Starting your own business may seem like a good way to make more money and gain more independence. And for some people, it really is the best course of action. This is especially true for people with some business experience, a little capital, and a lot of self-discipline. But for other people, it can lead to more stress and lost money. Occasionally, though, these failures are simply the result of bad timing or the wrong business choice. That’s why you should ask yourself five questions before you ever start.
Do I have a profitable idea?
Obviously, the first thing you need to know is whether your business has the potential to turn a profit. Does your idea meet a need for potential customers? You have many ways to determine this. First of all, are other businesses in the same niche? If those businesses are doing well, then there is obviously a need for it. But is the niche oversaturated? If there are too many people doing the same thing, you might have too much competition to make a profit.
You can also take surveys. Facebook surveys are a great way to gauge people’s interest in a business idea. You can even ask your social media friends to post the same survey on their pages to broaden your audience.
Can I start small?
Sometimes, the best way to find out whether your idea will be profitable is to test the market. Can you start your business on a very small scale to see if it will work? For example, if you’re thinking about starting a used car dealership in Groton, CT, perhaps you can start by flipping one or two cars through Craigslist. Or if you’re considering a cleaning business, build it up on the side before you quit your day job. And be sure to put any profits you make back into your business in the beginning so you can continue growing it.
Can I afford to lose my investment?
Another question to ask yourself is whether you can bounce back if you lose everything you put into the business. Starting a new business always brings risk, so you need to make sure that you have an alternative plan of action. Figure out exactly how much capital you’ll need for the business and decide how you will handle your finances if it fails. Having a backup plan will give you the confidence you need to go all in.
Where will I get my inventory?
Whether you are selling products or just running a service business, you will need inventory or supplies. And where and how you will get them should be determined before you ever start. For example, if you will have a restaurant, you will need to find out where you’ll find ice vending machines for sale. You’ll want to know whether you can purchase them locally or need to have them shipped. And you’ll also need to find out what you need to do to purchase your items wholesale.
Do I have what it takes to run my own business?
Most successful entrepreneurs possess certain qualities. For one thing, they are usually fairly self-disciplined. You will have to motivate yourself to work without a boss making you clock in. They also have clear sense of direction. You must be able to keep your goal in mind even when things go wrong. But there is no reason to think you can’t develop these qualities if you don’t think you have them. With enough motivation and sincere desire to improve, any skill can be learned.