If you’re thinking about starting a new business, here are a few things to consider before you take the plunge.
1: Am I ready to start a business?
I am not sure if anyone is ever 100% ready to start a business because there is always some sort of risk. You need to decide whether you are comfortable with taking a risk. If you are, then your next point of consideration is whether you will be able to give your new business the attention it needs to actually achieve success. If you have too many distractions that will take you away from working on the business, then perhaps it’s not the right time.
One of the biggest things to consider is that owning a business isn’t a 9 to 5 endeavour. There will be times that you are working long hours, or on weekends, to make it work. You need to be willing to sacrifice your personal time to build a successful business. You will get out of it what you put into it.
2: What value am I providing?
Your business needs to provide value otherwise no one will want to buy what you are selling. You provide value by solving a problem or filling a need among your target audience. While features are important in developing solutions to problems, you need to rely more on the benefits to your features to figure out whether you are providing enough value to make a sale.
3: Who else is doing what I’m doing?
Your competitors are the second most important factor when it comes to business development (customers are the first!). While you have obviously started with an idea for a business, you don’t want to do it exactly the same as someone else. Figure out how you can do it better and/or different than your competitors – this can be related to marketing, product/service offering, audience segmentation, etc. This will help you stand out among the crowd.
4: What contacts do I have in my industry?
Building a strong network is extremely important when starting your business. You don’t want to ever feel like you are on an island. Build relationships within your industry – there is room for everyone to have a piece of the pie! Information sharing and mentorship is priceless when it comes to entrepreneurship.
5: What is my growth plan?
There is no shame in starting smaller and growing organically. In most cases it will limit the amount of financing you need to get started. It also gives you a chance to work out any kinks in your planning before you start scaling up.
Regardless of whether you are starting big or starting small, you need to set out a growth plan for yourself to ensure you hit the proper milestones to indicate success. Start by identifying what you ultimately want to achieve and then work your way backwards to the beginning to figure out how you will get there. Your growth plan can be for 5 years, 10 years, 20 years, etc. but it needs to indicate milestones so you know when you are on to the next level. And be realistic with your goals. It’s highly unlikely you will be the most important player in your industry within the first 6 months.
6: How am I financing my growth?
Once you figure out what your launch looks like and when and how you will grow, figure out your basic financing needs. Only indicate what you actually need. Your financing needs may change throughout your growth, so look at options for each milestone.
7: What are my hard stops?
One of the most important things a successful entrepreneur needs to know is when to call it quits. It doesn’t mean you can’t move on to a new business idea, but sometimes, what you are working on just isn’t working. Be realistic about your limits right from the start:
- How much personal money will you invest before you start seeing returns?
- How long can you go without taking a salary?
- What is the minimum number of customers you need to sustain your business long-term?
- How many hours are you willing to work per week before things get going?
The list could go on. Determine what is important to you and what you are willing to give up.
8: Is a business plan really that important?
Even if you aren’t getting financing from a bank or other investors, a business plan will help lay out your strategy all in one place. It will act as a road map for you to achieve success. And if you feel things aren’t working, then you can go back to your business plan to figure out alternative strategies.
9: Do I believe in my idea?
This is possibly the most important question you could ask yourself. Believing in your idea doesn’t just mean “will it make money.” You need to love what you do because you will be spending a lot of time with that idea, shaping it and growing it.
Starting a business is never an easy thing to do, even if you feel like you “just fell into it.” It takes hard work and passion to get the idea off the ground, but it also takes sound strategy.
A version of this article was originally published to the SongBird Marketing Communications Blog.