19 Smart Things to Research before Starting a Business
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Wondering what are the things to research before starting a business? There’s nothing like a global pandemic to get you thinking about how you are the creator of your own destiny. One of the main reasons for starting a business is to have more control over your life.
It turns out that you are not the only midlife female entrepreneur. According to Forbes magazine:
“Over the past 20 years (1997–2017), the number of women-owned businesses has grown 114% compared to the overall national growth rate of 44% for all businesses. Women-owned businesses now account for 39% of all U.S. firms, employ 8% of the total private sector workforce and contribute 4.2% of total business revenues.
And, contrary to what Brooks’ wrote , the average age of the founders of the highest-growth startups was 45.”
Pursuing your own business means you are in good company and there has never been a better time to do it. Rather than diving in head first, prepare yourself for success as an independent entrepreneur and download your copy of the checklist for starting a business. These 21 things to research before starting a business will help you avoid some of the common pitfalls of entrepreneurship.
As you mull over things to think about before you start a business, are you considering any for the following?
- how to make a living online
- direct sales,
- franchising
- sole proprietor service businesses (coaching, realtor, accountant, etc)
- consulting
- traditional brick and mortar business
I think I’ve investigated them all at one time or another. I’m hoping that my exhaustive research can save you some valuable time and maybe even save you from some of my mistakes. These are the questions I now ask myself BEFORE I pour my heart and soul into the next business venture:
1. What are your reasons for starting a business?
If you are reentering the workforce after a long absence, taking an entrepreneurial path can be a smart move. You might want to do some soul searching to determine if you have the mindset to be a business owner. If you prefer the benefits of employment, consider your options and explore second career options for women reentering the workforce.
Have you simply had enough of working for someone else? Do you want to call the shots? Are you concerned about ageism in the corporate world? All of these are common reasons to pursue the path of a female midlife entrepreneur.
Lots of people love the idea of owning their own business, but fail to realize that they will also own all of the problems. For instance, there is no IT department to call when the printer breaks down, unless you hire one.
2. How do you evaluate success?
Be clear on your reasons for starting a business so that you can evaluate how well your idea fits into your ideal life. My definition of success might be different than your and vice versa. Blaze your own path. For instance, if your personal goals include moving to another state in a couple of years, starting a fashion boutique might not be the smartest idea right now.
If you are seeking a location independent business, consider making a living online. Options such as blogging, affiliate marketing, and creating courses are common choices for digital nomad wannabes. To learn more about blogging, read the absolute beginner’s guide to blogging.
3. Is this one of those businesses that earns passive income?
Passive income is commonly referred to as income that doesn’t require a lot of effort to make of maintain. However, I think this is a misleading assumption. Of course, it takes a lot of effort to generate this money. The difference is that once you put in the time and set-up your vehicle of choice, the money keeps rolling in month-to-month. You are no longer trading your time for dollars.
Common passive income ideas include buying rental properties and collecting rent month after month.
Some online searching will introduce you to the concept of passive income through blogging, publishing e-books, creating courses, and affiliate marketing, just to name a few.
Once you build an audience through the social media platform of your choice, you can market your unique products and/or services to your target customer.
The beauty of passive income is that it is like a time multiplier. In a traditional job, you might get paid by the hour. The only way to get paid more is to work more hours or increase your hourly rate. With passive income, you do the work once and collect money on an ongoing basis. Most entrepreneurs prioritize passive income opportunities over active income opportunities.
4. What kind of income potential does the business have?
Consider the income you require to live your dream lifestyle. Make sure you sit down and do the math. Many of us are so convinced that what we want is out of reach and we allow our limiting beliefs to impose insurmountable obstacles. Write out all of your expected expenses and come up with a monthly cash flow you need to produce to live the way that you want.
5. What is the format or business type for your new enterprise?
Some examples of entrepreneurs that offer services are realtors, lawyers, accountants, and life coaches. Others choose to purchase a system with a franchise. There is always the option of the traditional brick and mortar local business.
Increasingly, savvy business owners are choosing to make a living online. This allows you to have a location independent business. Often, this means offering the same products and services aforementioned, but through digital channels. Another option is to use digital marketing strategies to grow a business.
6. How does your idea fit your objectives for starting a business?
This is a key question because you will want to consider your overall goals and how this fits into your ideal dream lifestyle. Speaking of which……..if my goal is to live on a sailboat within the next three years, why would I start a brick and mortar business now?
If my main motivation for entrepreneurship is to control my own destiny, paying royalty fees to a franchise company might not be the best business format for me. Some people hate the idea of sitting behind a computer for most of the day so that means digital marketing ideas are probably a hard no.
7. What problem does your business idea solve?
This might be the very most important question of all.
First, you have to be able to answer the following question: “What is a business problem?” For instance, many midlife women feel they have no friends. This is a problem, but how do we make it a BUSINESS problem that is monetizable.
I’m impressed that Shasta Nelson figured this out. She became a friendship expert and built a brand that offers resources related to building better friendships. She delivers her solutions through speaking engagements, videos, courses, a community and her book Friendtimacy.
People buy because they want to solve some sort of problem. Ultimately, it’s a good idea if your customer believes it’s a big problem?
Whether your physical product helps people stop snoring or your life coaching business helps adults learn strategies for coping with ADHD, both have identifiable problems to solve.
