Not just your particular business, but any business. Your motivations can be a big factor in how successful your business will be. Necessity is the mother of invention, as they say, so the more compelling your motivation, the more likely you will be to succeed. Are you slowly dying under the crushing weight of a job you hate? Do you need more ‘mulah’ to realize a goal? Do you feel a calling to change the world in some way? Those are among the reasons why the most successful business get and stay off ground.
2. Can I handle failure?
That’s not to say every new business venture fails, but all entrepreneurs suffer some form of setback along the path to success. The movie studios always manages to skip those parts when they are making the biopic of successful business men and women. Some people take failure as a rejection from which they can never bounce back. Others see it as a learning opportunity. Starting a business is largely a testing exercise: you have an idea, and you test it. If it works, you keep doing it, and if it doesn’t, you figure out what went wrong and reevaluate. Successful entrepreneurs aren’t afraid to go back to the drawing board. In the words of Charlie Munger, they don’t suffer from ‘first instance bias’ i.e their first ideas or notion isn’t cast in stone, it can be changed if the facts or experience doesn’t support it.
3. Why do I think this is a good idea?
Lots of people—maybe everyone—have what they consider to be ‘good’ ideas, but they can’t always articulate why. If you can’t defend your business, you’ve lost sight of a huge part of being a new entrepreneur. Customers need a compelling call to action as to why they should take a chance on your product or service. Investors want to know exactly how your product will fill a new void or solve an existing problem in a better way.
4. How will I make money?
Generating revenue is the central point of any business. Anything else is a nonprofit venture. It’s rare these days for a company to raise funding without nothing more than a good idea and a revenue plan to follow—eventually. That just won’t cut it in 2013. If you’re selling a product or service, what is your pricing model? In any case, it’s important to know how and when your business will become cash-flow positive if you want anyone to take you seriously.
5. Who is my customer?
In coming up with an idea you’ll actually act on, a big component is being able to answer the question, “Who is buying whatever it is I’m selling?”—and don’t say “everyone” Rare is a product so revolutionary that literally everyone is a potential customer. It doesn’t work like that in the real world. It all comes down to finding holes in the market and figuring out which customers are languishing in those voids. Federal Express was just a regular courier service company. Things didn’t take off for them until they focused all their energy on delivering overnight packages and they actively sought out people, and businesses that needed such services.
6. Do I know what people I need to bring on board?
Successful entrepreneurs know when having a great idea is not enough, and they know exactly which people to bring aboard the bus to make their idea a reality. If you have an idea for a website, for example, do you know who’s going to code it for you? Conversely, if you are a developer with an idea, are you prepared to market and sell the site yourself, or is there someone better suited to the job? Success is a collaborative thing. Success often hinges on letting go of your ego—and a few shares in your new company.
7. Am I willing to commit the next 5 years of my life to this?
It’s rare that any start-up becomes an overnight success. Even the ones that seem to are typically in development for years before you ever hear about them. Expect countless hours of brainstorming, testing, development and evaluation, all before you ever see your first naira of profit. Are you prepared to make that sacrifice? It’s fine if you aren’t, but that is a huge sign that owning a business might not be for you. It’s rare that any successful company started and remained anyone’s “side business” At some point, you’ll have to dive in and commit to take it to the next level. Whether your goal is to grow the business into profitable fruition or build enough value so that you can make a tidy profit through acquisition, expect to dedicate several years of your life to it.
8.What’s my ultimate vision?
This applies to the overall operating scope of your business. There’s nothing wrong with starting a small business as a source of revenue and keeping it that way—not every restaurant owner dreams of franchising. There’s also nothing wrong with dreaming of building a global empire. Either way, you need to be able to answer the question and be realistic about what’s needed to realize that vision. It’s rare that a musician explodes into the global stage without that being their intention from the beginning. If you one day hope to go big, this has to be on your radar from day one.
9. Am I ready to be an employer?
If your business grows beyond the startup phase, chances are you’ll need to bring on employees to keep things growing and running smoothly. Are you prepared for that? There’s a big difference between doing everything on your own and letting go to hand some responsibility over to your employees. Delegation is a skill that not everyone has, and it’s rarely tied to your abilities as a developer or executor of ideas.
I hope you consider these nine frequently asked questions before you begin the entrepreneurial journey in order to find out if it is the right road for you.