Successful entrepreneurs know how to research topics relevant to their businesses before starting anything. One of the best ways for an entrepreneur to plan his or her business is by understanding its feasibility…
This article will provide you with some useful questions that you can ask yourself before beginning any startup so that you don’t end up with unrealistic expectations or poor decisions that would otherwise put your company in jeopardy.
Personality Type
If you are just starting a business, it’s important to be aware of your character and whether or not your personality is suited for entrepreneurship in the first place. If you are shy and reserved or have a “you must obey me” attitude, you’re probably better off working for someone else.
You’ll have to constantly interact with clients and employees – people you may not always like. In addition, if you are generally lazy, or don’t particularly enjoy hard work, it would be best to take employment elsewhere.
If you’re very creative, however, and always want to be out on the edge, then business ownership may be for you. There are a lot of advantages that come along with being an entrepreneur – not only get to choose what your company does but also have a lot more control over your pay and career advancement.
You will also have to take responsibility for everything that happens within your company – which can include fallout from poor quality products or services.
When in doubt, taking a personality test with a professional who specializes in helping entrepreneurs can help you determine whether or not starting your own business is right for you.
Researching Your Competitive Advantage
It’s important to understand your competition before you begin any business. If you are going to sell the same product that they do, then at least find out their prices and how they reach their customers.
Maybe you can find a way to provide a better service or product than they do.
Maybe you can find out why they’re so popular and try to emulate their success.
On the other hand, maybe you should sell something completely different from them, in which case it’s not really fair for your company to compete with theirs.
Researching Your Method of Distribution
It’s also important to decide how you’ll distribute your products or services. Are you going to sell directly to customers?
Are you going to go through middle people?
Will you use the internet or conventional advertising?
Are there enough outlets for people to buy what you’re selling?
And are there certain limitations that you’ll be working with, like only being able to ship by ground transportation, or not being able to offer shipping abroad or overnight service?
If you don’t answer these questions first, it’s extremely easy for an entrepreneur to waste a lot of time and money on a business that won’t work.
Researching Your Market Size
There are 2 particular ways that you can research your market’s size:
1) You can look at which companies in a particular industry are the most successful, and then base your projections on how well they perform. For example, if you’re in the business of providing pet grooming services, you would want to find out which company provides the best services for animals. Then, you would compare that company to your competition, and determine what sets them apart from others in the industry.
2) You can look at the market size in terms of how many people purchase certain products, and then base your business on that. For example, you may find out that there are 3 million dog owners in your area. Then, you would consider the number of pets living with them, and the average price that they pay for grooming services each year.
If you are just starting out, it’s a good idea to look at both ways. Go to the web and look at any information you can find about your competition in the same industry as yourself.
Find out what they charge and how they reach their customers. Figure out if they have a loyal customer base, and if so, why.
Then, run your numbers on a spreadsheet based on the market size data you learned from above. Based on this data, you will be able to find out what a realistic monthly sales figure would be for your business.
Researching the Necessities
You’ll be able to determine the necessities of your business by asking yourself these questions:
1) Do you have all of the required permits, licenses, and/or certifications that are necessary for this business to operate?
2) Are you able to meet all of the regulations, restrictions, and/or requirements that will come along with running this business? If not, is it possible for you to get them? Or if not, what could you do instead if there’s nothing else around?
3) Can you find enough financing for this business at a reasonable price? If not, what could you do instead? Or if that won’t work, can you find an investor who will finance your company without taking away too much control over it?
4) Do you have a strong enough network of people that can help you get started with your business – like an employee or consultant who can help with accounting, someone who knows someone in the industry, or with the government that could help you get the necessary permits and licenses?
5) Are you able to create a large enough market for your products or services? If not, how long would it take you to start selling something that will sell well?
Once you answer these questions, you will know if running your own business is right for you and could start building your plan.