8. What products or services will you offer to solve your customer’s problem?
Your products or services will spring from the initial problem.
For example, one of the most unique business ideas addresses the fact that many midlife women feel they have no friends. Shasta Nelson became a friendship expert and offers resources related to building better friendships. She built a business offering speaking engagements, videos, courses, a community and her book Friendtimacy.
Brainstorm a list of products and services that you can create around the problem you solve. Obviously, you won’t have all of these from day one, but it’s extraordinarily helpful to have a roadmap of where you are going with your business idea. Consider whether your idea provides enough room for expansion.
9. Does the business require specialized qualifications?
If it is your dream to open a luxury spa offering facials, you are probably going to need an esthetician’s license in your state.
Having a counseling credential increases your market credibility if you want to start a college career planning practice.
Life coaching is a popular choice for female midlife entrepreneurs and many pursue professional certification through coaching schools.
Investigate whether or not your ideal business requires any specialized qualifications. It might be possible to hire qualified employees, rather than to seek the qualifications yourself. Just make sure this fits your preferred business model.
10. What are the barriers to entry for this business?
Generally, large capital requirements are a major barrier to entry. Traditionally, owning your own business required saving up a lot of money for a brick and mortar establishment. Plus, you usually need to save up money to cash flow your own expenses until the business is profitable.
This is not necessarily the case anymore. With the advent of the internet, there are very cost effective ways to get your business up and running with very little cash required.
On the other hand, if your dream is to open a restaurant this means there are some serious barriers to entry into the marketplace. You need to qualify for a commercial lease, hire employees, and comply with food safety laws, just to name a few.
Here’s some food for thought: are the barriers to entry worth the potential hassle? Does the lack of barriers make your modest idea even more attractive to you?
11. Can you keep your day job and start with a side hustle or do you have to go full-time on day one?
It can take a long time to build a profitable business. This means you need a method to pay your bills until your business is a smashing success!
It’s a big plus if you can keep your day job (and paycheck) while you build your business. Opening a restaurant would probably not be a viable side hustle. In comparison, affiliate marketing through a blog is the quintessential side hustle.
12. Can you run your business with no employees or independent contractors?
Managing and leading employees is an art unto itself. For this reason, it’s worth thinking about whether you want or need this to be a part of your business structure. Some teams are best built with independent contractors. This structure also lessens your liability issues.
13. How will you reach your target customer?
Your customer needs to be reachable. For instance, Millennials and Generation Z tend to prefer Instagram, whereas midlife women most likely scroll through Facebook and Pinterest.
Think of this same concept in relation to magazines, television programs, conferences, trade shows, and social events. Does your customer have some obvious hangouts? What marketing channels will you use to reach them? Set yourself up for marketing success.
14. Which marketing strategies will you use to reach your customer?
Opening a store without a marketing budget is a prescription for a disaster.
The same can be said for writing ninety blog posts or even a novel without promotional efforts.
Even if you offer the best coaching services in your field, it will all be for naught if you don’t prepare a comprehensive marketing plan. Spend at least as much time on your marketing strategy as you did inventing your product or creating your service.
15. How will you brand your business entity?
This is the fun part. Every time I see those golden arches, no matter where I wander, I know what kind of french fries I am going to get at McDonald’s. This is because this chain has built one of the most recognizable brands in the world.
Branding makes the customer feel confident in their choice to do business with you. Presumably because the buyer knows what to expect and your offerings are of consistently high quality.
Consider how you will build a recognizable brand image for your business. You display your brand in your marketing efforts. Some examples of this include color choices, fonts, images, and logos.
16. What legal requirements do you need to consider?
Give some consideration to comparing business structures, as you start your business.
Depending on the type of business you are starting, you might need to seek legal representation. Legal Zoom is a great low-cost option for completing all of the required forms. Not all businesses demand this kind of protection, but it is something to factor into your planning process.
17. How will you scale your business? Is this even a priority?
Often you will find that a person starts a business in one area and then expands in a different direction. For instance, maybe you are a talented party planner and want to start an event planning business.
Once you master the mechanics of event planning, would you be interested in building a course teaching others event planning? You could promote the course on a blog and/or podcast. You could even offer 1:1 and group coaching courses for other event planners.
Another route could be to plan conferences for event planners to network and access resources. Perhaps, you could write an e-book on event planning.
Some businesses are scalable, some are not. Do you want to keep it simple or do you have a grander vision?
18. What is your business exit strategy?
The day is going to come that you no longer want or need to work. On the other hand, you might not want to do this particular business forever. It’s always a good idea to know your end game going in.
Are you building a business that you want to sell one day? Are you building a business that you want to leave to your children (or other family members) some day? Does your business model allow for this?
One of the disadvantages of a brick and mortar business or services business is that it pretty much requires that YOU be around all of the time. Is this okay with you?
Certain business structures allow you to leave a manager in charge if you want to be “out of pocket” for an extended period of time.
With many online business models, you can go on long extended vacations and your business will keep going.
As you define your business exit strategy, remember to begin with the end in mind.
19. Why are you doing this?
Entrepreneurs usually mention that building something out of nothing turned out to be harder than they thought. On the overwhelming days, your WHY will keep you going. Clarify who you want to help, why you are the best person for the job, and how your newfound mission is going to get you what you want.
There are many things to research before starting a business. Click on the button below to download a copy of the Checklist for Starting a Business.
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