52 Key Questions Before You Start a Business

Have you ever wondered what questions you should ask yourself before you start a business?

  1. Why are you starting a business? – You must have a reason. There are good reasons and not so good reasons to start a business. It is important that you are honest with yourself about why you want to start a business.
  2. Do you have a strong desire to be your own boss? – I wanted to own my own business since I was 17 years old. Even when I was working as an employee I knew that one day I would own my own business. I had a burning desire to own my own business. It was never about the money. I wanted to be my own boss.
  3. What are your financial goals? – There are businesses that make millions and very small businesses with fairly little revenue.According to compensation survey administrator PayScale in 2010, the average income of small business owners with less than one year of experience earn an annual salary between $34,392 to $75,076.
  4. Do you have the high level of energy it will take to start a business and to sustain it? – Start a business is fun, but it is also exhausting. One day you feel like a winner, and the next day you feel like the biggest loser in the world. Ups and downs are frequent occurrences. It takes a lot of strength.
  5. Are you willing to sacrifice time with friends and family to become an entrepreneur? – Especially, when you are starting out, you will spend many hours solving problems and servicing your customers. You will have less time for family and no time for friends. As your business grows and your team grows with it you will be able to get more free time, but it might not happen for years.
  6. How will you balance your personal and business life? – Work-life balance for business owners is a myth. There is no separation of your business from your personal life. If you have lost a key client one day, there is no way that you won’t think about its potential impact on your business on your way home or even during dinner time. Entrepreneurs never really removed from their businesses and the challenges surrounding them.
  7. Are you in a good place mentally to start a business? – You can start a business rich or poor or young or old, but you will fail if you are mentally not ready. If you have emotional issues, work them out before you take the plunge.
  8. Are you in a good place financially to start a business? If you are broke and desperate for money, starting a business should be the last thing on your mind. Desperation is a recipe for failure. Get a job or two if you need to, but resolve your financial woes. Starting a business with “making money” as its sole purpose is a bad idea anyway.
  9. Do you have the necessary skills? – No one is a born entrepreneur, but there are certain skills required. The skills you need are largely dependent on whatever business you start.
  10. Are you open to learning and listening to people more successful than you are? – Entrepreneurs love learning new skills. The best ones are also great at surrounding themselves with other successful people. They interact with successful entrepreneurs to learn. 
  11. What kind of business do you want? – Do you want a retail business? Or, would you rather deal with businesses? Do you want to start a business from nothing or do you want to buy a business? Do you want to buy a franchise? The possibilities are endless.
  12. Are you going to be able to sleep at night knowing that you are in charge of your own destiny? – How much stress can you handle? As an entrepreneur, even if you have employees, you are responsible for everything.
  13. Do you want a service business or a product business? – Service businesses require different skills than product businesses. The product business requires product design, inventory management, manufacturing, shipping, and normally a greater amount of capital than a service business.
  14. What are you passionate about? – There is a lot of talk about passion and how it is an absolute must to start a business. I disagree that you have to be passionate about your business. I do believe that it will be a lot more difficult to succeed without passion for your business. It will also be a lot less fun.
  15. Do you want a brick-and-mortar business? – Do you enjoy the face-to-face interaction with your customers? Do you get energized by meeting your customers?
  16. Do you want a location independent business? – It has never been easier to start a location independent business. If you enjoy traveling while working, a location independent business might be your best option.
  17. Are you going to partner with a co-founder? – Startups with two founders are more likely to succeed. Any partner won’t do. The key is to find the “right” partner for your business.
  18. What is your business idea? – The ideas phase is the most fun. Anything is possible at this stage. The key is to get beyond your business idea and take action.
  19. Did you validate your business idea? – Ideas a cheap. Validated business ideas worth gold. The only way to validate your business idea is by involving your potential customers. It also helps if you pre-sell for further validation.
  20. What is your business strategy? – You have to have a strategy for success. Your business strategy should include what is your product, who is your customer, and how you will sell your products or services. 
  21. Who is your customer? – You should be able to exactly describe your customers. For example, your customers could be females between the age of 25 and 40 years, who live in the Los Angeles metropolitan area. Their income is over $65,000 per year. They are college educated. The key here is to be as specific as possible.
  22. How many potential customers are out there? – A lot is not the answer. Assumptions won’t do. You have to have a number that shows the total number of potential customers. If you can’t figure it out, you don’t know your customer.
