If you go across the town right now and ask people what they want to do, you would be surprised that more than 30% of them want to become an entrepreneur, they want to build a start-up. But the brutal honesty is that excitement and passion is not enough for a successful business. You need to know and ask yourself the following questions before you take the big step:
1. Need for your service or product
Forget about everything and just think about this question.
Is there any need for your service or product?
If the answer is no, then no matter how great your product or service is, it’s going to fail because no one will buy it. Don’t lose your heart over this fact as many revolutionary products have come up when no one imagined that people would buy them. But if you are starting a new business, it’s better to be safe than being sorry afterwards. So, do your research, look at your competition, see if they are making profits and then decide whether you want to go ahead with it or not.
2. Is there any significant customer base?
The second question which you must ask yourself is this:
There might be a need for your product but is this where you’re going to set up your business ?
This can be a subjective question as there are many successful niche businesses that serve small markets quite profitably. So, take a proper look at the market where you will be operating to assign real money value to its potential.
3. Can this business be profitable?
Once you have established a firm foot over the top 2 points ,you can check the true profitability of your business. But don’t go overboard , you still need to figure out your start-up costs as well as ongoing business expenses. You will have to create such a pricing structure for which the customer is comfortable in paying and it generates enough revenue to keep the business running. After setting realistic goals, you will get a solid picture of how profitable your business will turn out to be.
4. Are you the right person for this business?
Don’t get offended by this question. You may eat, sleep and breathe your business. But still you will have to think why are you uniquely qualified for running this business?
As a CEO , it’s very important to know your weak points which can be covered up by employing the right people. So, first know yourself and then start finding the right people to bring into your business.
5.Is your business sufficiently funded ?
The first thing that the investors look for, in a business plan, is financial projections. They want to know if your targets are unrealistic or whether you understand the financial bottom line of running a business. Never shy away from explaining them that you don’t expect revenue to magically pour in within the first few months and you have sufficient capitalization to run the business to break even.
SWOT (Strength Weakness Opportunity Threat) Analysis is also a great way to analyze your business.
While all the excitement and energy is definitely important for starting a business, make sure you ask yourself these questions and analyze the answers. Once this part is done there is no one stopping you from becoming a successful entrepreneur.