6 Questions All New Entrepreneurs Should Ask Themselves When Starting a Business
Congratulations! You’ve decided to start a business and become an entrepreneur. You’ve made your mind up, which is good. But, now you’ve probably got a million questions. That’s a good thing.
At this stage in the game, it’s all about asking yourself the right questions. Asking yourself which color your business card should be is not a good question.
Instead, you want to ask yourself questions that will provide clarity of purpose on a day-to-day basis, because a day of uncertainty is a day wasted. Another major benefit of asking yourself the right questions is that the answers will lead you to greater productivity and quicker cash flow. These are the same questions I asked myself back in late 2013 when I first started selling grillz, men's gold chains and other hip-hop jewelry.
And remember, without cash flow, you don’t have a business. You have a hobby. The way you generate cash flow is by knowing what you’re selling, why you’re selling it, who wants it, why they want it and where to reach them. You determine that by asking questions like:
- What is my market size
- What are the market price points?
- What is my market demographic?
- What is the need of this market?
- Where are the market communities?
- Who are my market competitors?
So you can see the power of asking these questions early on, let me share an example. I recently connected with Max Salientes, an e-commerce entrepreneur who sells fidget spinners through his brand, Stealth Spinners. During his pre-launch phase, he asked himself all these questions.
He discovered the market was immense, but that the low-end of the fidget spinner market -- the most popular market segment -- was completely oversaturated. I agreed after seeing that even supermarket chains were getting in on the fidget spinner craze, selling them for $5 a pop at every checkout counter. That’s a big red flag.
However, Salientes found the high-end, collectible market was untapped; a market that your average fly by-night entrepreneur with a noncommittal work ethic wouldn’t find; also a market that a newbie who doesn’t ask themselves these types of questions wouldn’t find. “There’s a Facebook community called Spin Space with over 20,000 different hobby enthusiasts, most being avid collectors who are very helpful to people at all stages in collecting,” he told me.
Now, he knows where his potential customers congregate.
If you’re an entrepreneur looking to sell a product, these are the exact kind of communities you need to find and immerse yourself in. Salientes’s research led to other, more lucrative answers. Next, he dove into his market demographic. He learned that collectors weren’t just interested in one-time buys. He learned that collectors in his market have families, and they love to share.
“Many adults who collect fidget spinners have children,” he told me. “Through a subscription service, every month becomes a special event for the family. The parent gets a high-end fidget spinner while the kids get something different to play with.”
Most entrepreneurs never stick with their first idea or ideration, but typically for the wrong reasons. In Salientes' case, his market research provided all the direction he needed. His fidget spinner club was born.
Now, while his competitors go head-to-head in a price war to the bottom, Salientes is building a recurring revenue business -- the holy grail of business models -- for niche customers who are happy to invest in pricier products. But, he only came to that conclusion by asking himself the right questions and taking the time to find the answers he needed.