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9 Questions to Ask Before Starting Your Own Business
How do you know you are ready to start your own business? Asking yourself these nine questions can help you decide.
1. Have I kept my idea to myself?
Most businesses are started by people who work for other people before going out on their own. Walls have ears and, if you let others know about your idea, you could find it being copied before you have a chance to get started.
2. Am I an inventor or an entrepreneur?
You have to decide if you are an inventor or an entrepreneur. They have two very different skill sets. Inventors tend to focus on the development and function of products and so on, while entrepreneurs just get on with the business. Good inventors tend not to make good entrepreneurs, and good entrepreneurs are not necessarily good inventors.
3. What are my weak points?
Everyone has their weak points. Owning and managing your own business is exceptionally demanding. Sales, marketing, production, finance, HR, procurement, and distribution all have to be looked after, and no one can be good at them all. Identify the areas where you are weak and hire in the people who can do the job for you.
4. Have I got the right advisers?
Every business needs to have a professional accountant and a lawyer on hand to advise when required. It is no good going to someone who mightn’t understand your business. You need to appoint professional advisers as early as possible.
5. Is there a market in the niche?
Lots of people see a niche that isn’t being filled but you have to establish if there is a market in it. This can only be done through painstaking research and analysis of the market and wearing out a lot of shoe-leather in the process.
6. Are the finances in order?
If the business needs finance from your own resources or from friends or family at the beginning, make sure you have that in place in good time. Similarly, if you require equity finance from investors or loan finance from your bank, you have to ensure you have all the information they need to back you.
7. What are the worst-case scenarios?
You should think about the four or five worst things that could happen to the business in the first year and ask yourself how you would deal with them. What preparations and contingency plans can you put in place for these worst-case scenarios? The survival of your business could depend on it.
8. Can I afford to live during the start-up phase?
Most businesses don’t make any money during their first three years and you have to ask yourself how you are going to look after yourself and your family during this time. Can you take the fall in living standard? Have you access to funds to carry you through? These are important questions and must be answered before you start out.
9. What’s my end game?
You have to know what you’re in business for. Is it a lifestyle choice or do you have ambitions to grow it to become a business of real scale, or do you want to sell it to another company in a trade sale at some stage? If you don’t have ambitions and goals you can end up just gliding along and this will not be good for the business.
A version of this article was originally published in The Irish Times.
Please be aware that all of the views expressed in this Blog are purely the personal views of the authors and commentators (including those working for AIB as members of the AIB website team or in any other capacity) and are based on their personal experiences and knowledge at the time of writing.
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