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The Four C’s of Business Gems

Business GemsIf you’re familiar with the jewelry business at all, you know the four C’s of choosing a diamond are Color, Clarity, Cut, and Carat weight.  When looking at starting a business, there are also four C’s to consider.  They are Company, Customers, Competitors, and Collaborators.  If you evaluate each of these areas properly, you’ll get a good idea of whether your business idea is a good one, and more importantly, whether or not it’s the right idea for you.  If you’re going to create a formal business plan, these steps will help to clarify the components of your plan as well.

Company – Consider what your company will look like.  What form will it take?  Will you need employees to make your idea fly?  If so, how do you feel about that?  (Having employees can be a big challenge.) How will you provide your products and/or services, and what will your day look like running this business?  Also consider what you want your company to represent and how you’ll communicate your brand to the public.  If you do plan to have employees, think about what you want your company culture to be like, how you will find and train quality employees, and what you will offer them in terms of benefits and working environment.

Customers – Who will your target market be?  It’s important to look at the demographics of your potential customers.  Are they men, women, young, old, etc.?   Also consider how you will market to this group.  Depending on the makeup of your target audience, you might use Internet marketing, networking, or traditional advertising.  It’s important to think about influencers too.  In other words, your purchasers might be women aged 28-36, but their pre-teen children might have influence over their buying decision, so how will you reach both groups effectively?  Once you have customers, it’s important to know how you’ll treat them – what your customer service philosophy will be, including your return policies.  It’s important to look at the whole picture – from your customer’s point of view.

Competitors – Chances are slim to none that you have no competition in your industry.  So it’s important to know who your competitors are.  Most importantly, you’ll want to know as much as you can about their strengths and weaknesses.  Why do their customers go to them?  What do they offer that appeals to consumers, and where can they improve?  Again, put yourself in the shoes of a customer and ask yourself why you would or would not use each competitor.  Then use this information to improve upon your idea to capitalize on the weaknesses of the competition.

Collaborators – This might be the most overlooked piece of the business startup puzzle.  You might not want to bring on partners, but that doesn’t mean you shouldn’t consider collaborators.  Collaborators are people who can help you build your business, and often you don’t have to pay them anything.  Organizations like S.C.O.R.E. (Service Corps of Retired Executives) and the SBA are there to help you with your new businesses, and they don’t want a dime.  Additionally, many new businesses can benefit from forming a board of advisors.  These are people with specific skills and experience who can advise you on important business decisions, and again, you don’t have to pay them.  The benefit to them is that they get to help a fledgling business succeed, and it’s prestigious to serve on an advisory board too, so that doesn’t hurt!

So, if you have a gem of an idea, remember to use the four C’s to evaluate it, and progress from inspiration to functioning business, armed with the knowledge that your idea is sound and it’s a good fit for you.

Matthew Toren
 

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs.org, BizWarriors.com and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley).

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