1. Can you clearly describe your business idea in two minutes?
This is a crucial first step to starting a business. Here are a couple tips to creating it.
- What would your customers get from using your product or service? This is called your value proposition. Your description should focus on this proposition.
- Compare your product or service with something that’s already popular. Saying that you’re creating a “Netflix for books” or a “Uber for students” helps people quickly understand your business idea and associates that idea with a successful business.
- Practice your pitch a lot. Practice in the mirror, practice with your friends and family—the more you say it out loud the better you can make it. The feedback you get from those close to you can really help refine your description.
2. Do you know if people are willing to buy your product or service?
Your business can only be successful if people are interested in buying your offerings. Before you get started, you need to make sure you have potential customers.
- Think back to your value proposition (see above). What kinds of people would benefit from the value your business would provide? Try and be as specific as possible; invent a fake customer and come up with every detail about them. How old are they? What is their gender? Do they have a job? Kids? What are their interests? This is called creating a persona.
- Find people who are like your persona and ask them if they would be interested in your product. Try to talk to as many people as you can. As you talk to them, refine your persona based on feedback.
3. Do you know what kind of competition your business will face?
A little research can go a long way. Remember: competition isn’t just another business that sells the same thing. A competitor is any product or service that fills the same customer need. For example, a book seller may find competition from another book seller. They could also find competition in something similar, like a comic book store or a library. Yet they have other, even bigger, competitors. If customers are going to books for entertainment, then they could also find competitors in television, movie theaters, and much more! Think really hard about what types of competitors your product or service might have—some of them may surprise you.
It’s also important to remember that competition can depend heavily on location. If you’re starting a restaurant, look at other restaurants in the area. If you’re selling on the internet, then consider where you’re selling: is it on Etsy? Amazon? Your own website? Where you sell your product or service will determine who your competition is!
4. Do you know how much it will cost to start your business?
Costs are perhaps the biggest challenge to running a business. You don’t need to know every single cost to be ready for a mentor, but you need to start thinking about it. Start by making a list of what you might need to make and sell your product or service.
If you’re making a product: What materials will you need? How long does it take to make your product? How many people will you need to hire? Will you need to rent a factory? Where will you sell your product? How will you ship and transport it? Do you need to rent space?
If you’re providing a service: What tools will you need? Will you need a physical location? What kinds of disposable equipment (protective equipment, chemicals, food supplies, etc.) will you need?
Once you have a list, do some light research to find out about how much these things will cost. This can be very revealing: is making your product incredibly expensive? This could mean that your business isn’t realistic.
Do you already have a good understanding of the answers to these questions?
If so, then you’ve taken some first steps to starting your business. If you haven’t, spend some time working on them. Once you have a good grasp of the answers, you’ll be ready to find a business mentor.