Two Key Questions To Answer When You Are Starting A Business

Anyone asking themselves if they should be their own boss has to be able to answer two key questions. One is do they know how to actually do the business they are thinking about starting and the other is can they reach a big enough target market to support this business.

We have all been told to follow our passions and to look for meaningful work that we enjoy. This is good advice as far as it goes, but it is also very important to be able to do this work. Many of us enjoy singing; few of us are good enough singers to make a living doing it.


Some professions require much learning but still require an aptitude. If you have not been to law school then you do not have the necessary knowledge to be a lawyer. However just attending law school does not mean that you have all the skills to flourish in a law practice. To run a business well you need to have some business skills and knowledge. For example do you know the rules for paying income and sales taxes in the jurisdictions where you are running your business? Do you know how much you should charge for your product or services so that you will be profitable? Make a frank assessment of your skills and knowledge and figure out whether you are going to learn more or you are going to find the people you need to help you in the areas where your knowledge is not adequate. You don't have to know everything but you do have to make sure that you can stay out of trouble.

The second question concerns your target market. The purpose of a business is to make money. To make money you need people to buy your products or services. You have to sell at high enough prices to cover your costs and to have enough of a profit left over to pay your personal expenses. Everyone has to eat. If you are thinking about starting a business you want to be making more money than when you worked for other people. So do some research in your business area. Is your business idea unique? If not you have competition. Do some research and see if your competition is busy, then decide if there is room for more players in this market?

Answer these two questions and you are well on your way to starting a business that you will enjoy and that will provide you with a living.


------

Debi J. Peverill CA is an accountant with a sense of humour. She has written 11 books for business owners and is in demand as a speaker. Learn more business strategies at www.Peverill.ca