10 point checklist before you start a Business
In my line of work as an incubator manager, I received a lot of questions about how to start a business. Aside from telling them to start with what they have – who you are , what you know and who you know – there are certain points in which they will have to evaluate first before they start a business. Here is a 10-Point Checklist on what you should do to evaluate the feasibility of a business before you start. Let’s take a look at each of them.
Have you validated your business with customers? Do you have potential customers that get excited at your product and want it right away and willing to pay a price for it? If you don’t have, then it is not validated.
Are you able to articulate the precise positioning of your solution? Do you know how to position it in the minds of your customers? What are the values they are buying into? This is where you need to craft out your customer value proposition and validate the positioning before you start.
Free is NOT a business model. How do you monetize? Do you have a monetization strategy? Have you validated your monetization strategy?
How big is your market opportunity? This determines your financing and go-to-market strategy in a significant way. Do you know how big is your market? How do you extrapolate your total available market?
Have you done enough bootstrapping before approaching investors? Is your company fundable, or is it one that needs to be bootstrapped all the way? 99% of entrepreneurs bootstrap their businesses for at least a year before they approach investors. Bootstrapping is also useful to validate your business model first before looking for investors.
Over 99% of the entrepreneurs who go out to raise money get rejected. Are you planning to raise money? Do you understand what it takes to raise money, what investors are looking for? Is your company fundable? Do you know how to assess what is fundable and what is not? Are you getting rejected by investors? Do you know what is the current valuation range for your company? Can you enhance the valuation? What are the levers? What are your different types of financing options and what are the mechanics of those?
What is your customer acquisition strategy, cost, conversion rate, channels, channel costs? How do you plan to acquire your customers?