Congrats! If you have stepped into the world of entrepreneurship, as this filed is not about studying, in fact, it’s about implementations, turning your imaginations and dreams into reality by actually doing it.
As Seth Godin the author and entrepreneur, says, “Studying entrepreneurship without doing it …is like studying the appreciation of music without listening to it.”
Being a startup owner it’s not easy to handle things just like your 9 to 5 job where you have to perform according to the given tasks and job descriptions.
However, in a startup culture, you have to play at your own risk. While setting up new startup you will come up with hundreds of questions as it’s the part of the process to have questions that you want to be answered; in other words, it means your mind is committed to doing the business.
We’ve picked 10 of the most common questions that people ask about the startups they’d like to open, and accordingly, we’ve tried our best to give the answers as well.
- How much money will I need?
This may be the most-asked question of all an important one at the same time.
According to the research report by QuickBooks 64% of entrepreneurs (in a recent Intuit survey) started with less than $10,000. Although the answer to this question varies from startup to startup as each business is unique and they’re unique to their own markets.
Some companies will need thousands to get off the ground, while others can turn the profit with little investment. The best solution to overcome this problem is to make a forecast. For that purpose, put your estimates into a forecast to see you how much you require to earn to progress to the next step.
Pro-tip: Get an amount which at least carries you for 6-9 months with no income. We bet you always will find that it always takes you longer to get a hold of revenues and you will experience more operating cost than you anticipated.
- Do I need a proper and written business plan?
The answer is yes, as it’s always helpful to come up with a written business plan. It will be really helpful to have a written form of your plans and thoughts for the future and what you want to do for the development of the product or service. A perfect business plan includes marketing, financial, operational, social projections.
After writing, get some input and suggestions from trusted business/finance advisors.
Here is the important tip for a business plan, don’t go for lengthy or beyond a 50-page business plan.
- Where can I get investment?
When it comes to getting an investment most of the times entrepreneurs look to their own bank accounts or they consult their friends and families to secure their first round of investment.
This is because of the fact that your first round of investment will most likely be a quite low figure, so the people around you might well have the quantity of cash you need to initiate your startup.
Although, your first few years may be a thrash about if your business actually takes off, do you fancy full control or would you mind an investor declaring in what you do? Well, before rushing into decisions ask this question to yourself.
Apart from these, you have many other options to consider for seed funding.
- Personal funds
- Angel investors (the best choice)
- Venture capitalists
- Crowdsourcing sites such as Indiegogo.com and Kickstarter.com
- Bank loans/SBA financings
Pro-tip: first of all, discuss your startup idea or pitch with an angel investor. If it doesn’t help when you need to go for other options.
4) How can I come up with a great name for my business?
Ah, this one is difficult. As naming your startup is just like naming your newborn child. It’s the first basic need of every startup to get a catchy, interesting and easy to spell name.
Primarily you have to do some brainstorming with a bunch of different names. Make columns of familiar words around your industry, shortlist them and then, try this free business name generation tool – namobot.com, you can get 42 Million Words Availability in 6+ Name Generators. Isn’t cool?
Pro-tip: in order to save your time and cost visit namobot.com and get your domain name without any struggle. The benefit of getting the name through nanobot is, you won’t need to check the availability of the same name on social media sites (Facebook, Twitter, and Instagram) as on single click you can find out that too.
5) AM I REQUIRED TO HAVE A LICENSE TO START MY BUSINESS?
This is a vital question among all as a lot of businesses surprisingly need very little licensing, however, you’ll want to ask openly, nothing sinks a business faster than discovering out that it’s operating illegally.
Pro-tip: In this regard, make a visit to your local city lobby or hall then find out exactly what kind of permits are required, if any.
6) What kind of books and records do I need to keep for my business?
Doing business and maintaining everything by having an eagle eye on all operations isn’t an easy task to do. You have to maintain some records in order to get a smooth working environment for your future developments in the business. You need to tick the list of below-given bookkeeping and records in order to maintain your operations.
- Financial Statements (P&L, Balance Sheet, Cash Flow)
- Employee records
- Board and stockholder minutes and consents
- Stock and options ledger
- Invoices & contracts
- Bank accounts
- Creditor records
- Tax filings and records (Federal, state & local income, sales and property taxes)
- Secretary of State Filings (Certificate of Incorporation, annual filings, etc.)
Pro-tip: maintain daily/weekly records to get things smoothly.
7) Where I can get mentorship and advice?
There are many people in the startup industry who have done some aspect of what you’re trying to achieve. Yes, as a proof they have the scars and stories to share.
According to a coaching survey, 80 percent of CEOs said they received some form of mentorship. In another research by Sage, 93 percent of startups admit that mentorship is helpful to success.
In order to get success, you have to learn from their mistakes and getting sound outside counsel will be a vital factor to your success.
Pro-tip: It’s significant to make the most of your mentors’ talents.
8) What if I fail?
Although this question sounds scary but is the important one. We really hope you don’t, however, if things do go wrong try not to get too discouraged. The objective of this question is, it’s fine to be aware that there’s a soaring chance things won’t go to plan, but it’s essential to not be too negative.
As it is predicted 90% of startups fail due to many reasons.
To present you a real-life example, Julia Elliott Brown wrote for The Telegraph about her own business failure. Starting a footwear company, they ultimately arrived at a point when investors were expecting them to have truly taken off. She writes,
“The business simply wasn’t growing fast enough. Our cash was running out. I felt like the captain of the Titanic, with the iceberg looming rapidly. We were unable to secure further investment, nor find a buyer for the business in its entirety. We sold our key assets to a competitor, and our dream came to an end.”
Pro-tip: Although failing is nothing to be ashamed of, in order to minimize the risk of failure you need to get proper research before setting up a startup. Whenever you get down to think of James Dyson, Walt Disney, Ulla Popken, and Vera Wang, they all fell before they rose.
8) Do I have the right customers?
The base of your entire business is your “customers”
- Potential customers
- Target customers
One thing must be kept in your mind that customers are always right. They are just like fuel to your startup. Do a proper primary and secondary research about the target demographic.
Pro-tip: You need to target them with digital advertising, using Google and social media. Make positioning in the minds and hearts of the target customer
10) What is the importance of the team?
This may be the most often overlooked part of entrepreneurship and creates huge headaches in short order. It’s good to be a jack of all trades but you need a good team to handle all other operations
Pro-tip: You must have an answer to “who is going to handle accounting, taxation, finance, marketing, and operations”? The team is everything!
11) What skill set do I need?
Being an entrepreneur you have to be good at
- Communication and analytical skills
- Strategy making
- Finance handling
- Sales management
- Branding (personal and business)
In nutshell entrepreneurship is all about making “right decision at the right time with the help of good team”. We hope all these answers help you to overcome the resistance in the struggle phase.
Share your views about the struggle in the startup ecosystem and what is the most important question according to you? tell us in a comment box.