5 things you must consider before you start your business

Being mentor for startups, speaker and trainer on entrepreneurship and leadership people often come to me for advice with their business idea or for help with their struggling business.

best idea ever

I always tried to help where I could but then I realised that I am basically telling everyone the same things over and over.

Here is summary of my “frequently told answers” – 5 things I consider now, after 10 years and 7 companies, crucial to think over before you start your own business.

5 things to consider before starting your own business

1.) Complexity, People and Scalability

Three key criteria I now use for every new project. Simply, you want business that is as simple as possible. The less complex the business is the better. More complexity means more trouble and more chances for things to go wrong. As part of complexity also consider fixed assets – the less you have the better. You don’t want to be stuck with buildings, equipment etc.

Connected to complexity is scalability. Should you want to scale, how much pain it would involve? With complex business it is very difficult to scale. Take our cooking school for example. If we want to scale up, we need another building, more equipment, more of everything. If you have internet based business, you don’t need any of these to scale up.

People. For simple and scalable business you don’t need many of them. That is good. You can’t build great business without them, but if you don’t need many of them for the beginning and then your business is not “people intensive” once you scale up – you won the lottery.

2.) Blue Ocean vs Red Ocean

Blue Ocean Strategy is one of the best business books I ever read. Most people I am talking to about starting their own business didn’t read it and they definitely should. Idea is pretty simple. There is “red ocean” full of competition where everybody is fighting. You shouldn’t go there. You should develop your “blue ocean” – a place where there is basically no competition and you can enjoy those blue waters by yourself reaping all benefits.

As an example, if farmer’s markets are popular now, don’t go opening another farmer market. Maybe think about how you can create successful business serving the needs of i) sellers at farmers markets or ii) organizers of farmers markets. This way increasing competition (more farmers markets) will fuel your business instead of increasing competition for you.

3.) What business are you in?

This may seem a bit dumb question to ask, it should be pretty clear to everyone starting a business. But it isn’t. Usually, people want to do too many things and they need to answer this question to get focus and maintain clarity on business design and business choices.

Are you in design business? manufacturing? services? IP? Or take e-commerce as an example. Are you platform? brand builder? logistics provider? B2B or B2C? These simple questions made many people very uncomfortable when I asked them. Make sure you know.

4.) Who / What / How

These three questions I am using in everything I do. Be it planning my life, new project or investment. Who is your customer; Who are we as company; What do we offer and How will we deliver it.

You must answer these questions in the very exact order because answering WHO question will have tremendous influence on your whole business design. What I see is, that most people start with HOW question – drafting logo and building website before thinking hard about WHO their customer is. Probably most important question a business needs to answer.

5.) Three circles

Three circles are from Good To Great – the best business book I ever read. It simply says, you should build your business on the intersection of three circles. Each answering one question. i) what are we passionate about ii) what can we best in the world at and iii) what can we make money from.

Answering these 3 circles will tell you much about how solid foundation your business idea has and give you clear sense of direction for you startup.

good to great 3 circles



I don’t claim that these are “magic” questions that will secure your business success. But I am positive that if you put enough effort into answering them your chances of success will dramatically increase.

Recommended reading:

Good To Great;  Blue Ocean Strategy

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