5 Questions to Ask Before Starting a Business
With the changing global economy and the rising interest in independent employment, the number of people interested in starting a business has increased significantly. It has become more popular to follow trends in entrepreneurship and best practices in creating businesses. If you have been thinking of starting your own business but have uncertainties about what business to start, here are 5 questions to ask before taking the next step.
1. What is your target market?
This is one of the key questions before starting a business and it goes hand in hand with determining market demand. You can’t start market research for your product or service without knowing what your target market is. There are specific steps you can follow to identify your target market. Write down who your potential customers are—consider details like gender, age, geography, other demographics, economic status. Do not be afraid to make assumptions about your customer at this initial stage.
2. What is your niche and who would be your ideal client?
Once you identify the key demographic characteristics of your potential customers, niching down your market is the next step. The target market is the specific customer you serve while your niche is the specific product or service you offer to them. Let’s say, for example, that your target market is a high-impact entrepreneur between the age of 35-55 who has built several successful businesses but needs help with streamlining operations. You’ve identified the demographics of your ideal client (a high-impact, economically able entrepreneur between 35-55) and what he/she needs is assistance with their business operations. This is exactly your niche—the product or service you provide to your ideal client to resolve their pain points—streamlining business operations in this case.
3. Is there an actual need for your product/service?
It’s common for aspiring entrepreneurs to start a business based on their own interests, skills and passions. While combining these assets to start a business is helpful, deciding what your business should offer as a product or service is one of the most important first steps. Determining market demand for a product and service should be based on actual willingness and abilities from potential customers to buy your product/service. You should not determine market demand based on your own assumptions or personal preferences but rather on what your customers actually want and are willing and able to pay for.
4. What are your ideal client's real pain points?
Knowing the exact frustrations and challenges that your ideal client is going through will help you to be laser-focused on the product or service they will be more than happy and willing to pay for. Based on the above example, your ideal customer is a high-impact entrepreneur who is already successful in their business but since they have more than one business their real pain point is not enough time and capacity to streamline operations. In other words, what they worry about at night is whether their businesses are running in an efficient and effective way. Helping them streamline operations will not only help your ideal client’s business to become more efficient but it will give your client peace of mind. Thus, identifying your ideal client’s real pain points is all about psychology that will help you identify the product or service your customers would be more than happy to pay for.
5. Are your potential clients WILLING and ABLE to pay for your product/service?
This is one of the most important questions to investigate. If you skip this step, you might end up building a business that offers a product or service that your customer would not have the ability to or the willingness to pay for. Save months or years of pointless work and answer these 2 questions before you start a business. Based on identifying who exactly your ideal client is, what his/her demographic characteristics are, his/her psychology and pain points, you will easily know if your customer is WILLING to pay for your product or service. In other words, does your customer urgently need what you have to offer? Would he/she do anything to get your product or service to resolve his/her pain point? The second question is about your customer’s financial ability. Is your ideal customer financially able to pay for the product or service? If the answer to any of these questions is No, then you should move on and either identify the right client who will be WILLING and ABLE to pay for your product/service OR provide a product/service that your current client would be willing and able to buy.
There are other questions to consider before starting a business but the 5 questions above are the initial steps to help you decide if your business idea is a viable market product or service. More often than not, aspiring entrepreneurs skip these 5 steps. Following this process, however, might save you months or even years of working on a business that might not be viable. Trusting this process, on the other hand, can help you be laser-focused on what business to start and who your ideal clients would be.