5 questions to ask yourself before underestimating the demands of starting a small business

IMG-20141229-00144A restaurant business started a few months ago in the premises where a national food chain had vacated. The new small business came in with a line of flame-called chickens and the owner was excited to fill the gap left by the larger chain operation. The service at the new small restaurant and takeaway business was excellent, the food reasonably priced and tasty although perhaps not as good as the national chain store that had left.

Six months later this small business was dead. No more. Gone.

What a sad and sorry ending to this owner’s entrepreneurial dream.

What went wrong?

Small businesses and start-ups go belly up for a number of reasons. Is it possible to put it down to just one reason or a combination of deadly mistakes?

You could be thinking that there was a problem with management. Not really. In this instance the owner had run other businesses and management was sharp.

What then was the fatal error? Customer demand. That’s all. With so many other competing eateries, customers had a wider choice and in these times the number of customers had dwindled. Yes, there may have been a product issue because if the product had been far superior to that originally provided by the national chain and priced very competitively, the customer draw might have been larger.

Here are some questions to think about when starting any kind of small business:

1 Is there customer demand?
2 Do you have a product or service which can create strong demand?
3 Do you have the necessary business experience?
4 Do you have enough money to finance your start-up?
5 Can you handle the physical and emotional challenges?

These five questions will at least give you a good starting point to think about estimating the demands of starting and running a small business. Accurate planning and detailed preparation can help you improve your chances of success but you’ve got to think long and hard about customer demand, product or service and location.

By the way, the outlet run by the national chain moved into a new location where there is much stronger customer demand and is still doing very well. Sensing change in customer demand is often critical to success. That is unfortunately not something that business advisers or business book authors can help with. It comes with business experience.

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