Have you ever thought about starting your own business? In this day and age, there are so many blog posts and articles about how to quit your day job and become an entrepreneur, but not many about how to know if you’re ready. The truth is while quitting your 9-5 and starting your own business can be fun and exciting; you need to have what it takes.
If you’ve been thinking about whether the entrepreneur life is right for you, here are 5 questions to ask yourself before starting a business.
1. What value will my business add to the marketplace?
This is the first of many questions to ask yourself before starting a business: what makes your business unique? You should be offering something that’s cheaper, better, faster, or has better technology than what’s already on the market. If your offering isn’t challenging what’s already out there, you’ll have a hard time overcoming the competition. Warren Buffett, the legendary investor, only puts his money into businesses with a defensible competitive moat. That’s evidence for a critical lesson to entrepreneurs.
2. Do I have the resources I need?
Starting a business requires an initial investment of time and money. You should be sure you have access to enough cash to sustain you at least through the first six months, if not the first year. This is especially true if you plan to quit your day job right away, as you won’t have a guaranteed source of income until your business gains traction.
Think about the resources you have at your disposal, no matter what they are. Maybe it’s a relevant degree or a substantial savings account or a rock-solid support system. The successful entrepreneur has a plethora of skills and knowledge that can help them survive the rocky few months of starting a business.
3. Who is my target audience?
Thoroughly knowing your prospective customer is vital if you want to succeed in your industry. You need to know who your ideal client is, what their needs are, where they are in life, how they think, and how your product or offering can solve their specific problems. Here’s a pro tip: Clearly define who isn’t your target customer. This exercise will help you with clarity.
4. What does the future look like?
One of the most critical questions to ask yourself before starting a business is whether your idea has a sustainable future. How mature or developed is my market? Is there potential for consolidation, tech revolution, or market evolution? Is there an opportunity for your business to grow and evolve, or will your idea become outdated in a few years?
5. Do I have what it takes?
It takes a specific type of person to become an entrepreneur. You need to be okay with uncertainty and be willing to persevere through the highs and the lows. Ask yourself: am I durable and committed enough to do what it takes to start and develop a business?
Another question to ask yourself is this: do I have the active support of my family? Starting a business can put a strain on your relationships. Be sure you either have the support of your loved ones or are determined enough to succeed without it.
Starting a business can be truly rewarding, but it’s not an easy task. Considering these questions to ask yourself before starting a business is a great start. Download my free ebook, The 10 Critical Responsibilities of a Business Owner, to learn more about the needed skills to be successful owning a business.