Being your own boss can be rewarding, but it certainly isn’t for everyone. Sure, to some degree, you have more freedoms working for yourself than you do working for someone else. But often young entrepreneurs find that the workload and the stress of having to continually perform to keep their young business viable can be too much for them. It’s true that, statistically in the U.S., more new businesses fail than succeed. You shouldn’t let that discourage you but if you’re thinking about starting your own business, there are some important things you should think about before making your decision.
People start businesses for a lot of reasons, not just because they have some great idea that can change the world. In fact, many small businesses do very well marketing others’ products and services.
QUESTIONS TO ASK WHEN STARTING A BUSINESS
1. Is Now the Right Time to Start a Business?
Your idea may never take off if you try to start your business at an inopportune time. Are you currently in a position to pursue entrepreneurship? Consider your relationships, financial wellbeing, and physical health. For instance, if you recently welcomed a baby into your family, you may not have enough time and energy to dedicate to the growth of your business.
On the flip side, perhaps you’ve recently been laid off from your role in corporate finance. This turn of events could spark an ambition that can be poured into starting your new venture, backed by your professional experience.
It’s also important to consider if the timing is right in the broader economy and the specific market you want to enter. You should ensure your offering meets a current need.
2. Do You Have a Business Idea, and Is That Idea an Opportunity?
When starting your own business, you need to know what you plan to sell. If you haven’t fleshed out those details yet, brainstorm using the following prompts:
- Why does it take so long to ____?
- Why does ____ cost so much?
- Can I deliver ____ with a new business model?
- What can I change about ____ to improve it?
Your idea doesn’t need to be a new invention—it simply needs to fill an unmet need. If you have an idea for an original product, that’s great, but an improvement to an existing product’s cost, production, functionality, or accessibility can go a long way. Take Uber, for instance: Uber didn’t invent the idea of ride-sharing (taxis have been around since 1897), but it delivers the service in a new, innovative way.
You should also determine whether your business idea is an opportunity.
Next, test your hypothesis by conducting market research. We recommends you reaching out to strangers from your target market segment, rather than friends, family, and colleagues, who may sing false praises. The feedback you receive can inform if your hypothesis was correct, or whether you need to test other hypotheses.
3.What Funds Are Needed To Start My Company? How To Get Those Funds?
Every company needs funds but there are certain funds without which you absolutely cannot do in a company. Every company needs to figure out which funds are most essential, so as to cut costs, especially in its initial days. Funding by venture capitalists makes all the news headlines for a startup but there are other ways to raise funds too like getting a bank loan, crowdfunding, factoring etc. Of course, bootstrapping (funding from one’s savings) remains the most obvious option. In the long run, the company has to turn profitable and cannot depend on raised funds to sustain itself. The revenue model of the company will determine how the company manages its expenses and generates profits.
4.Who Are The Competitors/Who Else Is Already Doing What I Want To Do?
First mover advantage is always wonderful to have. But sometimes being the second mover also has its advantages. When it is a completely new field, the consumer habits need to adapt and for that, lots of investments in the form of discounts and promotions are required. Just imagine someone doing all the hard work of setting up the ground for you and you swooping right in and taking the pie. Irrespective of whether you are the first or second or Nth mover, it is always one of the first tasks to assess the competition and determine who is doing what and how so that you can formulate your strategies accordingly.
5.Where’s the money?
Where will the money come from for your startup costs? Consider basic things like marketing collateral, office space and travel expenses, all the way to the tools or equipment that are specific to your industry.
If you’ve been ramping up the business as a side hustle while keeping your “day job,” keep in mind all the perks of an established business that will no longer be available to you once you’re on your own.
6.Who is my target audience for my business?
You need to tailor your business to a specific target audience. This will be helpful when you are advertising and marketing your business to the niche audience and producing products that they would consume. You need to remember your business cannot be for anyone and everyone, find a niche market and focus on them as this will lead to financial rewards later on.
7.What are my goals?
Yes, you want to start your business but what are your goals with it? Where do you see yourself in 5 or 10 years time? These are some thoughts to have before you begin, it is important you see your business as a long-term goal where one day you will make your income from your business alone.
8.What is your mission?
No, really. What is your mission? “We’re building this company to sell,” or “We want to make x millions of dollars” may actually be your end goal, but that’s different than your mission.
Think of it like an hourglass. At one end of the hourglass, from the top to the middle, are all the streams of motivation and input that inform your interest in this particular business category. The opposite end, at the bottom, is your end goal, which may in fact be building the business to sell.
At the end of the day, and at the end of this list of questions, is your reality. Each of these questions does have relevancy as you’re considering the startup life, but the “secret sauce” is your unique perspective and the circumstances that will shape the next phase of your professional life.