So you have a great idea for a new business. That’s the first step to what may be an exciting and rewarding career as an entrepreneur but there are some questions to ask before starting your business. Many will start a business this year and many will fail not because the owner doesn’t have the skills to be an entrepreneur. Instead, the proper questions may not have been asked and the answers to those questions not properly analyzed. Here are a few to consider.
Do Your Customers Want It?
You might think your idea is a game changer but the rest of the money-spending public may not. Before committing a lot of time and money to your idea, conduct some market research. How large is your market? Are they interested in your product and how much are they willing to pay for it? Market research may reveal that your idea is worth the investment or it may need further refinement.
How Long Until You Profit?
Very few businesses will produce instant profit. In fact, most will take multiple years to become healthy revenue earning machines. If you have an idea that will take a lot of time to develop, refine, manufacture, and finally get to the shelves, do you want to commit years to the idea only to start the business after that? Big ideas take big resources. Is your idea worth the time and resources or could there be an easier path to entrepreneurship
What is the Price Tag?
Developing a product is expensive. For individuals, producing drawings, prototypes, and finally manufacturing enough product to start your business could take hundreds of thousands of dollars. If it’s an unproven idea and doesn’t prove successful, the losses could be large. Before committing money to your idea, put together a cost analysis of what it will take to bring your product to market. There are resources on the web that can help you with this.
What about Sales?
With any new product, there are two distinct entities to consider: the product and the business. First, you have to pour resources in to creating the product and second, more resources in to distributing, advertising, and selling the product. This will take two related but different sets of skills in order to accomplish both. Consider asking for help from those who have the skills in these areas. If you’re skilled at creating and refining products, ask for help from somebody who has sales experience.
Nearly all ideas change as more information is collected. After asking these questions, if your idea no longer feels right, don’t give up on your dream of becoming an entrepreneur. Refine your idea or look for a new direction.