New Year’s resolutions got you thinking about starting a new business? Want to enter into another adventure? Well, before you begin, here are five questions you need to ask yourself.
How Does It Make Money?
Figure this out now and do not skip the step. If it does not make money, then it is just a hobby. Nothing wrong with a hobby—but it’s not a job. Even if you are inventing a wholly new business, and no one’s done it before, you still need to figure out how work turns into money.
How Much Does It Cost?
What does it cost, in total, with all tools and such accounted for, to make something sellable, or to get something sellable from someone else? You must make more profit than that. It’s not high-level economics to work out roughly how long materials will last, and then need replacing, and how much the ingredients and such will cost to produce the product.
How Much Work Does It Take?
Hours, minutes? What’s a realistic expectation of how long it takes to make one product? Do you need help? Really be honest with yourself here. If you need more than yourself to make the business work, then you need to account for employees, as well.
How Will You Tell People?
I’m not even talking about high-level marketing here. What I mean is: do you have a place to even make it evident that you exist as a business? If you make, let’s say candles, do you have a shopfront, a website, anything, to tell the world that you exist?
What’s the End Goal?
Hey, even if it’s “run a successful business for the next ten years, then retire” that’s fine: it’s an actual plan. A random business begun with little planning and little intent is just a massive waste of money. What do you hope to accomplish with this business? Answer honestly for yourself—and make it clear to all who work with you what it is as well.
You have to have a plan of attack now so that you don’t get mired later. Your future self will thank you.