Starting a business sounds more than appealing, even though it requires a lot of work, time, and money.
The decision to become an entrepreneur is an act of courage (and it can also be one of the most nerve-racking experiences in your life).
If you want to be your own boss, you will have to deal with many legal, financing, sales and marketing, or human resources issues (and much more).
Notwithstanding the most common start-up challenges that every entrepreneur needs to face, there have been spectacular success stories of start-ups built from scratch that have become multi-billion-dollar companies.
Therefore, your start-up can be tomorrow’s unicorn (or even decacorn!).
Of course, there is no formula for success. Every entrepreneurial journey is unique.
But I guess you’re ready to take the leap and change the direction of your career, aren’t you?
In this case, I suggest that you spend some time answering a set of questions so that you understand your personal and business goals.
Below you will find a comprehensive list of intelligent questions that you should ask yourself before launching your start-up!
Table of contents:
- Top 10 generic questions to ask when starting a business
- Top 10 financial questions to ask when starting a business
1. Top 10 Generic Questions To Ask When Starting A Business
- Why do I want to start a business?
This question may sound like a cliché, but sometimes people start a business without even thinking about the why. What passions are you following? What sparked your business idea, and what’s your business mission? Think about what you like to do and not just the potential income.
- Am I highly motivated and passionate?
Everyone wants to achieve financial independence, but are you ready to face a myriad of challenges? Are you able to set realistic expectations and face business competition wisely? If your answer is “yes”, it means that you are motivated and passionate, and you are likely to overcome start-up challenges.
- Can I do this alone?
I strongly suggest that you reflect on the team you need. Doing everything by yourself isn’t that easy (and most of the time, it can also be counter-productive). I have already outlined in a previous post that doing everything by yourself can distract you from your core business operations and you risk stunting your business (you can read the whole post here).
- What are my goals?
This is another question that may sound like a cliché, but creating your business goals list is essential for the smooth running of your company. Where do you see yourself in 3, 5, or 10 years? You may hate this question during job interviews, but this time is different: you are building a solid foundation for your long-lasting business.
- Would there be a more convenient time for me to start a business other than now?
I know what you’re thinking: “There is no better time than now“. You’re right. But since many businesses are navigating through uncharted waters (especially thanks to the Covid-19 pandemic), I suggest that you reflect on the best moment to launch your start-up. Of course, it all depends on your business model. For example, if you plan on running an online business, you can do it whenever you want, as we live in the modern digital era. At the same time, some specific industries are still affected by the Covid-19 business restrictions.
- Am I prepared for the possibility of failure?
This may be a nagging question. According to Inside Small Business, “more than 60 per cent of small businesses in Australia close within their first three years.” You should come to terms with the possibility that your small business may not survive and know what steps to follow if such a situation occurs.
- Do I have the necessary skills?
You need two types of skills to run a business successfully: essential business skills (e.g., leadership, communication and negotiating, project management and planning, etc.) and industry-specific skills (for example, if you run an online business, it is evident that you need to be tech-savvy). Therefore, I suggest that you evaluate your skills and weaknesses and judge your readiness to run your own company.
- Am I ready to change my lifestyle?
Running a business will affect your everyday life. You will have to say goodbye to 9 to 5 regular business working hours (sometimes, you will also need to work on Sundays), be ready to travel more often, and live a more active lifestyle. Most of the time, the distinction between personal time and work time blurs. Are you ready to take this step?
- What type of business owner would I be?
Are you going to be that type of business owner who has both a short-term and a long-term vision and is constantly looking for business opportunities? Or are you going to run your business with an employee mindset and conventional thinking? If you’re still thinking like an employee, you must first change your mindset from employee to entrepreneur.
- Do I have a strong business plan?
A business plan is your most powerful strategic tool. A business plan is like a road map: without it, you risk getting lost along the way (meaning that you may not be able to articulate a strategy for starting your business). A strong business plan will help you make critical decisions, set objectives and benchmarks, reduce risk, and more.
2. Top 10 Financial Questions To Ask When Starting A Business
- Do I have the funds to start a business?
This is one of the most important questions you should answer before starting a business. For example, are you going to bootstrap your start-up or use crowdfunding? Will you get venture capital from investors or a small business loan? I also suggest that you make a list of the expenses you will have to cover before launching your business (e.g., company registration, website, labels, etc.).
- What business structure should I use?
Choosing a business structure is another critical decision that you must make before going into business. Your business structure can determine your tax liabilities, responsibilities, and more. In Australia, you can choose between sole trader, partnership, company, and trust. To learn more about business structures in Australia, please visit the Australian Government’s official website.
- Can I afford (or need) a physical office?
Getting a personalised and fancy physical office for you and your team from the very beginning sounds appealing. But do you actually afford to pay overhead costs? If you need physical office space but cannot afford an expensive brick-and-mortar office, you may want to consider a professional, fully equipped virtual office. Cost-effective virtual offices are perfect for entrepreneurs who want to get their start-ups off the ground.
- What kind of taxes do I have to pay?
In Australia, the amount of income tax your business has to pay depends on your taxable income. However, if you own a small business with an annual turnover of less than $10 million, you may get small business tax concessions from the ATO (Australian Taxation Office). For further details about the income tax for business, please check out this link.
- What are my costs?
New businesses need to consider the initial startup costs and ongoing overhead (for this reason, you should first decide whether you need a physical office or not). Therefore, you should determine the expenses you have to cover after launching your start-up (e.g., inventory, computers, employee costs, professional business address, etc.).
- How much capital do I need?
Estimating how much cash you need in the bank for the first six to 12 months is a critical success factor. I suggest that you overestimate the capital you need to launch your start-up in order to avoid risk. Please visit this link to learn more about how to estimate start-up capital and create a business plan with forecasts.
- Can I take care of my personal financial situation while running my business?
Are you going to take a salary in the first months after launching your start-up? Even after your business is up and running, you should consider reinvesting profits to grow your business. Thus, you should be able to manage your finances after launching your business (also, I suggest that you have separate personal and business bank accounts).
- Who is my target audience?
You may think that this should be a “generic” question to ask before starting a business (and not a “financial” one). However, determining your target audience means creating an advertising and marketing plan. As a result, you will also have to plan your advertising budget and create benchmarks.
- How will I price my products or services?
Setting prices can be a tricky process for start-ups looking to skyrocket sales. As a general rule, you should know how your competitors price their products and services. You do not want to be overpriced, but at the same time, you cannot price your products or services below production cost.
- Who are my competitors?
As I mentioned in the question above (question no. 9), to price your products, you must first get to know your competitors. Tracking other businesses and activities in your industry is critical so that you can understand the market. Otherwise, it may be challenging to write an accurate business plan and make realistic financial predictions.
Hopefully, by answering the 20 questions above, you are now able to answer the primary question of “Should I start a business?”.
If you believe that you’re ready to turn your idea into a successful story (and maybe become Australia’s newest unicorn!), the B2B HQ team would be glad to help you achieve your goals.
In today’s business world, traditional brick-and-mortar offices are too expensive for start-ups that need to maximise cost-efficiency. But, on the other hand, running a company without an office can put your business reputation at risk. For this reason, we can provide you with an affordable virtual office that has everything you need to run your business properly. Please feel free to contact us at any time for further details!