You decided that starting your own business is right for you, but which opportunity? Let’s examine this decision process.
I recently posed 5 questions to ask yourself before embarking on your own business. They were intended to clarify your thinking and direction. (see here if you missed them) I hope they helped.
I’m sure some specific opportunities or ideas have now bubbled to the surface.
If you have now identified some possibilities, here are my next 5 questions to ask before making your final decision.
#6 What can you find out about the opportunity?
“Due diligence”, as the venture capitalists and bankers call it, or research. There are so many aspects to this, but simply put, what can you find out about:
- How much the business costs to run?
- What real returns can it offer?
- Or, if an existing business, the historic numbers above
- Is the business (existing) or business sector going up, down or is it a new market? (Your very own idea).
- What market research have you done to prove there is a market for this business? This cannot be emphasised enough…but is also subject of several other articles on our site (or coming soon), so do look further…
There are many more questions under due diligence, but the extent of your questioning will be determined by the risk, the cost and who is involved with the decision (like a bank manager).
#7 What alternatives are there to the opportunity in view?
Having satisfied yourself that you know as much as you need to about a particular business, have a look around to see what similar ones are out there.
If you were buying a washing machine, camera or car, having decided on the model that you like, you may choose to shop for price or even after-sales service.
Basically, the same comparison shopping should be done around a business.
If it is an existing business, is there another one close by for sale? What is the difference in the two?
Are you being recruited into a business system? If so, who offers anything similar?
This type of comparison can throw up questions and answers you didn’t expect.
In business, although the product or service should be inline with your heart, your head should rule the investment.
#8 Have you sought professional help?
I love this one. If you are thinking of starting a business, you should seek a psychiatrist… Not, that is not the professional help I mean (I don’t think).
If you are buying into a business with the help of a bank or other investor, you will most likely need an accountant and a solicitor involved.
But even starting your own, there are levels of professional advice needed to help make the whole undertaking safer.
#9 What’s in it for you?
Focusing on a particular business, new or existing, “what’s in it for you?” basically means a business plan.
How do you expect the business to go from the time you take the reigns? What is reasonable, ambitious and worst case?
How much will you be able to make is of course the bottom line, but depending on how complex the business is, so will depend how complex your business planning needs to be.
#10 How and when would you choose to leave the business?
Ahhh, an “exit strategy”. Something most people forget when they embark on their own business.
This goes back to question #1 (the previous article) and your goals.
Is this a business you expect to run until you are in your 70’s or 80’s and cannot remember where the shop is, let alone where you left the keys?
Or did you want to make your killing on a rising market and sell your business to Google for obscene money in 5 years?
Why this question? Just a thought, but if you plan to sell the business, you need to build intrinsic value. That means a value that is still there after you have gone.
An artist is less likely to have a business to sell than someone who builds a product that anyone (with the patent or copyright) can reproduce.
If you have got to this stage and are still answering the questions with fervour and enthusiasm. Still happily filling in the blanks and finding out details. There is a very good chance you will be up and running soon.
If, on the other hand, you have already been through this process and have a business operating, do share something of your journey below.
If you missed the first 5 questions, do look for the same title (part One) on the right. Now good luck with starting your own business.
Tags: Business Costs, Business Sector, Business System, Buying A Business, Comparison Shopping, Direction, Due Diligence, Final Decision, Market Research, Mlm, Opportunity, Own Business, Possibilities, Risk, Starting A Business, Starting Business, Starting Your Own Business, Venture Capitalists