present and that a sales process can be established from the market. Too often, leaders plunge into an initiative because they get a gut feeling but find that the actual market does not support their vision or the version of their vision. - Doug C. Brown, Business Success Factors, LLC
12. View It From Your Future Customer's Perspective
Put yourself in the shoes of your future customer. Search for the products or services you are looking to offer in every search engine and social media site. This will give you a good grasp of not only your direct competitors but who else is competing for the online attention in that industry. - Beth Trejo, Chatterkick
13. Establish Your Personal Brand
Ensure that your personal LinkedIn profile is updated and the new company's branding is repositioned to present a positive view of the new business, what it does and why. Add an introductory thought leadership piece about the new business as that will impress clients, investors and employees. Add a new experience section and create new content to focus this new business venture. - Chris J "Mohawk" Reed, Black Marketing
14. Know Your Potential Timeline
Entrepreneurs should understand that a short life cycle for venture funds has negative consequences for innovation, particularly focusing on solving complex problems. Outsider investors aren't funding companies that take years of research. It's not that they are not interested in innovation but won't fund innovation that takes time. - Caroline Lee, CocoSign
15. Hire The Right Team
Hiring bright people with a zeal to succeed in the industry would top my list. Sizing up opportunity and need, conducting market research, understanding customer pain points and where other companies have failed and securing funding from experienced investors are all vitally important. The right people with ample motivation that are aligned with transferable experience will tackle these tasks and more. - Cybele Negris, Webnames.ca Inc.
