7 Important Questions You Must Answer Before Launching Your Business

Besides working in an organization to earn money, having a personal business is one of the ways of solving our financial problem, and attaining financial freedom. In fact, without engaging in business it might be impossible to become free financially. If you are to take an inventory of people with great financial success, you will discover that 99% of them are business owners.

 Since the time money was created, people no longer exchange goods for goods, but rather exchange money for goods and services according to the worth or value of the product or service. This new form of exchange makes people to start thinking of, and creating products and services other people are willing to pay for. However it is important to note that not all business ideas are viable. So many business ideas as good as they seem cannot produce the desired profit or result because of certain reasons. Consultants who are vast in business research have found out that 80% of businesses fail due to lack of sale. This means that sale is the sole driver of all successful business. Even common sense justifies that no business will succeed if sale is lacking.

Before one ventures into any business, it is important to provide answer to some important questions. A man once said that “questions are spirit searchlight”. The questions am going to suggest here  are business telescope to help you understand thoroughly if the business idea you are thinking about is a viable one or an idea that will crash after implementation. I learned these questions the hard way because when I started my first business it failed, but as I move ahead in life trying other businesses and observing the business of the people around me I began to understand why business fail.  The questions are as follows:

(1) What product or service do you want to produce?

The answer to this question is the simplest to most people. Before you embark on any venture, you must have a clear knowledge of the product or service that you want to sell. By this question, I mean, what commercial idea do you have? Is it to start the production of a particular product or to begin to sell your skill in form of service? You must know exactly what the idea Is all about.

(2)Are there people who need the product or service?

Of course you have gotten a business idea, but it is essential to know if there is a market for the product or service. Any product or service that is not needed by a considerable number of people is a useless one. You will be the one to consume it yourself. It is not all business ideas that work. For any business to thrive people must be willing to pay for the product and they must have the capacity to pay. Only business ideas in this category can be called a business opportunity. Never confuse a business idea with a business opportunity. For a business idea to be translated into a business opportunity the idea must offer a viable solution to a problem experienced by potential consumers and for which they are willing to pay. A business idea no matter how novel it is cannot be a business opportunity, if customers cannot see its added value, and therefore unwilling to pay for it. Before you proceed to the implementation of that idea of yours, are you sure it passes this test? Be sure, if not discard it may not work.

(3)What is the level of income of the people who need the product or service?

This is where the capacity to pay for the goods or service comes in. some product are highly needed, but the targeted market may not have the financial strength to afford it easily. They may have to save for a while before they can afford such product or service. This will affect your business in the sense that sales will be slow, and that may discourage you to quit the business. A business worth investing in by a young entrepreneur is one which the targeted market will need not break a bank before they can afford. Think of such service or product when embarking on a start up.

(4)How often will they need your product or service?

The essence of going into business in the first place is to create value in form of product or service that can meet people’s need, and profit thereby. So in a situation where people refuse to buy your product, the overall objective has been thwarted. Some product or service may have a high demand backed up with purchasing power by the targeted market, but the rate or frequency of demand by buyers may be low. For instance, certain goods don’t command frequency of demand as a result of their nature. Products in this category are those who after purchasing, one may not need to purchase another one until the one bought becomes faulty, or one decides to change to a better type of such product. Example of goods in this category is electronic devices, books, bags and so on. I don’t encourage upcoming entrepreneurs who are still struggling financially to invest in such product or service.

Products that are in high demand, and affordable by the target market and accompanied by frequent demand per buyer will definitely generate high sale. Products in this category are those products that are easily exhaustible, and are highly needed for our daily activities. Example is fuel, such as kerosene, petrol, diesel, engine oil, and firewood. People must cook, and they must power their car, and machines. And after exhausting the one purchased the individual must go for another one. Other goods in this category are shoes, clothes, soap, stationery, pampers for babies, food stuff and so on. if your product or service passes this test, and the rest, the workability of your business idea is guaranteed

(5)Where are the people (target market) located? 

One critical factor to consider before going into any business is the location of the target market. If proper decision is not taken in line with this factor, one may end up regretting. You must know if the people who need the product or service are concentrated in a particular place, or scattered. If they are concentrated in a particular place, the cost of marketing will be drastically reduced, sales rate with be fast and high, and more profit will be generated. But if the market population are scattered, there will be need to move from one geographical area to another, and that will consequently increase expenses and thus reduce profit, and reduction in the speed of sale.

(6)Do you have sufficient capital to run the enterprise?

One of the critical questions you must solve before you launch out is whether you have sufficient capital to launch the business idea or not. A lot of businesses fail due to lack of sufficient capital to see the venture through, especially in time of financial crises. Every would be entrepreneur is expected to do an accurate estimation of the amount of money and other form of capital that the business opportunity will require before starting, this is necessary so as to  prevent the crash of the business. There are cases where a business folds up for a while and later needs to be revived after a while or may even collapse completely due to lack of money to fund certain project that are essential for its  survival.

However, it has often been said that dream big, but be ready to start small. To start a business it not really compulsory you start it in the big way you want it to be. You may start small with what you have and expand as the business grows. The owners of highly successful businesses or brands in the world today such as coca cola, Dangote group, Facebook, Google, Apple, and Microsoft all started small with their little capital and grow the business to what they are today. Whether you are starting small or big, be sure you have enough capital and reserved capital that will see the business through.

(7)Are there people who are producing the product or service already?

It is important to find out if someone else is already doing the business we are planning to do. This helps a lot, as it can help one to know the weakness of their product or service and thus improving on it thereby creating a better product or service. It will also enable one to know the area of the market they’ve covered so as to help one identify a fresh market. One can as well learn what not to do from those who are already doing it.

However, if the venture is a fresh one without any competitor, one will have to put up strategy on how to combat the effects of competitors incase they venture into the venture in the future.

Final advice: At this point I will emphatically say that you should never start any business without having an alternative source of income or some saved amount of many that will enable you meet your daily needs while your business is growing. It is an act of foolishness to put all your resources into a business and assume you will start making money as soon as the business kicks off. If you have never been into business before, I want you to know that the first few months is the toughest. If you are into sales for instance, for the first few weeks you may not record any remarkable sales. Every business needs some time to grow before yielding profits. This is the single reason why business consultants often advice entrepreneurs never to quit the job that provide them steady income before launching their business. Getting money from a steady source of income while your business is growing will reduce the impact of the frustration lack of sale brings.