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20 Questions to ask before starting a business

Tuesday, August 02, 2005

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?

8/02/2005 11:09:00 PM :: ::

4 Comments:

• 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

  at August 03, 2005 2:59 AM  

• 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

  at August 03, 2005 7:36 AM  

• 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

  at August 08, 2005 11:11 AM  

• 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

  at August 08, 2005 1:08 PM  

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