“Any time is a good time to start a company. Choose a Business that you love, and you will never have to work another day in your life. Be so good they can’t ignore you.”
Topics: Passion, Product or Service? Skills, Energy, Failure, Persistence, Partner, Market, Competition, Price, Funding, Mentors, Balance, Strategy, Niche, Charging,
Entrepreneur Questions. Here are Questions to separate the serious “contenders” from the “pretenders”. These questions will help you identify good Advisors, Board members, & Investors (if you have the luxury of choosing Investors at this stage).
- What are you Passionate about? – Choose something that you are wildly Passion about, but don’t forget to work in a lot of fun with it
- What “kind” of Business do you want?– Do you want an Online Retail business? Or, would you rather be B2B? Do you want to start a business from nothing or do you want to buy a business? Do you want to buy a franchise? The possibilities are endless.
- Do you want a Service business or a Product business? – Service businesses require different skills than product businesses. The product business requires product design, inventory management, manufacturing, shipping, and normally a greater amount of capital to start & operate, than a service business.
- Is your Business Idea good? – Is it unique or “Better, Faster, Cheaper” than competition? Discuss it with Friends, Family & potential Customers to determine if it’s a good idea & get feedback to make it better. Will potential Customers be willing to pay for it?
- Do you have the necessary Skills? – No one is a born entrepreneur, but there are certain skills required. The skills you need are largely dependent on whatever business you start.
- Do you have the high level of Energy it will take to start & sustain a Business? – Start a business is fun, but it is also exhausting. One day you feel like a winner, and the next day you feel like the biggest loser in the world. Ups & downs are frequent occurrences. It takes a lot of persistance.
- Are you able to deal with Failure? – Many businesses fail in some aspect. If you talk to successful entrepreneurs, most of them will tell you that they have failed in the past. You might get lucky and succeed the first time, but for many success only comes after one or more failures. If you “Fail fast & Fail often”, you’ll be able to bounce back from each and eventually succeed.
- Do you not Give Up easily? – You read about overnight success stories, but not many exist. It will often take years to build a reputable business. Are committed & persistant enough to make it happen?
- Are you open to Listening to people more successful than you are to Learn? – Entrepreneurs love learning new skills. The best ones are also great at networking with other successful people. They interact with successful entrepreneurs to learn & help each other.
- How will you Balance your Personal & Business life? – Work/Life balance for business owners is myth. There is no separation of your business from your personal life. If you have lost a key client one day, there is no way that you won’t think about its potential impact on your business on your way home or even during dinner time. Entrepreneurs never really removed from their businesses and the challenges surrounding them.
- Are you going to Partner-up with a CoFounder?– Startups with two Founders are much more likely to succeed. Choose a Partner who has many skills you don’t, so your skill-set is more complete. Choose someone you’ll enjoy working with.
- Who is your Target Market? – You should be able to exactly describe the demographics of your customers – so you are “targeting” the right market. Be as specific as possible. Look for a niche that’s not or under served
- What is your Strategy? – How are you going to let your Target Market know you exist? How are you going to sell to them? Will you offer incentives to get to them?
- How many potential Customers are out there? – You want to know the total number of potential customers, so you know whether or not they have good long-term potential for your business.
- What’s than nature of your Competition? –How many competitors do you have? You should know exactly what the features your competitors have. Are they weak in an area that you could take advantage of.? Could you be “Better, Faster, Cheaper?
- What “differentiates” your Business from the Competition? – Some of the most common business differentiators are excellent customers service, low price, fast response, wide selection, specialization, unique technology, geography, client list, accomplishments, & experience.
- How Competitive is your Niche? – There are well established business niches and newer ones like Social Media Marketing Analytics services. Regardless of your niche, you should understand the level of competition so you can estimate if you can get a share.
- How much can you Charge and still be Competitive? – Study how much you competitors charge. Understand their pricing structure. It’s easier to start high and come down, than try to raise.
- How much are you going to charge for your product(s) or service(s)? – Pricing is an art & science. Too low and you will fail to make a profit. Too high and you will fail to sell it. Talk to potential Customers and see what they are willing to pay. Will your cost enable you to make enough Profit Margin?
- How much $$$ do you need to Start your Business? – The level of investment needed is dependent largely on the type of business you are starting.
- If you need to, are you willing to Invest $$$ in your business? – There are businesses you can start with very little or almost no money, but with most, you will need to invest your own money in your business.
- Do you need to get a Loan? – Business Loans are nearly impossible to get for a new Business from a Bank, if you don’t have much Cash Flow. The alternatives are Angel Investors, Boot-Strapping, Crowd Funding, Family, Friends & Fools.
- Should I start out Boot-Strapping? The biggest advantage is, you only answer to yourself. You are free to do as you wish with the direction of your startup. It also forces you be more creative, lean & mean.
- How long will it take to “develop” your Product or Service? – For product businesses this could take months and sometimes even years. It is very important to consider your product development cycle. For services, you may be able to start off in a few days or weeks.
- Marketing. How will you Sell? – Are you going to sell your customers directly or through resellers? Will you sell online or offline? Will you have a Sales Force or strategic partners? What is the best channel for your products or services?
- Can you find Mentors to help you succeed in business? – As an entrepreneur your Team expects you to have all the answers, but that’s impossible. Reach out to experienced Entrepreneurs when you are unsure of the the next step. You will find that many of them are happy to help. Don’t be too needy. Don’t confuse Mentorship with Friendship. Try to get a permanent Mentor to bounce your idea off of – for advice.
- Dividing Shares of Co. Should two Founders split the company right down the middle? No, allocate 25 % to future Employees & 35 % to the first two Rounds of investments. That leaves 40 % for the Founders to split amongst themselves. That may seem low. But if you have a Winner Co, you’ll be adequately compensated by the Profit. Do the split 21/19, so if you get in a deadlock, one Partner can make the decision.
More Formal Questions
- What kind of Legal Entity should we form? What’s right for you depends on your business and your situation.Sole proprietor best for 1. LLC when you’re small & want to stay small, “C corp” is best if you want to get big one day
- Vesting. Should all employees, including founders, go through a Vesting process? “Yes, because you don’t want a founder to leave with a significant % of the company after a few months.”
- Consultants. Should we pay them with Stock Options? “No, stock options are for long-term employees, not short-term consultants.”
- How much Planning should I do? Start with a comprehensive Executive Summary. Once you see the pattern – as your business grows – you can write a more formal Business Plan.
Comments: Are there any other Question to ask when Starting a Business?
compiled by Peter/CXO, Wiz4.biz & 5 Star Startup Services 27 Oct 17
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