Asking Difficult Questions
Business can be exciting and edifying but often challenging when getting into the details of starting, maintaining, and expanding. That’s why, in business, asking the right questions is paramount. Business owners are often so close to their ideas and passions that they lose focus on what drives their success. All businesses need creativity and enthusiasm to stay relevant and move forward, but owners also need good, transparent, concise decision-making. Business is primarily about knowledge of the industry, decision-making, and relationships; this is why running a business sometimes becomes mucky. Thus, now and then, a business owner needs to step back and ask some critical questions.
A business founder should ask important questions after identifying an idea, expertise, and passion for an industry: Is there a market for the product or service? Is this a new or unfounded market? If a market already exists with competitors, Will the entrepreneur’s business idea/concept upset the current market? Is a location in the community/region going unserved or not being served well?
When a founder has identified a marketable concept and a target audience, the next natural question would be: Is the business feasible? The only way to know is to find the cost of doing business and determine the total costs of expanding or starting the company regarding capital purchases and operational expenses. Can the business drive enough revenue to break even or turn a profit? Does the company’s founder have a minimum investment of 20% equity of the total cost of the business? Financers often require a minimum of 20% equity, if not more, depending on the type and risk of the business, before they will consider funding an organization.
With a marketable idea, target audience, and financial budget, the following question ensues: Can a founder communicate and funnel their excitement, ideas, benefits, and potentially profitable business concept cohesively and comprehensively? So often, this is where several entrepreneurs fail; they need a map, a flow chart, if you will, to provide a visual aid to attract prospective financing and business advocates such as banks, private investors, friends, family, and the people of the community to support the business. They need a communicable plan, a business plan!
Now, the final question: What is your Social Capital? A business owner’s social capital cannot be undervalued. What is social capital? It is a person’s social network, the personal and professional relationships a person has built within a community. These relationships are often what keep a business thriving and sustainable. If a person’s self-assed social capital is poor to mediocre, How will the founder become involved in the community? Community involvement and presence is another key factor in having a successful business. If a community doesn’t know a business owner or key employees, it is less likely to succeed.
Once a founder has asked some critical questions and believes it is wise to move forward, finding a guide, mentor, coach, or a “Business Advisor” is wise to assist in this somewhat overwhelming process. The Dickinson SBDC provides “No-Cost and 100% Confidential” business advising. The ND SBDC Business Advisors specialize in providing information and resources to make informed decisions in developing a business plan and financial plan to create a solid foundation for growth. SBDC knows those who have a plan are more likely to succeed!