Starting a Small Business: 5 Questions to Ask

Startup Sunday

Are you one of the many people dreaming of starting a small business? To make that dream a reality, you must first answer five key questions.

What's your motivation for starting a small business?

Entrepreneurs tackle starting a small business for a number of different reasons. Some are inventors or technical geniuses who are passionate about transforming a new idea into a real-life product or service. Others simply can't stand the 9-to-5 grind and would be happy starting a small business in any number of fields, as long as it provided a solid income.

Once you understand your primary goal in starting a small business, you'll have clarity about how to attack the project and how long to persist. If you're a passionate inventor, you may want to hold onto your day job so that you don't run out of resources and have to abandon your project.

What financial resources can you access?

The most important practical question in starting a small business is: how long can you wait before seeing some profits? That hinges on what financial resources are available to you.

Do you have a spouse who's providing health insurance and whose income pays the monthly bills? You're in an ideal situation for starting a small business. Are you the sole breadwinner in your household? That's a trickier sell.

Bootstrap as much as possible before thinking about taking out a loan, whether a small business loan or borrowing from a friend. Before you drain your savings account, barter services with friends and colleagues -- find creative, cheap ways to get the job done.

What business resources can you access?

When I was starting out as an entrepreneur, I put together an informal board of advisors of friends and colleagues with expertise in my field. Even though they could have viewed me as competition, they were unfailingly gracious and helpful as I got my business off the ground.

I continue to rely on these friends for quick opinions on issues like handling late-paying clients or contract negotiations. And I've tried to pay it forward, both by giving help and advice to other new entrepreneurs and by referring work to my "board of advisors" when I am too busy. If you are starting a business and already know experienced people in that field, you are far ahead of someone starting cold. 

You'll also have a huge advantage if you know people in your academic and civic community. They can steer you toward small business grants or free seminars, not to mention internship programs that can be a source of free labor for startups.

The entrepreneurs I really envy are those related to a lawyer or certified public accountant or any professional services provider who charges by the hour. If you know a small business professional well enough that she'll waive her fees, you're golden.

Who will take over the tasks you currently handle?

Many entrepreneurial moms make the mistake of starting a business without figuring out who will take over the household and community tasks they currently handle. Sure, you can aim to work on your business only when the kids are in school, but it's not like you were sitting around eating bon-bons before starting a business. You were grocery shopping, volunteering at school and church, tidying the house, arranging doctor's appointments, filling out school and medical forms, planning birthday parties, writing notes to relatives -- you get the idea.

There are only 24 hours in every day. When you're starting a business, something else has to give. This is the time for a frank talk with your "home team," whether that's your spouse, parents, babysitter or other adult who can pitch in. You will need their support to be successful in starting a business, so you might as well get them on board now.

What's your market niche?

The most complex question to answer, of course, is whether your business will succeed. You'll need to suss out your competitors, understand your potential customers, develop business and marketing strategies, pull together financing and produce whatever goods or services you plan to sell.

Entire textbooks have been written about this topic, but in my opinion it boils down to: what is your market niche? You need to figure out what differentiates your products or services. (More on this in future blog posts.)

Photo by Wendy Piersall (@eMom) via Flickr

Comments

[Adalia John]

Even with the challenges of being a business owner, if your a a mom entrepreneur, the benefits (in my opinion) overshadows the benefits. Being a single mom entrepreneur of four allowed me the freedom of being involve with my children on a daily basis both at home and at school. Of course planning and accepting your limitations create a climate for a successful business.

[Adalia John]

OOPS! sorry mistake in the first post.
Even with the challenges of being a business owner, if your a a mom entrepreneur, the benefits (in my opinion) overshadows the challenges. Being a single mom entrepreneur of four allowed me the freedom of being involve with my children on a daily basis both at home and at school. Of course planning and accepting your limitations create a climate for a successful business.

[Shagun Bagga]

So true!! It definitely takes a few years before your business takes off to get the financial returns you are looking for. But it is so worth having your own business if you are passionate about it because of so much else you can achieve by steering in any way you think would be good and all at your own flexible time. Gives more time to be involved with your kids and home along with your work.

[ゼチーア]

Hi there,
Really nice job,There are many people searching about that now they will find enough sources by your tips.
Also looking forward for more tips about that

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