A List of Important Questions to Ask Yourself Before Taking the Leap 

The life of an entrepreneur sounds incredible – setting your own hours, being your own boss, and, in some rare cases, making loads of money, but starting a business is no easy feat.  It’s definitely not something for the weary or lazy, but for the brave, daring and strong-willed.

So here is a list we’ve put together — with questions ranging from basic and common-sense to down-the-line and detailed — to help make a success of your venture:   

Getting Started

• • • What kind of business do I want?
    • Who is my ideal customer?
    • What products or services will my business provide?
    • Where will my business be located?
    • How many employees will I need?
    • How much money do I need to get started?
    • How will I acquire customers?
    • How will I manage my business?

Making Your Product Distinct

• • • Who is my competition?
    • What differentiates my business idea from others in the market?
    • How will I price my product compared to my competition?

Focusing on the Financial/Paperwork Aspect

• • • How long do I have until I start making a profit?
    • How will I set up the legal structure of my business?
    • What taxes do I need to pay?
    • What kind of insurance do I need?

Take time (preferably a minimum of a few weeks) to come up with specific answers, and then you are ready to go on to the next stage.

Asking Yourself the Hard Stuff

These questions are less concerned with practical minutiae, and have more to do with the psychological underpinnings of building a commercial enterprise. You will need to have a good grasp of your own personality, and a sense of how you have performed in past business situations, to come up with candid and accurate answers:

Are you comfortable with financial insecurity? Launching a business, especially a start-up, is monetarily demanding and can pose a challenge to your personal finances and savings. In addition to your initial investment into the business, you’ll have to pay for everything from website creation to trash bags. Before you launch your business, make sure you have enough money to last six+ months with minimum (or even zero) income coming in, and that you’re prepared for financial setbacks, e.g.:

• • • Products and services costing significantly more than you planned
    • Profits taking twice as long to achieve
    • Customer acquisition costing more than you planned

Are you willing to make sacrifices? If you enjoy working 9 to 5, five days a week, and not working on the weekends, starting a business is not for you. Entrepreneurship requires significantly more hours beyond the forty-hour work week, especially during your first three years. You can set time limits and strive for work-life balance, but in reality you will be working around the clock to make sure your dream turns into a profitable reality. 

Are you a leader?  Being your own boss has its advantages, but it’s definitely not for everyone. You will be the one everyone turns to for answers.  So ask yourself:

• • • Are you ready to call the shots and make the tough decisions?
    • Do you have what it takes to drive yourself during the tough times when no one else is pushing you?

How optimistic are you?  When you ask most entrepreneurs how things are going, the typical answer you will hear is “Great!” That’s not because things are always actually “great,” but that constant optimism is required to get you through the tough times. Entrepreneurship is a rollercoaster of wins and losses – and being able handle adversity and hang in there when business gets tough is an important quality for small business owners.

Can you balance your optimism with realism? Another important characteristic is setting realistic expectations and being able to recognize when a product, service, or solution is actually bad, needs improvement or is clearly moving in the wrong direction. Entrepreneurs who are optimistic yet realistic will be able to learn from their mistakes, course-correct, and continue onto success.

Do you have a solid support system?  Most budding entrepreneurs start a company, thinking solely about the product or services they want to sell, but forget that providing those solutions requires both a team with diverse skillsets, and a solid foundation of friends, family members, and advisors.  So, besides your employees, you’ll need:

• • • Industry contacts to educate you
    • Mentors to go to for advice
    • Friends to help you beta-test your first product
    • Family members to understand when you work late
    • And loved ones to take you out for a drink when you don’t think you can make it through another day!

Do you have an exit strategy if things don’t work out? The reality is that startups fail all the time. You might put together a solid team, work around the clock, and build the exact product you set out to launch, but there’s still a high probability that your endeavor may not be successful. While the knowledge that you gained and the personal and professional growth that you achieved during the process will have made it all worthwhile, you still need to have a solid exit strategy in the event your venture is not the prosperous business you were anticipating.

There’s no right or wrong time to start a business, or a blueprint for the exact way to do it. Heed some words of wisdom from Michael Dell, Founder, Chairman, and CEO of Dell Inc., who noted: “Ideas are commodity. Execution of them is not.”

So you’ll never know unless you try… and trying can be the hardest part, before you get to the rewards.