10 Steps to Starting a Business
Step 1: Assess Your Strengths and Your Business Idea
Let’s face it, we’re not all cut from the same cloth. Some of us are great at math, some are great with vocabulary, and some are just ok at both. Knowing your strengths and weaknesses can really help you narrow down what type of business you should devote time and effort into. Self-assessment is critical in the beginning stages of starting a business.
Being an entrepreneur involves risk! You must take a risk, with your money and time, in order to be successful. Nobody is going to invest their time for you and nobody is going to just hand you the money. If you are not a risk-taker, then entrepreneurship may not be for you. This is why the self-assessment portion is so critical…you may find that the risk is not worth the reward; or, you may find the exact opposite. This is when things get exciting!
How to assess your strengths
This exercise is meant to provoke thought. You may already have a business idea; you may already know your strengths. But, you may not have thought about how to apply your strengths to a sound business plan or how to structure your future business. So, take a little bit of time and walk through the following steps.
Answer the following questions from three perspectives: Personal/Hobbies, Professional and Financial:
- What makes you happy? Sad?
- What do you enjoy doing?
- What are a couple of things that you are really good at?
- What do you have the most experience doing?
List goals (personal, financial, professional):
- Short-term goals: Goals for the next 3-12 months
- Mid-term goals: Goals for the next 1-3 years
- Long-term goals: Goals for the next 3-6 years
By now you should start to see some sort of pattern. You should also be narrowing down some sort of business idea and/or path forward. You should also start to develop some sort of ideas, based on your strengths and goals, on how you want to conduct your business (e.g., work from home, retail store, part-time, client interaction, etc…).
Assess your business idea
Now, let’s take a look at your business idea. Most people have some type of business idea that they think is wonderful and that they think could be the next Nike or Microsoft. But few people actually take the time to sit back and think about the reality of starting a business or the feasibility of their idea. The most important question to answer in this stage is, “Can this business make money?”
It’s very important not only to know yourself and what kind of business you think you would be good at, but also you need to know that your business can actually make money; enough money to support both the business and your personal expenses (i.e. house payment, bills, food, etc…).
This phase of assessment will force you to look outside yourself. You must look at similar businesses in your desired industry. Answer the following questions to the best of your ability:
• Is there a growing need/desire for the products or services that you want to sell?
• How much competition is really out there?
• Are similar businesses in my desired industry growing, slowing, or stagnating?
• Are similar businesses going out of business?
• Can I offer something that my competitors don’t? (e.g., better prices/service, new technology or way of doing things)
• Who is my target market/customer? What is the status of their economical situation, as a whole? (Macro-level)
If you find that the answers to the questions above are largely negative, then you may wish to reconsider your business idea. However, if the answers are largely positive, then you may have just found a solid business idea that can be monetized.
Tying it all together
By now you should have a good idea of what your strengths and weaknesses are and a general idea of how feasible your business idea is. You should have a general idea of how you want to work and what type of business structure you want to run. You may have even come to the conclusion that starting a business of your own will prove too difficult and that buying an existing business (link to buying a business article) is a better option for you.
Regardless of what type of business you’ve decided to start, or if you’ve decided to purchase an existing business, now is the time to take it to the next level. It’s time to start thinking about creating a plan, a roadmap for the next 6-12 months of your business. Take all of the information you’ve gathered in this stage, both about yourself and your business idea, and apply it to the next stage.
Remember, becoming an entrepreneur takes some risk tolerance, it requires you to be a self-starter, you have to be able to deal with uncertainty and have self-discipline. Most of all, you have to be willing to work hard. If you’re ready, then move on to create that business plan.