Five questions to ask before you start up a business

By: Daryl Woodhouse

Date: 27 June 2016

Five questions you need to ask and answer before you start up a new business. Great advice here from business adviser Daryl Woodhouse.{{}}You've got a great idea. You've got the passion and the commitment. You're ready to start to start your own business. But wait! There are five questions you need to ask and answer before you start.

  1. Is there a commercial market for it? It might be a great idea but you can only be sure if you do your market research.
  2. Do you have the knowledge, experience and muscle (both influence and financial) to get it to market? Be honest in identifying your skills and knowledge gaps and then figure out how to fill them.
  3. What else do you need to know? Get advice on the areas you are unsure about from people who know. Also remember that: "you don't know what you don't know". Even if your business idea is going to see you working from your kitchen table as a sole trader, it's still worth getting advice from a successful business coach, a good accountant and a trustworthy lawyer.
  4. What kind of business set-up would be best? At the simplest level a sole trader status can be set up quickly but do you understand the implications of being a sole trader? Would your business be better suited to a limited liability partnership, a limited company, a charity or a social enterprise? You need to get advice on which one will be right for your business.
  5. If you're starting the business with someone else, think carefully: are you going to work well together? How do you structure the arrangement? Are you equal partners? Do you have an agreement on what will happen if circumstances change, because of a dispute or critical illness for instance? These are all things that need to be considered now while you are in a position to discuss these issues without emotion.

All these steps are crucial as the decisions you make at this stage are the foundations for what you build going forward. Of course you then need to focus on the operational aspects of getting a business started: the funding, the website, advertising, networking, a business plan and all the other activities that will become your daily focus as you establish your business. However, the importance of these pre-start-up considerations cannot be over-emphasised.

Once you've identified the need for the product or service, the price, volume/frequency needed and the route to market; and you're confident that you have the commitment, the stamina, the resources, the commercial knowledge and the support (family, friends and the right business team) to see the idea through, then you can get going with confidence.

There's no rule about which ideas will fly. You never know - it might be your great idea that becomes a winner!

Copyright © 2016 Daryl Woodhouse, ceo of Advantage Business Partnership and co-author of Creating Business Advantage: Setting Up and Running a Successful Business. ABP delivers performance improvement, top line to bottom line, through business coaching, mentoring and hands-on consultancy.

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