Starting a Small Business - Twelve Questions to Consider
Here are twelve questions that you should consider when starting a new business.
1. What is your product or service idea? Are you making a product or delivering a
service? What is the need in the market that you will serve? This is the "what". If you
can define the specific product or service you want to deliver in a paragraph or two, it
will help you to focus on the "how". Try not to be too general. Instead of "Photography"
consider refining it to "In-home baby, child and family photography" or some other more
specific area. You can always broaden it later.
2. What geographic area will you serve? If you intend to run a mail-order business, you
may not have geographic limitations. However, if you have a product or service that is
locally deliverable, such as a store, restaurant or in-home service, a pin on the map will
define where your business will exist, but from what demographic areas will you draw your
customers? Will these demographics change during the week or year? If you have a business
where you travel to your customers, consider making a map to clarify your served area.
Draw a shape to enclose the area where you want your primary market to be, from which
you expect to get most of your business. Make another larger one which would be areas you
would consider servicing but in which you would incur higher costs or longer times to
deliver your product or service. And then define the third area, in which you may consider
delivering services for a higher price or other consideration.
3. What is your competition? Do some research. The phone book, internet, chambers of
commerce and personal contacts are all good sources of information. Try to identify each
of your competitors' strengths and weaknesses, and think of ways you can operate your
business that will overcome their strengths and will take advantage of their weaknesses.
4. What skills are needed to operate this business? Think beyond the actual craft or
product. You'll need marketing, selling, customer service, accounting and bill paying, web
and computer skills and more. beside these tasks and skills, note which things you do well
and don't do well. Be honest, and think about a plan that will either improve your skills,
or will bring into your business someone who can coach your or will do these things for you.
5. What equipment or resources do you need? Again, thinking in terms of three levels is
helpful. First level, what do you need to barely operate the business out of your home or
a small space? You may have most of all of these things now. You don't want to go into
large debt just starting your business, so keep this level "bare bones".
Next level, what would you need to establish a firm base for growth? That may be better
equipment, a better place, or more machinery. You can take this list and make it your
"grow as you go" list - as your sales come in, you can divert those early profits to
growing your business to the second level without incurring additional debt. Third level,
think about if your business was making $1 million per year, or per month. What would that
business look like? That distant view may help you lay a stronger foundation in the first
two levels to support growth.
6. How will you enter the market space? Few businesses succeed without an initial push.
Do you have friends, relatives or local businesses upon whom you can count to give you
some business and exposure? How about a press release and grand opening celebration? TV
coverage is good, as are reviews in the paper and online. You may want to think about some
initial marketing and advertising strategies to get your word out there. Also think about
the best time of year to start, where your investment is most likely to generate sales and awareness.