5 Questions to Ask Yourself Before You Start a Business
I adhere to the belief that you don’t have to have everything figured out before you start your business. It’s important to have your mission and your business model, of course. As for the rest, that will evolve over time.
Still, I meet a lot of people who are unsure whether or not to take that first step. Certainly, it can be challenging to do a business "on the side" until it's big enough to sustain itself. But the most effective way to find out if your idea is going to work is to simply go all-in. Otherwise you’ll never truly know.
Here are some questions to help you decide whether or not to go "all-in."
1. What problem am I solving?
Answer this: My product will solve ___________________. If you can’t answer that, stop there and go back to the drawing board. It’s important that your product solve some sort of need because that’s what determines the value.
The book Rework likens entrepreneurship to having an itch and then scratching it. The "itch" is your problem; the scratch is your solution. Kids losing their self-esteem after hair loss through chemotherapy was my particular itch. Headbands of Hope, which provides headbands to kids during treatment, is my scratch.
When you think of solving a problem, you usuallly think of functionality. For example: a coffee mug that keeps your coffee hotter longer. Or luggage that compresses to take up less space. However, a need can also be something less obvious and still have value. For example: The app Offline Media tells you what’s going on in your city, if you live in North Carolina. The need it's filling is getting people "offline" and outside.
2. What funds do I absolutely need to start?
Maybe your dream is to open up a storefront to sell your handmade chocolates. However, that’s a lot of money you'll need up-front to open a store, especially if you haven’t tested the concept. Instead, do whatever you can do in the beginning to use as little in funds as possible to grow organically.
Sell your chocolates at farmers markets, or online if you can. When I started my company, I only had a very limited number of styles for people to choose from. Once I sold those, I used the profits to expand my collection.
Think about what you absolutely need to buy in order to start, not what you’d ideally like to have in the bank. Your number to get started might be smaller than you think.
3. Who else is doing this?
You can’t play the game if you don’t know the players. Do a simple Google test to see who else is out there doing what you're doing. Just because someone else is out there selling chocolates doesn’t mean you can’t sell chocolates, too. However, you need to see what the competition looks like in order to decide if you can offer something better.
4. What’s my ‘special sauce’?
Speaking of differentiating yourself from the competition, determine what your "special sauce" is. According to Shark Tank's Mark Cuban, your special sauce is a quality about your company that stands out from the rest. For example, my headband company donates a headband to a child with cancer for every headband we sell. Our charitable donation is our special sauce because it differentiates us from other headband companies.
Your own special sauce can come from a lot of different areas of your company: where it’s made, the unique quality of the product, how it’s made, competitive pricing, a charitable component or your stellar customer service.
For example, Lawson Hammock's product differs from other hammock companies' because it has a built-in tent on top.
Ask yourself, "What is going to make someone purchase my product over my competitors'?" Your answer is your special sauce and should always be included in your marketing.
5. What resources do I currently have to get started?
Remember in Cast Away when Tom Hanks' character opened all the floating packages and repurposed them for survival? That’s exactly the mentality you need to have when you’re an entrepreneur.
I hear too many people tell me what they don’t have. I’d rather hear what you do have access to and how you plan to utilize it. I started my company when I was in college. Even though I didn’t have any money or experience, I focused on what I did have: professors (closest thing to industry experts) and access to numbers (students).
I worked with different professors to help develop a business plan and create a product and website and everything else I needed to get started. Once I was ready to go, students were my first customers.
So, make a list of everything you have that can help you: people you know, finances, skills and anything else. You’ll be surprised how resourceful you can be even when you feel limited.
Another question I hear people ask themselves before they start a business is, “Is this the right time?” I’m going to save you from asking yourself that because there will never be a time that feels totally right.
But I will tell you that when you want something badly enough, you make time for it no matter what. Starting a business isn’t about the stars aligning and your feeling 100 percent confident. Starting a business is about your passions and excitement outweighing your fears and doubts.
These questions might not give you a clear answer, but when you catch yourself constantly going back to the same idea when you lay your head down on your pillow each night, you know you’re on to something you're passionate about. Sometimes, that’s the only answer you need.