Questions to Ask Before Starting a Business

MT499 Bachelors Capstone in Management

Questions:

Q1 What skills must be in place on opening day? Do you, or members of your team have these skills?

Q2 Will you be outsourcing any work? Outsourcing can include professional services (legal, accounting, for example), production services, marketing services, and the like. How much do you anticipate spending on these outsourced services?

Q3 What positions do you need filled for up to a year after opening? Do these positions require specialized training? If so, how will you find these employees?

Q4 Will you be sharing your profits with partners or employees? If so, how do you propose determining this profit sharing?

Q5 What are the assumptions you are using that help build your revenue forecast?

Q6 What share of the market do you intend to serve?

Q7 How many customers does that share afford you?

Q8 How much money, on average, will each customer spend per contact?

Q9 How many times will each customer use your product or service per year?

Q10 What are your monthly sales? Provide supporting calculations for how you reached your sales figure, and assure the calculations are realistic. For example, you might expect 100 visitors to your store the first month, 150 the second (and so forth) and they will each spend an average of $20. For the year, that might total $100,000.

Q11 How much will electricity and other utilities cost?

Q12 What salaries will you pay and what perks will you give employees?

Q13 What is your salary or intended draw from the company?

Q14 Given your projected opening cash needs, will you need funding? Think about your credit rating. Do you have adequate credit and assets to qualify for funding? If not, are there co-signers available?

Q15 If you need funding, how much and what kind will you need? Do not forget to consider your own investments, and well as investments from others. Be sure to read the articles on bootstrapping and franchising.

Q16 Will you need or can you benefit from a line of credit? If so, how much, and what are your expected interest rates? Why would you select a line of credit over a longer term loan?

Q17 Will you need funding in your first year (after the startup)? Is your need seasonal? If you will need funding, what will be the likely source(s)?

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