You’re an entrepreneur, going into business with the expectation that your business idea is a good one, and that your future is bright. You’re ambitious, brave and optimistic. Admirable qualities for an entrepreneur, but not nearly enough. Unless you consider the likely possibilities, and verify that your business idea is sound to start with, you may be in for some unhappy surprises.
It’s easy to fall in love with your business idea, to ignore the negatives and focus on the positives. Which means that while your idea may be the best thing since Bill Gates came up with Microsoft, your refusal to ask yourself the tough questions just might be leading you into a business failure. If there are basic problems with your idea, know what they are, going in. You may conclude that your idea needs work before you put your career, and your bankroll, on the line. Or maybe that a different idea, altogether, holds more promise..
There are countless matters to consider, and questions to answer, if you’re to put your new business on the track to success. We can’t deal with all of them here, but these are 10 of the most basic issues for you to consider. Answer “yes” to all these questions, and you can be comfortable that your business idea has merit.
Is there a real need for what you have to sell? Who will you sell it to? There can be a great difference between what you’re trying to sell and what people are ready to buy. Don’t think you can generate a market where none exists right now. Even giant companies, with immense advertising budgets, often fail at it.
Is the trend of business in your market on the upswing, or at least stable? You don’t want to try to sell into a declining market.
Is your business in the right place, at the right time? Timing and location are often critical factors.
Do you have enough business capital? Inevitably, it seems, it takes more money than you think.
The number one reason new businesses fail is: not enough capital. And of course, you have to keep putting food on your table, too, while your business moves toward profitability.
Have you made realistic cost and sales projections, and do they make good business sense? It’s hard to tell if you’re meeting your goals if you don’t know what they are.
Does your idea have sales appeal? You’ll have an easier time building your business if your product generates a clear sense of sales excitement.
Are you competitive? You must know who your competitors are, what they offer, how they sell, and who they sell to.
Is your business idea simple enough for your new company to execute without operating or sales problems? Your new business has better opportunities if the basic idea is straightforward and uncomplicated.
Can your new business be up and running within a reasonable time? Until you’re able to start selling, money keeps going out, with none coming in.
Is the risk reasonable? The risk should be commensurate with the projected rewards. It makes little business sense to take a big risk if the expected profits aren’t big, too.
Don’t try to sell yourself on your idea. Be tough-minded and objective. If your idea isn’t sound, better to find out now than six months or a year from now, when you’re inundated with bills you can’t pay. If your idea is sound, it will withstand careful analysis, and you’ll have the confidence of knowing you’re about to travel a productive road to riches.