5 Q’s to Ask Before Starting a Business

A lot of the savviest daddies I know have figured out a way to invent a life they enjoy - significant time with the kids and doing something they love.  Many of them have achieved this life by starting up a business.  What does it take?  What questions should you ask before making the leap? 

As I just recently launched another business (Movement121 - check out the bag in the picture in my starbucks "office"), I just went through a lot of these questions myself yet again. Lots of choices to make up-front. Before you delve in, ask yourself these 5 questions.

1. Why am I starting this business?  There are many reasons to start a business - some good and some terrible.  Take some time to get some clarity before venturing out.  I’d suggest you do at least 3 things. - Read Marcus Buckingham’s “Go Put Your Strengths to Work” – being good at something is not the same as a real “strength.” Understanding your strengths and designing a business around your core strengths will give you so much more drive and persistence. - Ask 3 people who know you well about when they’ve seen you most energized in life.  What were you doing?  Why were you so energized? - Ask 3 people who you trust about the business idea.  This is a great chance to get some real input, some “tough love”, and also possibly feelers for potential business partners. All these questions and conversations will help you tease out exactly why you want to start this business, and whether it is the right business for you.  It sounds weird, but it's tough work getting to know yourself.  But doing so will make you that much more effective in whatever you do, and steer into a direction that fits how you're wired.
2. Do I have all the basic elements of a new business in place?  Okay, forgive me, but here's a crash course in MBA entreprenuership 101.  One great framework to refer to is the B-I Triangle. This triangle displays the 8 key parts of any successful business, and it may not be what you expect.  3 key parts are leadership, team and mission. Too many people minimize this. And ironically, the product is the smallest part of the B-I Triangle, and strangely may be the least important part of your business.  How many great products have never seen the light of day?  How many not-bad products have turned into huge businesses?Do people go to McDonald’s because their hamburger is better than all other hamburgers? Do people go to Starbucks because it’s got the best coffee?   No, they have a decent product, but what they do best is how they systematize everything - especially how their train their people.   Also, experienced venture capital people will tell you that they don’t fund “ideas”, they fund people.  And when “people” is more than 1 person, it says a lot – there are likely complementary skill sets, networks to leverage. It show that the leader of the start-up was strong enough to recruit a team to join him.  That’s a good sign.  Enlist a partner in crime - the chances of success skyrocket.
3. Who you going up against?   Naturally, you gotta think about who you're fighting against for the mindshare/loyalty/heart/dollars of your customers.  Having competition isn’t necessarily a bad thing if you view it the right way. A lot of the greatest companies were launched in super-competitive industries - Southwest Airlines and UPS are great examples of that. Competition can keep you on your toes and it can also provide motivation for you to succeed. Be clear about how you’ll be different than the competition, and be clear how you’ll respond when the competition tries to copy what you’re doing.  How will you stay ahead?
4. How much of an initial financial investment do I need to make?  Don't ballpark.  Do the research and flesh out costs and revenues as much as you possibly can.  Many experienced entrepreneurs will tell you that most new entrepreneurs overestimate the demand for their products or services (by 10x), yet they underestimate the initial costs (especially marketing cost - by 2-3x).  Supplies, contract work, legal/accounting, rent, taxes – it all starts adding up quickly.  Go in with both eyes open.
5. How much will my family time suffer?  Most people also underestimate the time required to start a business.  More so, it's a new mindset where your business is always on your mind.  You'll have to work hard to not work too hard. To shut "it" down and be emotionally available to the people you love.  Are you prepared for this? Is your family prepared for this? Have your spouse read this Inc article - confessions of a entrepreneur's wife.  It's not for everyone, and your family has to support you from the get-go.

Ok, are you ready to rock and roll? What other questions are important to consider when starting a business?  Some people also wonder - is this the right time to start a business?  After all, we're in an extended recession.  Definitely a real consideration is timing, but think about this - some of the most enduring companies of our generation were started during a recession - GE, Microsoft, IBM, Disney, and more.