Before you consider in a new startup, you should understand that there is quite some distance between a great idea and a great company. As part of your due diligence, perform these reality checks before you spend your savings on starting something new:
- Are you ready for the entrepreneurial lifestyle? Entrepreneurship is not a get-rich-quick scheme; it takes real dedication and hard work to make a go of a new idea. Do you love your idea to make it through the inevitable challenges along the way?
- Is there a market for what you’re selling? People may like a lot of things, but will usually only pay for what they need, either emotionally or physically. Have you tried to sell any of what you want to start a business around yet? If not, do.
- How big is the market opportunity and does it have potential for growth? Don’t just go with your gut; get market analysis information from an unbiased source or create your own market analysis with a small run of Facebook ads or by trying to sell your idea before you make a big investment.
- Is the market already crowded? Perform a simple Google search to gauge your competition. Don’t let competition stop you; in fact, if there is no competition it’s a bigger red flag than if there is competition. You want proof of concept by seeing what others are doing, but you also don’t want to dive into an already saturated marketplace. The cool thing is that truly, when you are building a business around your uniqueness and truth, there is no competition.
- Does your product or service have hidden costs or hurdles? Be sure you understand the costs, distribution channels, marketing requirements and any cultural issues that could turn out to be insurmountable hurdles.
- Is there intellectual property to protect? Be sure you search the U.S. Patent and Trademark Office website for copyrights or trademarks that may have already been submitted but have not yet reached the market. Then talk with a Creative Business Lawyer™ about the intellectual property you will need to protect for your company and the best way to go about it.
- Can you build a great team? It’s hard to launch a new business by yourself. Can you find the right people to build your company with you? Your business lawyer has an important role in a company, whether it is just starting out or well-established, if you work with a legal team like ours — we will proactively support you to build a foundation that supports hiring the right people in the right way. That is why finding the right attorney is essential to avoid legal problems in your business in the future.
- Have you taken a realistic look at the costs? Many entrepreneurs make the mistake of wearing rose-colored glasses when making projections for their sales and revenues. This is something we can take a look at with you as part of a LIFT Start-Up Session where we’ll cover all of the legal, insurance, financial and tax pieces you’ll need to set up your business.
- Do you have skills and staying power? Starting a new business in an industry where you have some expertise is recommended over going into a new venture with zero experience. However, what really matters is staying power. Many startups fail simply because they give up.
- Is entrepreneurship an escape? Many people pursue entrepreneurship as a way to escape a boring job, only to find it more stressful than they can handle. Before you make the leap into entrepreneurship, be clear about the entrepreneurial archetype that is the right fit for you and your business model — you could possibly be better served to take a more entrepreneurial approach to your job than to start your own business from scratch. Contact a Creative Business Lawyer for a LIFT Start-Up Session and they’ll take you through the Entrepreneurial Archetypes to help you know the best type of business model to use.
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