Questions to Ask When Starting a Small Business
What are the questions to ask when starting a new business? You may be asking yourself whether you should start a business.3 min read
What are the questions to ask when starting a new business? You may be asking yourself whether you should start a business.
The human mind is comfortable with binary choices that allow for yes and no answers; it's a survival adaptation of our basic fight or flight instinct. However, you cannot decide to start a business by merely asking yourself such trivial questions. You also need to realize that the answer to the question of starting a business is a function of the type of business you plan to establish. Small business ideas have varying degrees of success; business such as restaurants have extremely slim chances of success.
What Questions Should You Ask Yourself When Starting a Small Business?
There are several questions you need to ask yourself before starting a business.
Ask yourself the following questions if you are thinking of starting a business.
- How much money will I be committing to this business?
- How much of my time will I dedicate to running the business?
- What amount of energy will I put into the venture?
- What other obligations do I have currently that can prevent me from overseeing the new business?
- Is now the right time to start the business or will a future date be better?
- What other choices do I have if I decide to delay starting a business now?
- What's the likelihood of the business' success?
- Do I have a competitive advantage by starting a business now?
- Before I quit my day job, can I run a pilot phase of the business part-time?
- Should I go for a lower-risk or higher-risk business?
- If the business performs below expectations, when should I wind down the business?
- If the business fails, when will I recover from the loss?
Answering the above questions will provide concrete answers to the generalized question of whether you should start a business.
Additionally, the answers to these questions will also help you choose a business which you have confidence in running, should you decide to start a business.
Things to Do to Help You Decide If You Should Start a Business or Not
Weigh the Risk vs. Reward
There are several risks involved in starting a new business, and it's important to identify the risks as well as the potential rewards.
For instance, your current job may offer a great salary with excellent benefits and retirement package, as well as promising career progression. In such a situation, the question you should be asking yourself is whether you are going to start a business that will require quitting your present job.
Your initial investment is important as it is a critical determinant of the type of business you can start. However, you can start a business with a small capital outlay.
Most people are afraid of taking risks. However, you can reduce the risks your new business will face by setting clear limits written down in your business plan. Setting boundaries will help you reduce the risk you will be exposed to and protect you from investing too heavily in an idea that may fail eventually.
It's essential to have a plan before starting your business. You need to have a well-written business plan that covers the most important aspects of the business.
Importance of a Business Plan and Who Should Write It?
A business plan is a detailed document that outlines the startup and the prospects of your business.
The best person to write a business plan is the founder because you are in the best position to outline your business objectives. However, you can outsource the job to specialists, but you need to be part of the process as you will be the one to pitch the business idea to investors and financial institutions.
What Problem is Your Business Solving?
You also need to identify the problem your product or service will solve as this is the only way to add value to the business.
Before you start a business, you also need to set goals and have a plan to achieve those goals. This is why writing a business plan is essential before starting any business.
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