Isn’t it exciting to start your own business? You can be your boss, do what you want, and set your schedule. However, there are several questions you should ask yourself before starting a business that you might not consider at the time.
You, like many others, could be thinking of some fantastic product ideas. Still, you may be unclear of all the nitty-gritty elements of beginning your own business, especially in today’s unpredictable environment, where you may be hesitant to leave a position that’s currently offering you security and stability.
Being your boss is exciting and rewarding, but let me unwrap the hard truth; it is not for everyone. According to statistics, the vast majority of new businesses fail, with only a tiny percentage succeeding. But don’t worry; regardless of how you feel, now is the best time to be alive for exploring entrepreneurship.
Not only are investors willing to listen to people and be more accepting of many crazy ideas, but they are also willing to put up large sums of money to see them succeed.
But, before you start your own business, you should ask yourself these 20 questions:
Why Am I Interested In Starting A Business?
Your startup will not last long if you are doing it just because you hate your current 9 to 5 job. And you shouldn’t also be starting a business just because everyone around you is running one. You must ensure that the interest generated within you is genuine and should be ready to embrace all the ups and downs that come with it.
What Problem Am I Trying To Solve or What Market Gaps Do I See?
Your idea is pretty much worthless if you don’t know if there is a market for it. Try to figure out what’s the real problem you’re trying to solve or if there are any market gaps or niches that no one else is filling. If those areas overlap with your interests, you’ve found your sweet spot. Read and understand How to Do Market Research for a Business Startup?
What Is My Business’s Target Market?
Another vital part of being aware of is the target market. This is one area that’s faded to many business owners, and they tend to shoot in the dark without having a proper target audience. Not every product can satisfy everyone, so you need to find the right audience for whom your product can bring satisfaction.
How Much Money Do I Need To Start My Business? What Is The Best Way To Get Startup Funds?
The answer to this question relies solely on your idea. If you have a product, an incredibly unique one, you will need a large sum of money to put it into action. However, you can start your business for very little money if you are running a service-based business. Thus, in a nutshell, the budget is primarily determined by your niche, target market, office structure, staff, and a variety of other costs.
Do I Have The Support Of Friends And Family, Both Personally And Financially?
There are good days and bad days in life. When it comes to entrepreneurship, bad days can be devastating. Having the support of friends and family can help you stay positive and sane during difficult times.
Another thing to mention here is that families and friends are among the best alternative sources of funding. Unlike having lots of prerequisites while approaching VCs and angel investors and mostly getting rejected, it’s better to have some friends or family lending you the money you need for starting up. Read the 17 Vital Factors Venture Capitalists Evaluate When Deciding to Invest in Your Startup.
Is Your Company’s Concept Scalable? If Not, What Can You Do To Make It More Scalable?
Scalability refers to a company’s ability to handle an increasing number of customers and vendors. Startups can be said successful only when they show the immense potential to expand and scale up. If you don’t see your company growing in the future, you should consider dropping the idea or looking for alternative ways to scale it up.
Who Are My Competitors And Who Else Is Doing What I Want To Do?
Having the advantage of being the first to do something is always a plus. Being the second mover, on the other hand, can have its benefits. Regardless of whether you are the first, second, or the last mover, you can formulate your strategies by assessing the competition and determining who is doing what and how they execute.
Having the proper market research in place will help you quickly identify your direct and indirect competitors within the industry. Here are the Types of Research Methods to Launch a Successful Startup.
What Makes My Product Or Solution Stand Out From The Competition?
Building a robust online presence is the first piece of advice we have here. Standing out from the competition is always the priority for every business out there. Another tip to achieve the same is to meet your target market’s challenges with unique and easy solutions. It is always beneficial to set your USP (Unique Selling Proposition) to highlight individual factors helping you differentiate yourself from the competitor.
How Will I Validate And Test My Product Idea?
Consider how much time, effort, and resources you’d need to turn your brilliant idea into reality, only to find out later that it wasn’t so brilliant after all. It turns out to be a flop as the market never needs it. This often occurs in businesses where you tend to see higher demand, but as the business launches, it fails prematurely.
This is where market research and idea testing come into play. Validation allows you to test your ideas in the form of MVP, and you can proceed if it appeals to the target audience. Even if the idea gets rejected, you’re never getting bankrupt.
Am I Willing To Invest The Time, Resources, And Capital Necessary To Succeed? What Kind Of Sacrifices And Risks Am I Willing To Make For The Sake Of The Company?
It takes a lot of time, sacrifices, and risks to start a business. If your previous job required 8 hours of your time per day, running your own business might require twice or thrice that amount, plus weekend effort to be put in additional.
