Starting a business is not something you should do on a whim. It takes more than just a great idea. It requires careful planning, a financial investment, and a significant amount of time. Not to mention critical thinking, attention to detail, tremendous focus, and the ability to stay motivated.
Most small business owners start a business based on their personal interests. For example: a person who loves gardening is not guaranteed to succeed owning a flower shop. The same is true for someone who collects baseball cards and wants to open a sports memorabilia store.
So before you jump in with both feet, do yourself a favor, and ask yourself the following questions, first.
Questions To Ask Before Becoming A Business Owner
What type of business do you want to own?
Will you need retail space or do you plan to sell your products or services online?
Who are your prospective customers and how will you let them know about your business?
Having a clear niche and knowing your customer demographics will make it easier to market your business. Generally speaking, a company that sells perfumes or candles would market their brand to females, while a hardware store’s most likely customers would be males.
Who is your competition?
Sometimes competition is good; but if you're competing for the same fish in a small pond, you may be fighting a losing battle. Sure, you could lower your price to out-sell your competitor(s) but smaller margins requires more sales volume. Just look at the ads for car sales. Almost all of the dealer ads promote special sale prices.
Do you need commercial space or can you do your business from home or online?
What makes your business unique and better than your competition?
This usually comes down to the 4 P’s of business: product, price, place, and promotion. Note: The most successful businesses are those that solve a problem for their customers. Amazon is a great example — from its free shipping, to its vast array of products, and competitive prices.
How many people do you need to run your business?
At first, you may start as a solopreneur and think that you can do it all. This may be true but if you truly want to grow your business, you will need to either clone yourself or hire help.
How much time are you willing to devote to your business?
If you think a 9 - 5 job is hard. Think again. Entrepreneurs work long hours and sometimes 7 days a week, especially in the start-up phase.
Can you afford to hire staff?
Are you comfortable carrying debt? Can you afford to start a business and still pay your monthly bills?
Remember, most businesses take at least three years before they turn a profit. Be sure you set realistic expectations for your business. Otherwise, you will be in for disappointment, frustration, and potentially greater debt.
How much money will you need to start your business? Where will you get your start-up capital?
How many clients or sales will you need in order to break even?
If you are thinking about starting a consulting business, you can get away with a minimal investment by working from home. Once you have a few clients under your belt, you might consider renting office space.
If you are planning a brick and mortar business, your budget should include rent, insurance, inventory, display cases, office equipment, and employees along with marketing expenses (business cards, signage, a website, advertising, etc.).
Putting the financial aspects of business ownership aside, you should also consider your entrepreneurial type. Are you a Creator, Builder or Operator?
As a self-described serial entrepreneur, I am definitely a Creator type. I love the process of establishing a business and have started and sold three before my 45th birthday. I also created a business plan for a national magazine, only to realize after reviewing my in-depth 3-year business plan that I was not the Operator type. I simply could not commit the time or energy necessary to build this million dollar business.
If you are thinking about starting your own business and have questions or would like an opinion on your idea, feel free to email me at firstname.lastname@example.org.
You can also follow me at Schoner Communications on Facebook and Instagram.
Should you decide to start a business, please let me know. I’d love to hear about it.