So you have the entrepreneurial bug and you want to start your own business, huh? Starting a business can be one of the most rewarding, difficult, and beautiful challenges that you can face as a person in today’s society. The ability to choose the products and services that best serve your customers is a liberating feeling – you’re actually helping people and making a difference.
However, there is a dark side to entrepreneurship that doesn’t get talked about in popular magazines and news headlines. The truth of the matter is that most new businesses fail within the first year of their creation. According to recent statistics, 46% percent of failed businesses can be linked back to incompetence and emotional pricing frameworks. This article is targeted to give you the best questions to ask yourself before you start on your entrepreneurial journey.
1. Is your idea scalable?
This is a critical question to ask yourself before taking on the challenge of starting your own business. Does your product or service have scalability qualities? Your business needs to be able to grow and expand in all directions if you plan of weathering tough economic times that are bound to come in the future
- Is there room for adding employees in the future?
- Can I implement a subscription of some kind to increase profitability?
- Do I have products or services that can branch off my original products and services? (upgraded software, updated merchandise, new sales training packages, upgrade fees, etc.)
- Does my product or service have long term use? Or does it solve the problem after one consultation or application?
- Will my customer rely on me to operate my product or service? Or is it straightforward?
- Can I bring in experts or contractors from the outside to expand later on?
These are all questions to be asking yourself when trying to filter your bad ideas and good ideas. Although your idea may sound good, it may fall short in terms of scalability. Being able to grow is one of the catalyst to succeeding in your business start up. Failure to have a scaling product or service is dangerous and increases your odds of failing.
2. Is there a need for my business?
Another question that you always need to be asking yourself: does my product or service have demand in the market place? The key to running a successful business is finding a problem or pain within an industry and creating a solution to alleviate that problem. Many failed business start ups were created on the idea that their product ‘sounds cool.’ People make the mistake of trying to be an inventor rather than a business person.
An inventor is someone that comes up with products and ideas that currently don’t exist. While there is great money in this field, it’s not the best way to start a business. A small business that’s just sprang to life needs money and revenue in order to survive. To increase your odds at succeeding, create solutions that people are already looking for. This also increases the chance that you will generate valuable cash flow right out of the gate.
Don’t fall into the trap of creating an idea for a business that caters to you but neglects the rest of the world. You need to place the need’s and want’s of the marketplace ahead of what you value. The money and impact rests within being able to help others, not yourself.
3. Can you complete the project?
The last key step in creating your business is asking yourself if you can complete the project at hand. Can you work the hours needed in order to make a business thrive in the marketplace? Can you handle the up’s and down’s that come with being a business owner?
Peter Voogd and Hugo Fernandez recently talked about this factor in an episode of The Entrepreneur Grind. Entrepreneurs and small business owners are superstars at starting things and creating good ideas. Where they fall short is in the execution and getting down to the work aspect of their business. Ask yourself this: am I merely glorifying the start up process? Or can I commit to the actions and steps required to turn this idea into a reality? Your product has to sound good in your mind and also look good in it’s creation.