7 Questions To Ask Before You Launch A Business

September 11, 2008


Before you launch a business, aside from doing thorough research, there’s a few questions you need to ask yourself. Don’t skip these questions. I ignored the first one once and actually sank one of my businesses.

Am I Truly Passionate About This Business?
Passion really is far more important than anything. If you’re not passionate about the business you’re about to launch, find something you are passionate about. Otherwise, you’ll wind up wasting a lot of time and money, or stuck in a business
you don’t enjoy.

Do I Know Enough About This Business To Get Started?
If you can’t truthfully answer yes, go out and learn some more about the business first, even if it means delaying your launch.

Am I Self Motivated Enough?
Some people seem to find it easier to motivate themselves than others. Are you the type of person who would be more likely to watch tv than work on their business, if you based your business at home? If you’re not sure, it might be worthwhile starting your business on a part-time basis to begin with.

Do I Have A Decent Amount Of General Business Knowledge? Do you have a basic understanding of how to run a business? Do you know enough about sales, marketing, accounts etc to get started? You can and will learn a lot as you go, but it will be far easier if you improve your knowledge before you launch your business. You can do this through reading books and taking courses.

Is The Business A Good Fit For The Type Of Lifestyle I Want To Lead? Think about this one carefully. Will you be able to carry on doing the things you enjoy doing now, if you start this business? If you’re an outdoor person, you may not enjoy running a business that keeps you indoors all day. And if you’re not a morning person, starting a business that requires you to get up at 4am may not work out.


Do I Know What My Business Is Going To Look Like When It’s Complete? This may not sound relevant - especially if you think you might want to keep your business forever and never sell it. But you really want to know what your business is going to look like when it’s complete, before you even launch it. That way, you can plan to reach that point and you’ll also know what you need to do to get there.

Will I Be Able To Raise The Start Up Capital Needed For My Business Launch?

Even if your start up costs are low, you’ll still need money set aside to live on. And how much you need will depend on many factors. For instance, if you need to employ people from the beginning it may take longer to break even than it would if you are working alone.

If you don’t have at least enough cash, on top of your start up costs, to meet your daily living expenses for one year, you might want to launch your business on a part-time basis to begin with. Unless you can come up with other ways to meet those expenses.

In a future post, I’m going to cover ways you can raise cash to help with the launch of your business. If you’d like to learn about this, click here to subscribe in a reader.

Can you think of other things you might want to consider before you launch a business?

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31 Responses to “7 Questions To Ask Before You Launch A Business”

  1. Jim Gaudet on September 11th, 2008 4:43 pm

    Great information. I think the most important is being passionate about your business. If you do not love what you do, your clients will notice this.

    ~ Jim

    Jim Gaudet’s last blog post..Why Costa Rica?

  2. cathlawson on September 11th, 2008 4:51 pm

    Hi Jim - That’s definitely the most important one. And it’s not just the fact your clients might notice it that’s a huge problem - you simply won’t be happy.

  3. Lillie Ammann on September 11th, 2008 5:57 pm

    Great questions, Cath. I like your suggestion to start a business part-time to be sure you’ve got the self-motivation. It’s also a good way to learn some of the things that you don’t even know you don’t know and to avoid the degree of risk you would have going into business full-time.

    Re: passion—I agree with you completely, but I heard an interesting perspective on this recently. I went to a booksigning for John Hoich, a self-made gazillionaire, who came from a severely dysfunctional family. He started out in the lawn-mowing business because one of the few things he got from his mother on her death when he was a teenager was a lawnmower. In his talk, John said he had a passion for success, a passion to care for his orphaned siblings, a passion to change his life. He didn’t have a passion for mowing grass—in fact, he didn’t really like it and had allergies that made the work difficult for him. But his passion for success carried him past his lack of passion for what he did and led to great success. He said you had to have passion, but it doesn’t have to be passion for what you’re doing.

    Lillie Ammann’s last blog post..Patriot Day 2008

  4. Vered - MomGrind on September 11th, 2008 6:29 pm

    Being passionate is important because when you own a business, you spend tons of time on it. It’s not a 9-5 job that you can forget about when you leave the office. It’s consuming and incredibly demanding and the only way to do it is if you’re passionate about it.

