Like many things that could radically change our lives for better or worse, the idea of starting a business stirs extraordinary emotions. On the one hand, who doesn't dream of being one's own boss? Who wouldn't get excited by the notion of building a successful enterprise from scratch? Or the possibility of becoming financially independent while still pursuing your passion?
Of course, that's the best-case scenario. Starting a business and making it a success requires negotiating a gauntlet of challenges. And not everyone is cut out for the task.
Here are a few questions to consider that will help you reflect on your business idea.
What's my motivation? "Why" is one of the most important words in entrepreneurship. Starting a business is a serious undertaking that requires hard work and sacrifice, so why, – exactly, – would you want to do it? Whether it's money, independence, or passion for a new product or service, it's important to understand your motivation for getting started.
Am I willing to do what it takes? Can you tolerate a certain degree of risk? Are you willing to assume a greater degree of responsibility than you may have ever had? If the answer to either of these is "absolutely not," entrepreneurship may not be the best personal or professional fit.
Do I have the resources to get started? Businesses come in all shapes and sizes. Some require serious startup cash, while others can be bootstrapped for virtually nothing. Whatever your situation may be, it's essential to ensure you are sufficiently capitalized before taking the plunge. If you need funding, get ready to explore financing options from friends, family, a financial institution, or investors.
What type of business do I want? Many people come up with a fantastic idea, then decide to become an entrepreneur to make that idea a reality. Others, however, feel the entrepreneurial urge but lack a compelling business idea. If you're in the latter category, focus on two things: your skills and your passion. The common ground between these two areas is often where you'll find a strong business idea.
How will I attract business?You won't last long if you can't find customers. Formulating a plan to attract and retain clientele is a critical part of an early business strategy. It's important to think deeply about your industry and the competitive advantages you can create. You need to differentiate your product from others already in the market.
Where will I locate my business?For brick-and-mortar operations, location is extremely important. If you're planning on opening a food truck, for example, it's a good idea to park it next to a large office park during lunch hours. Think about foot traffic, accessibility, and other issues.
How will I handle staffing?Are you going to be a sole proprietor? Hire contractors? Full-time employees? It’s important to consider what your company needs to start and how it will expand.
How will I handle taxes, insurance, and accounting?New business owners can get overwhelmed by the need to keep track of their finances. Make sure you have plans to handle taxes, insurance, and accounting.