25 Jan 13 questions every entrepreneur should ask themselves before starting a business
So you want to own your own business?
With the striking reality that a large percentage of startup businesses fail within the first five years, it is imperative that any prospective small business owner does whatever he or she can to maximize their chances for success. Occasionally, I have the opportunity to speak with entrepreneurs who are interested in creating a new business. As a part of our discussions we frequently touch upon their reasons for wanting to start a new venture and they often fall into one of three different categories. Namely, increased personal earnings, an ability to set one’s own schedule and being one’s own boss. While these reasons are perfectly valid, I caution entrepreneurs to be aware of the fact that as a business owner you are frequently the last to get paid, seemingly everyone but your employees suddenly becomes your boss and regardless of whether you are in the office, it is rarely far from your mind.
Regardless of the initial reasons given for wanting to start a business, if a prospective owner does not possess a strong knowledge of the industry he is about to enter, and a burning passion to succeed his chances for long term success are radically reduced. This is not to say that one must be an expert at everything related to running a business, but rather that a prospective owner must have an understanding of exactly what it will take to be a success in the business they are about to start.
Being mindful of the fact that one must not be an expert at everything related to running a business, the following is a list of questions that a prospective business owner may want to consider as they work through the steps of starting their new enterprise:
- Have you written a business plan?
- Who is your target market?
- What differentiates you from any other products or services that may already exist?
- Will the existing customer base support another entrant into the market?
- How will you get your product or service to your customer?
- Have you developed a detailed set of projected income statements and balance sheets for the first three years of your company?
- How will you fund the startup and ongoing operating costs of your new business?
- Will you require an outside investor?
- Have you sat down with an accountant to discuss taxes and how they will impact your company?
- What specialized licenses or permits may be needed to operate your business?
- How many employees will you have and what benefits will you provide them?
- Who will manage and run your operation?
- How will this new business impact you and your family?