What Business Should I Start? 4 Questions to Ask Yourself.
Starting a business can be one of the most rewarding and challenging experiences in life. Here are four questions to ask that should help you figure out what business to start.
1. What do I know?
What are your areas of expertise or experience? When starting a business it is very helpful to leave the starting gates with a competitive advantage. One way to gain a competitive advantage is to have in depth knowledge or experience in a certain area. Think about your area and identify all the pain points — which ones can you solve? This is a great place to start to determine the type of business to start.
2. Who do I know?
Part One — Sometimes people that are subject matter experts (SME) either are not good at business or would never start a business. These can be great people to partner up with. Apart from partnering, SMEs can also be valuable early beta testers, provide valuable pain point insights, and possibly have more experience with your potential customers than you do.
Part Two- Unless you have a pile of money waiting to fund your startup, you should think about who you know that believes in you (and your idea) that could provide seed capital. One of the best (or most reliable) sources of capital for early stage startups is friends and family.
3. What will it take to scale this business?
This is an important question to ask to set realistic expectations for how your startup will grow and what it will take to make that happen. Start with these questions: What resources are required for five customers? 500? 5,000? How large do you want to scale?
Does your business rely heavily on people (consulting, hair salon, law firm)? Or is your business a service that can grow exponentially without significantly adding people (mobile app, information brokerage, digital service)?
Is what is required to scale your business in short supply or easily available? IT engineers (service business) are in limited supply, versus app downloads (mobile app business) that can scale significantly with relatively low costs.
Of course you will notice that the easier something is to build and scale, the higher the competition will be. Don’t let this discourage you, find a competitive advantage and leverage it.
4. What is my end goal? What do I want to get out of this?
This is perhaps the most important question to ask, and yet it is the one that is most often overlooked. Why am I doing this? What do I want to get out of this multi-year effort? Is it the experience, credibility in an industry, money to live on, money to retire on? How long will it take? And, what will it take (time, energy, people, costs)? Will doing this require me to sacrifice something in my life that I might later regret (people/relationships, time, money)?
It is well worth your time to stop and think about this. Figure out what you want to accomplish / where you want to go — then work your way backwards from there. Carefully lay out a high level plan. And then adjust it as time goes by and things change.
Conclusion
Figuring out what and where to start can be daunting. Don’t be afraid to fail. We have all been there. Fail fast, fail often, for in your failures you will uncover your greatest opportunities.
One final bit of advice — before you actually start building your business, do this: write down your idea, find five customers who will buy your product or service if you build it. Listen carefully to these five customers, show them prototypes, incorporate their feedback, redo this process over and over. Basically, follow the Lean Startup Methodology!