So during the early stages of your business, you may need to sacrifice many outings, me-time and whatnot. Know that many of the successful companies, you see out there were built by entrepreneurs by spending an average of 80 hrs a week.
Do I Have The Skills And Abilities To Start And Manage A Company’s Day-To-Day Operations?
Skills and abilities make up 80% of what it takes to run a business. Are you equipped with the necessary entrepreneurial skills, and if not, how can you learn them? There are numerous resources available to help you achieve those skills.
However, suppose you lack the essential skills needed to run the business and still think your idea is significant enough to pursue. In that case, you can always outsource your requirement to reliable companies with people highly skilled than yourself.
What Are My Short- And Long-Term Personal And Financial Goals For Myself And My Company? Is This Something I Could See Myself Doing In 5 Or 10 Years?
Your objectives will determine your personal and business financial and operational strategies. These goals will determine how you raise funds, what your product roadmap will look like, how many teams you’ll need, how many employees you’ll need, and what costs you’ll need to cut. Consider where your company will be in the next 5-10 years and whether you are passionate enough to keep doing what you’re doing now.
Is My Knowledge And Understanding Of The Industry I Want To Work Sufficient? How Can My Previous Work Experience And Education Be Of Assistance To Me?
It is critical to have a thorough understanding of the industry in which your business will operate. Knowledge of the apparel industry is required if you want to start an apparel business. It is best not to enter any industry if you are unfamiliar with it. Always consider how your education and experience can help you better understand the industry.
Is It Necessary For Me To Have A Co-Founder(s) For My Company? If So, What Complementary Skills Would The Co-Founder(s) Require For The Business To Run Smoothly And Successfully?
Everyone can’t have all the skills in all areas of running a business. You may have excellent product development skills, but you may lack technical or coding skills. Finding the right co-founder is critical because a startup’s founding team should have all the necessary skills.
Not only should your co-founder(s) complement your skills with their own, but they should also share your vision with zeal and passion. So, one of the most challenging and crucial steps in starting a business is choosing the right co-founders.
If you find difficulty finding the right co-founder, NeoITO can act as your tech co-founder and help you know the right set of technologies to be applied for your product development.
In The Short And Long Term, What Organisational Structure Would I Require For My Company?
In a typical B-school Organisation Design class, you’ll learn about a variety of organisational structures. While they may appear to be useless, they all serve a purpose. A small company can work better with a flat design, and as the company grows more prominent, the structure becomes more hierarchical. There are different types of facilities, such as functional, divisional, and matrix structures. You must understand and determine which design best suits your company at which stage for optimal performance.
How Many Workers Will I Require?
Consider the costs and what you can afford. Keep in mind the importance you place on each employee when starting a business; quality trumps quantity. While starting up, the quality matters more than the quantity. One great employee can be equal to tens of average employees. Recruitment takes utmost priority. Always know that the initial team of a company is the hardest to form.
Also Read: Startup Guide: Things To Consider When Bringing On Early Team Members.
How Will My Company’s Legal Structure Be Set Up?
It is one of the most crucial decisions to make when starting a new business. Your decision has to be based on the country’s tax implications and the amount of risk you are willing to take. You can then choose a legal structure that best suits your needs, whether it’s a sole proprietorship, partnership, LLC, or corporation.
Am I Willing To Meet And Network With A Large Number Of People For Investments, Promotions, Advertisements, And Other Purposes?
Starting a new business necessitates attending numerous conventions, seminars, workshops, and networking with as many people as possible. Sometimes it’s to recruit people, other times, it’s to pitch ideas to potential investors, and other times it’s to listen to other entrepreneurs’ ideas.
On some days, you must be comfortable networking with hundreds of people. If you believe you are too shy and the thought of all of this makes you feel uneasy, this may not be the path for you. Today as technology advances, you need not get outside to start networking with people. There’s always some virtual networking events to connect founders, investors and entrepreneurs from across multiple disciplines.
How Will I Exit My Business If I Want To in a Few Years Down The Road, And How Will The Responsibilities Be Transferred?
You might want to sell your startup to a larger company a few years down the road, or you might want to leave the company yourself. Examine all terms and conditions thoroughly, and make a mental list of all available options. Even an initial public offering (IPO) can be used as an exit strategy.
The goal should be to leave the company with your head held high and your pockets are bulging with profits. The transfer of responsibilities should be carefully handled with a proper business succession plan so that the company keeps doing well even in your absence.
Now read the 15 Great Signs You’re Ready To Start Your Own Business.
Once you have asked yourself these questions and are satisfied with the answers, it’s time to consider turning your idea into a successful business. As said many times, keep in mind that the journey ahead isn’t going to be a smooth ride. Embrace yourself for a bumpy ride!