3 Questions to Answer Before You Start a Business
You know you have the inspiration and the drive to launch a business. But it takes more than that to survive and thrive over the long term. Here’s what you should know to make sure it starts off in the right direction, and keeps on going that way.
What is the ultimate goal?
There are many reasons why people decide to start their own business:
• Do what you love doing for the rest of your life
• Do something that makes the world a better place
• Make a pile of money and retire early
• Be your own boss
If you don’t define your ideal outcome, you won’t be able to plan a strategy for working towards it, or even see when you’ve achieved it.
A goal-based strategy can be a big help in keeping you on track. For example, if your goal is to create a smart, efficient business that allows you to spend more time with family, then it would be counter-productive to get bogged down in routine tasks that could easily be automated with a small investment in the right software. If your forte is interacting with people and selling your product, you shouldn’t spend hours alone in the back room doing paperwork.
How are you different/better?
The key to competing successfully in any market sector is to stand out from the other businesses selling the same products or services that you do. Some possible answers include:
• Higher level of expertise — “25+ years of real estate experience”
• Better customer service — “I personally respond to every client”
• Affordability — “We beat their prices every day”
• Unique product benefits — “Patented technology for faster results”
• Benefits the community — “Made with 100% organic, sustainable ingredients”
Once you’ve established your USP (unique selling proposition), your marketing plan will flow from there. You’ll know who your customers are, where to reach them and how to talk to them. And you’ll avoid wasting money on trial-and-error strategies.
How will you track progress?
You may not like thinking about numbers, but they really are the only way to gauge the financial health of your business. Financial reports clearly show you when and how to take the next step toward your ultimate goal.
Problems can be nipped in the bud: budgets reallocated, expenses trimmed, profit margins adjusted, cash flow bottlenecks removed. Opportunities can be seized: capital purchases timed for tax savings, operations expanded, working time reduced.
Now that you’ve answered these three questions, you’re ready to break ground. With a defined vision, targeted strategy and measurable goal, you’ll make the right decisions to achieve success for your business and your life.