5 Questions to Ask Before Starting Your Own Business
You have what you think is a great idea for a new business. But being an entrepreneur isn't without hazards. Before quitting your job, it's important to take a hard look at your circumstances.
Take it from Brian Short, founder of Allnurses.com, the largest online networking community for nurses, with about four million unique visitors a month, 830,000 registered members, and 300 new members joining per day. This kind of traction wasn't a sure thing back in 1994, when Short, then a registered nurse, started building the site during a time when the Internet was a relatively new thing for most people. Here's what he learned along the way and the questions he says you should ask before starting your own business.
Will I have passion for running this business?
Short's website grew out of his love of the burgeoning Internet and how it offered an entirely new way of finding information about nursing. He says it just goes to show that turning a hobby into a business makes a lot of sense, because when you enjoy something, you're less likely to burn out and more inclined to be willing to put in the long hours necessary to get a new venture off the ground. But what if your idea has the potential to be lucrative while not involving an exciting product or service? "I think you can be passionate about anything, even if it's customer service or customer experience," he says. "You don't have to love, [for example], car insurance." The idea is to find some aspect of your business that you can nail better than the competition.
Is there a strong need in the market for this business?
Talk to everyone you can about your idea--including professionals with some knowledge of the space you want to enter--and ask for honest feedback about whether it's something people need. "Make sure [your] gut feeling is based on research," he says.
How will I pay the bills?
Unless your business will be making money from the start, you need a plan for paying your bills, one that figures in unexpected bumps in the road. "If you run out of cash and get strapped, you're going to start losing your passion because you have to put food on the table," he says. To lessen your risk, figure out how long it will take to be profitable, how much money you'll need in the meantime, and where it will come from. Want ideas? Read "10 Crazy Bootstrapping Stories."
Do I have the strengths needed for this business to grow?
No one is good at everything, which means you have weaknesses. The key is identifying the talents you need for your business to grow and taking a hard look at whether you possess them. Short did this himself a year ago after moving out of a home office where he had previously been doing everything himself. "I realized there were things I wasn't good at," he says, "so I ended up hiring out all my weaknesses so they supplement my strengths. And I can just focus on my strengths."
Does my family support me?
If your spouse or significant other isn't on board, he or she also won't appreciate the time and attention your fledgling business will require. "If you're single and you don't have any responsibilities, this question might not apply," he says, "but if you have other people involved in your life, if they're not on board it's going to create friction."