  23. What are you selling? – Is it a product or a service?
  24. Are you in it for the long haul? – You read about overnight success stories, but they don’t exist. It will take years to build a reputable business. Are committed enough to make it a reality
  25. Who is your competition? – Before you can understand your own business you must understand your competition.
  26. How many competitors do you have? – Every business has competition. You should know exactly how many competitors you have.
  27. How competitive is your chosen niche? – There are well-established business niches like business attorneys and newer ones like social media marketing analytics services. Regardless of your niche, you should understand the level of competition. Some niches require huge upfront investment in order to compete.
  28. What price can you charge to stay competitive? – Study how much your competitors charge. Understand their pricing structure.
  29. How can you outsmart your competition? – The most successful businesses can improve on already existing solutions to problems. You can outsmart your competition by better understanding the customer, stay more focused, and by turning your customers into evangelists.
  30. Are you willing to invest money in your business? – There are businesses you can start with very little or almost no money. The fact is that you will need to invest some money in your business.
  31. How much money do you need to start your business? – The level of investment needed is dependent largely on the type of business you are starting. For example, if you are starting a business that will not have any paying customers for the first several years, like Facebook or Twitter, you will need to have millions of dollars in investments.
  32. Do you need to get a loan? – Business loans are nearly impossible to get for a new business. If you can’t get a loan from banks there are alternatives like angel investors, friends and family, and services like Kabbage.
  33. Do you need investors? – While it sounds great to use other peoples’ money, you should avoid investors if possible.
  34. What differentiates your business? – Some of the most common business differentiators are excellent customers service, low price, fast response, wide selection, specialization, unique technology, geography, client list, accomplishments, and experience.
  35. How many employees will you need?
  36. What suppliers do you need? 
  37. How soon will it take to develop your product or service? – For product businesses, this could take months and sometimes even years. It is very important to consider your product development cycle.
  38. How much are you going to charge for your product(s) or service(s)? – Pricing is an art and a science. You price something too low and you will fail to make a profit, or too high and you will fail to sell it.
  39. How will you market your business? – Not only that you have to know how to market your business, but you have to market it profitably.
  40. What is the Lifetime Value (LTV) of a customer? Your LTV will control how much you can afford to spend to acquire a new customer.
  41. How will you sell your products or services? – Are you going to sell your customers directly or through resellers? Will you sell online or offline? Will you have a salesforce or strategic partners?
  42. Who are your best potential strategic partners? Strategic partners can help you grow your business exponentially with very little expense.
  43. How long will it take to make your first sale? – You should know how long it will take you to get ready to start selling your product or service. It is not a random number, but an exact number. You should know that you should be able to sell X number of products in X number of days or months. Without it, you won’t be able to plan ahead.
  44. How long can your business survive without profit? – Most bootstrapped businesses will fail without profit.
  45. What legal entity will you select for your business? – You have several options from sole proprietor to LLC to Corporation. What’s right for you depends on your business and your situation.
  46. What taxes do you need to pay? – Your business entity will have a lot to do with how much taxes you have to pay.
  47. What kind of insurances will you need?
  48. How will you manage your business?
  49. What will you outsource? – Outsourcing is a great way to grow your business while minimizing risk. You can start outsourcing your simple repetitive tasks at first. The easiest way to outsource is by creating systems in your business.
  50. What sacrifices are you willing to make in order to succeed? – To start a business is tough. It is time-consuming, and it will take longer and more of your time than you think.
  51. Are you able to deal with failure? – Many businesses fail. If you talk to successful entrepreneurs, many of them will tell you that they have failed in the past. You might get lucky and succeed the first time, but for many success only comes after failure or multiple failures.
  52. Can you find mentors to help you succeed in business? – As an entrepreneur you are expected to have all the answers, but it is impossible. Reach out to experienced entrepreneurs when you are unsure of the the next step. You will find that many of them are happy to help. Don’t be too needy. Don’t confuse mentorship with friendship.

 

photo credit: Stranger Nº 7/100 – John

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George Meszaros is the editor and co-founder of Success Harbor where entrepreneurs learn about building successful companies. Success Harbor is dedicated to document the entrepreneurial journey through interviews, original research, and unique content. George Meszaros is also co-founder of Webene, a web design and digital marketing agency.

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2018-03-15T20:01:42+00:00March 15th, 2018|Articles, How To Start A Business, Startup|2 Comments