Starting a business is a big decision. While it’s good to be decisive, you don’t want to dive into the deep end before you make sure there aren’t any sharks. Ask yourself these questions before you start a business. ( #4 will help you stand-out in a competitive market.)
1. Do people want what you have to sell?
Birds are my favorite animal. I want everyone to know how majestic these creatures are. They can flap their wings and fly from one country to another. It’s like Superman in animal form! Even though I’m enthusiastic about birds, I don’t think there’s a business opportunity here.
If I lived in an area where tons of people are genuinely interested in bird watching (and there aren’t already a whole bunch of competitors), then this might be a viable business option. However, I’m not convinced this is going to be the case in a large amount of places.
It doesn’t matter how much I love birds. For a business to do well, other people have to share the same passion. Do NOT ask your friends and family for feedback. They’ll say nice things, but their input is worthless (they don’t want to hurt your feelings).
Fortunately, the Internet makes market research easier than ever. You could run a Facebook ad that sends targeted traffic to a sign-up page: “Bird watching lessons are coming soon! Enter your email to get a heads-up before the first lesson starts.”
The goal is to determine whether your business has a decent chance of being profitable before you even launch it. This will help you prevent wasting your precious time, money, and energy on a bad idea. Testing is important. Do not skip it!
2. What do your potential customers need?
Fill in the blank: “My product or service makes my customer’s life better, because _____________.” If you’re stumped, that’s not-so-good. Your business needs to solve a problem that’s shared by a large amount of people.
People love watching TV, but hate sitting through customers. Netflix eliminated that problem. People like getting drunk, but dislike taking a Taxi home. Uber made that process a lot easier. What need will your business meet? Don’t quit your day job until you figure that out.
3. How much money is this going to cost?
Online businesses are inherently cheaper than in-person ones. Filming an exercise routine is easier than opening a gym. Selling a cookbook doesn’t require as much capital as opening a restaurant.
I recommend boot-strapping until you determine whether your business can succeed or not. Yes, failure is a necessary part of the learning process… but in this case, failing has expensive consequences.
Start small. If you want to open a gym, begin with exercise classes at a park. If you want to open a candy store, begin by selling your candies at a local farmers market. However you choose to do it, confirm your idea resonates before you go “All in.”
4. What makes you so special?
It’s important to differentiate. Otherwise, your business will be forgettable. How are you better than your competition? There are many ways to stand out. Here are a few general ideas:
- Use a unique and innovative feature or ingredient
- Offer to meet or beat the prices of every major competitor
- Donate a certain amount of every sell to a charity your customers care about
- Provide a 110% money-back guarantee (you add an extra 10% on top of the purchase price when customers are dissatisfied and request a refund)
5. How do you handle stress?
Let’s not romanticize. Starting a business is one of the hardest things you’ll ever attempt. What’s more difficult? Climbing Mt. Everest… taming a lion… swallowing a sword… scared yet?
There will be days, weeks, or months where you struggle to find new customers. You’ll have to deal with doubters, haters, and naysayers who think your idea sucks. Your staff will blame you for everything, whether it’s your fault or not.
I don’t mean to discourage you from starting a business. I’m just being real about the kinds of struggles you can expect to deal with on the regular. If reading this article made you feel anxious, please build some mental strength before you start a business. You’ll need it later! (Focus and persuasion will be helpful, too.)
Starting your own business is hard work. Share this article with your friends, because it will help them start their business on a strong foundation, too.
Image credit: Jared Cherup | Flickr