Starting one’s own venture is a big step. It requires meticulous planning, dedication, time, and funds. In simple words, there’s a lot at stake. Although the risk or failure cannot be completely avoided it can be minimized by extensive research of the new venture idea and by asking yourself some very critical questions.
The answers to these questions will help you decide whether you want to go ahead with the venture or give it some more thought or not pursue it at all. Honest answers at this stage – the idea generation phase, will not only save you lots of time, energy, and funds, but will also help you arrive at an idea that is both feasible to implement and has a market demand.
So before you set out on working on the business idea, take some time to ask and reflect on the following questions.
1. What problem does this idea address?
This is the most critical question. Every business, to be successful, needs to resolve or fulfill a market demand. Before you invest your time and efforts in an idea – ask yourself this question – try to find out how your target customers will benefit from the business – will it save their time, will it help them save money or will it provide a necessary service. Find out how will your business make life easier for your customers. This will also help you in the later stages when you go out to market and sell your product or service.
2. Is it legal?
Check if your business idea is in compliance with the laws and regulations of the country or state that wish to operate in. Study the laws of the country/state that you are planning to launch your venture. Find out the compliance requirements and accepted business and industry practices.
At this point of time you should also decide what kind of legal entity you want to create for your venture – a sole proprietorship, partnership firm, One Person Company, limited liability partnership, private limited company, public limited company. Each type of business structure has its own benefits and restrictions both legally and for acquiring funding from potential investors.
3. What will you name it?
Shakespeare may not have thought much about names, but entrepreneurs need to. Like legal aspects, meanings of words and names differ from culture to culture, country to country. So it is important to arrive at a name that conveys a positive meaning, specially in the country you intend to operate in.
Apart from the meaning of the name, you must also decide whether you want the name to convey the nature of the business you do, the product you sell or a use a generic name which does not specifically relate to the business activities of the firm.
4. Do you have the time?
A new venture is like a baby. It requires your complete attention and full time to prosper. Before you launch the venture, find out if you can work on it 24*7 for a couple of years or at least till it becomes profitable.
5. How will you fund it?
Once you have answered all the above questions, work out how you will fund it. Study your finances and find out if you can bootstrap and for how long. Learn about funding requirements, figure out whom you can pitch your idea to acquire funding.
After this exercise, if you choose to go ahead – the answers to all the above questions will help you set up the basic frame work of your business idea and also help in creating in a well thought out business plan and strategy!
About the author: The article is written by Divya Chauhan, who is co-Founder at it’spleaZure.
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