The most exciting and fundamental part of starting a business is choosing a great business idea.
But thinking up a great idea is just the first step in IT products and services–it’s critical that you take the time to thoroughly examine the idea that’s to become your future livelihood.
As most IT business owners eventually learn that it’s not the person running the business, the marketing, or the employees that make or break a company’s reputation–it’s the quality and profitability of the idea behind the company that helps in the company’s success.
When you go into the IT business, you have to look at the idea or opportunity driving it from a different angle than you might assume. Most people wrongly choose an IT business based on one of two personal biases:
- It’s a business they already know. The hairdresser opens a salon, the lawyer his or her own practice, the chef opens a restaurant and so on. It’s generally a huge mistake. They’re thinking about the job they’re–not the business. Just because you’re a good chef doesn’t mean you know how to run a restaurant and it will be a successful business for you. More important, it doesn’t mean a restaurant would be successful in your market also.
- It’s a product or service they’ve fallen in love with. Again, just because you love something doesn’t mean it’s going to be a profitable business for you. This is especially true for first-time entrepreneurs. Learning to run a business is hard enough; you don’t need to make it any harder by doing something you love rather than something customers love paying you a good profit for. Apply the successful business strategies.
There are three essential considerations from which you can truly make a profit:
1. Make sure the product or service has a repeat buy and demand in the market.
This is by far the most important aspect of long-term IT business success.
IT business can be much diversified. As we all know technology changes with time and is never constant, so you can always provide new products and services to your customers and still offer the products and services that have a repeat buy.
You have to have a product or service that people will keep buying and updating. It’s better and more profitable this way, in my opinion, to have a pool cleaning company than a pool building company.
Put another way, a business owner should focus on getting a customer once, but making a profit from that person for a very long time should be the priority.
2. Be certain that you have a high profit margin.
There are very few IT companies that can compete long-term on a “we are cheaper” marketing platform. But you cannot be all cheap.
In any new business, you need to watch your cash flow–and if you’re trying to work with low-profit margins and make gains in bulk, you’ll need to have a high level of working capital to keep you running through the lean profits early on.
Having a higher profit margin is extremely important when you’re growing a business so you can self-finance your growth.
3. Good idea isn’t enough to build a strong IT support team.
The idea comes first, yet a quality idea must still have a great team of people behind it to give it wings.
Time after time, when people bring you an IT business investment proposal or an idea they want to take to market, ask them who’s on their team and check for their response.
Get a board of advisors. Get a team of professional IT staff, Software Engineers, Software developers, accountants, lawyers and bankers. A great team will greatly improve the chances for success of any IT business.
Now the question is if I were going into the IT business today, what IT products and services would I choose?
I would start with one premise and some hot IT products and services. The premise is, you don’t make money panning for gold, you make money selling pans.
There are a lot of options you can have in starting an IT business. You can go for Digital Marketing, Website development, Mobile App development, Ecom development, providing OIS (Offshore IT Staff), QA and testing.
Once you understand this, the question is, where are you going to target your customers and who will be your targeted customers?
With an aging population, health and leisure are growing industry segments. And professional advice is at an all-time high in many fields.
You can target Realtors, the healthcare industry, manufacturing, finance, cybersecurity, and many others industries. You can always deliver just a little bit better than the competition.
One last point: Start with the end in mind.
Look for an idea you can take national or, even better, global at some stage. It might be fun and a challenge to establish yourself locally right now, but eventually, you’ll want to build something much bigger, you would want to be global.