Answer These 7 Questions Before You Start Your Small Business
You have an idea.
It’s BRILLIANT. (Or at least, you, your spouse, and your best friend believe so.)
But… then what?
If you’re new to the world of business, it can be daunting to know how to take an idea from your head to reality and really put it into practice.
How do you know if it’ll actually work?
Will people even be interested?
What if it fails?
That’s why I curated seven questions you MUST answer before moving forward with your business idea.
Sit down with your partner or journal and go through each one in detail. By the end, you’ll have more confidence and clarity around your idea.
01. How will your business make money?
This one sounds obvious. But when you really dig into the structure of other businesses, you’ll find that almost every business (big or small) makes sales in more than one way. Will you be taking on one-on-one client work, hosting a group program, selling monthly subscriptions, operating a product shop, selling mini courses, etc.?
02. How much will your business cost to operate?
Take some time to detail both your fixed monthly and annual costs, but also your initial start-up costs. Map out those numbers for the first 3-5 years, if possible — even a rough estimation can help you make a financial plan. And (I have to use the “t” word), don’t forget to account for taxes and licenses specific to your business.
03. How do you intend on cultivating interest in your business and getting your first clients or customers?
“Build it and they will come…” isn’t really a thing. As the owner and brains behind your small business, it’s up to you to figure out how to get the word out there so people know you exist!
And on top of that, simply sharing about your business isn’t a guaranteed way to get people in your doors and money in your bank account. How will you garner interest and get those first few sales? This blog post I wrote about standing out as a new business might strike some inspiration for you.
04. What are three different ways you could structure your business?
Yes, you have one BRILLIANT idea. But that one idea can truly manifest in several different ways. Detail out three different ways in which you could structure this business idea. This practice not only opens your eyes to new possibilities of how to build your business, but also helps build in ways you can pivot or shift your business structure down the road, if necessary. Also, identify the version that feels the most exciting and aligned with your dream for this business.
05. Referring to that “most aligned” version… what does a lean version of this business look like? How can you start with the simplest version while still serving your people in an impactful way?
There’s no doubt you have big ideas for how you want your business to operate. It’s a good idea to sit down and detail all of those so you can capture every possibility from day one. But then, take a step back and identify how your business can operate profitably in the simplest, sustainable way. What does phase one look like? What is the most feasible service or product to launch with that will not only serve your audience but also start building a solid foundation for your business.
For instance, you might have plans to operate a full-service agency, complete with courses and digital products and an exclusive monthly subscription, but maybe the best first move is to focus on getting clients in the door to start finessing your processes while building a solid financial foundation.
06. Is there any way to test your idea on a smaller scale with less at stake before you officially make the leap?
Look, I’m all for DOING. Too often, we get caught up in the planning and overthink our way out of taking any real action. (In fact, by taking action to actually START your business, you’re already leaps ahead of so many who choose to stay in planning mode forever.)
But — especially if your idea is a little more on the innovative side — is there a way to share, research, and experiment with your idea before building out the full-fledged business? This could not only ease your mind about the validity of your idea, but might even help you work out some kinks early in the game when shifting gears is way more affordable and easy to do.
07. What is the worst case scenario you could encounter with starting your business? What would you do in that case?
I know, I know — this one sounds all doomsday. But the truth is, facing the “worst case scenario” head on is actually pretty liberating. It helps move you away from fear of failure because you already have a baked-in plan on how you would handle that scenario. And generally, it’s not nearly as bad as what we build up in our minds.
Could I keep going?
Absolutely.
But these are some of the most powerful questions you can answer for yourself before officially starting that business. A one-hour journaling session can save you months of headaches and redirections and financial surprises along the way.
P.S. Planning to set up an online business? Hop over here to get started with these four essential steps.
