From Startup Idea to Successful Business: 7 Questions to Ask Before You Pursue That Venture
According to a study conducted by Bloomberg, 8 out of 10 startups fail within the first 18 months of doing business. While there are certainly some unpredicted circumstances that lead small businesses to fail, the majority of them actually fail due to making a mistake in one (or more) of the areas discussed below.
Having a viable business idea is extremely important, as it’s the starting point of every business endeavor; yet executing that idea through an actionable process represents a large challenge. Here are some of the questions you should ask yourself if you are preparing to embark on starting your own business.
– Is your idea simple enough?
Trying to execute a very complicated business concept is a big challenge, even for well-experienced entrepreneurs. If you’re about to start your first business, make it something simple. Bill Gates most likely didn’t have a vision of Windows 7 sidebar gadgets when he dreamed about creating his own operating system. Start small with your idea and work your way up to bigger and better things. The idea has to be simple at the beginning, and it should grow over time following the company’s success.
– Are you going to add value to the market?
Unless you’re trying to push through some completely new idea that no one else has thought of before, the chances are quite high that there are already products or services on the market similar to the one you intend to offer. Are you bringing anything new to the table? Will your product or service be any different from already established competitors? If not, then you should probably rethink your concept. In the words of Jack Welch: “If you don’t have a competitive advantage, don’t compete.”
– Do you know your target clients well enough?
If you haven’t already done your research, turn around right now and do it. Make sure you do not skip this step! It’s very important to know who your clientele will be. The more details you can find, the better. Try to find out everything about your market demographics and/or their spending limits or habits. For example, it would be pointless to create a product for elderly people and give it a childish design.
– Do you know your competitive market well enough?
Have you done your homework and conducted research on the market and your possible competitors? What are the strengths of the market your product or service will appeal to? How large is the market? Make sure you are not starting a business on a market that’s too small. You’ll invest too much money and effort into a market that simply won’t pay back enough.
– How many steps will there be until you start making some revenue?
If possible, try to reduce the number of steps to a minimum. The less steps you have, the faster you will realize whether or not you are on the road to success. The sooner you start making some revenue, the sooner opportunities will open up, like winning some investors or re-investing some of your capital into better technologies or hiring more experienced employees.
– Have you presented your idea to your friends and family first?
Do not be afraid to share your business idea with people around you to get some initial feedback prior to investing in your idea. Sometimes people think that their idea is so brilliant that they hide it from anyone out of fear that it could be stolen. And while indeed, sometimes there is a real risk of that scenario, the chances are pretty slim that some of your friends will just stop everything they are doing to pursue your great idea. The more unbiased feedback you initially solicit from others, the better for you.
– Work hard to succeed, but don’t be too stubborn
So, you completed all of the steps above and started your company but, all of a sudden, you’re experiencing some unpredicted issues…now what? Do your best to overcome any difficulties you stumble into along the way. If you run away after encountering the first serious problem, you’ll never get anywhere. On the other hand, if you’ve invested too much of your savings, time, and effort, and you keep failing, don’t continue pushing your initial idea further into chaos as that may ruin your future. If you’re not succeeding at accomplishing your goals, take a pause, re-consider all of your options, and think about an exit strategy. You already have one in place, right?
“Ideas won’t keep. Something must be done about them.” – Alfred North Whitehead