You’ve set your mind on a business idea and now you can’t think of anything else. Sounds familiar – passion is what drives most small business owners.
When starting a business though, passion will not suffice. Without a solid plan, sufficient funds, and consistent effort, passion alone simply will not do.
So many individuals dream of running their own businesses and finally quitting that dreadful, dead-end job. But it’s often this immense desire that causes them to take that leap before they’re fully ready.
About 20% of small businesses fail within their first year.
We’re not saying you should give up. We’re saying you should be thoroughly prepared for venturing into a new business.
The questions below will help you figure out where you stand and give you an insight into how ready you are to become an entrepreneur.
Does Your Product Meet a Need?
This should be the first question you ask yourself when thinking about starting a business. The idea might sound great in your head, but have you researched the market to figure out whether there is an actual need for such a product/service? Will your product solve an existing need?
If you’re unsure whether the answer is “yes”, you’re not ready to take the first step. Research further, do better. If the product turns out to be useless, discard the idea, and stop wasting time. If there is no need for your product/service, how will you sell it? Who will buy it?
Ask around and find out what people think and whether they’d buy a product like yours. It’s relatively easy to get that much-needed feedback nowadays so venturing into business without testing the waters is a recipe for failure.
Make sure there is a market for your product before launching it. But don’t just stop there, continue researching the market and stay up to date with the changing needs of customers, as Eric Rea, CEO and co-founder at Podium, advised in an article published by Inc.
Do You Have the Right Idea and Motivation to Run Your Own Business?
Does your idea have potential? Will it add value to customers? Do you believe in it and in yourself?
If the answer is no, then you’ll likely be just another number in the statistics of failed businesses. People already have pretty much everything. They’re looking for products that will improve their lives, not the same ideas they see daily.
But before you convince potential customers that your product does bring certain value, you need to believe in it yourself. Having the right mindset is essential for a successful entrepreneur. What does that entail?
Motivation and business savviness are some of the traits that characterize a successful entrepreneur. You should be determined, disciplined, and driven to succeed.
Do you think you fit this description?
If you’re the type of person whose motivation quickly fades at the first obstacle, then you should think twice before you enter the harsh business world. If you lack motivation and don’t know what the true value of your product is, how will you persuade customers to buy it?
Even if you are highly motivated right now, you might experience a drop in enthusiasm after a few setbacks. Find ways to stay motivated during the tough times.
Is Your Business Idea Feasible?
Many small business owners rush to start their business and think they will figure out the rest as they go. This is not the right approach. It should be the other way around, you should figure out everything before you launch your product.
Is your idea feasible? Do you have the necessary resources available? Have you taken the time to do your taxes properly? Will you be able to dedicate enough time to this business in the future? How will it affect you and your family? If it isn’t feasible, you’ll only be wasting your time.
Who is Your Target Audience and How Will You Market the Product?
If you’ve established that your idea is indeed worthy of customers’ attention, you need a marketing strategy. How will you present it to customers?
Maybe your idea is great but that certainly doesn’t mean people will rush to spend their money on it. They need to be compelled to buy it. They want you to show them that they need this precise product/service and why.
To do this, you need to understand your audience. Who is your target audience and what are their needs?
Will you try to create some buzz before launch, create useful content that targets your audience, or will you give something for free to get some publicity?
Consult a marketing agency to help you promote your product.
Can You Secure the Necessary Funds?
Have you asked yourself this burning question already?
Money is probably the greatest obstacle for entrepreneurs and the reason why some businesses stay small and never succeed at scaling it.
Perhaps your business idea doesn’t require a lot of startup money. Even so, be careful not to spend money on unnecessary things in the beginning. For example, if you don’t absolutely need to rent a space for your business, then don’t. Work from home, and if you’re opening a shop, sell online until you earn enough to easily cover the rent for the foreseeable future. Spend on the things you need, not the things you’d like to have.
Save as much as possible in the beginning and use the money you earn to expand your business later.
It doesn’t hurt to have an emergency fund to dip into when things get rough. In fact, this is a must. Having some money aside will come in handy in difficult situations and will save you from having to apply for another loan or closing down your business.
Have You Researched Your Competitors?
Who else is doing what you do? Probably a lot of people.
But don’t let this discourage you. Even if there already are countless businesses like yours, it doesn’t mean that you can’t do it too. You just need to check out your competition and offer something better.
For example, if they offer a cheaper service, you try to offer a quicker service. This is your competitive advantage. You are selling the same product/service as your competitors but you’re adding that extra value that will make customers choose you.
Answering these questions will help you realize whether you’re ready to venture into business or not. Making well-thought, informed decisions will significantly minimize the risk of failing.
Leslie runs Cube Digital an SEO agency based in Dublin. When not sat in front of a computer he loves to be out hiking the mountains around the country.