Considerations When Starting a Business

Learning Outcomes

  • List important considerations in deciding to start a business
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The three fundamental questions to consider when deciding to start a business are:

  1. Do you have what it takes?
  2. Do you have a viable concept?
  3. Is the reason you want to start a business consistent with your character and concept?

Yourself

Do you have what it takes?

The entrepreneurial assessments discussed earlier this module are a good starting point for self-assessment. Additionally, you might want to take the Grit Test developed by psychology professor and researcher Angela Duckworth.

Another way to approach the question is to review the type of questions a founder might ask in an interview and consider whether you would hire yourself. For perspective, scan the questions —and thought process behind the questions—shared by startup leaders and others in Firstround.com’s The Best Interview Questions We’ve Ever Published. According to Anne Dwane, one of the serial entrepreneurs interviewed, “the most important quality any start-up leader (current or aspiring) can have is adaptability.” To get at that, she asks (and you might want to ask yourself – and reflect on your responses) the following questions:

  • What have you started?
  • How would you describe yourself in your own words?
  • How would a colleague describe you in three adjectives?
  • What current trends are you seeing in your profession? (Substitute your target industry/market for your profession)
  • What new things have you tried recently?

Additional questions to consider include Koru co-founder and CEO Kristen Hamilton’s questions regarding grit, rigor, impact and ownership.

Your Concept

Do you have a viable concept?

Viability is something that will come out of the business planning process, which we will discuss in the next few sections. Before you dive into a business, it’s essential to do careful planning to ensure that the venture has potential to succeed. Jumping in with no information and no plan is a recipe for disaster.

Your Business

Is the reason you want to start a business consistent with your character and concept?

The third consideration is doing a reality check on why you want to start a business. Consider Dwane’s opening question: “what motivates you and what do you want to do next?” Can you connect the dots? Starting a new small business will require a lot of time and energy—if you’re not truly passionate about your venture, especially when it’s new, it (and you!) won’t be able to stand up to the stress of day-to-day business.

Practice Question

Starting a Business

Starting a business doesn’t have to be an all or nothing proposition. A number of successful entrepreneurs developed their business concepts while in school or working a traditional job. In his “The Surprising Habits of Original Thinkers” TED Talk, Organizational psychologist, professor and author Adam Grant discusses the mistake he made in passing on an opportunity to one of his student’s start-ups. He assumed that because the founders were working internships while developing the concept and had lined up jobs as a Plan B, they didn’t have the commitment to make the business a success.

The business the students launched: Warby Parker, a glasses e-tailer that Fast Company named as the world’s most innovative company in 2016. Warby Parker is currently valued at $1.75 million. For additional perspective, read Jason DeMers The Pros and Cons of Starting a Business While Working A Full-Time Job for Entrepreneur.

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