A lot of people with great ideas venture into the world of entrepreneurship with the motive of making profits. However, setting up your own business isn’t an easy task as you need to look after a lot of things which might seem very new to you.
While contemplating whether or not to start your own business, ask yourself the following questions:
1. Why should I introduce this product into a market?
If you cannot answer this question successfully, it clearly means that your product is either not new or not enough to suffice the current problems of society. If you can answer this question without hesitating, go ahead and answer the rest as well.
2. How will my product/service help the society or any other stakeholders?
This is a crucial question which needs to be answered because the whole point of entrepreneurship is that you spot a problem and create a new solution. You need to make sure that your product/service affects your stakeholders for the better.
Related Post: 8 attributes of successful entrepreneurs
3. What is the end goal of your business?
If you don’t have a mission and vision for your business, the whole thing could result in a failure. You need to have a goal besides profits which you want to achieve through the business you are setting up.
4. Which groups you need to target as your audience?
You can’t go around assuming that all people are your customers. You need to identify a proper target group for your product and focus on them more than other groups. You could also have secondary and tertiary target groups.
5. When are you likely to break even?
Break-even is a point where the total revenue earned is equal to the total cost incurred. This question is crucial because most businesses take about 6 quarters to break even. Also, this is the first question your potential investors will ask you because no one likes investing in a business which isn’t profitable.
Related Post: 10 Reasons why entrepreneurship is awesome
6 What is your product’s USP?
USP is a unique selling proposition and it distinguishes your product from other competing products already available in the market. If you can clearly point out what is unique in your product and why it will work with your target group, go ahead with your idea.
7. What convinces you that customers are ready for your product?
Your product might be solving a problem and unique, but customers still might not want to buy it. In that case, you need to speak to some members of your target group and do basic research to see if introducing your idea into the market makes sense.
8. Who are your competitors?
As a businessman, you should be aware of your competition in the market and learn from their strong points. Based on the present competition, you can mould your product or service to make it look more appealing to your target audience.
9. How and what will you price your product?
Pricing is a very sensitive and important part of a business. You need to identify which strategy you would use for maximum market share. You could opt for sales maximisation or profit maximisation depending upon the nature of your product.
10. What channels of sales and distribution would you employ?
You also need to figure out the medium of sales and distribution you would want to employ for your product. It could be an e-commerce based product/service or sold through personal selling. You also need to figure out where your product would be available.
Related Post: 12 powerful lessons for new entrepreneurs
11. How much capital would you need to set up the business initially?
You need to be sure about how much capital you would require to set up your business in terms of rent, labour, raw material etc. Calculate the cost of fixed and variable inputs for a better understanding.
12. What are the risks you might be facing?
Every business has its own risks. You need to figure out the risks of your own business and try and minimise them.