We're kicking off a "year of entrepreneurship" with the theme of "research." Here are key questions to look into before you launch your business:
Can you spell E-N-T-R-E-P-R-E-N-E-U-R?
Entrepreneurship always sounds like a great idea in theory. You get to set your own hours and more importantly, be the boss. But to not understand the extraordinary hard work that goes into being an entrepreneur can set you up for a fall. Writes expert salesman and entrepreneur Alan J. Zell: "When I give my seminars to business "wanna bes," I ask them to spell "entrepreneur." Most can't. My comment is that if it is that hard to spell, it is just as hard to be one."
How big is the pie?
You love cupcakes, so you want to open your own shop. Great. You're convinced that your inherent gifts for fondant and passion for flavor combinations will carry you to greatness. Wait just a second. When you're planning a new business venture, it's absolutely critical to take the time to study your market in depth and find specific evidence of opportunity. Pardon the mixed metaphor, but how big is the pie and what's your slice of it? Learn how to make those determinations and you'll be ready to make the leap.
Are there underserved niche markets?
Many fabulously successful businesses were built on niche markets. Rent the Runway is an example of a successful business that was built to fill a very specific need: women who want to wear high fashion to special events but don't want to shell out thousands of dollars for an expensive outfit. By filling a niche, and making it easy for people to "rent" an outfit for a week or weekend, Rent the Runway took advantage of a niche opportunity. Learn more about niche businesses.
Are you a planner or a doer?
This is kind of a trick question because the truth is, to be successful in business, you need to cultivate both skills and be ready to turn on a dime. Business plans definitely have their place -- though not every entrepreneur uses them. If you're the fly-by-the-seat-of-your-pants type, make sure you've done enough due diligence to be prepared for the very real challenges that you'll face. Learn more about what type of entrepreneur you are and what business will suit you best here.
What's your MVP?
Chris Guillebeau cites it as the best way to launch a "$100 Startup." Aficionados of "lean" call it the "minimum viable product." Whatever business you're trying to start, see if there's a way to launch a prototype into the world and begin learning about customers and, ideally, making some capital you can reinvest in the business.
Can you do it in a weekend?
App Sumo founder Noah Kagan is on a one-man crusade against "wantrepreneurs" -- these are people who dream about starting a startup instead of actually launching a startup. In a famous post for Tim Ferriss's Four Hour Workweek blog, Kagan challenged wantrapreneurs to launch a million dollar business...in a weekend. But don't let the deliberately provocative premise throw you off -- Kagan's post actually has an invaluable microcosm of advice for people seeking to build profitable businesses.
How are you going to support yourself?
Most entrepreneurs are going to have to burn the midnight oil in some fashion or another, and most of the time that means juggling lots of different side gigs or holding down a fulltime job while working on your business on the side. Tim Ferriss has long been a proponent of the concept of the "muse business," which is a small-scale, bootstrapped enterprise meant to generate cash for you to live on and pursue your other interests. With a "muse" business, you are looking for a product you can sell at a high markup that doesn't require a lot of attention from you. Learn more about Tim Ferriss here.