Guide to Clearing Your Head Before Starting Your Business

Determine why you want to be in business.

Successful businesses have clear goals, but you will have difficulty in setting them if you do not know where you want to go, personally. What is your life about and what will you contribute to the world? These may seem like philosophical or spiritual questions, but the answers will have a huge impact on your business success. Consider them consciously and write down the answers. Avoid them at your (business) peril.

I recommend: that you visit First Steps to a Business Startup.  This enlarges on the ways you can consider why you want to be in business. Make use of the ideas you'll find there to get you working on the answers.

Test the strength of your motivation for business startup.

Perhaps you have seen others do it and guess you could make a go of it, too. Or maybe you have always wanted to get into business, but have never gotten around to it. Possibly you have just been waiting for the right moment. If any of these apply, chances are that you will not take the plunge. So try and find out how motivated you really are to start a business.

I recommend: that you find out if you can picture yourself in business NOW. What does it feel like; what is happening; how is it affecting your life. Otherwise, ask people in your circle if they can picture you as a business person. Get them to answer frankly. Or you can examine what other people think about the characteristics of entrepreneurs and rate yourself. One place to start is Entrepreneurship and You. Also, be a bit scientific and complete a questionnaire or two. I recommend you take the late Professor David McClelland's test. Do not fear. There are no right or wrong answers, though his research suggested that entrepreneurs are more concerned about achievement than power or affiliation.

Be passionate about your business idea AND clarify your business model.

Successful businesses are built by people with a passion for what they do. But passion alone is not enough. You will have to be clear about the means by which your idea will generate revenue. You may have invented a great widget, but if nobody buys it, you remain an inventor. Figure out: 1. the value you will offer to customers in what marketplace; 2. how your product will be available to customers and the means by which it can be purchased; 3. where your business fits and what makes it special.

I recommend: that you are convinced about set ting up in business, before you start. There is no way anyone else can help you to be passionate! However, there is help available to you for thinking about the business model that you are going to adopt for your business. There is a very simple tool you can use: the Savvy Business Model Grid.

Get clear on the role of money in your business-to-be.

The first questions you need to answer are: how much money do you need to start and how much will you need to survive? Think about money as the blood of the business. Like blood, money flows in and out of the business. If more flows out than in, your business life will be at risk. If the money in the business is not working, then it may be you have more than you need. Don't fool yourself into thinking that you can help yourself to cash whenever it is available. Determine how much money you really need to live and keep within budget.

I recommend: that  you do not get 'hung up' on money. See it as a means to an end, not an end in itself. Even before you start budgeting and planning actual amounts, consider your uses of money and its sources very carefully. Try to use as little money as you can. Be a bootstrapper. Experience has shown that too much money in a business is often worse than too little. If you can sell services first or as well as physical product, you will find that you need less cash to finance it. Make sure you understand the basics of business finance.

Commit yourself to selling NOW, for there is no business without revenue.

This may sound silly, but if you want to get off the ground and keep flying, you better be selling, even before day one. You may not like the idea of selling, but if you are passionate about your product, you will do it naturally. If you have never done it before, be yourself, be honest and do not claim more than you can deliver. Ask lots of questions of your prospects and find out what they really need and then see how you can best help them best meet those needs.

I recommend: that you realize right from the word go, that sales: 1. produce revenue that will reduce your need for cash in the business; 2. sales and customer feedback will be one of your greatest entrepreneurial teachers; 3. will produce more sales if you establish good strong relationships with your customers. Make sure you keep a handle on your cash-flow and forecast it accurately - for at least three months ahead, both NOW before you start, and continue to do it as the business grows.