Questions that Startup Founders Should Be Asking Before Launching Their Business
Launching your own business can be an exciting but also complicated process. To better prepare yourself, here is a list of questions that every startup founder should be asking himself before starting a company.
Does My Idea Provide Value?
For a startup to be successful, the products and services it offers need to add value to a customer’s life. Perhaps you are offering a brand new innovation or simply providing services for cheaper and better quality than local competitors. In either case, you need to ask yourself what people are currently using and whether your business will be able to provide a competitive replacement.
Note that people will not switch to solutions that only provide a marginal benefit over their current solution. You have to really outperform the existing solutions in order to stand out.
Can I Keep Doing This for Years?
While you may have passion for your new startup idea, that alone is not enough to make your startup successful. Although launching your own business is an exciting endeavor, you will inevitably run into a myriad of challenges within your business operations that can shake your resolve. Your journey as a startup owner will be hectic, entailing an immense sacrifice of your time, money, and energy towards your startup project.
It is therefore imperative that you carefully evaluate your motivations for launching your business and determine whether they will help you weather the storm that comes with being a startup founder. Without undergoing this critical self-assessment, you will have a very difficult time staying committed to your business idea and that will significantly hamper your chances of success.
Who Is My Ideal Customer?
If your business does not add any value to your target customer, then your startup will fail. According to CBInsight, 42% of startups fail because there was a lack of market need for their products or services.
For your startup to succeed, you should have a clear understanding of exactly who will benefit from your products or services. This entails knowing the demographic of your customer base, such as age, income level, occupation, ethnicity, geographic location, and even their marital or family status.
You will also want to take into account the social and psychological aspects of your ideal customer so that you can target them more easily. Consider factors such as how they get their information, what their motivations are, pain points, and consumption behavior. The more data points you have on your customer base, the easier it will become to narrow your scope and determine who your ideal customers are.
If you do not develop an understanding of your ideal customers, then you will be unable to effectively market your business and stay in business for long.
Can I Sell My Idea to Anyone?
When you are explaining your startup business to strangers, you need an elevator pitch. If you cannot describe your business succinctly within a few sentences, you will miss many business opportunities.
To determine how effective your idea is, try selling your product or service to complete strangers. By doing so, you can get truthful feedback of your idea and determine whether it is worthwhile to pursue it.
Do I Have the Right Skills to Build My Business?
Even though you are the founder, you will likely run into tasks that you might not be able to do well. You have to be honest with yourself about your own capabilities and determine how quickly you can learn the skills you are lacking. You may also consider seeking outside resources to help you out when you need it, whether it is through software, new hires, freelancers, a new business partner, or other companies.
Do I Have the Funding?
Even if you have brainstormed the most innovative solution to a specific problem or developed a cutting edge product, none of it matters unless you have sufficient capital to operate your business.
Startup founders will need to secure funding to pay off startup costs. At some point in your business operations, you will need additional funding to supplement your working capital or for expansion. Therefore, you should know what your financing options are, whether it be VCs, business loan, business line of credit, invoice factoring, crowdsourcing, or even your personal funds.
Accel Business Funding has provided business loans and business lines of credit through and has funded many businesses for more than $380 million. When banks say NO, we say YES to funding in 24 hours!
If interested in business funding, please contact:
Chris Han, Accel Business Funding
Tel – 818-963-8882