I work with entrepreneurs starting and growing all kinds of companies, everything from traditional tech-based ventures to creatives launching businesses out of their homes and local small business owners filling a niche in their local community. And while every type of business has its own challenges, at some point or another all of the entrepreneurs I work with struggle with the same underlying issue: uncertainty over whether they’ve set their business up to succeed.
Why does this come up? Despite what you might think or hear, entrepreneurs don’t start businesses just to make money. Trust me, the entrepreneurial journey is way too hard, and way too unknown, of a path to walk with only an exit in mind. You start a company because you want to make a difference, and the way you know you can do that is by sharing a particular passion you have in a specific way. Which is great – you need to be passionate about what you’re doing in order to create products and services that people will pay for.
But there’s the rub: having a product or service that you’re passionate enough about to want to build a business around probably means you don’t have a lot of room to be an expert at a lot of other things, including understanding how to build your business strategically. And so entrepreneurs like yourself end up finding someone like me to help clarify and stabilize the business that’s been built.
So how do I help entrepreneurs figure this out, and how can you get started on your own for your business?
We start with the 5 basic questions below.
Surprised? You probably assumed we either dove right into product, pricing or something else very business-y. And while that’s important, it’s actually more important to first take the time to define what a successful and sustainable business means to you. Because making a business work means answering a lot more questions than simply whether or not a product/market fit can be found and what price point the market can bear. It also means getting clear on what your expectations are and what a successful business looks like to you. It’s only after answering these questions that you can start filling in your traditional business model.
The First Five
- Why do you want to transform this particular passion into a business? Do you have clear ideas on why this passion would make a great business, or are you just hoping you can do what you love for a living?
- Who are you building this business for? Why do you want to help them? When answering this one make sure you actually like your customers and want to help them – too many people develop a product for a group of people they just don’t like spending time with. If this is going to be your business, and your business will depend on these customers, you better make sure you’re prepared to be in a long-term relationship with them.
- What do you need financially from your business in the first 3, 6, 12 months? And how large do you want it to eventually grow? Some people need their business to make money right away while others take a more long-term approach right from the start. Both approaches can work but probably require different strategies, at least early on. Be clear about what income you need now, and what you want later, so you can build a model that accommodates those goals.
- What are your expectations for outside investment? Do you need to build to attract investors, or are you funding the business alone? Get clear on this because a business that needs to attract outside investment might need to grow and scale at a much quicker pace than a business you’re funding on your own. I’ve seen more than one business that was making money and growing at a steady clip still have to shut its doors because it couldn’t grow fast enough to meet investor demands.
- How do you want to show up everyday? If you’re going to start your own business make sure you create something that you enjoy working on. There’s nothing worse than going through an entrepreneurial journey only to discover you’ve simply created another job for yourself. Make sure the decisions you’re making around the kind of business you want are in alignment with how you like to show up.
Spend time considering these questions before jumping into developing your business and you’re much more likely to end up with something that fits your definition of success.
I’d love to hear from you!
What do you think? Did you consider any of these questions before starting your business? Or have you resisted starting something because you weren’t sure how to know if it was set up for success? Let us know in the comments.