10 Questions You Have to Answer Before You Start a Business Venture
“Remember your dreams and fight for them. You must know what you want from life. There is just one thing that makes your dream become impossible: the fear of failure.”
Starting a business venture or a side gig is exciting. Unfortunately, many people embark on this journey hustling without ever seeing any substantial income. They invest time or money and hope that their efforts will pay out somehow someday. And that’s totally fine if you consider your side gig as a hobby that does not necessarily lead to income. But if you intend to use your creative, entrepreneurial potential, you need to ask and answer the following 10 questions:
#1 What is your vision?
If you don’t have a vision, it’s tough to know where you are going and why. It’s like going on a trip without a destination.
A vision is an image of where you see your business and yourself in the future. It’s a mental picture of the promise you make to your customers AND yourself. It can include a vision of your product, your service, your team, or even the office you want to work in. And — not to forget — a powerful vision also shows you and your future life. The more vivid this picture, the more powerful it will be. A vision does not only serve as guidance, it’s also that shining light at the end of the tunnel that helps you keep going when things are difficult.
In coaching sessions, I use a technique called Motivational Interviewing to help my clients defining a vision. It’s a series of question that can help to identify the bigger picture, the intrinsic motivation, the desire that make you wanted to start a project in the first place.
Apart from that, it is helpful to create a vision board or a journal with images that represent your future self, clients, etc. When I was interviewing for my dream job in South Korea, I even created a business card with the job title I wanted to have. I know that sounds silly, but I got the job.
Be creative when it comes to picture your vision, take your time to do it. Whatever inspires you to work — no matter how silly it might look.
#2 What are your strategic goals?
Strategic goals derive from your vision and describe outcomes that happen in the future (typically 1 -5 years from the starting point of your project). Compared to a vision, they’re more tangible and often include numbers like sales or revenue goals.
From my experience, it’s essential to find a good balance between being ambitious AND realistic when defining your strategic goals. If your goals are not challenging enough, they will not excite you enough to fight for them. If your goals are too ambitious, they might be too intimidating to get you started.
Once you have set your strategic target(s), you can plan backward and define deliverables for each year, month, week, or day.
#3 What are your worst-case and best-case scenarios?
Working with scenarios, is an excellent way to make decision and to anticipate potential obstacles. Before starting a business, you should try to define:
The Best-case scenario:
Take a pen and a piece of paper and write down the best possible outcome of your endeavor. How would your life look in 1, 5, and 10 years from now? Ask yourself why that’s important to you.
The Worst-case scenario:
Now write down the worst possible outcome that could happen if you go after your dream. What would you lose? How would your life look like if you fail? Ask yourself, why that scares you.
The no-case scenario:
When I coach clients, I also like to discuss what will happen if you would never start your side-gig? I call that the “No Case Scenario”. Last, write down what would happen if you’d keep the status quo. Picture yourself in 1, 5, and 10 years from now: would you regret that you didn’t try to pursue your dream?
#4 What is your brand promise?
If you want to build a successful, profitable business, you need to have a strong promise that you make to your customers. You have to offer a solution to one of their most pressing issues or fulfill one of their desires. To define your promise, you need to know what your target is and how you can solve a problem that is so important for them that they are willing to pay for this solution. The more specific your promise, the easier it will be to sell your products or services.
That’s why defining your target group as clear as possible is essential. A target group is the center of every business. Your target group pays your bill and secures your job. During my first job, my boss told me a sentence I’ll never forget: Your customer is not only king, it’s your employer. People that work in big corporations often forget this. They worry more about their superiors or how to climb the career ladder as soon as possible than thinking about the customer. However, if you stop caring about the needs of your target group, your venture will fail. The most well-engineered, beautiful product will not sell if it does not solve a problem or fulfill a desire.
In business school, most people learn that a target group is characterized by demographics such as age, gender, income, etc. And while that’s still valid, there’s one more important thing you have to add to that list: a problem or desire that unites your potential customers.
For example, you define your target group as young mothers with a household income of X that doesn’t have much time on their hands but want to lose their baby weight. Once you a clear picture of your target customer, you can think about your offer and how it addresses their most burning issue, aka your brand promise.
#5 What is your brand?
A brand is the translation of your promise into a short statement that you use to communicate it to your customers. A logo, a key phrase, the look and feel of your products, your website, basically any customer touchpoint including your behavior and the behavior of your staff.
