Questions to Ask Yourself Before Starting a Business

Have you ever thought about starting your own business?  Nowadays, there are numerous blog posts and articles on how to quit your day job and become an entrepreneur, but relatively few on how to determine if you’re ready.  While leaving your 9-5 and starting your own business can be fun and exciting, you must have what it takes.

If you’ve been thinking about whether the entrepreneur life is proper 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?  It would be helpful if you offered something cheaper, better, faster, or with better technology than what’s already on the market.  If your offering isn’t challenging what’s already out there, you’ll have difficulty 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 necessary resources?

Starting a business requires an initial investment of time and money.  You should ensure you have access to enough cash to sustain you for at least 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.  Maybe it’s a relevant degree, a substantial savings account, or a rock-solid support system.  Successful entrepreneurs possess a range of skills and knowledge that help them navigate the challenging early months of starting a business.

3.  Who is my target audience?

I want you to know that knowing your prospective customers is essential to succeed in your industry.  You need to know who your ideal client is, their needs, where they are in life, how they think, and how your product or offering can solve their 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 rewarding, but it’s not an easy task.   Considering these questions 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 own a business successfully.

Coach Dave