Fundamental questions to ask yourself when starting a business

The world of entrepreneurship can be both exhilarating and terrifying, but that should not stop you from starting a business. This article aims to ask you those crucial questions that will focus on your business plan and see if it is feasible. Maybe your plan needs some work or maybe it is ready for the next big step! 

Fundamental questions to ask yourself when starting a business

What kind of business are you starting?

Are you providing a service or a product? It is important to distinguish between these two as you generally will need more capital for a business that requires products versus a service that needs to be provided. Not only do you need money to buy raw materials for product creation, but you also need to think of the equipment that you will need in order to create your product. A service orientated business might require you to hire staff to enable you to run your business eventually but initially, you might be able to manage your business by yourself quite well. This means it is quite “easy” and cheap to set up initially, but it will become more expensive as you will have to hire staff in order to keep your business growing.  

What funds do you need?

It is important to have a rough estimate of the amount of money that you will need to start up your business. You need to know this if you are going to apply for bank loans. This is essential for any business plan otherwise you are going to overspend and run out of money before you even start your business. How much will your raw material cost? Do you need a staff member and how much would you have to pay him/her (consult average salaries for their job description on the internet)? Do you need to rent an office space? How much electricity and water costs are you going to pay? 

What makes your business special/unique?

You need that “wow” factor in your business or something that makes it different from your competitors. If it does not stand out from the rest and there are many competitors that sell similar products or services, then it will be difficult to launch your business and make failure much more likely. 

How long can you survive without a salary

The first few months or even the first year of launching your business might be incredibly tough financially. This does not mean you failed or should give up yet. People have to become aware of your product, see how useful it is, and only then will you start seeing the money flowing in. You will need patience in these months and some money reserved to rely on in case you run into some trouble. 

Fundamental questions to ask yourself when starting a business

Who do you need to help start up your business?

Do you need to hire an employee perhaps? Do you have all the time and skills to run your business by yourself? If you do need to hire an employee or employees, keep it to the minimum amount. The more people you hire, the more people you will have to pay and the more people you will have relying on you. 

Where will you start up your business

If you already have a space available where you can run your business from, then this will be ideal, like running your business from your house, for example. If you have to rent an office space, aim to rent a cheaper space. You can always upgrade later. The fewer expenses you have initially, the better.