May 20, 2020

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by: Jonathan Hung

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Tags: Entrepreneurs

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Categories: Startup Funding

9 Questions To Ask A Founder Launching A Startup

If you’re reading this then that means you may be launching a startup. Odds are that you’ve worked a few jobs and the 9-5 life just isn’t for you. Either that or you’ve got a killer business idea and want to turn it from an idea into a reality. Either way, props for you. You’re at the beginning of an exciting journey.

That being said, entrepreneurship is not for the faint of heart. There is no roadmap, instruction manual for success, no security, and there are lots and lots of hard work. To make sure that you’re fully aware of the challenges that launching a startup will present, I’ve put together this article.

These are hard questions that everyone should ask themselves before launching a startup.

Table of Contents

1. Why Are You Getting Started?

2. Is Your Business Value-Based?

3. Do You Have Relevant Business Experience?

4. Are You Ready For The Time Commitment?

5. Do You Have The Right Support System In Place?

6. Have You Thought About The Entire Process From Start To Finish?

7. What’s Your Exit Strategy?

8. How Will You Fund Your Startup?

9. Can You Persevere Through Tough Times?

Conclusion

1. Why Are You Getting Started?

Ultimately the answer to this question will be what pushes you to succeed. If you don’t have a strong enough motivator then it will be tempting to just give up at the first sign of a struggle. These are some of the most common (and most powerful) reasons that drive people to launch a startup:

  1. They want to change the world and their business is a way to do that (Facebook, Apple, Nike, etc.)
  2. They want to be rich and are willing to do whatever it takes to escape the 9-5 life and earn their time freedom back
  3. They have a need to be in control and run their business to their own terms

These are three of the strongest motivators for budding entrepreneurs. If your own reason for wanting to get started in business is more along the lines of “it would be fun” then you might be wise to reconsider.

2. Is Your Business Value-Based?

This may seem like a simple question to ask but it’s actually one of the most important questions on this list, if not the most important. It’s important because if your business isn’t value-based (providing a solution to a problem) then it’s destined to fail.

Consider some of the world’s most recent exciting startups and the problem’s that they solved:

  • Uber – It was a hassle and expensive to get a ride somewhere via taxi
  • Bird Scooters – There was no easy, cheap way to travel a few blocks at a time
  • Beyond Meat – The world needed an alternative to meat products that create health and environmental products

All of these companies are successful because they solve some type of societal need. Either that or they drastically improve society’s way of doing something (ordering an uber is much easier than a taxi).

When launching a start-up it’s easy to get caught up in the excitement of doing something new, trying to secure new funding, and enjoying any publicity that you might get.

However, first and foremost it’s an entrepreneur’s job to provide value to other people.

Only once you’ve checked this box off with an emphatic “yes”, should you move on to the other questions on this list.

3. Do You Have Relevant Business Experience?

A professional basketball player has lots of skills when it comes to dribbling and shooting. However, if that same athlete were to suddenly hop on a diving board and attempt a double reverse backflip they’d probably land on their face.

The same analogy can be applied to the business world when it comes to launching a new business. If you don’t have the relevant skills and experience that are required to compete in your industry, then you’re in danger of landing on your face. If you don’t know the first thing about baking, how a kitchen operates, or the ingredients in a cake then you probably shouldn’t open a bakery.

Of course, that isn’t to say that you can’t learn on the fly and succeed. In fact, even if you’re an expert in the industry you’re entering there will be a lot of learning on the fly. It will just be a lot easier if you already have a firm background in your industry. If you haven’t launched a company yet but have been working in the same industry for a while, it could be a good idea to start looking around for business needs in your industry!

You never know where opportunity will strike.

4. Are You Ready For The Time Commitment?    

You’ll need to give it 100% of your attention so it literally feels like you’re eating, sleeping, and breathing your startup.

And it makes sense. Think about just a few of the things you have to do as the founder of a company.

  1. Come up with the company name, logo, brand, and mission.
  2. Incorporate the company
  3. Build/contract for a website/social media
  4. Develop products
  5. Develop content to drive traction/ promote your products
  6. Handle the company’s marketing and PR efforts
  7. Secure angel investors/funding
  8. Develop a sales strategy and implement it
  9. Balance the company’s budget and maintain standard accounting practices
  10. Make every single decision that comes up

You’re responsible for literally every aspect of launching a startup and need to make every decision. Of course, some of these things can be outsourced but if you don’t have the money for outsourcing (or don’t want to spend it on that) then you better be prepared to handle these tasks.

It won’t be just a few long nights too. Research shows that it can take anywhere from 2-3 years (sometimes much longer) for companies to become profitable. This is why it’s so important to have a good motivator and a strong support system.

5. Do You Have The Right Support System In Place?

Speaking of which, how do your family and friends feel about you working on a startup and taking a big risk/gamble? Are they supportive of you in your decisions? Would they be interested and willing to invest some seed money?

This is an important question because not everyone is built for the entrepreneurship lifestyle and not everyone is going to be supportive. There are going to be people who tell you that you’re making a bad decision and that your idea will never work.

In the sports world, these types of naysayers are commonly referred to as “noise”. To be successful, you need to ignore this noise and instead find people who are going to be a positive influence on what you’re trying to achieve.

