Ask These Questions Before Starting a Business

“One of the greatest concerns most entrepreneurs face is whether their business will be sufficiently lucrative to replace the income they are giving up by taking themselves off the job market,” says Andrew Oman, founder of the Olive Tree Network, an organization that helps entrepreneurs get started in business. “This concern is referred to as opportunity cost. By answering a few questions, most entrepreneurs can evaluate their business idea and determine whether this opportunity is better than working for someone else.”

Yesterday, Promotional Consultant Today shared three important questions entrepreneurs should ask before starting a business. Today, we share three more of Oman’s questions.

How will you market to your customer? Knowing your customer is important, but knowing them is meaningless if you don’t know how you’ll reach them to educate them on your company and sell to them. Marketing is a major expense, so understanding this strategy will also help you figure out how much capital you’ll need to make it work.

Who are your major competitors? There is a difference between entering a field that is new, with few competitors, and going against big companies with deep pockets. You may need to raise more capital if you are going up against some heavy hitters.

What are your start-up expenses—the one-time expenses that need to be considered prior to beginning business operations? Setting up an office, creating business cards, buying software and other costs need to be considered in order to determine how much funding you’ll need to take your best shot.

As Oman says, “Choose a venture that makes you jump out of bed in the morning with anticipation for the day, and you’ll be equipped with 90 percent of what you need to succeed.”

Source: Andrew Oman is the founder of the Olive Tree Network—an organization devoted to helping entrepreneurs evaluate their risks, find funding and get started in business. He has successfully run his own online business since 2001.