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4 questions you should answer before you embark on setting up your own business. 

They are not meant to be exhaustive, they are purposefully designed to encourage you to think deeper about starting your own business, which should encourage a more robust thinking process throughout your journey.

This blog is the result of me being asked recently what do I need to think about when considering whether to start my own business? 

It’s a great question, because many would just jump straight from thought to action and in the process miss 4 key questions

These questions are not meant to stop you or hold you back from your dream, they are here to make sure you are adding rational thought to balance the initial excitement we feel, which can have us thinking only of the positive and ignoring the critical thinking process. Anything you learn from these questions will increase your knowledge & confidence in your ability to make it happen. 

Question 1. Why, do you want to start your own business?

When someone says to me “I’m thinking of starting my own business” I always ask them Why? 

The thought of starting your own business, being your own boss, having the chance to take your future into your own hands, can all be compelling reasons for starting your own business but why do you want to do it? What’s driving the decision?  This important decision could have a fantastic or disastrous effect on your future. You need to make sure you are going in with your eyes wide open so that the outcome is closer to fantastic than it is to disaster. So, why are you doing this, what’s behind your decision, it could be:

Why do you want to start your own business?

·      Unemployment

·      Redundancy

·      Don't like your Job

·      Bored/not being challenged

·      You need a lifestyle change

·      You have a great idea

 These are just a few examples that may be driving your decision but whatever the reason, it’s important that you are clear why you are taking the step you are about to. It will be challenging, certainly for the first year or so. If you ask yourself “why” and can be sure about the reason, you will have a stronger story, which will help later down the line. 

If you have not considered your “why” then the decision may not be right, you will be in danger of justifying what you are about to do without having considered the consequences.

Having a strong why is a great start point, now if anyone asks you, why? your story will be strong & your confidence high.

Now you know “why” next up I want to know what business are you going to set up?

Question 2. What Business to do you want to start?

What business do you want to start?

Having understood your why it is a good idea to think about what you are planning before you begin your detailed plan. Do not be tempted to jump from, even a strong why, straight into your business plan without considering your what. See this question as a part of your pre-planning. Here’s a a few thoughts to help you when considering what you want to do;

·      Basic principles

·      It’s not a hobby!

·      You must enjoy your work!

·      How many days in a week are you prepared to work on an ongoing basis?

·      Will you be able to achieve a work/life balance?

·      What problem are you solving?

What need you are providing?

·      How will you sell your services? 

·      What resources will the business need?  

·      Will you be able to achieve an exit/succession plan?

·      Will what you are planning strengthen your why?

·      Research

·      How is the sector currently doing?

·      How is it projected to do in the near future?

·      Check out the competition.

·      See if you can find opportunities to do it differently from them.

The more you think through your what the smoother it will be when you begin your business plan.

 Ok, so now you know Why? you want to go into business and you have an outline of What you are going to do. Next, let’s talk about your financial Runway!

Question 3. Do you have enough Runway?

Do you have enough financial runway

Now you need to understand how much personal runway you need to finance your new venture.

·      Runway

o   Your business will not make sales from the moment you complete your research so you will need to estimate how long it will take before you can rely on the business to pay you enough wages to at least cover your personal costs, rent/mortgage, food, utilities, etc. 

o   I would suggest that whatever the amount you come up with, you should at least double it. 

o   You will probably be seeking financial help from your bank or some other source of funding and it is important that you understand how much of what you have today will be needed to support yourself through the start-up phase. Otherwise you are asking your investors to take all of the risk. 

This really is a key point for any start up. The stress of not having enough income to pay yourself can force you to give up before you should. Being able to answer this question will give your bank/investor confidence that you will be able to focus on your business without worrying about the mortgage.

So, we have discussed Why, What and Runway, next up is Testing.

Question 4 Have you Tested your idea?

Testing your idea

I’m sure throughout this process you have been talking excitedly to loved ones and friends about your project but now you have looked deeper in to what you are planning, it’s a great idea to share some detail with them and ask for their honest feedback. Here’s a few questions to get you going;

·      Feedback

·      How does my idea sound?

·      Do you think I could do it?

·      Would you buy my product/service?

·      How often would you buy the product/service?

·      Do you have any ideas that may help?

·      Can you or do you know anyone who could help me?

 This feedback will help with your story and may give you some thinking that you have not considered, or, some contacts that may help, or even some opportunities.

I am confident that if you ask yourself these 4 questions you will be better prepared to execute and deliver your plan.

 Execute

Now it’s getting exciting and your confidence level is high. It’s time to begin your journey.

Good luck!

 Feedback is always welcome so leave a comment or email me at rikki@thinking.co.uk  You can also visit my site www.Thinking.co.uk.