Evaluate My Business Idea
So, you’ve got an idea for a business and are ready to start raking in millions, huh? The dream of becoming your own boss seems so attainable that you cannot contain your excitement. We’re sure a lot of you reading this are feeling these very same feelings. And that’s normal! However, what’s not normal, is the pathway to success that every business must run through. Owning your own business is a never ending roller coaster of ups and downs, healthy cash flows and thoughts of closing the whole thing down. We hope that this How to Start a Business Guide will help get you started on your path towards financial freedom and happiness.
Before you can begin registering your business, finding any licensing you may need, signing any contracts, and laying down any of your personal funds, there are a few things you should ask yourself.
Do I have what it takes to run my own business?
Running a business is hard. It’s filled with a lot of responsibilities that the typical employee will never face. There are many advantages to starting a business including being your own boss, making a living doing something you are passionate about, and setting your own schedule. Check out this article from the Small Business Administration on the characteristics and skills required to be a successful entrepreneur.
Is my idea a good idea?
Typically, we like to think our ideas are the best in the room because they are based on past experiences and framed in our own world view. This may work as an employee working a 9-5, but is completely irrelevant if you own the business. But why is this? When you are offering goods and services, the customer is ultimately the judge and jury when it comes to making a sale. If your customer doesn’t like what you’re offering, they won’t buy. Because of this, you need to know as much as you can about your customer as possible. Typically, learning more about your customers is called customer discovery.
How clear is my path to my first sale?
This depends entirely on your product market fit (determined during customer discovery). The more willing your customer is to buy your product or service, the more likely you are to make a sale. Seems pretty straightforward, right? Regardless of how you get your first sale, just remember, unless you can sell it, it is basically just a “glorified hobby”. When you can find the factor(s) that convince someone to buy, you have found the right product/service for the right audience!
Should I find a business partner?
Yes and no. This depends entirely on your business, situation, personality, and future plans. Sometimes it just makes sense to work alone. Perhaps you run a handyman service, or only work for a handful of clients. Maybe you just don’t like working with others! However, maybe your vision of your company is much larger than it is now. Eventually you will probably need help, so maybe it would be better to start with help now rather than playing catch up later?
Maybe you are wanting to join a business accelerator program, or get a loan from a bank (not necessarily a requirement to get a loan). If you do decide to identify and partner with someone, just make sure you find someone with a complimentary set of skills to your own. What do we mean by this? If you are a computer programmer, but terrible at business and don’t like the sales process, why would you partner with someone who is also the same as you? Wouldn’t it make more sense to hire a business person? Someone who is good at sales and communication? This ensures you can be efficient in all aspects of your business from the start, rather than having to hire outside help or give up additional equity in the future if you are in need of a different skill set.
Are you starting a franchise?
You may consider the pros and cons of buying an existing business. This opportunity may be less risky than starting your own business from scratch but you still need to perform due diligence before making the commitment. Some prospective business owners may consider buying a franchise. Check out the consumer guide on buying a franchise if considering this route.
Should I have a counselor or mentor?
As you are starting a business, advice from a mentor or business counselor will be valuable to help you avoid common mistakes. Organizations such as SCORE and Small Business Development Centers can help you clarify your ideas and plans.
What kind of classes and events should I attend to bolster my entrepreneurial skills?
Basic “starting a business” classes cover finance, legal structure, marketing, planning and other topics that can get you off to a good start. Find classes and workshops near you on our IASourceLink Statewide Calendar.
Frequently Asked Questions
Do you have questions about setting up your online store? You should consider checking out our Resource Navigator. It houses the contact information of 400 of our most helpful partners from across the state who provide free to low-cost assistance to Iowa entrepreneurs and small business owners.
Q: How many customer discovery interviews should I do?
A: As many as you can! Technically, you should never stop talking to, and learning from, your customers. A good rule of thumb is anywhere between 20-50 interviews should give you a good idea of what your customers think about your product or service. Keep in mind that you should completely AVOID asking for input from your friends and family. Though they may be willing to help, anyone with a close relationship to you most likely will show their approval of what you are making/providing, but their opinion may not represent your entire customer base. Start with strangers, you’ll be glad you did!
Q: Why should I find a business mentor
A: It’s always a good idea to learn from others. It’s an even better idea to ask for input and guidance from someone who has already ventured down a similar path of your own. Finding a business mentor can be both challenging and rewarding. Start by looking inside your current network and work outwards. And no, advice isn’t always free. A mentor may charge you for the guidance they provide, but it can payout heavily in the future.
Q: Are there any shortcuts when it comes to building a successful business?
A: Absolutely not. Building a business is hard and takes time. As the famous saying goes, if you believe you can you can. If you believe you can't, you can’t. Either way, you are right. The more you learn about your industry and customers, the more chances you have for success.
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NOTICE: The information included on this website is to be used only as a guide. It is not intended to cover all provisions of the law or every taxpayer's specific circumstances.