8 Frequently Asked Questions(FAQs) to Entrepreneurs
Entrepreneurs are the group of people brave enough to take that leap from the safety of secured monthly pay checks to investing resources in a venture that does not come with a success guarantee.
It’s a high-stakes game that comes with its own set of challenges. In Singapore, for example, entrepreneurs have to surmount roadblocks that include high labour costs, growing competition, and the uncertain economy, among a host of other challenges.
Despite this, Singapore is seeing a huge rise in its startup scene, with Block 71 located in JTC [email protected] becoming known as the Silicon Valley of the country. Touted as “the world’s most tightly packed entrepreneurial ecosystem,” Singapore turned the tides on its once dying start-up scene and produced a thriving economy of entrepreneurs.
You may be one of those entrepreneurs, armed with an idea that you believe would grant you high returns. What do you need to ask yourself now that you intend to be part of the business world?
What is your purpose for starting the business?
There may be a strong background story as to how you came up with the idea of selling your product or service. Will this be something that makes you happy or something that you enjoy doing?
Knowing the reason behind your business—really seeing it as a clear goal in your head—means you will put in the time and effort to achieve your purpose. You have to know what your idea of success is, as business owners constantly face drawbacks. Your purpose would be your North Star and guide you to keep going.
Who is the target market?
People don’t usually purchase anything that they do not see the point of buying. Is there a need for the product that you have? Are you going to address pain points for a significant number of people or would the niche be too small? Is the market growing? An entrepreneur needs to have a clear idea of his or her user base—who they are, their demographics, and their needs.
What makes you a cut above the rest?
Uniqueness is crucial especially if you’re entering a crowded market. Your user base needs to see the value of what you are offering, the element that would make you stand out among your competitors. Will you provide value to your market’s lives or do you have a product that is a rehash of an existing product in the market?
How much capital do you need?
The amount of capital you need is one of those numbers you have to crunch and have a clear idea of, not just a rounded-off number. Keep in mind that you will not immediately achieve return on investment. So if you’re going to use your personal money, it’s best to have around nine months to a year’s worth of living expenses.
This goes hand-in-hand with where you are going to get your funding. Most entrepreneurs would get it from personal savings, but there are other sources such as angel investors or bank loans.
How viable is your economic model?
Your economic model dictates how you are going to get your target revenue with the costs you need to run your business. You may have a brilliant idea in your hands, but you need an economic model that would match your product or service.
For instance, selling cheap flowers to a market that’s mostly catered by its expensive counterparts would sway clients to your side. However, would that be a viable model in the long run or would it make you burn your capital fast? Would your profit margin be enough?
What is your cash forecast?
Again, this is one of those numbers that you need to calculate and have a clear idea of. Forecasting your cash flow trajectory means you can be proactive about the expenses that you will need every month—your operational expenses, salary for employees, amount for research and development, etc. Your target sales may not always go as planned, so never underestimate your cash needs.
Who will be part of your core team?
Running a business requires you to work with people. Functions necessary to sustain your day-to-day needs should be met by competent and able employees that you trust, especially for areas of operations, accounting, and finance.
Conversely, you also need to be in touch with mentors who will give you advice based on personal experiences. Their insights would be valuable, so you know which pitfalls to avoid and which step would further your goals.
The vendors and partners you work with over the long run, like those you get from private versions of GeBIZ, also play a part in your success.
What are the risks and how do you overcome them?
Imagine going to war without knowing the lay of the land. One of the defining qualities of entrepreneurs is the ability to face risks head on, and part of that is knowing what you are up against.
You will be constantly challenged. Months of not earning anything, cash flow might dwindle, sales not reaching target, errant employees—these are just some of the roadblocks that will be thrown your way. Go back to your purpose in starting the business in the first place; there you’ll find the will to persevere despite challenges. This will be a long and tough road ahead of you, but with the right mindset, patience, and hard work, you will see your business grow.