20 Questions to ask before starting a business

Starting your own business and becoming an entrepreneur is no easy task. As I said in my previous posts, a would-be entrepreneur need to evaluate himself/herself before actually starting the business. Here is a handy list of questions to ask and answer convincingly and in great detail.

1. What is the product or service?
2. Can I describe the product in three to four sentences?
3. What is the target market for the product or service?
4. Is this product or service practical? feasible?
5. Is there a demand for the product after discounting for existing suppliers?
6. What is the price I can get for the product?
7. What are the qualities that will give me an advantage over other businesses?
8. Where will the business be located?
9. What is the advantage in locating the business in a particular location? Availability of raw material? close to target market?
10. Do I need to consider any zoning or fire regulations or restrictions before opening the business?
11. Is any permit or license needed to start the business?
12. What will be the legal structure of the business? 'C' corp., 'S' corp., LLC or Sole Proprietership?
13. What equipment, plant, machinery, raw material and supplies needed?
14. What type of commercial and professional insurance is needed?
15. What is the inventory of skills and experience? self? in surrounding areas?
16. How much capital is needed for startup and maintenance of the business?
17. What are the financial resources available?
18. How do I identify and reach my customers? marketing? website? weblog? mailings?
19. What will be my day to day operations plan? procedures?
20. How and when do I compensate myself?





Comments

Anonymous said…
Great list! It's so hard to force yourself to be honest when asking yourself these questions, isn't it? Mainly because when starting a company based on a product, you'll typically be zealous about it - not rational :) 

Posted by Ryan Carson
August 03, 2005 2:59 AM
Anonymous said…
Thanks Ryan!

I could not have said it better. To succeed, one needs to maintain a correct balance of zealousness, rationality and a true evaluation of self. 

Posted by Harish Keshwani
August 03, 2005 7:36 AM
Anonymous said…
My favorite came from a VC-he looked at me and said "what is the exit strategy for my investors?", start there and work backwards! It was a sobering meeting for me. Thanks, Steve 

Posted by Steve Mertz
August 08, 2005 11:11 AM
Anonymous said…
Oh yes! meeting with Venture Capitalists is always sobering and eye-opener. One may think his business idea is world's best idea, but when he meets Venture Capitalist, that is the true test of the feasibility of that idea. If you make it past the Venture Capitalist, chances of you idea succeeding increases 100 fold as it is evaluated by a Financial Wizard himself. Exit Strategy is extremely important. It provides you a goal and then all you need is a way to reachi it. 

Posted by Harish Keshwani
August 08, 2005 1:08 PM
Post a Comment

Popular posts from this blog

Financial Plan - Assumptions - 2

There is a slight change since yesterday. I will not fill the Assumption table in yesterday's post. Instead, I will discuss what each variable means. This way table is more meaningful, rather than mere numbers. Variables_Used_for_Assumption Units_Used Explanation_of_Variables Average Monthly Sales US $000s Here you can enter net sales value. Desired average finished inventory % of Sales Does not apply to Service / Distribution business. For Manufacturing business, this variable is % of sales. Cost of materials/goods As % Sales This value is set to zero for Service business and for Distribution it refers to the purchases/inventory for resale. Target materials/goods inventory US $000s This value is set to zero for Service business and for Distribution it refers to the purchases/inventory for resale. Average monthly direct costs US $000s It is set to zero for for Distribution business Average monthly overhead expenses US $000s Interest and Depreciation is not included Opening total co...
Read more

The Circle of Information

First there was light, then there was a Light Bulb controlled by a switch, then came Internet and the light bulb was still controlled by a switch, finally Pervasive internet will come and control the Light Bulb. This is the vision of Pervasive Internet. This next version of Internet is destined to control : * Industrial - Capital Equipment, Automation & Control Equipment * Power - Meters, Distributed Generators, Electricity Grid and Pipelines * Healthcare - Medical Devices * Home / Consumer - Game Systems, Consumer Electronics, Appliances * Buildings / Facilities - Access Controls, Office Equipment, HVAC / Environmental Systems * Retail - Lighting & Refrigeration Systems, Scanners & Registers * Transportation - Vehicles, Airplanes, & Intermodal Transport This congregation of Internet with the smart devices will create a serious shift in the advancement of the digital revolution - forming a comprehensive "digital neural net". Imagine a large office building in ...
Read more

Brainstorming - RFID Discussion

Radio Frequency ID tags or RFID Tags came into limelight when Walmart insisted their suppliers to have them by January 1st 2005. RFIDs have existed for few years and are used as security devices on Music CDs, Games CDs and DVDs and various other areas. There are however many unexplored areas where RFID solutions can be used. We are going to explore some of these areas for potential product and/or services that Businessworks Inc can provide. If we go with RFID based solutions, manufacturing RFIDs will not our goal as it can be prohibitively expensive. Our goal would consist of using RFIDs readily available and building custom solutions and sell it to Government and private organizations. This idea ranks very high in our potential list of technologies. Tomorrow I will discuss Nanotechnology.
Read more