Ever thought about starting your own business? As a business consultant, I have lots of conversations with people who are thinking about starting a business. Most of the time, a few questions reveal that they haven’t really thought through the process in enough depth to make a quality decision, yet many of them are determined to take the plunge anyway, thinking that they will “figure things out” and “make adjustment on the fly.” This kind of approach can be disastrous and can cost one a lot of money as the “start-up” spirals downward.
The facts support my last statement. According to the Small Business Administration, 80% of all start-ups fail within the first five years. Of the 20% who do survive, 90% of them will never see their tenth birthday. Why? Because the people starting these businesses never thought things through and developed a solid plan for moving forward.
So how does one approach evaluating a potential business? There are two key categories to consider: the viability of the business in the marketplace and the ability of the individual to establish and run the business.
The first thing to consider is the viability of the proposed business in the marketplace. One needs to ask questions like:
- Is there a verified need for the product or service being offered?
- How large is the potential market and how much competition exists?
- Who are the key competitors, how large are they, and what percentage of the market do they own?
- What barriers to entry exist? (high capital investment, long selling cycle, high volume production needs)
- What does the cost and profitability model look like? Can you make money, over what period of time, and do you have the staying power to get there?
In addition to business viability, one must take stock of his abilities to be a business owner.
- What skills do you bring the business you plan to start?
- Have you done your own personal SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)?
- Are you willing and able to put in the time required to make the business successful?
- Do you have the support of your family and loved ones in taking on a major venture like this?
- Do you have the heart to do this?
There are many more questions to be asked, but these serve as a good starting point. If you want help exploring these, and more, questions, call us at 203.599.1467 or email us at email@example.com. We’re here to help you achieve the success you’ve always dreamed of.