The top things to think about before you start up your business

Small business owners (and people who want to run their own companies) ask us a lot of questions. It’s great that they do and we always do our best to answer their queries.

But we thought that it would be useful to cover off just a few of the questions that we think everyone should ask themselves too, before they start out.

So, with that in mind, here are the five questions that we believe everyone needs to ask themselves before they set up their own small business.

1. Does anyone actually need this?

The single most important question any business owner needs to ask themselves. It doesn’t mater how you identify customer need – whether through market research or your own industry experience – but you cannot skip it.

Too often, companies fail because the exciting idea comes first, and the need a distant second. Make customer need your first priority, and then start to work out how you can meet that need in a distinctive and unique way.

2. What can I afford to lose?

Setting up your own business is hugely rewarding. But it is also risky. It’s likely you’ll be taking on a lot of extra financial liability in the coming months and years. Extra debt, increased monthly overheads, or rent. Or, you might simply be taking on the responsibility of looking after your employees.

As an employer you have a duty of care towards them, and all of the many associated risks that go along with it. So, understand your own appetite for risk. Know what you can afford to lose if the worst happens, and have the capacity to cope with it.

3. How is this any different to what other people are doing?

So you have a great idea, and you have identified a need in the market. But why should people choose your product or service over someone else?

Is it better? Does it do the same as everyone else, but just more efficiently? Is it cheaper? Or, if it is more expensive, what more do people get than with the cheaper alternative?

They are all important questions, and a really important part of identifying whether your product will sell in a crowded marketplace.

4. How will I know this is a success?

What does success look like for you and your business? It is remarkable how many people enter business in a very open-ended way, without having a real sense of what they are trying to achieve in the long term.

But having a very clear set of objectives that give you an idea of where you are going, and crucially how you’ll know if you get there, is really important. It helps you to form a strategy and a roadmap for success. And it helps you to make changes if you’re not on track to reach your objectives.

5. Why am I doing this? Really?

It seems like a basic question – and it is. But that makes it no less important. It is a question that can actually lead to a lot of things – not least, a company vision.

Getting to the heart of that big question of why you are getting out of bed everyday to do this job, and why you’re investing your time and money into it, is key. It is important that you find out the answer to this question, not just for you, but for your future employees and investors too.

Why? Because the reasons you’re committing to your business dream will most likely be the same reasons that they might do it too.