8 tough questions to ask before starting your business

5 min read

When you begin investing your time, effort and money into a new business venture, your family, friends, hobbies and interests are likely to take a back-seat so before you consider establishing a small business, you might need to ask yourself a few tough questions:

1. What are my priorities?

These may be continuously changing however making a list of them as you see them now and then later may identify how serious you are about your dream and what priorities will need to be changed. If you have decided that your family is your highest priority, how are you going to meet their demands when starting a business will, at times, take all your time and energy? Be honest with yourself on how much you want to trade-off your existing lifestyle and whether or not it is actually even possible at this point in time, or if it's a dream, which is better delayed until a more appropriate time

2. When can I start?

It is all well and good to just say, "I am just going to go for it" but what does that mean? To turn your dream into reality, you will need to think about what it will take to launch your business and set a time line in place, preferably outlining each step along the way. This is most true if your business will sell products. If you are selling your services, it may be comparatively easy to 'just do it' however if you are selling a product, you are likely to need time to make your product better or more marketable than your competitors' products and reduce the risk of having to return to the drawing board for redevelopment or redesign

3. Can I do it alone?

There's no doubt about it, making a small business work all on your own is a huge challenge. Do you have what it takes to make it happen? At this point you may need to revisit your underlying reasons for starting up a new business. Is it the thought of more control of your work life and financial destiny? If you were to go into business with another person, what are the pros and cons? Would the benefits of gaining another person's point of view, skills, experience and even capital outweigh negatives like losing some of your control? Or would you be better off trying to find a silent partner?

4. Do I need new skills or education?

This may be about getting up to speed on the product or service that your business offers but is more likely to be about learning business management skills. You might be excellent at what you do but lack the business skills and acumen you need to make your venture successful. If you don't have business management skills, you might want to draw on an expert for help, attend some business skills workshops, get some professional mentorship or coaching or, preferably, all three. You might also review your own life skills and experiences. Think objectively about how well you interact with people. Even online businesses may have to deal with suppliers and customers, so business communication skills are likely to be important.

5. What are my risks?

There are two sets of major risks when you are in business for yourself "the first are risks that affect you personally and the second are risks that affect your business. Your first biggest personal risk is the risk that your business won't make any money or won't make enough money in the short and long term to fund your lifestyle. Consistency of income is likely to be an issue. The second risk is that because your business will be totally reliant on you, it won't be able to operate without you. This means it may be a long time before you can take annual leave and you will probably have to soldier on in the business even when you are sick. Other personal risks include continuity of your superannuation and insurance policies. Because the business is totally dependent on you, it is also at risk“ it is highly likely to fail without you. Find out more about business insurance here : Another risk is the ongoing relevance of the product or service your business offers. You need to consider how you are going to manage or mitigate these risks

6. What are my values?

Consider the kind of people you would like to deal with in business. Are their values likely to align with yours? Sometimes (particularly in the early stages) you can't always choose the people you deal with is that acceptable to you?

7. What are my one to five-year business plans?

Having goals will help drive the development of your business. Initially it is probably easier to list one to two-year goals. These goals may include sales targets, number of clients, revenue and even personal income. If you have made plans before how does this new venture re-define your existing personal plans? Having an exit plan may appear a bit premature, however, think generally about where you want to be in say five to 10 years. Would you sell at that time? Would you have staff to run the business and allow you to develop other ideas or interests, or just take it a bit easier?

8. Do I have the focus and commitment to make my dream come alive?

Concentrating on the main game will be tough at times as there are likely to be many distractions. You will need to keep focused and remain committed. However, as you take steps to turn your business dream into reality it is likely to look a little different from what you first imagined. Changing course with your business idea does not necessarily diminish your dream it may actually define and improve it.

Turning your dream into reality will only happen if and when you want it to. Perfect timing is not always possible, however, careful planning is an important first step in a long journey.

Read more from our Women In Business Series - Why you need a business plan.

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This information is current as at 17/12/2013.

BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.