    Vered - MomGrind’s last blog post..Almost-Wordless Wednesday: Correct Your Nose Without Operation!

  5. Scott McIntyre on September 11th, 2008 6:58 pm

    I found this a very useful list, Cath.

    The point you highlight about self-motivation is key I think.

    I don’t believe it is possible to stick at doing something unless your heart is in it- especially when the rough times come.

    Being enthusiastic in your business life also tends to inspire others who work with you.

    In my experience, the most inspiring colleagues have been the ones who just get on with the task at hand- simply because they are driven to achieve results.

    (Sorry I’ve not been around for a while- faulty pc!)

  6. Brad Shorr on September 11th, 2008 7:09 pm

    Cath, I’m with the other commenters. Your list is right on target and self motivation is key. One other question worth asking is, what will make my business better than the competition? If you’re going to do the same thing everyone else is doing, it’ll be tough sledding.

    Brad Shorr’s last blog post..Project Confident Friendship Recap

  7. chris on September 11th, 2008 10:06 pm

    One of the mistake we made when we open our Dry Cleaning business was that we didn’t know much about the industry. We thought that our hard work will get us through. Unfortunately, our had work was not enough.

    You also have to add that picking the right partner is key to having a successful business venture.

    chris’s last blog post..Previously From Car Chronicles?

  8. cathlawson on September 12th, 2008 4:07 am

    Hi Lillie - I wonder if Forrest Gump was kind of based on that guy? It’s definitely true that you can be passionate about your business without being passionate about the actual physical work.

    I felt a lot like that about my fire and flood restoration business, but not about my plumbing business - I thought I could be I didn’t.

    I just didn’t find plumbing so exciting somehow, I don’t know why. Maybe it just wasn’t as challenging. I guess I was also trying to change an industry that didn’t want to be changed.

    It’s interesting that guy was passionate despite the allergies that made work difficult for him though. I’m going to research him - he sounds really interesting.

    Hi Vered - It really helps a lot. Like you say - it’s not like you can just go home and forget about it. Even when I went on holiday - I used to call in, or log into my computer every day. And the one time I didn’t, I got robbed.

  9. Kelly@SHE-POWER on September 12th, 2008 4:21 am

    All good points here cath. Nice job. I used to want to own and manage a cafe, but then I realized I would hate being chained to one location day in and day out. I like my freedom too much. I don’t like to have to be anywhere in particular for my work to exist. I guess that’s why I like writing. I may get lonely sometimes, but I can do it wherever.

    Kelly

    Kelly@SHE-POWER’s last blog post..A Free Writing Exercise Unleashes Lovely Loralee

  10. cathlawson on September 12th, 2008 4:32 am
    Hi Rita - Thanks. I think it’s a shame when people encourage someone who is really enthusiastic to try something else. Enthusiasm makes learning more easy doesn’t it?

    Hi Scott - That’s a good point - I guess folk find it far easier to motivate themselves if they’re really passionate about something. And as you say - folk inspire those around them more if they’re driven to achieve.

    Hi Brad - Definitely - they need to have a USP. If they don’t stand out from the competition, they’ll just wind up competing on price and nobody wants to do that. Having a USP that would be difficult to copy is even better.

    Hi Chris - I can imagine that being quite complicated. I was tempted to add dry cleaning when I did fire and flood restoration, but I just didn’t know enough about it.

    Picking the right partner - or not having a partner at all, is a good point. No matter how well you get on with someone, so many things can go wrong - especially if you don’t have the same goals.

  11. Lillie Ammann on September 12th, 2008 4:40 am

    Cath,
    John Hoich was very strongly motivated by his need to care for his siblings so he did what he had to do. As he became successful in the grounds maintenance business, though, he expanded into other areas as well, notably real estate investments. I found his autobiography fascinating.

    Lillie Ammann’s last blog post..Patriot Day 2008

  12. cathlawson on September 12th, 2008 6:14 am

    Thanks Lillie - It definitely sounds like something I want to read. I’ll check it out.

  13. Alex Fayle | Someday Syndrome on September 12th, 2008 7:22 am

    I think numbers 4 and 5 are the ones that new business people need to really focus on. Those are most likely the ones to kill any business before it gets a chance to start producing profits (at least from what I’ve seen).

