7 Questions to Ask Yourself Before Starting a Business
According to several studies, over 60% of Americans have had an idea for starting a business and dream of being their own boss someday. Having started my own financial planning firm, I can relate to this desire. There are certainly a lot of benefits to owning a business: a flexible schedule, choosing who you work with, and making business decisions. But starting a business is also a lot of work and comes with risks.
After having gone through it myself, below are some questions that I’d encourage you to ask yourself before deciding to start a business.
Why Do You Want to Start a Business?
If your main reason for starting a business is simply because you like the thought of owning your own company, you may be in for a rude awakening. Starting a business is hard work and it’s important to be passionate about the product or service that you will offer. I absolutely love the opportunity that I have to work one-on-one with people and help them to steward their resources in a meaningful way. This passion has helped me to stay focused when facing numerous challenges over the past seven years.
Do You Have a Valuable Service or Product to Offer?
It is important that there is a demand for what it is you are selling. You could manufacture the best VCR that has ever been on the market, but you wouldn’t sell many today. Make sure you have a product that people actually want. Before I started my business I saw a real need for fee-only financial planning for those who didn’t have significant assets accumulated. Since starting my firm, I have found that there is an even greater need for this service than I originally anticipated.
Do You Have the Skills and Training to Start a Business?
Having significant experience in the field in which you plan to start your business is extremely helpful. I would not have even thought about starting my company had I not had more than seven years of financial planning experience and my CFP® designation already.
Do You Have a Support System Around You to Help You Start a Business?
If you are married, having 100% support from your spouse is crucial. I’m thankful to have an incredible wife who was probably more excited for me to start my business than I was. She understood that our family would have to make sacrifices in order for me to own a business. It is also helpful to be part of a professional network for comradery and growth.
Are You in a Financial Position to Start a Business?
What are the startup costs of your business and how will you cover these costs? Do you have money saved? Will you take out a loan? Is there someone from whom you can borrow money? Thankfully the startup costs for my business were low, but I still had to use a combination of the options above to get going.
What is the Worst Case Scenario?
Think about the worst thing that could happen if you start the business. This was a helpful question for me because I realized that the worst thing that could happen is that I wouldn’t earn enough money to be able to stay in business and would have to join another financial planning firm. I would only be back to my original situation. When I realized that this was the downside, it made it much easier to take on the risk.
What is the Best Case Scenario?
This is a great question to ask before starting a business because it allows you to dream and think about the impact that you could make in your community or in the world. For me the best case scenario was that over time I could use the skills and abilities I have been given to build a team of advisors who could help thousands of people to faithfully steward their resources in a meaningful way. By the grace of God, the firm that I started alone in my basement is now a team of four, helping over 80 clients on an ongoing basis and many more for one-time engagements.
If you are one of the three out of five people who would like to start their own business someday, I hope that you find these questions to be helpful. Starting a business is not something to do on a whim but it’s also very attainable. If you want some help determining if your finances are in a place that could support your entrepreneurial goals, we can do that. Schedule a free introductory call today.
About Guide Financial Planning
Guide Financial Planning is led by founder Ben Wacek, who is a Christian fee-only Certified Financial Planner™ and Certified Kingdom Advisor®. He has a passion to help people of all income levels make wise financial decisions and steward their resources from an eternal perspective using Biblical principles. Based in Minneapolis, MN, he works with clients both locally and virtually throughout the country and abroad. You can follow the links to learn more about Guide Financial Planning and our team and the services we offer.