If you don’t have the right support group that doesn’t mean that you can never launch a startup. It just means that you need to find new people. Don’t cut out your family and friends but if they aren’t going to help you achieve your dreams then you need to find people who will. To do this:

  • Join Facebook groups
  • Go to networking events
  • Attend seminars
  • Search LinkedIn for people with experience you want

Trust me, having the right support system in place can be crucial later on when things start to get rocky for your startup (which they will).

Don’t forget that all of your networking and finding a support group will also help you find a co-founder. Someone who you can work with the build the business shares your vision and will have skill sets that fill in where yours are lacking. Remember, neither I or many other investors want to invest in a “solo-preneur”.

There is just too much that goes on with a startup to have it rest on the shoulders of a single person. You will need help and you will need someone to work with you to build the business. In addition, this “team” approach to building your business will make investors feel more comfortable investing in your business.

6. Have You Thought About The Entire Process From Start To Finish?

Try to think of every aspect of the startup you would launch and be literal.

  • Who are the customers that you’re going to sell to, i.e. your target market? Where do these people shop and how will you reach them? Why will they choose you over other companies? In essence, you want to create the perfect “avatar” for your company so you can gauge the size of the market, who are the competitors and what is the problem that your products or services will solve for them
  • Do you have the skills required to launch the company? If it’s web-based, do you have the technical knowledge or are you committed to learning? If it’s retail or something similar do you know how to buy an office/store space? Are you familiar with all the laws, rules, and regulations needed to run a retail outlet?
  • How are you going to physically build and sell your product or service? Do you need to store inventory? Where will you do that? Will you manufacture your product overseas? Have you factored all these costs into your profitability assessment?

Really dig deep into the “nitty-gritty” of your business to try to uncover potential potholes. Doing significant thinking upfront will definitely better prepare you for the journey to come. The goal isn’t to talk yourself out of starting. The goal is to make sure you’re aware of what will be required of you so you can better prepare. Know how you’re going to start, grow your business, and how you want it to end. 

7. What’s Your Exit Strategy?

When you’re thinking about launching a startup it’s best to start with the ending in mind. What do you ultimately want to accomplish from launching your startup? What we mean by that is you should be asking yourself these questions:

  • Do you want to build your business as big as possible, IPO and crack the Fortune 500 list?
  • Do you want to be CEO and run the company for the next 5, 10, 20, or 30 years?
  • Would you be satisfied selling your company after a few years and making a quick buck?
  • Are you just looking to launch a fun venture that pays your bills?

It’s important to ask yourself these questions because knowing the answers will help influence your decision making as your progress. Again, the market and the competition will influence your exit strategy. Not every company will successfully IPO and become the next Facebook, Uber, or Airbnb. Don’t worry that investors won’t invest or that there is no use starting a company unless you think you’re going to be the next big “unicorn company”.

A successful company that generates a profit and creates a nice return for your investors is a lot more than most companies achieve. You can shoot for the stars but you should congratulate yourself if you can build a company that provides a meaningful product or service to your clients, takes care of its employees, and generates a significant return for the owners and investors.

8. How Will You Fund Your Startup?

This is another important question to answer. How are you going to pay for the expenses that come along with starting a company? Assuming that you don’t have any of your own money to spend, here are a few good places to start:

  • You can ask some of your friends and family if they’re interested in investing. This is called “Friends & Family” investing
  • Go to the bank for a small business or a personal loan
  • Search for an angel investor
  • Consider crowdfunding your business

If you are spending your own money then it’s important to remember that every dollar you spend is an investment in your business’s (and your own) future. Be smart with how and where you spend your money in order to get the most optimal return.

9. Can You Persevere Through Tough Times?

There are definitely going to be tough times as a founder of a startup. Steve Jobs has gone as far as to say, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

This is very telling advice coming from Steve Jobs (a man who founded and grew multiple companies).

If you’re able to consistently persevere through the difficult times, then you will surely find success. A big part of persevering through tough times is being able to pivot and take your business in new directions.

Sometimes a roadblock doesn’t mean that you need to stop. It just means that you need to find a new way to continue forward when your path is blocked. For example, take a look at a few popular companies that started as something completely different:

  • Wrigley – Used to sell baking powder and soap. They offered chewing gum as an incentive to bring customers into the store and eventually it became their main product.
  • Colgate – Was founded in 1806 but didn’t start making toothpaste until about 70 years later.
  • Instagram – Was started as a mobile check-in app but was competing too closely with Foursquare to be competitive. The founders decided to strip away everything except for the photo-sharing aspect, which is now what the app is known for.

Conclusion

In short, there are many reasons why creating and startup is more difficult than it is worth. It absolutely has to be a “Labor of Love” as they say, or you can forget about it. If this all sounds too much and way more than you want, you could always try a “Side-hustle” or even buy a ready-made franchise if you have the money and want to have support right off the bat.

Entrepreneurs are like the pioneers of the old days; they venture where few have gone and risk a lot…. usually no one ever heard from them again. That’s a bit dramatic but you should be aware of the risks and hardships you are going to undergo while getting your business moving. You have to be committed and willing to put the time and effort into the deal. In addition, you are going to have to learn one of the most difficult lessons for any entrepreneur, they need to let go and delegate to the rest of the team. If they try to do it all the endeavors will fail 9 times out of 10.

If you move forward with your world-changing business and you succeed, it will be like no other feeling. You will have accomplished a life goal that is certainly something to be proud of.

I hope that you’ve found this article valuable when it comes to understanding what types of questions you should be asking before launching a startup.