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Opinions expressed by Entrepreneur contributors are their own.
Most often, the first questions you should ask yourself before starting a business have to do with one of two things: funding and why you’re crazy enough to want to start a business anyway. Or at least this is what I heard from so many of my friends, mentors and fellow entrepreneurs when I first got started as a business owner.
However, from my personal experience as an entrepreneur in the crypto field, I believe we should start with a different series of questions:
1. Does your new business solve a problem or address a current need?
This question is crucial in understanding if your business is going to have competition or if, in some way, it is a novel product or service. You may find it harder to determine if a new product will have an impact and be groundbreaking. On the other hand, you won’t have to measure yourself against established competition.
An aspect to focus on when you are still designing your idea is to make it unique, as potential clients are easier to gain when they don’t have other firms to buy your product from. Many consumers are overwhelmed by the amount of choice they have in just about every line of products and services.
Related: Product-Market Fit: How to Measure If Your Business Is Filling a Need
2. How does your product stand out from the crowd?
If the business idea you have is based on an already available product, then you must take that product or service to the next level. You must find a way to stand out from the competition. Clearly, they have at least some starter advantage. Although cryptos and blockchain technology haven’t been around that long, they still have a client base and an established name.
You may need to find better ways of doing things — basically an improvement of the product or service. And if possible, make the product cheaper for your future clients. Either way, you will need to differentiate yourself from the rest of the firms. When you think of how to market your product, it must be easily clear to you what a one-sentence message would say that sets you apart.
3. Who are my competitors?
Getting to know your competitors is extremely important, because it allows you to learn exactly what they have to offer. Having a clear grasp of this knowledge should allow you to find ways to improve on the products they already offer.
Also, knowing your competitors will allow you to better understand the market you are entering. It will also give you information on marketing practices as well as pricing. Eventually, you should manage to find their weak points. Ultimately, these details will help you to design a better product.
Related: How to Convince Customers to Buy From You and Not the Competition
4. Can I do this alone?
This question is often overlooked. From personal experience, I used to think I could do it all by myself. I would simply hire the people I needed in a specialized field, as and when I felt it necessary. However, I learned pretty quickly that hiring people is fine for certain jobs, at some point it’s inevitable.
But the truth of the matter is, you are still alone, no matter how many employees you might have. Setting up a business requires a lot of time, work and dedication. And the last aspect is one that only entrepreneurs are most likely to show. Team up with like-minded people who share your passion for your product and running a business. In the long run, it pays off.
5. How long am I willing to stick with it?
This question arises, because as we all know, not all business ventures succeed. Knowing that there is a chance of failure means we must prepare for that possibility. First, we should ask ourselves, “How long am I willing to stay on the project even though I’m losing money?”
Next, we need to set aside enough finances to bear out a period that proves to be slower than planned. We also need to know we have enough cash to fall back on if the business does fail. Knowing you have your back covered no matter what is fundamental to your mental health and therefore, to your success.
Related: How Entrepreneurs Benefit From 3 Types of Failure
6. Where will I fund my business?
Now you are ready to ask yourself this final question. Funding, for many businesses, is important — not just to initiate operations, but to keep the project going until it turns profitable. The obvious first choices are savings, relatives and friends.
However, your project may not appeal to the people closest to you, or they may not be the type to invest in a new business. In this case, you may need the extra funds from angel investors. You don’t have to know anyone personally, although it could be someone you know. In fact, it’s good to talk about your idea to as many people as possible.
Another way is finding an angel investor through an online platform. These websites, which I have no affiliation with, can act as a meeting point where entrepreneurs and angel or early-stage investors can become acquainted:
Answering the questions above should help you have a clear focus on your business idea and how you should go about its execution. There are no right answers or wrong answers, but the response you give should clarify how and if your business idea is likely to be profitable.
From my perspective as an entrepreneur in the crypto field and in digital marketing, I would say that you have a much higher chance of success if you are passionate about your business. Passion is the driving emotion to any long-term outstanding success. Something you love doing is much easier to do than something that is just a job. If you’re truly passionate about your entrepreneurial project, you should be able to find solutions to these all-important questions.