I get many questions from ex and serving police officers in relation to starting a business. In this week’s BTF email, I thought I’d share with you what questions you’ll need to answer before you even begin.
WHAT IS YOUR REASON WHY?
Why do you want to go into business you crazy person? Business is fricking hard work! It has hardships, it has challenges, and it’s very frustrating. So, having a strong reason why is really going to set you apart and pull you through those hard times.
I believe your reason why should be more than just money. That’s not to say that money’s not important, because it gives you choices and ultimately, it’s going to change your life. But really, money shouldn’t be the motivating factor.
Think about the deep-rooted reasons of why you’re going to want to go into business. Is it to spend more time with your kids? Is it to never miss a cherished moment with your wife or your husband, or other family members? Is it to make a bigger impact in the world? Is it to support charities better?
Whatever that reason is for you, hold it dear to you, because that is really going to help you through the hardships that are going to come on your journey.
WHO IS YOUR TARGET CUSTOMER?
A common problem that many start-up entrepreneurs make is that they focus on the product first, and not their target customers. Entrepreneurs start with the target customer and how they can solve those customers problems.
Think about the niche that you want to go into and think about the demographics of your target customer. It could be an age range, or perhaps a career that these people are working in. Whatever it may be, please focus on that target customer.
Once you know who your target customer is and the problems they’re facing, what products and services are you going to create to solve those problems? Are you going to have a physical product? Are you going to have a service-based product? How are you going to deliver that product? How are you going to sell that product? Ultimately that’s the thing that’s going to move your business forward.
WHAT IS YOUR UNIQUE SELLING PROPOSITION (USP)?
Let’s face it, it’s 2019 and it’s certain that there’s going to be competition for you, whatever market you go into. Think about how you’re going to make your products or service better than the competition?
HOW ARE YOU GOING TO GET CUSTOMERS?
What I mean by this question is, how are you going to market your brand and business so that you’re in front of your target customer? Are you going to market online? Are you going to run Facebook ads? Are you going to go on Instagram? Are you going to be on LinkedIn? Or are you going to market offline at events? Really think about what’s the best marketing strategy that’s going to bring in the leads and bring in the customers which ultimately are going to bring in the sales for your business.
WHAT IS YOUR RETURN ON INVESTMENT (ROI)?
I believe, especially when starting your own business, you should be the biggest investor within your company in time, money and energy. So, you want to make sure it’s worth it, right? You don’t want to go through the hardships and the challenges for nothing. So, you want to look at how much you’re selling your product for, and you want to look at the costs associated with creating your product or service.
As an example if you are selling your product for £1,000, but it takes £1,000 to create or deliver your product, then ultimately you are not making any profit margin, which isn’t great. However, if you are still selling your product for £1,000, but it takes £500 to create, then that means that there’s a £500 profit margin. You’ll also want to consider the running (day-to-day) costs of your business.
There are two ways of looking at this, your variable costs and your fixed costs. Variable costs for my company for example are things like marketing, workbooks and collateral for our events. Fixed costs are things like our mentor fees, venues, and payroll. Really think about those costs as well because ultimately you want to make sure that you’ve got a healthy business going forward that’s going to give you the lifestyle that you really want.
As a side note to this question, you should also look at the number of months or the years it will take for your business to break even? How long will it take until you’re making a profit? How long will it take for you to reach your financial goals? Whether that’s six figures, multiple six figures, 500K or a million. Whatever it is, make sure you’re mapping out a route to get there through a structured financial plan.
WHAT IS YOUR BUSINESS MODEL?
How are you going to create value? How are you going to deliver value? How are you going to capture value from your customers? Are you going to run an offline business or an online business? Is it going to be a subscription-based model? Are you going to run events? Are you going to have an offline product and also an online product and combine the two? Really think about how you’re going to run the business model within your company so that you have clarity around all the moving parts within your business.
WHO IS GOING TO BE ON YOUR TEAM?
When starting out in business as an entrepreneur, you’re going to be wearing many hats, as a typical entrepreneur does. Hats such as admin, finance, operations, marketing and sales. However, you cannot keep that game up for too long. The reason being is that you’re going to get frustrated and you’re going to end up bottlenecking yourself with all the many tasks you’re going to be doing. And to be honest, entrepreneurship is a team sport. You’re going to need a team to grow your business to the next level and ultimately grow faster with a team around you.
So, think about whether you need a graphic designer? A virtual assistant? An executive assistant? Do you need mentors or advisors? Do you need someone on sales and marketing? Do you need content managers? Think about all the key components within your business and who you can delegate things to, because that is going to be a critical factor for you getting you to where you want to be.