5 Questions to Answer Before Starting Your Business

Are you thinking of starting your own business?

Starting a business is such an exciting time of your life.  You get to be your own boss.  You get to build something you can call your own.

Unfortunately, there are some mistakes and pitfalls that can cost you a lot of time and a lot of money.  To help you avoid these, here are five key questions to ask before you start your business.

1) Who are my customers?

Too often we think that customers are going to fall in our lap.  When we start we can pick up our first few customers through friends, family and our networks. This may be ok for the first couple of sales or jobs, but what happens after to that?

Get clear on exactly who your ideal customers are so you can find out where you can find them.  This will ensure your marketing will be able to target those people effectively.  (and save time and money along the way)

2) What is the actual demand?

Many people starting a business assume there is going to be plenty of demand for their products and services.  But is there?  Your job is to find this out. It is like the coffee shop that sets up in a shopping centre that already has seven other coffee shops. Or the electrician who starts in an area where there is already a dozen electricians in that area.

It is important to find out how much demand there is and how well the current players are meeting that demand.  That way you can work out of the is room for someone else.  Which leads us to the next question…

3) Who are your competitors?

Who are you truly up against? Who are you going to be competing against in the marketplace?  Your first step is to identify who they are.  Then you want to understand what their strengths and weaknesses are.  When you know this you can work out how you can be different to them in the marketplace.  Plus you may uncover areas that they are not servicing well.

4) Where are the gaps?

By assessing demand and your competition, you will get a good understanding of any gaps.   There may be certain products or services that you could be offering.  There may be parts of the market that are being under-serviced or serviced poorly.  By doing your homework upfront you are more likely to find any gaps. These gaps can lead to a successful business by serving the need the market wants.

5) What skills do you need to start a business?

Finally you want to look at what skills you have or do not have when it comes to running a business.  Any skills you are weaker in you, you will have to either go and learn them or hire those skills in.  Don’t think you can just wing it and make everything happen.

There are fundamental skills you will need to know to:

  • understand the financial side of business;
  • market your business;
  • hire your first employee;
  • and grow your business, to name a few.

There may be some areas you are naturally good at and areas you are not.  Make sure before you start that you have a good grounding in the fundamentals of running a business.

So make sure you answer these questions before you start your business.  You will avoid wasting time and money when you do.