Frequently Asked Questions To Ask When Starting a New Business
When an entrepreneur wants to start a small business, he must first decide on what he wants to do and how. An entrepreneur first scans available options and then selects the type of business, given his major considerations.
I know when it comes to starting a business, many questions come to mind. It happened to me when I started my first business and when I helped others with assistance, and I do get similar questions from them too.
I went and research on frequently asked questions on starting a business, I interviewed many successful entrepreneurs to find out the questions that they do get from aspiring entrepreneurs and their best answers.
I have 5 major questions that are the most frequently asked questions by aspiring entrepreneurs and I will help by giving possible answers given by successful entrepreneurs who have been in business for decades now.
Basic Questions To Ask for Small Business Success
Why do I want to start a business?
Not just your particular business, but any business. Your motivations can be a big factor in how successful your business will be. Necessity is the mother of invention, as they say, so the more compelling your motivation, the more likely you will be to succeed.
Are you slowly dying under the crushing weight of a job you hate? Do you need more ‘mulah’ to realize a goal? Do you feel a calling to change the world in some way? Those are among the reasons why the most successful business gets and stay off the ground.
Why do I think this is a Good Idea?
Lots of people—maybe everyone—have what they consider to be ‘good’ ideas, but they can’t always articulate why. If you can’t defend your business, you’ve lost sight of a huge part of being a new entrepreneur.
Customers need a compelling call to action as to why they should take a chance on your product or service. Investors want to know exactly how your product will fill a new void or solve an existing problem in a better way.
What Kind of Business Should I Start?
This is one common question that aspiring entrepreneurs do ask especially when they don’t know anything about starting a business.
The best can only be answered by you and only you. Think of a business that you can start using your talent to generate money.
Picking a business that you are familiar with is the best choice of business for you. Don’t make the mistake of meeting a business consultant to tell you the kind of business you should start.
You are the entrepreneur who will operate and manage the business, not the consultant. Start a business that you are passionate about, have some experience, and do not involve a huge amount of money to start.
Who is My Customer?
In coming up with an idea you’ll act on, a big component is being able to answer the question, “Who is buying whatever it is I’m selling?”—and don’t say “everyone” Rare is a product so revolutionary that literally, everyone is a potential customer. It doesn’t work like that in the real world. It all comes down to finding holes in the market and figuring out which customers are languishing in those voids.
Federal Express was just a regular courier service company. Things didn’t take off for them until they focused all their energy on delivering overnight packages and they actively sought out people and businesses that needed such services.
How Will I Make money?
Generating revenue is the central point of any business. Anything else is a nonprofit venture. It’s rare these days for a company to raise funding without nothing more than a good idea and a revenue plan to follow—eventually. That just won’t cut it in 2013.
If you’re selling a product or service, what is your pricing model? In any case, it’s important to know how and when your business will become cash-flow positive if you want anyone to take you seriously.
How Much Cash Do I Need to Start?
The amount of money needed to launch a business is determined by the kind of business that you’re venturing into.
The first thing you need to do is by drawing up your business plan so everything will be clean for you. Armed with this information, you can then be able to analyze what it will cost you to start your business.
According to business experts, if you are starting a business, you should have a capital that can cover the business operation for up to at least 6 months if the business requires location, office space, electricity, etc. and mostly when it will be your only source of income.
Where Can I Source for Fund if I Can’t Raise it?
There are many places and ways you can source for the fund if your capital won’t be able to launch the business.
You can go to the bank for a loan, ask from friends and family, use a credit card, attract angel investors, register at crowdsourcing sites like www.kickstarter.com so that you can get help, etc.
These option listed above are all trusted and it works very well for aspiring entrepreneurs. Another way of getting funds is through partnership. If you know of any business person you can share your business idea and vision with that has the money and will be willing to fund your small business, you can sign up a partnership deal with the person and launch your business.
After the business has grown to the stage where you now have enough money and you don’t want any partnership again, you pay the partner off and take charge of your business.
