I want to start a new electrical equipment wholesale business, what are the important steps that I should follow?
I started with the business plan and it is almost finished, I also own a warehouse and a place that could be changed into a showroom so I can reduce my costs. My father has been an electrician for almost 25 years so I am counting on his PR and his experience in the market to kick off my business.
Understand your competition 'inside out'. Understand the pricing and margins in your industry thoroughly. 20% of the products you stock will make 80% of your margin. You have to have a unique position in your industry. What will you be known for in 12 months time? Best quality, lowest price, fastest delivery, earliest opening hours? You need to become known for something that electricians value.
1) Web from day one. Tight integration between your inventory database and the web to make sure that you are only selling what you can fulfill.
2) Go shopping. Find the physical and web addresses of your competitors. See what you like about their approach See how they price things. The customers you are hoping for are buying from somewhere today. Keep that in mind.
3) Train your staff. If they pick up a call or talk to a walk-in, they have to be experts. If I know more than your guy, I'm not buying from you. If I say ESD-safe, I expect the sales/support people know those initials.
Your industry is highly competitive. Here are so questions to answer:
Who is your competition locally/regionally and nationally?
How do plan on differing your company from the competition?
How will you market your company?
How much do you have budgeted for marketing?
How will your pricing differ from the competition?
If no real difference then why you?
Have you set up a website?
If not , have you received quotes on how much it will cost?
How much have you budgeted for it?
Will it allow ecommerce?
What company will do the merchant processing?
What bank will your company use?
Shop around banks can fee you to death!
Do you plan on extending credit / terms?
If you don't, you will lose business and they are less likely to come back.
If you do, do you have a credit application / new account form?
It should have a PG (personal guarantee) section for the smaller buyers.
If they sign the PG with a title then the PG is invalid.
How much do you plan on spending on inventory?
If you don't have credit/ terms with manufacturers and distributors how are you going to pay for product to sell?
Can & will your father help?
I would highly recommend building out a Business Model Canvas. This will structure your next steps and create a framework that will force you to prove your business's viability. Below is a link to get you started.
I would also recommend checking out the free financial projections template within SCORE. This will also guide you to start quantifying the cost of running the business and hold you accountable to finding real numbers behind executing your new company.
On a customer survey side of things, check out a doc called The Mom Test by Rob Fitz. A quick and very valuable read.