How does this business make money?
This may seem obvious, but take a moment to think about it. Do you sell products? service? Do you offer content that you can monetize for free through advertising and sponsorship?
Once you understand that, ask yourself why people make the decision to give money to your business. What are they actually buying? A tool that makes their lives easier? What skills can they use in their future careers? Emotional experience? The more familiar you are with a business’s unique selling proposition (USP), the more ready you are to sell it to potential customers.
How Much Money Does This Business Need to Make?
Many business owners assume that their business is not profitable, at least initially. However, it is important to ask yourself both business is any need to earn enough money to cover its costs and whether there is a need to earn how much money from your business to fund your expenses. (In addition, the amount that must be set aside for taxes.)
After drafting some numbers, ask yourself when your business needs to start making that money. If you don’t have a lot of money to live while you launch and run your business, your business needs to reach your minimum income by the end of its first quarter There may be. Other business owners may be able to go from their business without taking out money to pay themselves for a year or so, but businesses that still bring enough money to cover their own expenses Required. (And tax.)
What kind of career capital do you bring to this business?
Very good in his book, they can’t ignore you, Cal Newport explains that many small business owners jump into new businesses without first building. Career Capital- Skills, resources and networks needed to succeed in a particular career.
Newport uses the example of a woman who decides to start a yoga studio after a month of teacher training. Business failed because women had little educational skills (compared to experienced teachers) and had no accumulated resources if they had spent more time in the yoga industry before starting their studio.
Did you work to build career capital, or are you starting a business in a new industry or discipline for you? Keep in mind that you start a small business passion project before building the capital you need to succeed.
What kind of capital do you actually bring to this business?
Some businesses require more upfront costs than others. If your business falls into a “heavy startup cost” camp, do you have the money to cover that cost without jeopardizing your own financial stability?
Who are my customers?
The task of creating an ideal customer profile is great. It’s even better to start a business that already has a group of potentially interested customers. For example, consider the people who teach a course from a blog. They already know who is interested in their work and can design the course based on the needs of the audience.
This can also be useful for career capital. For example, if you plan to consult, the first client must of course be derived from the network.
You can also use services such as Kickstarter to test new business ideas and see if there is a group of potential customers of interest. However, you need to identify the ideal customer and use your current network to reach that customer.
How do you connect my business to new customers?
The decline in customers is a reality. If you’re constantly connecting with new customers and not fostering those relationships, sales and revenue will decrease rather than increase.
Think about how to reach out to new customers. Are you going to advertise? Would you like to work with other small business owners? Would you like to attend the convention? Would you like to create a YouTube how-to video?
What is my growth plan?
Where do you want to go once you start a business? What will be the realistic growth next year? Next 5 years? Knowing what a realistic path to success for a business like you looks will help you set SMART goals and benchmarks to get there.
Under what circumstances would you close your business?
When do you decide to stop building your business? When are your revenues below a certain number and staying for 6 months? If you put X cash or time into your business and you don’t see any growth teeth?
Know when to quit before you start. That way, you won’t throw good money after bad.
Under what circumstances would you sell your business?
Running a profitable business has a lot of value, especially if you generate unearned income. Selling a business is also of great value. Ask yourself when you are willing to sell and keep asking that question each year to keep your business going.
Why would you like to partner in this business?
People want to partner in business for a variety of reasons, including pursuing dreams, using their skills to help others, earning passive income, and investing in companies that they may sell in the future.
Knowing why a future partner wants to get involved in the business will help you decide if this is the right partner for you. Business partners who focus on helping others often make different business decisions than business partners who want to create assets that can be sold. Does this small business vision match or complement your vision?
How Much Money Does This Business Need to Make?
Yes, you have already asked yourself this question, but if your partner’s answer is significantly different, you will want to discuss it. For example, a business where one partner can afford to go without income and the other partner cannot go without income can lead to disagreements in business decisions.