To this, I will say yes and no. don’t get it twisted, let me explain.
Yes in the sense that if your business to be launch is a complex one, you may need a business plan. It will help you gain a better understanding of what you are venturing into because as you start writing, new ideas start dropping into your head.
No on the other hand that sometimes having a business plan is useless. What if after drawing a business plan and tomorrow you wake up and a new government that knew not Joseph comes into power and change the economy?
If you know you want to write a business plan, my candid advice for you is first, let it be flexible and don’t kill yourself preparing a 52 pages business plan. A well-detailed business plan outline just 2 to 3 pages is okay.
Secondly, do not follow it too much because of market changes.
In reality, many startups deviate from their business plan. The ball is in your court!
Do I know what People I need to bring onboard?
Successful entrepreneurs know when having a great idea is not enough, and they know exactly which people to bring aboard the bus to make their idea a reality. If you have an idea for a website, for example, do you know who’s going to code it for you?
Conversely, if you are a developer with an idea, are you prepared to market and sell the site yourself, or is there someone better suited to the job? Success is a collaborative thing.
Success often hinges on letting go of your ego—and a few shares in your new company.
What If I Fail?
What if you fail? You come let me give you a dirty slap for failing (just kidding but don’t bring your face).
To be frank with you, the earlier you fail the better for you. When you fail, it shows that you were not doing something right. Learn from the story of the old man that invented the fluorescent bulb.
Do you know what businessmen do when they fail? They go back to their drawing board. According to statistics, 98% of startup businesses are expected to fail within their first five years.
Some even fail after the first 5 years. The reasons for your business failure serve as a learning tool.
In conclusion, do not see failure as a stop, see it as a pause and reevaluate the business then push further.
Can I Handle Failure?
That’s not to say every new business venture fails, but all entrepreneurs suffer some form of setback along the path to success. The movie studios always manage to skip those parts when they are making the biopic of successful businessmen and women.
Some people take failure as a rejection from which they can never bounce back. Others see it as a learning opportunity. Starting a business is largely a testing exercise: you have an idea, and you test it. If it works, you keep doing it, and if it doesn’t, you figure out what went wrong and reevaluate.
Successful entrepreneurs aren’t afraid to go back to the drawing board. In the words of Charlie Munger, they don’t suffer from ‘first instance bias’ i.e their first ideas or notion isn’t cast in stone, it can be changed if the facts or experience doesn’t support it.
Am I Willing to Commit the Next 5 Years of My Life to this?
Any startup rarely becomes an overnight success. Even the ones that seem to are typically in development for years before you ever hear about them. Expect countless hours of brainstorming, testing, development, and evaluation, all before you ever see your first profit.
Are you prepared to make that sacrifice? It’s fine if you aren’t, but that is a huge sign that owning a business might not be for you. It’s rare that any successful company started and remained anyone’s “side business” At some point, you’ll have to dive in and commit to taking it to the next level.
Whether your goal is to grow the business into profitable fruition or build enough value so that you can make a tidy profit through acquisition, expect to dedicate several years of your life to it.
What’s My Ultimate Vision?
This applies to the overall operating scope of your business. There’s nothing wrong with starting a small business as a source of revenue and keeping it that way—not every restaurant owner dreams of franchising.
There’s also nothing wrong with dreaming of building a global empire.
Either way, you need to be able to answer the question and be realistic about what’s needed to realize that vision. A musician rarely explodes into the global stage without that being their intention from the beginning. If you one day hope to go big, this has to be on your radar from day one.
Am I Ready to be an Employer?
If your business grows beyond the startup phase, chances are you’ll need to bring on employees to keep things growing and running smoothly.
Are you prepared for that? There’s a big difference between doing everything on your own and letting go to hand over some responsibility to your employees. Delegation is a skill that not everyone has, and it’s rarely tied to your abilities as a developer or executor of ideas.
I hope you consider these nine frequently asked questions before you begin the entrepreneurial journey to find out if it is the right road for you.