The authenticity of a brand is crucial, aka the look and feel of your brand have to reflect your brand promise and the quality of your products have to live up to that. For example, while a Porsche or a BMW implies “dynamic driving”, a Honda promises it’s consumers “value for money.” While I was working at BMW, we had an entire department that was devoted to brand management. The team made sure that everything from the sound of the engine to the design of an ad would reflect the BMW brand values.
How does your brand have to feel, look, or sound to tell the story of the promise that you give to your customers?
#6 What are your potential income streams?
Now it’s time to translate your brand promise into tangible income streams, aka your product or service portfolio. A product can be everything from a physical product, a professional service, a membership subscription, a digital resource such as a course, e-book, etc.
When I work with companies, I try to help them to identify potential digital products that complement their physical product portfolio. Digital products don’t require a warehouse, supply is endless. And while the production often requires time and planning, they have the potential to turn into a substantial, long-term income source.
Additional (digital) products can also help you to differentiate from the competition and increase perceived customer value. For example, if you not only offer a coaching service but also downloadable templates or workbooks, you might be able to make a difference for your customers and your business.
When developing products, it’s essential to understand how much your potential customer is willing to pay for them. Market research, surveys, or focus groups can help you to define the right price point. The importance of this step is often undervalued: while it’s relatively easy to discount a product, it’s tough to increase prices. So, you might miss out on higher margins if you don’t understand the perceived value of your products or services.
#7 What are your business priorities?
Being overwhelmed with choices is very common when you start your own business. It’s easy to get lost in tasks or chores that are not crucial for developing your business. That’s why prioritizing your projects is essential.
When I was working in a marketing job in South Korea, I had two burning assignments: 1.) to rebuild the brand that I was responsible for and 2.) to turn around the sales and to prevent stores from closing.
As our budget and time were limited, my team and I had to develop a strategy and marketing tools that would ideally serve both targets:
First, we defined sales targets and a vision for our brand that we wanted to reach within three years. After that, we brainstormed measures to drive sales and activities that would help to build the brand. Once we had all of them laid out, we tried to find marketing activities that would serve both. And lastly, we categorized all measures into four categories:
a.) Effective and easy to implement
b.) Less effective but easy to implement
c.) Highly effective but hard to implement
d.) Less effective and hard to implement
After this process, we built a marketing plan based on the following premise: within the next six months, we focused 80% of our energy on activities that were serving sales and (to a lesser degree) the brand targets while being easy to implement, yet effective.
The remaining 20% were used to work on long-term, highly impactful brand-driven measures.
Over time we were able to change the ratio to 50/50 and eventually to around 30/80%.
I can’t go into the details, but long story short: within 18 months, we turned around the sales situation while creating a strong brand footprint that would help us in the long run.
#8 When do you want to start your business?
A concrete starting date will help you in many ways: It allows you to plan backward and to define a critical path. A critical path is the base of your daily, weekly, and monthly milestones. What needs to be done first to achieve your first milestone? When do you need to what?
A starting date will also motivate you to START. How many people do you know that just talk about their dreams but never make the first step? Or that randomly do things that lead nowhere? Don’t be one of them.
#9 Are you willing to do what it takes?
Building a business requires hard work. Many entrepreneurs working a 9–5 job while working on starting their own company. This can mean that you have to sacrifice time for hobbies or friends until your business is running like a well-oiled machine.
The worst part: you don’t have a guarantee that things will work out the way you planned them. When I was a teenager, I wanted to be a Judo Olympic Gold Medalist, and I spend most of my childhood in the gym and dojos while my friends were playing or partying. I didn’t mind, because I knew why I was doing it. In the end, I didn’t make it. However, I don’t regret what I did, because it made me go to Japan, where I and got introduced to a fascinating culture and amazing people. That is a good “side effect” of chasing your dream: it might help you to make priceless experiences.
If you’re willing to do what it takes, commit to your plan, communicate it to the people that might be affected by your choice, and try not to feel guilty whenever you have to make hard choices.
#10 What will you do today?
I believe that it’s essential to start working towards your next milestone within hours of making the decision that you want to commit to a project. When working with clients, I’ve made the experience that the likelihood of achieving your goals drops by every day a project is procrastinated.
Apart from that, it will be motivating and empowering if you accomplished a task or a mini-goal soon after you committed to change.
Starting TODAY does not mean that you have to fall into “blinden Aktionismus” (the German term for just doing something just for the sake of something without a clear objective). It means to start one — maybe even a symbolic task — that marks the beginning of a new chapter in your life. This could be buying a notebook, brainstorming your vision, identifying resources or people that can help you accomplish your goals.
“The secret of getting ahead is getting started.”