    Alex Fayle | Someday Syndrome’s last blog post..Our Lives Are Full of Stuff - Full Text Answers

  14. Barbara Swafford on September 12th, 2008 7:24 am

    Hi Catherine,

    This is another great list of superb ideas. With our business I found we work a lot more hours than someone working for a wage. We laugh as some days we do the math and our wages are way below minimum wage. But…..the days we do better, we smile and realize it’s all worth it.

    One other thing that needs to be asked is if you can work with the public. Some people are better when they work behind the scenes and don’t have to meet people face to face. You have to get out there to promote your business, so it’s no time to be shy.

    Barbara Swafford’s last blog post..Mini Meme - Open Mic - Free Ebook

  15. cathlawson on September 12th, 2008 7:45 am

    Hi Barbara - I know the feeling. A lot of folk don’t seem to realise that in the early days of business, often you can’t afford to pay yourself at all. And as you say - there’s times when you feel like you’re working for shrapnel.

    Good point re: shyness. I guess it’s something people have to try to overcome if they want to promote themselves well.

  16. cathlawson on September 12th, 2008 8:08 am

    Hi Alex - sorry. I almost missed you. Definitely lack of business knowledge would make things difficult for anyone wouldn’t it. And I guess if they haven’t learned anything about sales and marketing they’ll struggle.

    Also, it wouldn’t be so great if the hours didn’t suit. I’m a morning person and I would hate to be running a late night business such as a pub or a restaurant.

  17. Lance on September 12th, 2008 10:20 am

    Good morning Cath! These are a great series of questions to ask. I wonder if less businesses would fail if people really answered these questions with their hearts and minds…

    Lance’s last blog post..Fog: Does It Slow You Down?

  18. cathlawson on September 12th, 2008 12:15 pm

    Hi Lance - I guess it would help. I think the trouble is - a lot of folk don’t understand what they need to be asking themselves until it’s too late. I’ve messed up on a lot of stuff myself.

    Some people do try to acquire a bit of knowledge beforehand. But I’ve noticed a lot of business books are written by people who’ve not even ran a business. So lots of really useful info is missed out.

  19. cathlawson on September 12th, 2008 12:39 pm

    Hi Kelly - Sorry - I didn’t mean to miss you out. I know what you mean. I should imagine that it would be quite tying to run a cafe. And many of them seem to open 6 or 7 days a week.

    Because you can write anywhere it fits in with your plans to travel, which is brilliant.

  20. Tom Volkar / Delightful Work on September 12th, 2008 2:36 pm

    Hi Cath this is a good service you’re providing - getting folks to really think before they make the move. Your question about the end is a particularly good one because it forces us to consider that there will be an end and to look at how long we’ll play the founder/president role. Some of us are great starters but not so great maintainers of businesses so we are better off to at least consider end game contingencies.

    I’d also add these two questions.

    If I temporarily earn less than projected will the freedom and fulfillment of being my own boss still be worth it to be? I’ve had many clients who can say yes to that but some say no way. It’s good to know going in where your heart is.

    Is this business in true alignment with my core values? If it’s out of alignment you’ll end up working far to hard to try to make it fit.

    Tom Volkar / Delightful Work’s last blog post..Believe It Or Not

  21. Graham Strong on September 12th, 2008 3:18 pm

    Hi Cath,

    Great points, all.

    One thing I would add to point #1 — is this something you would get sick of? I have a friend who is an excellent cook. He should be a chef (I worked in fine dining for many years, so I am not making this claim lightly…!) But he steadfastly refuses to become a chef because he is afraid of losing his passion for it if he was forced to do it every day instead of when the inspiration struck him.

    Something else to think about when considering your passion.

    ~Graham

    Graham Strong’s last blog post..Finding the Time

  22. Wendi Kelly-Life's Little Inspirations on September 12th, 2008 3:29 pm

    Hi Cath,
    Reading through all of the comments, I find the conversation about passion to be an interesting one. People need to think very hard and indepth about the nature of their passions and then focus on what that would be like day after day.

    I had a friend who was passionate about shopping in boutiques and clothes and all of the artsiness that went along with it. So…she opened a boutique. She found she was NOT passionate about paperwork and venders and bills and the daily toil of being locked in a shop all day long and never seeing the sun.

