10 Questions to Ask Before You Start a Business
Before you start a business, it’s vital to know whether you have a scalable and sustainable business idea. Answer the following 10 questions to help you decide whether your current business idea is worth launching.
It goes without saying, but issues such as obtaining a domain name, registering a business and determining marketing budgets should not be considered until you’ve confirmed the nature of your business. Unfortunately, it’s not easy to be objective about your “baby” (the idea you’re passionate about), especially when you’re caught up in the excitement of launching your business. That’s why we’ve put together these critical, honest questions to ask yourself before you start a business.
1) Is There a Demand for My Business Idea?
According to Investopedia, demand is defined as “a measurement of consumer desire and consumer spending on a particular good or service at a specific price.” If there’s no actual demand for your business, it’s highly unlikely you’ll be able to “manufacture” that demand. Your product supply will be resigned to the shelves if consumers don’t need your product. If your business idea is not an entirely new phenomenon, a little market research can help you better understand the trends in the market and determine whether there’s a demand for your product or service.
2) Will My Product Be Unique?
Often, the best markets to enter are those brimming with competition — it’s a clear sign that there’s demand in abundance. However, this doesn’t mean you can simply offer more of the same — you need to stand out, and to do that effectively, you need to be unique. Before you start a business, ensure that you’re offering something different to the tried-and-tested products already available. Again, some thorough industry research will help you to improve on existing products and offer customers a new, better, solution. Consider your USP — your Unique Selling Proposition — but try not to compromise solely on price.
3) Is There a Clear Way to Market My Service?
No matter how hard you try, it’s unlikely you’ll find a clear path to market meat products in a strictly vegan cafe. If you’re struggling to find a clear channel to market your services, you might need to return to the drawing board. When introducing a new product to an established market, you should leverage existing marketing channels to get you up and running.
4) Can I Automate Many of the Business Operations?
If you can’t foresee a cost-effective way of running your business, it’s probably time to think of another business venture. You cannot afford to have an exponential increase in operating costs, especially before your brand has even gained traction. If you can automate some of your work processes — in marketing, for example, social media schedulers and email marketing tools exist to automate the entire process — you’ll not only save money, but you’ll also increase productivity.
5) Will My Business Become a Sellable Asset?
It’s not easy to contemplate giving up your passion project before you start a business, but if your business does not stand the test of time and hold value in years to come, it may not be worth your time. After all, your business is an asset and you must take all possible eventualities into account if the need to sell your company arises. Having a solid business plan in place will help you plan for these contingencies.