Starting a Business- Ask Yourself These Questions

Starting a Business- Ask Yourself These Questions

Last week we asked you to be truthful with yourself when considering starting a new business, and how much you want to break out on your own. As we follow on from last week’s post, we delve a little deeper with further hard hitting questions.

 

4. How will you fund it? Can you survive financially while you get this off the ground?

We’ve touched on this a little in last week’s questions, so there’s not much more to say here. As many CFOs I have worked with have told me, cash flow is king.

Unfortunately, when you start up a business, unless you are one of the 1% who strike gold as soon as they launch, cash flow is never certain when you start or launch a business. So, you need to have sufficient funding to start your business and sustain it until you generate recurring revenue or reach a point where you can secure funding to grow the business and gain traction.

This is critical. Understanding how you will fund your business, which also means how you will fund yourself, needs to be crystal clear. Unfortunately, too many people are way too optimistic about how much funding they need to get started or how quickly they can generate revenue to sustain the business. Be real conservative with number.

Think of your worse case scenario… and double that as an indication.

If you are not prepared, we all know what happens then!

5. Should you quit your day job?

Which leads us to a really valid consideration when you start a business. Should you or can you keep your full-time permanent role as you start up your new business venture?  The obvious answer is, if you can, you should.

It gives you an obvious steady income while you set the business up and get it started. Sure, it means that you’re putting yourself under pressure. But if your new business model allows for it, it takes the financial pressure off, allows you to fund your new venture to a point when it is right for you to transition out and into running the new business.

Not every new business will allow you the luxury of being in your own paid job!

But if you can, why not? Don’t be fooled by those experts who tell you that you are not serious if you don’t commit and devote yourself 100% to your new venture from the outset. They will not be there to put their arms around you when you run out of cash 3-6 months into your new business venture!

 

Starting-a-business-quetions-to-ask-yourself

6. Do you have a business plan?

Getting to this point where you have committed to starting a business is key. But wait, there’s more you need to do. This is the biggest decision you may have made in your career, so you need to invest in creating a proper Business Plan.

Fortunately, there are some great tools and resources around for you to access, so I won’t go into this in any detail. Do some research on “Creating a Business Plan”. Australian Federal and State Governments have created some wonderful free resources that you can access to help you create a business plan for your business. Here’s a link to the business.gov site Develop your business plan | business.gov.au where you are provided with some resources and templates to get you started.

Understanding how you will fund your business.

If you can afford it, you could also engage a business coach who can get you started in the early stages. With some coaching and mentoring on how to go about it. You will probably also need an Accountant or Bookkeeper to help you set up your business, and they are also well-prepared to help and advise you with your business plan.

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Read the final hitting questions when starting a business.