Top 5 Questions to Ask Yourself Before Starting a Business
Starting a business is exciting and scary. One of the best ways to boost the excitement and shrink the fear is by taking the time to make sure you are fully prepared for what's ahead.
While it's difficult to plan for every possibility and challenge that may occur, you can get yourself on the path to success by considering these five questions before jumping in with both feet.
Set Goals and Make a Plan
Someone once said, "He who fails to plan is planning to fail." This could not be truer than when starting a business. Without a clear idea of where you want to go and how you plan to get there, you may find yourself stumbling through the stages of starting a business and getting nowhere.
One of the most important steps is to set goals that outline what you want to accomplish in the short term (one-12 months), as well as over the long term (12 months or more). Once you have created your goals, create a plan for your business that will guide you along the way. It's also helpful to understand your motivation for starting a business in the first place.
Think Through the Finances
Money is a major concern when you start a business. You might be leaving behind a steady paycheck, and your business could have significant start-up expenses.
There are some business financing options to consider to ease the financial transition. You could start your business on the side while continuing to work full-time or work a part-time job until your business becomes established.
You might wait to start your business until you have saved up a financial reserve or borrow the necessary funds to pay expenses until your business becomes profitable.
Small business loans or grants are some other options you have for financing your startup. If you feel it will be profitable, you might seek out some venture capitalists or angel investors for assistance.
Consider Laws and Regulations
There are a number of legalities that you should consider when starting a business. You should decide on the structure of your business, such as a sole proprietorship or limited liability company (LLC).
If you are the only owner, with no partners, a sole proprietorship or LLC is appropriate. When starting a business, most states require that you register your business name. You'll need to obtain any necessary licenses and permits, and ensure your budget for business taxes.
Establish a Support Network
We accomplish very little in life completely autonomously, and the same is true in business. Even if you plan to be a sole proprietor, you can benefit tremendously from creating an external support system to keep you on track.
Your support network may include family, friends, colleagues, a mentor, a coach, or anyone else who can help you navigate roadblocks. When you have an effective support system in place, you will find that you have a cheerleader, consultant, moral support and even a devil's advocate when necessary.
Ensure You Have the Right Mindset
Being a successful business owner requires a unique mix of personality and small business character traits. While there isn't a standard formula that makes one type of person more successful than another, some entrepreneur-friendly personality traits that can ease the process of getting started as a business owner include passion, drive, dedication, and self-discipline. And it doesn't hurt to be an effective communicator and someone who is willing to take measured risks.