12 important questions to ask before diving into a business idea

Thinking of starting a business? There are critical questions
you need to ask yourself first before pursuing the idea.
Entrepreneur and founder of StartupProfs.com Mike Cooch
recommends these 12 questions

I do that evaluation by asking 12 questions that I’ve found are
critical to determining if a business idea is right for me. If I
have more than a few “No” responses, I can immediately cross
the idea off my list and forget about it. If it’s all “Yes”
responses, I know I have an idea with real potential.
Here’s the list of questions, with my thoughts explaining why
each is important to me:

1. WILL THIS BUSINESS SUPPORT THE LIFESTYLE I WANT?
I work to live, not live to work. I also love to travel and have
flexibility in terms of when I get my work done. That
immediately disqualifies many businesses.

2. IS THERE PROVEN DEMAND FOR THE PRODUCT I AM
GOING TO SELL?
Creating demand is hard, slow, and expensive. I’d rather
capture my share of an already existing demand.

3. IS THERE A CLEAR VALUE PROPOSITION THAT WILL MAKE
MY PRODUCT UNIQUE IN THE MARKETPLACE?
Business is no fun if I don’t have some sort of competitive
edge.

4. IS THERE A CLEAR WAY TO MARKET AND SELL MY
PRODUCT OR SERVICE THROUGH EXISTING CHANNELS?
Leveraging existing sales channels is the fastest and easiest
way I’ve found to get a business off the ground profitably.

5. CAN I LEVERAGE ONLINE MARKETING AND SOCIAL MEDIA
TO GROW THIS BUSINESS?
These are two of the most powerful business-building forces
of our time – I want to be sure to take advantage of them.

6. WILL THIS BUSINESS HAVE GROSS MARGINS OF AT LEAST
50% AND/OR NET MARGINS OF AT LEAST 20%?
At the end of the day, a business has to make money.

7. CAN THIS BUSINESS BECOME A SELLABLE ASSET?
The big win often comes from being able to sell and exit your
business when you are ready, but not all businesses are easy
to sell.

8. CAN I AUTOMATE THE MAJORITY OF THE OPERATIONS OF
THE BUSINESS?
I try to take advantage of as much automation as possible to
reduce the overhead of operating a business.

9. CAN I EASILY FIND SOMEONE TO SUCCESSFULLY RUN THE
BUSINESS FOR ME?
Eventually, I’ll likely want someone to run the business for me.
Is this a business that can easily be handed over to someone
else, or does it require my specific knowledge and talents?

10. IS THIS A BUSINESS THAT I’LL FIND FUN AND
INTERESTING TO RUN TODAY?
Yes, life insurance is very profitable, but it’s not fun. Profit is
not enough. I want to be in businesses that I actually enjoy.

11. IS THIS A BUSINESS THAT OTHER PEOPLE WILL FIND
FUN AND INTERESTING?
I’ve found that it’s much more enjoyable to be in a business
that other people think is fun and interesting.

12. IS THIS SOMETHING I’LL STILL BE WILLING TO RUN
SEVEN YEARS FROM NOW?
The reality is that most businesses don’t grow as quickly or
as profitably as I’d like. If I am still running this seven years
from now, will I still find it enjoyable?
You should be able to answer “Yes” to the majority of the
questions. If not, drop the idea and be thankful that you didn’t
invest your time and energy into something that ultimately
wouldn’t fulfill your entrepreneurial dreams.

This article was originally published on Entrepreneur.com