It is smart to start thinking along the lines of a side business while you have a full-time job. Your side business has the potential to become a long-term solution to financial needs and an enriching life experience. Answering these questions should give you enough information to create a clear path forward, help kick-start your new venture and help you decide whether or not to go “all-in.”
Are you passionate about the business?
This is a simple but very important question. If you can’t imagine yourself working on your business idea and loving it less than 10 years from now, you need another idea. Making money can’t be your only motive—it won’t be enough to sustain you when you face challenges. You must be truly passionate about your business and its potential in the world. If you want to succeed, you need to love even the process of building that dream from the ground up.
What finances and other resources are in hand?
What do you have that can help advance the groundwork? Many people think immediately of cash or other capital, but relationships can be crucial resources, too. Perhaps you and a business partner could share resources or maybe you know someone who could act as a mentor to advise you during the startup phase. You will be surprised how resourceful you can be even when you feel limited. Create a list. Include everything, from the people you will need on your team to expenses you can’t escape, then calculate the financing required to bridge the gap. Give this question careful thought and write down every asset you can put to work for your new business.
Who is your ideal customer?
Creating a customer persona is an important step to help you communicate your message clearly, stand out from the crowd and connect with people because you already “know” them. Craft a detailed profile to describe their demographics, their characteristics and their motivations. What’s their age range? Does gender matter? Can you find research to back up your preconceived notions about their psychographics? Do everything you can to discover what they love. At the end of the day, if there’s no audience, there’s no million-dollar idea.
Which problems will your business solve?
If you’ve done your homework on your ideal customer, it shouldn’t be difficult to identify your customer’s problems and pain points. What are their motives for wanting to resolve these issues, and what might they already have tried? It’s important that your product solve some sort of need because that’s what determines the value. The “itch” is your customers’ problem; the scratch is your solution.
Who else has done it and how did they accomplish their goals?
Find someone who already has attained a few milestones on the way to startup success in your industry, or a similar market. It need not be in the same niche, although that certainly would be preferable. The simplest way to locate these people is to tap your network. Ask around in related groups or do a quick Google search to create a list of names and then work to find degrees of connections you might share in common. This step could take some time, especially if you’re entering a new market or otherwise are unfamiliar with your niche’s online communities.
What is my ‘special sauce’?
Speaking of differentiating yourself from the competition, determine what your “special sauce” is. According to Shark Tank’s Mark Cuban, your special sauce is a quality about your company that stands out from the rest. Your own special sauce can come from a lot of different areas of your company: where it’s made, the unique quality of the product, how it’s made, competitive pricing, a charitable component or your stellar customer service. Ask yourself, “What is going to make someone purchase my product over my competitors’?” Your answer is your special sauce, which should always be included in your marketing.
How will this business make money?
This might seem like a no-brainer, but take some time to think about it. Are you selling a product? A service? Ask yourself why a person would make the decision to give your business money. What are they actually buying? A tool that makes their lives easier? A skill they can use in their future career? An emotional experience? The more you know about your business’s unique selling proposition or USP, the better prepared you’ll be to sell the USP to potential customers.
What is my plan for growth?
Where do you want your business to go, once you get it started? What does realistic growth look like over the next year? The next five years? Knowing what a realistic success path looks like for a business like yours can help you set SMART goals and benchmarks to help you get there. You need to determine if you can afford to build out this business idea and whether you have the drive and determination to go the distance. It often is just about the idea, with little thought to reality.
What Is the legal landscape?
Never was the old adage that “an ounce of prevention is worth a pound of cure” more true than when pursuing a new business idea. Before you invest any time and money, first check in with a lawyer to make sure you understand what you will be legally required to do when pursuing your idea and the ongoing legal costs and risks.
It is not enough to have a good idea, even one that’s potentially very profitable. Your idea has to arrive at the right time and be so persuasive that it’s hard for customers to say no to. As Lao Tzu said, “The journey of a thousand miles begins with one step.” Don’t be afraid to start somewhere because one day, you will get to where you want to be.