There are several questions to ask yourself before starting a business; for instance, you might wonder how it will impact your personal finances. Or, you may be concerned about whether or not the venture is sustainable. Equally, you might be confused about where to look for new business startup funding. This is especially the case if you’re thinking about setting up a business in a saturated sector. With so much competition, making your mark can seem like a daunting task. However, the opposite can be true; sometimes, going into a viable, thriving segment is a good choice. For example, many women entrepreneurs are setting up businesses in the lucrative beauty industry.
So, whether you’re setting up a niche endeavor or wading into a booming segment, there are five key things to consider when starting a new business. These points are crucial to rising to the challenge, gaining momentum, and ensuring you can get your venture off the ground. In this article, we’ll run through these five pivotal questions to ask yourself before starting a business, from identifying profitable market gaps to measuring engagement. Then, once you’ve asked yourself these important questions, you’ll be able to assess whether or you should take the plunge.
1. Is there a gap in the market?
The first of our questions to ask yourself before starting a business is whether or not you’re offering something new. Even if you’re planning to enter into a burgeoning sector, it is still important to consider whether or not there is a gap in the market for the idea. For instance, does your product or service improve on existing models or methods? Or have you discovered a solution that many consumers didn’t even know they needed? The new American tech industry is full of examples of this sort of innovation; for example, Airbnb has completely transformed the accommodation market. There was once a time where apartment rentals or home swaps were risky or complex, but now, thanks to Airbnb, travelers save hundreds of dollars on apartment rentals. Equally, ride-hailing app Uber has changed the way we hail rides, fulfilling the previously overlooked market needs of economy and security.
2. Will you have a robust client base?
A healthy customer base is essential to long-term growth. Therefore, analyzing your potential client base is one of the most important things to think about when setting up a business. There is a combination of factors that affect the size of your market, however, the first step is to identify your target customer. How old are they? What is their gender? What is their average annual income? Once these basic demographic questions have been answered, you can begin to drill deeper into the impact your product will have. For instance, is a task impossible without your product? Or is its function highly specialized? Both of these questions will affect the size of your customer base, as niche or non-essential products are likely to have a more limited reach. However, another important factor to identify is whether or not your idea has crossover potential; the ability to penetrate more than one market will significantly expand your customer base.
3. Are consumers engaged with the market?
Today, social media marketing is more powerful than ever. With so much potential for cross-promotions, collaborations, and personalization, social platforms like Instagram and Facebook are becoming crucial to reaching your customers. Therefore, the impact you’ll have through these media is one of the most important things to think about when starting a business. A good example is Rihanna’s wildly successful Fenty Beauty range. Riding the wave of celebrity cosmetics brands and Instagram beauty influencers, Fenty Beauty leveraged the singer’s popularity and social media presence to maximum effect. However, for those us that aren’t multi-platinum selling pop stars, there are other ways to assess your product’s impact. For instance, millennial consumers often seek an emotional connection with a brand before purchasing. Therefore, it’s critical to weigh up the potential for meaningful audience engagement.
4. How authentic is your offer?
Speaking of personal connections, our fourth point is about authenticity. Consumers want to feel that your product or service is authentic and relevant to their lifestyle. They want to be able to relate to the business, share common goals and connect with its founder. Therefore, you need to think about what you have in common with your client base. For instance, if you’re setting up a personal training service, what was your fitness journey? How can you share this with your clients to prove your investment? Bear in mind that authenticity will be an important edge you have as a small business owner. Compared to large corporations, you’ll be able to meet your clients on a more personal level – so make sure you can leverage this opportunity.
5. Have you got the stamina to start your own business?
Starting a new venture is a demanding, long term endeavor, so it is vital that you ask yourself whether or not you’ve got what it takes. This is especially the case when you need to keep your current job whilst you get your business off the ground. Another important thing to remember is that you’ll need to be tenacious. The essence of entrepreneurship is believing in your vision and working hard to make your dreams a reality. Therefore, you need to make sure you have the emotional strength to face down your critics and keep your eyes on the prize. This is perhaps the most important of our questions to ask yourself before starting a business, so make sure you have the determination and energy to succeed.
Ready to launch?
Got a unique idea? Check. A strong potential customer base? Check. Plenty of motivation and tenacity? Check. Then it’s time for you to get things moving and launch your business! However, once you’ve established that you’ve got what it takes, there’s a few practicalities you’ll need to address. For instance, there are some important startup costs to take into account, from incorporation fees to equipment. For some pointers on what to expect, check out this article. Moreover, another of the important questions to ask yourself before starting a business concerns funding – for tips on where to find startup financing, take a look at our guide.