Entrepreneurship isn’t easy. If you have attempted starting a business and failed as most entrepreneurs have or will, you’ll find that one of your largest mistakes was not understanding your business fully. You must be the expert in your business because you usually will not have the resources to rely on when you first start. Most often, entrepreneurs will not start a business with a full staff to cover every aspect of the business. You will need to understand enough about each portion of the business so that you can perform well and grow. Ideally, you’ll eventually hire people to do these things for you but until then, and to survive, it’s up to you.
For instance, if you are an engineer who develops the coolest new invention and you attempt to take it to market based on that “cool” factor alone, you’re likely to fail because you are assuming the market will automatically take your product. The engineer usually has failed to account for things such as the effort of educating the market on this new product or failing to properly account for competition that is actually in the target market. The engineer has failed to know his business fully. Obviously this is just one specific example where one can fail to understand their business.
The key idea here is to realize that when you are first going out on a limb and starting your business, there will be many things you didn’t know and many things you will learn. As you venture out further and begin to build your business, you will begin to understand how important it is to be the expert in your business. You need to be able to answer the tough questions. Most importantly, you need to be able to make the tough decisions.
What if you think you already know your business? What questions can I ask myself to test my knowledge of my business and the market it is performing in? I would ask the following questions to begin evaluating my actual knowledge of my business to understand if I truly know my business or just think I do. If you can’t answer these questions without considerable thought or if you struggle to answer them, you need to reassess and learn more about your business. You need to become the expert!
- What problem am I attempting to solve or what service am I attempting provide that my customers need?
- How do I better serve those unmet needs compared to my competition?
- Who are my competitors?
- What is my competitive advantage and how do I maintain it?
- How do I earn a profit?
- What is my cash flow?
- How long can I operate at the current cash flow rate?
- What are the goals for the business or where is it headed?
- Is my strategy in alignment with my mission and vision for the company?
- What measures are showing that I am achieving my planned goals?
- Do I have the proper resources to access my target market?
These basic questions bring to light certain areas of the business that could potentially ruin a new startup. First of all, you must decide how you are providing values to others and you must evaluate how you can do it better than your competition. Believe me, if you say you don’t have any competition, I will tell you right now you are wrong or there is no market for your product. You must do a thorough competition analysis and evaluate your market.
Overall, the questions I pose here are meant to quiz you on your business. Obviously there are many other factors to consider and to become the expert on, but I would say these are the basic questions that you need to know with absolute confidence at all times or you’ll get beat by those who do.
What questions do you think are most important in your business? Are there ones you would rate more important than mine? Please share and comment!