- Why do you want to start a business?
- What is your ultimate goal of starting a business?
- What are SMART goals?
- Does your strategy match your goal?
- Are you able to execute?
3 Questions Every Entrepreneur Must Ask Themselves About Starting A Business
While the rewards of launching a start-up can be great, it is important to examine what exactly an entrepreneur must do to succeed in a deeply competitive marketplace. Here are just a few questions entrepreneurs should ask themselves before starting a business, and why these questions matter now more than ever.
1. Are Goals Well-Defined?
Undoubtedly, one of the biggest mistakes that entrepreneurs make when starting a business involves relying on nonspecific goals to achieve the desired outcome. For example, a common refrain heard in Silicon Valley is that founders want to determine their own destiny in the business world.
Of course, this is an understandable and even commendable goal to have as an entrepreneur, but, honestly, what the heck does that mean? It is not a specific goal in the least. Unless entrepreneurs have a specific set of goals that they intend to achieve in the business world, they will be unlikely to develop a winning strategy for long-term success.
Understanding the SMART Goal System
Indeed, many top start-ups achieve success because their goals are clearly defined from the outset. Using the “SMART Goal” system is a fast and efficient way to examine how clear and concise a business goal actually is.
In this system, the acronym SMART determines whether a goal is “Specific, Measurable, Attainable, Relevant, and Timely.” If a goal meets these criteria, it is likely that the goal can be realistically achieved. If a goal does not meet these criteria, however, it is likely that entrepreneurs will falter when challenges occur.
For example, suppose a start-up wants to achieve profitability by December 2022. This goal is specific (it defines the terms of the goal); it is measurable (the company will either be profitable by December 2022 or it will not be); the goal is attainable if the company truly believes that the goal can be met; it is relevant if founders can start working toward the goal immediately; it is timely because there is a clear end-date by which the goal should be accomplished.
By clearly defining a goal, in other words, the founders of a start-up will know exactly what they must do to succeed and how to measure that success when it occurs. Conversely, company leaders who only vaguely understand what they want out of their business plan will likely flounder once they hit significant obstacles in their path.
2. Do I Have the Right Strategy for Success?
Of course, without a clear strategy for achieving a goal, success can be difficult to achieve. In many ways, a goal is a sort of map for arriving at a particular destination; a good strategy provides the means for realistically reaching that endpoint.
For example, Steve Jobs and Steve Wozniak maintained a simple strategy when they launched Apple Inc. in the 1970s. For the first time in history, technological innovations had made it possible to provide consumers with personal computers. Prior to that point, computers were so large and expensive that only corporations and universities could afford one.
Jobs and Wozniak were passionate about the concept of home computing, however, and their business strategy was simple: They would succeed in the computer market by providing customers with high-quality home computers.
To wit, Jobs and Wozniak wanted to create a product that they themselves would buy, and because of their passion for the field, Jobs and Wozniak were able to create one of the most successful companies in history.
3. Is a Strategy Executable?
Undoubtedly, one of the best qualities that an entrepreneur can have is a realistic outlook on the marketplace. Such an outlook will enable entrepreneurs to see whether their strategies are realistic or whether those strategies will need to be retooled.
In the case of Jobs and Wozniak, it is clear that the founders of Apple Inc. understood that they must succeed by realistically fulfilling existing consumer needs. Jobs and Wozniak were computer hobbyists at heart, but they understood that there was wide-scale demand among non-hobbyists for home computers.
Contrast this strategy with Pepsi’s failed “Pepsi A.M.” marketing push in 1989: At the time, marketing heads at Pepsi were convinced that consumers wanted a cola that they could drink in the morning. Clearly, Pepsi did not have a realistic idea of what consumers wanted. Moreover, Pepsi executives clearly bought into their own hype. They did not have a realistic approach to their own strategy.
During the same timeframe, however, entrepreneur Howard Schultz understood that consumers wanted high-quality coffee to drink during their morning routines. Accordingly, he created and developed a strategy that would meet that demand.
Because he had a realistic understanding of what his strategy should be, in other words, Schultz turned Starbucks into a global success story. Both Pepsi and Starbucks were aiming for the same market, but only Starbucks looked realistically at what would thrive within that market.
Summary of 3 Questions Every Entrepreneur Must Ask Themselves About Starting A Business
While launching a start-up can often be a confusing and stressful process, the truth is that there are proven steps that entrepreneurs can take to help ensure that their business will succeed. By establishing clear goals, developing a winning strategy, and making sure that a particular strategy is executable, entrepreneurs can position themselves on the road to success. Truly, that is entrepreneurship at its best!
If you have any questions about starting a business, please feel free to contact us.