Are you thinking of starting up your own business? If so, you will need to ask yourself a couple of pertinent questions as start-ups could prove to be a mammoth task. Being realistic can and will save untold heartache, time, energy and money when honestly answering these three questions first.
If there are answers that you are either not too certain about or even answered a resounding “no” to, then perhaps you ought to re-look and re-evaluate some of your ideas prior to embarking on your project.
Putting ideas on paper is one thing, but reality is an entirely different matter entirely when you have real expenses to take care of and when you are faced with paying wages and salaries.
Here are three questions you need to ask yourself and answer honestly:
- Is there a market for my product and/or service?
You need to know whether the share of the market your competition occupies leaves enough room for you to make a success of your business. Be careful treading on territory that is already mature in your market in which people are at present spending money on. While you can make money in mature markets, it might be very difficult unless you have a truly unique answer to a long-standing industry matter or your product can sell at a superior price point.
Testing the market first might be a good idea based on the total value of the market in your area. In the retail sector it might be a great idea to start off by occupying shelf space by offering your goods on consignment with established outlets.
You need to work out what the true costs are. In the beginning stages nothing is definite, but to get a clearer picture add 30% over and above the expenses, and then reduce your expected revenue by 50%.
- You need to ask yourself whether you have sufficient capital for your enterprise:
All businesses require capital to keep afloat; a good rule of thumb is to have no less than eighteen months’ worth of capital prior to setting out on your venture – this includes both living and businesses expenses. This is only a general rule of thumb and estimation, though.
- Do I really know my figures?
The language of business is done in figures and numbers – if you don’t know your numbers you cannot survive in the world of commerce. Obviously if your numbers don’t look rosy on paper, chances they will be less rosy in reality.
These three questions are not designed to put a dampener on your enthusiasm but are posed to ensure your venture is a success as reality is key to your ultimate gain. Once the numbers for start-ups add up, this might just be a brilliant opportunity or niche you never even thought of in the beginning stages when planning your business, and might be a brilliant opportunity you might not have been aware of and the one you should go after since that is where the market for your business might lie.