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Answering Tough Questions That Can Save Your New Business

Guest post by: Teresa Bohannon

Article Overview: New businesses start up every day, both online and offline. Unfortunately, statistics show that the majority of them will fail. Asking a few tough questions, and knowing the answers can prevent your dream of owning your own business from becoming just another sad statistic. Isn't that worth a bit of your time?

Answering Tough Questions That Can Save Your New Business

Asking a few tough questions can mean all the difference between success and failure, and the fact of the matter is, if you are not willing to take the time to answer them you are probably doomed to failure anyway.

It really does not matter what business you are in as long as you either know what you are doing in the first place...or you are willing to put the necessary time and effort into learning the ropes—preferably before you open the doors!

That sounds like insultingly simple common sense...and it is. The problem is that some people get so caught up in the dream of being a business owner that they forget the ultimate responsibility for vision, direction, decision-making, tough choices, filling in the gaps and sacrifices will ultimately always fall on their shoulders...and the newer, or smaller, the start-up the more this is true.

So how do you avoid becoming overwhelmed and failing—know thine enemy. Be prepared whenever preparation is possible. Troubleshoot scenarios in your head and on paper and know how you will react in many common circumstances. Do your research, ask questions of those who are more experienced, and make plans.

Unfortunately, short of franchise operations, very few new businesses come with an owner's manual, so in essence what you want to do is build your own, and you can begin by asking yourself the following questions.

* What problems do you anticipate having in your new business, and how do you anticipate solving those problems? That one is a no-brainer, again almost insultingly simple common sense. However, that does not mean it is a step you can skip. If you do not anticipate problems then you will caught flat-footed when they occur and if that happens enough your business will be weakened and quite possibly fail. There will always be problems you cannot anticipate; but if you are prepared for those you know will occur then you will not be unnecessarily distracted when the unanticipated and really difficult ones come along.

* How do you accomplish this? Study similar businesses. Join various business associations. Attend seminars. Read books. Use the search engines and find out what the other guys are doing and how they are doing it. The online world presents wonderful opportunities for free research—that's what it was originally created to accomplish—the free exchange of ideas and information. Use it. I can almost guarantee you that there are free forums and business groups online tailored to any business you can dream up. Use these free resources to find out what problems to expect. What has been tried in the past? Read about the concerns of others. Find out what they have done. Ask questions.

* What will it take to solve your problems before they occur? What inside resources will you need to have available? These can be as simple as a “How To _______________ For Dummies book, or friends and family who will willingly volunteer to keep the doors open as emergency back up. What laws, rules and regulations will apply to you and how do you make sure you are in compliance? What outside resources may be necessary? Who will be available to help if you need them? For example: Do you have already have a lawyer you know and trust? What is their expertise, family law or business? What is their hourly fee? The same questions would apply to an accountant, an advertising or human resources, contracting or tax consultant. Depending on your business you may never need one, but I can promise you that if you do ever need one, the last thing you want to do is stressed out, last minute expert shopping.

* Envision and define your company's projected strengths and weaknesses. Do not skip this step! Your strengths will be the things that make it possible to open your doors in the first place, they will also make up key promotional points. Your weaknesses will be those things that you particularly need to plan to improve and be prepared to troubleshoot. If you skip this step you will be unprepared to capitalize on your potential successes, and worse yet...unprepared to overcome your potential failures.

* What are the potential risks do you foresee... and are you willing to take them? Even the best laid plans can fail, and sometimes fail miserably. You can mitigate this somewhat by planning ahead, and building in a certain fluidity; but the one thing you must never do is risk more than you are “willing” to lose. Some brave souls are willing to risk everything, others are only willing to risk up to a certain point. Decide before you begin how much time, effort and the degree of financial resources you can afford to expend. Be upfront and honest with any business partners, venture capitalists, family members and other stakeholders who are likely to be affected by your decisions. The buck will stop with you, but if it is their lives and resources you are gambling with, they need to know the risks they are taking as well.

* What are your time constraints and deadlines? Without a set “realistic” time frame, you will not be able to accurately set benechmarks for either success or failure. Overnight success occurs to a very well financed, very fortunate, or very talented few. The rest of us generally have to watch and wait, so you want to be sure that you do not become discouraged too early in the game, or hang on longer than you resources will allow. Only by planning ahead, strategizing and developing contingency plans will you be able to avoid overestimating either the negatives or the positives. Goals can be reached for any project if time is not a factor...or at least you can let yourself believe that if you have the luxury of forever to deal with..

* What are the projected financial resources required? This is probably the most important question of all and the one most people avoid asking and setting in stone! Above all, be honest with your answers to this question, and set both your monthly and long-term budgets accordingly. As much as possible, build a cushion into your budget and do not spend it just because it is there. Sooner or later you will need it! Know, going into this new venture that there will be times you will run over budget and your cushion will be a mini-lifesaver. However, there will be times when even this cushion is not enough. Know in advance where your emergency assets are located, and know in advance how much of them you are willing to risk—and return them safely to their original nesting place as soon as possible. Restoring your emergency funds once they have been utilized is important, because if you do not make rebuilding them a priority, they will not be there the next time you need them. Practically speaking, the only guaranteed way to do that is to repay them from your monthly budget, which means that budget cuts will need to be made elsewhere.

* Who will be your customers? How do you plan on delivering both short and long term customer support? How will you reach them both before and after the sale? What marketing and advertising methods will you use? How will you determine if your business is giving your customer what they need. A product that is not in demand is useless...unless you create that demand. One satisfied customer can create a tenfold demand for you product, and one dissatisfied customer can cost you ten times that number of sales. Without a product that is in demand, and satisfied customers your business has no chance of succeeding at all.

It all really just comes down to planning, even for a small one-person start-up. There are dozens of software packages online that will let you build a business plan, some are even free. Also your local Service Corps of Retired Executives(SCORE) chapter will be happy to help you. However, in the case of the truly small start-up you can get by with answering the questions listed above, and all the others ones that will suddenly pop into your head as you go through these steps.

****
It is not wealth one asks for, but just enough to preserve one’s dignity, to work unhampered, to
be generous, frank and independent.
– W. Somerset Maugham (1874 - 1965) Of Human Bondage, 1915

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Article Tags: brainer, business owner, circumstances, common sense, doors, fact of the matter, franchise operations, gaps, learning the ropes, necessary time, new business, new businesses, sacrifices, scenarios, shoulders, success and failure, tough choices, tough questions



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My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: What I'm reading this weekend - Nov 5, 2010 - Tough to say Yinka - I'm usually working about 25 hours per week - a lot of that is online. For most of these articles I pick them up from my RSS feeds, recommendations from friends, or Twitter posts. I'll do a quick skim of the article and if it looks interesting I'll save it for later to read.
Re: Quote of the Day - ?"Just because you come up against a wall - I love this. Thanks Evan for posting. I love this saying also. "Tough times never last, but tough people do."
Re: Kevin. What happened to all others moderators? - Thanks Kevin for your reply, I will be fulfilling my obligation of a moderator from now on. I was going through some rough times in the past months, that was why I was not consistent. Thank God the rough times is gone and i am back. Tough times never last but tough people last.
Dramatized the product - Tough one... It's going to have t be a mix of different media. 1. Testimonials of current owners of the product and how it's helped them. This can be done thru Video and print 2. Somehow I believe there will have to be Video of it being "dramatized" 3. People of influence will have to support or sponsor the product. just some that came to mind..


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