The Red Dog Bar and Grill in North Salem, IN was famous for its apple-wood grilled steaks. My mom and dad ate there in the 1960’s. My band performed there Halloween 2011. A fellow, who had a background in shipping, bought it. He faced multiple challenges, one of which was he was unprepared because he’d never worked in food service. Now, it sits empty. Before taking over or starting a business these 10 questions should be asked and answered.
How Deep is the Water?
Have you known someone who jumped feet first into a new venture unprepared? Don’t be that person. If you’re considering starting a business, I assume you’ve asked yourself why. Is it money, freedom, helping others or? Have you considered how your start-up will help you reach your goals? If you’re serious, you know what your product or service will be and the problems you solve, but your considerations shouldn’t stop there.
10. Who is your competition? You need to know more than their name and product line up. How do they market and who do they market to? What are they good at and where are they weak? What weakness of theirs could be an opportunity for you and what strengths could pose a threat?
9. What is your USP (Unique Sales Position)? What’s your niche? What sets you apart? Why would prospects choose you over a competitor?
8. How much money do you need to get started? How will you pay yourself? Can you manage your personal finances? “Set aside enough income to match your current full time pay for as long as you believe it will take your new venture to replace that income (minimum of nine to twelve months). If you’re not in that position, my best advice is to start saving.” — Is it time to quit your day job?
7. How much time will it take? This question is a two-parter. How much time will it take to get the business up and running, and how many hours per week will be required from you? My best advice is to plug-in worst case scenario answers to both questions.
6. What is my overhead? Before you can set a price for your product, you have to count every penny it takes to get it to market. This is one area you may want to hire a professional. I worked with a growing business that hit its annual goal of six million in gross receipts. It was a new sales record. We lost money. Hire an accountant.
5. What about government regulations? This is another area where contracting a professional may be the prudent thing to do. To know what you’re talking about I suggest you review this from the SBA (Small Business Administration) Learn about business laws.
4. How will I manage employee payroll, taxes, and regulations? What you need to know before hiring your first employee.
3. What do I need to know about insurance? Choosing Insurance for your small business.
2. How will I market my product? Where do your competitors advertise and where can your target market be found? Identifying and reaching your target audience.
And the number one question is, Will my family support my new venture? To answer this question, you must first be completely transparent with your family. They need to know every pitfall and every possible negative consequence of this endeavor. If it means you can no longer coach the youth sports team, or tightening the home finances, your family can only make an honest decision if they’re informed. Tell ’em like it is, don’t blue sky this.
Do you have the answer?
There you have it, my top ten questions to ask before considering starting a business. All I’ve done is ask questions. You’ll have to find the answers. Are you a business owner? What advise would you offer anyone considering a new business?