    People get idiolistic about ONE aspect of their passion. The fun part. The hobby part. They don’t call it work for nothing. I have been self-employed or a contractor my entire life and it isn’t for wimps. There are no free paid vacations, sick days or holiday pay. because in the end it’s all coming out of YOUR bottom line…believe me….THAT takes passion.

    Wendi Kelly-Life’s Little Inspirations’s last blog post..A Letter to the World

  23. John Hoff - eVentureBiz on September 12th, 2008 5:10 pm

    Excellent list Cath.

    I’d like to add “Are you wiling to sacrifice?”

    Starting a business is tough. It takes a lot of hours and dedication. Are you willing to sacrifice time with the family, watching movies, hanging out with friends, going camping, etc.

    I love watching movies but haven’t for a couple years now. But that’s ok, I’ve found my passion.

    John Hoff - eVentureBiz’s last blog post..Staying Positive During Hard Times

  24. Mrs. Micah on September 13th, 2008 12:25 am

    Great questions. I’ve decided that while I enjoy consulting, I think my personality is better suited in the long-term to library work. I’ll probably consult on the side. Fortunately, I figured this out early enough that there’s really no loss…I’m not that bad at running my own things that I went crazy or completely failed. I just prefer not to.

    Mrs. Micah’s last blog post..How We Optimized Our Banking

  25. Evelyn Lim on September 13th, 2008 9:17 am

    The rest have discussed passion at some length. What I would also like to highlight your point on how important it is to ensure that the business fits in the lifestyle we have. For instance, I just cannot imagine setting up a business that requires me to take time away from my kids. I’d have to choose one that allows me the flexibility of being able to adapt to their schedules.

    Thanks! You’ve brought up a set of essential questions. More of us should think through them carefully before diving into a business and then realizing that we have made a mistake.

    Evelyn Lim’s last blog post..Hire A Dream Team For Creative Visualization

  26. Cath Lawson on September 13th, 2008 11:23 am

    Hi Tom - Thank you - those are great points. And I guess a lot of people have become used to working for a wage and there’s no way they will work for less initially. I know I’ve spoken to people before and they say - I need to find a business that will replace my salary of X amount of £’s per year. It’s not a good way to start out and I should imagine it leads to a lot of dissapointment.

    And as you mentioned - it’s definitely better to try to create a business that’s in line with your core values to begin with.

    Hi Graham - that’s an important point - some people lose their pssion when they’re doing something day in day out and putting in long hours. Monika Mundell of Writers Manifesto used to be a great chef and she reached the point where she wasn’t loving it anymore.

    Hi Wendi - that’s an excellent point. People have to be realistic about the work they will have to do in their business beforehand and be honest with themselves about the bits they won’t like.

    Nobody is going to like doing every single thing and sometimes it is better to make plans to eventually outsource, or employ someone else to do the stuff you don’t want to waste time doing.

    Hi John - that’s a good point - cutting out lots of TV watching etc is going to be essential isn’t it. For a long time, I didn’t use the Internet when i was running my fire and flood business - unless it was work related - eg. email and checking the enviroment agency flood warnings etc.

    Hi Mrs M - It’s good that you figured that out early and you’re doing what you really want. I was surprised when you started consulting. With your skills, I thought you might have written a personal finance book or something.

    Hi Evelyn - the lifestyle one is important isn’t it? I barely saw my kids when they were younger and if I’d thought things through - I’d have done something that allowed me to work from home, rather than travel to an office.

    I would definitely advise folk to think carefully about that.

    Cath Lawson’s last blog post..7 Questions To Ask Before You Launch A Business

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  28. Steve C on October 6th, 2008 1:25 am

    Excellent post. I tend to think that its the lack of courage and knowledge that prevents people from starting their own business. Of the questions that you’ve pointed out on in your article, I think the most important one is motivation. Even if you don’t have any clue about business, self-motivation can almost always get you past any obstacle.

    Steve C’s last blog post..Why Writing A Business Plan Is An Overrated Practice

  29. cathlawson on October 6th, 2008 1:58 am
    Hi Steve - Thank you. I agree - self motivation is the most important thing. And some folk just don’t seem to be able to motivate themselves as well as others, so starting out part-time might be a good test for them, to see if they have what it takes.
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