Friday, February 24, 2012

3 Questions to Answer Before Starting Your Business

Okay, I had to stop what I was doing in order to right this important post. For, yet another engineer comes to me saying he wants to start his business because the market is ripe. Beginning entrepreneurs pay close attention. Those who know anything about me know that I am all about taking action and taking it quickly. However, anyone considering entrepreneurship must be prepared to answer, at a minimum, 3 important questions. If they cannot answer these questions, they should either reconsider or get the answers before starting.

1. Who Is Your Market

We need details here folks--a full profile of your exact market, not something like, "Well, so and so said he might do business with me one day. He promised!" Those promises will be soon be forgotten when you show up expecting a commitment. To answer this question properly, you must narrow your market to a small niche. You are not as big as the company you plan on leaving and cannot possibly target as big a market as them. Also, many of them will be reluctant to do business with you because you are too small. Find those who do not have this concern and test them.

2. How Will You Reach Them

Well, someone has to do the business of selling. Yep, I said "selling." The company you are in now has a sales department dedicated to keeping the company coffers healthy. These are the guys most of the engineers laugh at and call clueless. Well, you would stop laughing if you saw their commissions. They are paid well for a reason. Are you ready to sell?

3. What Will You Charge Them

You need a fair price acceptable to the customer with enough profit built in to feed you and your business. There is much to consider here including your taxes, vacation (no more paid vacations), health care and much much more. These are questions you never had to consider before because someone else did it for you. Well, that someone else is you now. Think of Dave from the Staples commercials. Are you ready to be Dave?

I do not mean to throw cold water on anyone's dreams, for I love entrepreneurs. Those who know me well would gladly back me up on this. It is for this reason I wrote this post. I want to see more entrepreneurs succeed because this is best for everyone--the entrepreneurs, their communities and the economy as a whole. Starting off on the right foot will increase the likelihood of success.

The next time someone approaches you all hyped up and ready to jump into the fray, direct them to this post and insist they answer the questions. If they cannot answer, they are not ready. Period. Now that I have this out of my system, I can return to my other work.

Good luck and I look forward to seeing you in the Players Lounge.

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