by Scott Harris
Before Thanksgiving, I requested a quote on a custom terrarium from a small, local pet store. Three times I checked in, and each time I was given a sincere apology for the delay and a promise of the quote “coming soon.” I finally gave up and ordered the terrarium online. I’m also going to buy the supplies online, rather than drive 30 minutes to the small store. I was ready to pay a small premium in price and even in convenience (the drive) to support an enthusiastic pet store owner, but in the end, I wound up doing business with a business – cold and impersonal, but fairly priced and immediately responsive.
In my conversations with the pet shop owner, I learned that he recently converted a long time fish and reptile hobby (his wife said “obsession”) into a small business, buying a failing pet store from someone who, I’m guessing, had a very similar story. It’s one I’m hearing more in the past few months than at any other time in my 25 years in business.
We are all adjusting to the new economy and, for many of us, our faith in the strength of large companies has been shaken; we are looking for alternatives. For many, that means turning a hobby, family specialty or long-time passion into a business. A new phrase has even been coined for those moving in that direction – “Hobbypreneurs.”
I certainly applaud those with the courage to open a small business. Small businesses, beginning with family farms, have always been the backbone of the American economy and will likely remain so for the foreseeable future. However, hobbypreneurs need to pay attention to the same dangers and red flags that confront every other business owner.
One of the keys to starting a new business, large or small, is market research. I received a call recently from someone who wanted us to develop a name, logo and website for their new “pie” business. They knew it would be successful and were willing to invest some hard-earned and long-saved money to get their business started.
They came armed with a stack of recipes and testimonials from family members, young and old, attesting to the fact that grandma made the “best pies ever.” What they didn’t have was any idea of the cost (hard or soft) of baking pies, nor the legalities of selling a food item or a market (outside of family) for the pies. They had a dream, not a plan. Unfortunately, a love of animals does not necessarily make for a successful pet store (though it certainly helps) and even a great pie recipe (especially when made with love) does not guarantee success in the very competitive world of baked goods.
There are another dozen similar stories that have come my way in the past few months, all driven by passion and a belief that a great product will sell itself. My goal with this column is not to discourage people from opening small businesses – especially ones that they feel so strongly about. However, I do want every budding entrepreneur to recognize that starting a business is expensive, consuming and risky. Even some basic marketing research will show if there is a market for the product or service outside your immediate group of friends and family. Of course, you might just hit on the right thing at the right time, and there are few joys in the business world that can equal making a living doing something you love.
Allow me to make a couple of suggestions for those considering a new start-up business. First, talk to a couple of people in that same business. The world is filled with people who love to cook and had no idea of the expense, time commitment and risk of running a restaurant. There are great hosts who never knew what hit them when they opened a B&B, and legions of people who don’t understand why the world did not beat a path to their door to buy a product that the family has loved for years.
If at the end of those conversations you are still inclined to try, then bring in the experts. Develop a complete business plan, including a full marketing plan. Assess your appetite for risk and hard work, and make sure your family can afford the results of failure. If you’re still anxious to move forward – congratulations and the best of luck!