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Questions to ask yourself and issues to consider before starting a business
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Questions to ask yourself before starting a business
In business, there are no guarantees. There is simply no way to eliminate all the risks associated with starting a small business - but you can improve your chances of success with good planning, preparation and insight.
Do you have what it takes to succeed?
Start by evaluating your strengths and weaknesses as a potential owner and manager of a small business by asking yourself these questions:
- Are you a self-starter? It will be entirely up to you to develop projects, organize your time, and follow through on details.
- How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants or consultants. Can you deal with a demanding client, an unreliable vendor, or a cranky receptionist if your business interests demand it?
- How good are you at making decisions? Small business owners are required to make decisions constantly - often quickly, independently, and under pressure.
- Do you have the physical and emotional stamina to run a business? Business ownership can be exciting, but it's also a lot of work. Can you face six or seven 12-hour work days every week?
- How well do you plan and organize? Research indicates that poor planning is responsible for most business failures. Good organization of financials, inventory, schedules, and production can help you avoid many pitfalls.
- Is your drive strong enough? Running a business can wear you down emotionally. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout.
- How will the business affect your family? The first few years of business start up can be hard on family life. It's important for family members to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term.
When creating your list of reasons, be as specific as possible. It might seem like just soul-searching, but pinpointing the reasons why you want to start a business will play into your business plan later.
Do you have these attributes?
There is no such thing as the "perfect" set of attributes that a successful small business owners should possess. Success is attributable to a wide array of factors, only some of which relate to the personality, traits and background of the company's founder and owner. However, there are some attributes that can increase the odds of small business success. These attributes include:
- Self confidence. You have a belief in yourself that you can do it.
- Does not consider failure as an option. You recognize that failure is a necessary step to finding what does work.
- Able to move from ambiguity to clarity. You recognize that confusion, chaos and lack of clarity are all pieces of the “playing full out” puzzle. You have a process that allows you to move through this phase into a state of power and momentum.
- Has perseverance and discipline. You know that every day you must focus on what MUST be done, not what you feel like doing. You engage in consistent, supportive habits.
- Has a plan yet is “flexible.” The key to massive results is setting your mind on a desired outcome while being willing to “go with the flow” so the idea can expand and grow with the changing environment.
- Sets and attains realistic goals. In my work, the only difference between goal talkers and goal getters are how realistic you are about your time management and abilities.
- Takes calculated risks. Risks are necessary – but they must be tempered against what is good for you and your business.
- Equally skilled in sales, marketing and craft. It's not enough to love what you do; you must become masterful at bringing in the business opportunities. Otherwise you will be the best kept secret in the world.
- Has financial backing/funding sources. To truly achieve success, you must have access to financial leverage. As the saying goes, "It takes money to make money."
- Enormous passion and drive for the work. When the going gets tough (and it will) the one thing that will keep you going is your passion. You have to get up every day believing that what you do is so vital, so important and so necessary that you are willing to overcome any obstacles in your way.
- Willingness to learn. You recognize that the minute you know it all, you are done. Bigger successes come from continuing to learn, grow and evolve your mind and your goals.
- Surrounded by other successful entrepreneurs. You invest your time, money and energy in people who are playing a big game. Choosing an environment to tap into collaborative opportunities, brainstorming and big thinking is your way to leaping forward.
- Good health and unbounded energy. The one thing that is precious that can't be bought once it is gone is your energy. You make a commitment to maintaining a good health regime as a priority, not a last resort.
Do you have these traits?
Again, small business success come to owners with all types of personalities, with all different types of talents and traits. But some traits are more common than not with successful entrepreneurs, according to the the U.S. Small Business Administration. According to the SBA (see "External Links"), these are common traits found among entrepreneurs who succeed:
- Persistence
- Desire for immediate feedback
- Inquisitiveness
- Strong drive to achieve
- High energy level
- Goal oriented behavior
- Independent
- Demanding
- Self-confident
- Calculated risk taker
- Creative
- Innovative
- Vision
- Commitment
- Problem-solving skills
- Tolerance for ambiguity
- Strong integrity
- Highly reliable
- Personal initiative
- Ability to consolidate resources
- Strong management and organizational skills
- Competitive
- Tolerance for failure
- Desire to work hard
- Luck
Spend a good amount of time reviewing these traits and honestly assessing whether you have them. This might be an exercise best done with a friend, colleague or business mentor. When you’re finished, take a look at the list and note any gaps. Your lacking some of theses traits doesn’t mean your business will fail, but it will give you a good idea of your strengths and weaknesses—and any partners, employees or advisers you may need to help you fill the gaps.
Ask questions about the business you want to pursue
One of the first steps to starting a business is assessing why you want to open your own business. Before starting out, list your reasons for wanting to go into business. Some of the most common reasons for starting a business are:
- You want to be your own boss.
- You want financial independence.
- You want creative freedom.
- You want to fully use your skills and knowledge.
When creating your list of reasons, be as specific as possible. It might seem like just soul-searching, but pinpointing the reasons why you want to start a business will play into your business plan later.
What business is right for you?
Which comes first: the desire to be one’s own boss or a great business idea? The answer probably depends on whom you ask. For some, business ownership starts with a great idea; for others, it’s an intense desire to stop being an employee. Whether you think you have an idea yet or not, assessing what business is right for you is a necessary step before starting a business. To help determine your ideal venture, ask yourself these questions:
- What do I like to do with my time?
- What technical skills have I learned or developed?
- What do others say I am good at?
- How much time do I have to run a successful business?
- Do I have any hobbies or interests that are marketable?
Is your idea feasible?
Identify the niche market your business will serve. Conduct the necessary research to answer these questions:
- Is my idea practical and will it fill a need?
- What is my competition?
- What is my business advantage over existing firms?
- Can I deliver a better quality service?
- Can I create a demand for my business?
You'll conduct a more detailed feasibility analysis as you develop a business plan. That doesn't mean you should skip the step here, though. Considering the feasibility of an idea now will save you the trouble of starting a business that has little chance at success.
