When you decide to start a business, it will change the way you live your life. Starting a business takes courage. Make it works takes even more.
To ensure that you’re making the right decision, here are questions to ask yourself before starting your small business.
It’s a simple enough question.
List down all the reasons why you want to start a business. Is there a hole in the market? Are you providing a service that no one else is? Is your product better than the others available?
"Even if there’re lots of similar products out there, there’s going to be something special about what you can deliver that differentiates you,” says Leanne Faulkner, business coach and founder of Fortitude at Work, “and that’s what you need to be able to express.”
To stand out and be successful, you’ll need to analyse the competition and ensure that your business is the more attractive option.
What is it about your business that means people will come to your business, and not go your competitors? What is the unique selling point of your product or service? What do your competitors do well, and how could they be better?
If you’re planning to devote yourself to starting up a small business, you will want to make sure that you have all the skills like product knowledge, customer service skills, business acumen, supplier knowledge, market understanding, and the time to devote to not only running your business, but to research ways to continually improve your business. Be prepared to upskill.
You’ll need to know who your customers are and understand their buying habits before setting up shop.
Which people are the ones that should be buying your product or service? How will they learn about your company? What will cause them to choose you over your competitors? How will you keep them coming back?
If you can worth with what you have and keep your overhead low, you can start to see profits sooner.
Can you work from your home, or will you need to rent a shopfront or office space? Do I you have plenty of startup capital to buy supplies, pay rent, pay utilities, and pay employees? Can I utilise any skills that friends and family have?
Hopefully, you have larger goals beyond simply setting up a new business. You’ll need them if you want your business to have a direction.
“Once it’s all down on paper,” says Taryn Williams, founder and CEO of The Right Fit and Wink Models, “you’ll be able to see much more clearly what it is that you need to do and you’ll feel a lot less overwhelmed.”
What do you project your profits will be for the first year? What are your plans for expansion, should everything go well? When will you be able to hire more employees? When will you need to move to a larger premises? Can you expand your product/service range?
Nothing will end your business more quickly than the authorities shutting you down for not adhering to the law. Do you need to hire a lawyer or solicitor?
It takes time to recoup money from initial set up related out lays, and it could be quite some time before your business can actually turn a profit.
Are you prepared to not pay yourself a salary? Will you be able to cover employee salaries without making profit? How long can you go financially, before you have to close the doors?
A problem shared is a problem halved, but it also means that you might have to share any profits that your business makes.
Do you share the same beliefs and values as your partner? Have you agreed on how much each founder will contribute to the company’s startup capital? Have you agreed to an appropriate division of work? Have you discussed the possibility that one will have to buy out the other? Have you had a solicitor draw up a contract or terms of agreement?
To give your new business every chance of success, you will need to devote a lot of yourself to the venture.
Do you have the nerve and firmness to hire and fire employees? Do you have the backbone for tough negotiations? Are you prepared for potential late nights and early starts? Are you prepared for less time with your family and friends?
Learn more about the whether you’re business ready and other small business skills with Women in Business, a fully subsidised* online program from TAFE NSW.
*Eligibility criteria apply