With respect to these realities it is worth appreciating the usefulness of having a checklist in helping the individual to cover most, if not all, of the variables and uncertainties that are involved in starting a business.
With such a checklist you will be able to address two main concerns i.e.
- Evaluating your preparedness in terms of starting the planned venture and
- Ensuring that you get off to a great start once you launch the business
The following are some of the most crucial questions that you must find answers to as a prospective entrepreneur:
1. How is your reaction to business opportunities like?
Successful entrepreneurs are known to react quickly to seize business opportunities whenever they arise.
Poor business people, on the other hand, are known for their procrastination which typically results in missed opportunities and general poor business performance.
In this regard, would you describe yourself as proactive or reactive?
2. How good is your management of energy and time?
The old adage “Time is money” holds true for any entrepreneurship activity.
Ideally, you should be one who is willing to commit energy and time to activities that will profit your business venture.
The start-up stage is extremely crucial. Creating a successful business from the ground up will require 101% of your involvement, no compromise.
Are you ready for self-sacrifice?
3. How prepared are you in terms of saving money, making business contacts, and learning / training about your prospective business engagement?
Prior to starting a business you must fully understand what the decision implies – it is a process that will require you to be wholly committed to the cause.
Think about how termites build their nests. Individual grains of earth are gradually pieced together and the result is an imposing structure so rigid and strong.
Likewise, you will need to prepare a solid foundation upon which to grow.
4. How well or how badly do you take discouragement or failure?
Successful entrepreneurs are those who have thoroughly understood that both discouragement and failures are realities in the business world.
They are however pragmatic and work hard to make their business ventures successful.
While being persistent in their efforts they also don’t over commit themselves and their resources to an extent that initial failures will ground them for good.
Are you ready to be persistent or will you quit as soon as things start going wrong?
What will you do if customers don’t show up as anticipated?
5. Do you have a competent adviser or team of advisers?
Prudent entrepreneurs seek the advice of seasoned business people in different lines of enterprise.
They do so in order to have their ideas vetted before they embark on them.
Doing so has spared many novice entrepreneurs undue financial and psychological hurt.
There’s no substitute for experience, and a problem shared is a problem solved.
Do you have a group of persons that you can consult with moving forward?
6. Have you established that the demand for your products and services actually exists?
This holds more so for innovative ideas.
Talking to people about the idea may give some form of encouragement but the crucial consideration is ideally whether the intended product or service will actually be bought and become profitable.
Have you studied the marketplace and confirmed that there’s indeed a demand for what you plan to start selling?
What similar solutions already exist?
How does your solution stand out from the rest?
Last but not least, does the solution actually work?
You definitely don’t want to go the way of Theranos or Juicero
7. Have you established the financial implications required in starting up?
It is important to have a clear picture of what your business’ start-up costs are.
Additionally, you’ll need to factor in money estimates that will help the business run well for at least six months after its inception.
Here is an awesome guide for setting your budget.
8. Do you have enough to go on for at least a year?
Apart from the start-up and operating costs highlighted in point 7 above you must have a sufficient income or savings to maintain your upkeep for at least a year. This is so whether or not you have a family to support.
These monies should be sufficient until a point where the business venture starts earning you a good income.
9. Do you have any external sources of funding in mind?
Sometimes it so happens that individual savings are exhausted before a business takes off.
It is therefore prudent that you have reliable sources of potential financing backup in case such a scenario arises.
How well prepared are you for such an eventuality?
10. What form of business organization do you have in mind?
There are quite a number of business ownership forms that you can create including a sole proprietorship or a partnership.
All these forms have different implications and you are well advised to clearly understand these before you settle for any.
A lawyer’s advice may come in handy here.
11. How do you plan to maintain your records?
Successful entrepreneurs have an efficient system of knowing what their incomes and expenses are, and how much their businesses owe or are owed. Such a system need not be complicated in design – it just has to serve the purpose.
Record keeping is an integral part of any successful business.
Effective accounting will only become possible if there are accurate records to start with.
Is the record-keeping system you have in mind going to be appropriate for your type of business?
12. Will the venture need personnel?
Entrepreneurs whose businesses have to hire personnel understand the importance of having a skilled team. Prior to establishing your business you must first ascertain that the kind of people you need exist and that you can afford to pay them.
Where will you find the sort of personnel you require? Will you need full-time employees or will freelancers be appropriate?
13. How will your pricing be organized?
It needs to be clear from the onset that a correct pricing of your products and services is of the essence. Basically, successful entrepreneurs set prices that will help them cover all their production expenses as well as earn them a viable profit.
What considerations have you weighed in arriving at your proposed price?
Will the revenues you’ll earn as a result of selling at this price be adequate to sustain the business?
14. How soon can the initial investment be recouped?
One aspect of successful businesses is such that they are able to recover their costs of investment in a reasonable time-frame. Such costs include items like machines and equipment, any construction and design work, etc., and they must be recovered before the business earns a profit on its investment.
From your own estimations, how soon do you think this will take?
15. Does your business satisfy the legal requirements?
Successful entrepreneurs make a thorough background research into all legal aspects that are required for their ventures to operate within the law. You should therefore identify all the permits and licenses that you should secure before starting off.
Will you be operating within the law when you open your doors for business?
This checklist is neither conclusive nor does it suffice for every type of business. It however offers a general idea of what prospective entrepreneurs must bear in mind if they intend to be successful at the nascent stage of their business ventures.