If you are thinking about starting a business you will without doubt be excited, believe it is the best idea ever, and have an expectation that you will be able to make your fortune and retire early and live the dream.
While you don’t have to work out every little detail before you kick start your business it is really vital that you have your business idea, business model and your direction of travel. Lots of other stuff will evolve over time and you will, like most of us, ‘build the plane as you fly it’. I regularly receive enquiries about start up funding whether it be grant or loan funding and I still listen to individuals who haven’t fully asked the first 3 fundamental questions before you start a business. Here they are:
Q1 What problem am I looking to solve?
Whether you are looking to sell a product or provide a service it is crucial that you can answer this question. Why? Because if your product or service cannot solve a problem or meet some kind of need or be the answer to a key challenge then how will you find someone who wants it or how will you be able to determine how you price it?
Think of some of the things we all buy and the problem they solve or the need they meet. For example:
– a sandwich
– a suitcase
– a chair
– a book
– a pen
– a cup of offee
– a pint of beer or a glass of wine
– a train ticket
– a bicycle
– a pram
So what is the solution your product or service is going to provide?
Q2 How much money to I really need to start this business?
I regularly receive enquiries (as I said) about funding for a business start up and 9 times out of 10 the enquirer cannot in all honesty tell me the exact amount of funds required to kick start the business. Normally they have a very rough idea of what they think they need funds for, then a ‘would like to have’ list ,with a ‘guess’ at the real costs involved, and most never share what they are going to do at no financial cost because they have found a way of marketing their business without much cost at all.
If you are going to start a gym you will need a lot of money for equipment, premises, insurance and marketing and if you haven’t tested the idea before you spend the money, you could easily be exposed financially very early on. That’s why doing whatever you can do at the beginning with as little cash as possible is a key way to manage financial risk very early on.
It is totally vital to think about what it is that you cannot in any way do without. For example we all need air to breath – we cannot live without it! We are minutes from death if we don’t have air. Not that’s what I’m talking about when it comes to what is absolutely essential in order to kick start your business.
Q3 Is anybody else trying to solve this problem or meet this need?
Recently I was asked to source funds for research for a health and well being product. I heard the word ‘unique’ so many times from the owner I decided to do an online search for the business name/product name he was using and within 10 minutes I had discovered the very same name being used for a completely different product in the USA. You just need to know what is out there and whether or not what you are looking to offer clashes, competes, repeats or is stunningly different to anything else. Look in the mirror and honestly ask yourself what it is that is going to move somebody to buy my product or service rather than a competitor’s.
So, think about these 3 questions as you look to start your business and before you borrow funds, list everything you already have that can help you move this business idea forward: people you know, available finances, existing skills and anything else you can think of.
You’ll be surprised how resourceful each of us can be even when we feel limited.
Thanks for reading and all the very best with your business start up!