Starting a tool business is easy. I don’t know if this came as a shock, but it’s true. There are many different business opportunities to be had–and nothing at all says “entrepreneur” like having your own business. And you’ll feel like an entrepreneurial rock star when you realize how simple it is to start your own tool business (or other kind of home-based business).
While starting a business may be more challenging and taxing than any other endeavor for some people, it’s becoming their only option. A lot of the younger generations, specifically, have had it with working conditions, and they simply don’t see themselves working for another person for the rest of their lives. So, they get into the entrepreneurship world and become owners instead of employees.
The hand and power tools industry are very popular nowadays, and a lot of people are considering getting in on that action. But there are quite a few things you need to take into consideration before starting your own hand and power tools business.
The market
While it is a popular field, it’s also a pretty saturated one, which means you can’t just get into the game without doing some market research. First of all, you need to find out what tools people really need, and why other companies have not been able to supply them. More importantly, you have to check out the competition, and you can be certain there is going to be a lot of it.
This will help you understand if the market can handle another hand and power tools provider, as well as see where your competitors’ shortcomings are so you could avoid them.
The cost
There’s a lot of money in this business, if you know what you’re doing. But to get there, you have to consider the initial costs. High-quality hand and power tools aren’t exactly cheap, and if you really want to make something out of your company, you will need a capital to start with. It’d help if you talked with someone in the field, preferably not a direct competitor, so they could give you some insight into this world and how to best get into it.
This also brings us back to the importance of market research, because the last thing you need is spending money on tools that aren’t really in demand in your area.
Marketing plan
Like with any other business, you’re going to need a solid marketing plan if you want to reach a lot of people. Relying on word of mouth isn’t going to cut it anymore, and people most likely won’t open the yellow pages to find a hand and power tools provider. So, you need to have on-ground and digital marketing plans.
Print flyers detailing your services and put them up at stores and markets, or any other place that would have them in your area. More importantly, create a website and social media pages and take advantage of the power and reach the internet gives you. You could land more customers than you can imagine via digital channels, and this is why it is important to create a digital marketing plan.
The kind of tools
You can’t really start a hand and power tools business without carefully considering the kind of equipment you will have in your store. As mentioned earlier, the market research will help you figure out what people really need, but there are essentials that have to be included in your inventory either way—like the scroll saw.
The thing about this type of saw is the fact that it will help users create intricate designs and patterns in wood or several other materials they’re working on. It is a must-have in any workshop, because the level of detail it gives is significantly better than most other hand tools out there.
Safety
Hand and power tools are not just meant to help users get whatever job they’re working on, done, but also provide a level of safety that ensures they wouldn’t get hurt. And this is another factor you have to take into consideration, because the last thing you want is for your brand to have a reputation of offering tools that don’t provide the necessary safety level. So, always make sure you’re going for the tools that not only give the best performance, but also provide a certain kind of protection to the person wielding them.
Durability
A major problem a lot of users face with hand and power tools is the fact that a lot of those aren’t very durable. A consumer doesn’t want to buy a saw or a drill that would malfunction or break down after six months. This is why durability is a very critical angle to consider when creating your selection of hand tools. Performance and safety are imperative, yes, but so is durability, and it’s a feature many users even prefer to the other two.
Functionality
Having a diverse collection of hand and power tools in your inventory is important, and it’s something most consumers would appreciate. But you need to also consider functionality when it comes to the tool. Starting out, you will not have the money needed to get all the equipment you want. So, instead, try going for the ones that have different functions, which will save you money and offer consumers a multifunctional option.
Location
One more thing you have to consider when it comes to this kind of business is the location. For instance, it wouldn’t make much sense to focus mainly on woodworking tools in an area where structures are mostly metal. Taking the geographical position into consideration will help you choose the right products for your up-and-coming business.
Franchising
The thing about a business like this one is the fact that it has so much potential for growth. If you do all the right things—getting the right tools and going with a solid marketing plan—you should definitely start considering franchising. There’s nothing stopping you from taking it slowly, opening one store in a different city after the other.
A hand and power tools business can be extremely rewarding, but it’s also a lot of work. The competition is quite fierce, and if you don’t go the extra mile, your own brand will hardly stand out. The key to success here is a good plan and careful preparation, as well as having a thorough understanding of the market and their advances.
Pick a business structure
There are many ways to start a business with different incorporation structures. Your business structure influences key parts of your business, from taxes to operations to your personal liability. Choosing the right structure is about balancing the legal and financial protections you need with the flexibility offered by different options. It’s an important decision, and it’s one you should consider carefully before you launch your business.
Business structures vary based on your country and area, but two common types—that may go by different names in your country—are sole proprietorship and incorporation. A sole proprietorship is great if you’re the only person involved in the business and is usually the lowest-effort structure to pursue, but it leaves you personally liable for the business and its activities. You can hire employees as a sole proprietor, but you’ll need an employer identification number to do so, which means registering your business.
On the other hand, if you opt for a more formal structure, like a corporation or a limited liability company, it’s easier to involve multiple owners and you’re not personally liable for the business. At the same time, there’s more paperwork and steps involved in starting and maintaining a corporation.
When it comes to considering the right legal structure for your business, there are a few factors you’ll need to consider as you understand how to start a small business:
- Where is your business located? Your country’s laws will outline the different business structures you can form and whether or not you need a business license to get started.
- What kind of business are you running? Some structures are more suited to businesses of a certain scale or within a certain industry. There might come a time when you need to restructure your business in order to work with new partners. It’s not uncommon for large businesses to ask that their suppliers or partners be incorporated, for example.
- How many people are involved? If you’re going it alone as a solo founder, you may be able to look at streamlined options. If you have a business partner or multiple people with ownership in the company, you’ll need to look at more advanced options to ensure everything is set up and shared properly.
An accountant or lawyer can be helpful in evaluating the different options available in your area and with the process of setting up a business. You can also check out this sole proprietorship vs. LLC comparison.
Conclusion
If this is your first time starting a small enterprise business then you may be wondering how you can make thisThe first thing you should ask yourself is why you want to be in the tool business. Why does this industry captivate you so? Do some research as to whether this industry is as attractive as it looks. There are some pros and cons of running a tool company. Every business has its advantages and disadvantages, and you need to evaluate them before you decide on an action plan.