They say, entrepreneurship is living a few years of your life like most people won’t so that you can spend the rest of your life like most people can’t. Entrepreneurs are arguably some of the most fulfilled people in life. They are flexible to work from wherever and whenever they feel like it. The success or failure of their businesses is fully dependent on their decisions. Many people desire to be entrepreneurs, but it is not as easy as it sounds.
I have watched a good number of episodes from the famous entrepreneurial TV shows, Shark Tank and Dragons Den. These shows bring to life the rules of pitching and the benefits an entrepreneur stands to reap from properly pitching their ideas. Since I started watching the series, there are lessons I have learnt and I present them here as questions you need to raise prior venturing into business.
1. How much do you need and how much have you invested in the business?
This question tells of how much capital you need to invest in your business to acquire assets (both current and non-current), to pay for the services rendered to the business by other firms such as the services of a lawyer or an accountant. It also tells of the effort you have already put in the business by raising capital that is used to run the business. It gives the investor a glimpse of the level of your commitment and shows that you are not fully dependent on the capital they will offer you.
2. What stake do you have in exchange for the capital you get?
People willing to invest in your idea will need some stake in exchange for the money they give you. It’s a pretty well known fact that most investors want to be in control of the business to protect their money in your business and will need a stake that will make them be in control of the business. Here, one needs to properly understand what it means to let go of a major chunk of the business.
3. How well do you know your numbers?
This is a question that many entrepreneurs are unable to answer. The investors are regularly looking at the strides you have made in terms of selling the products you process and the services you render. They need to know the number of units you have sold and what the worth of the business is. If the units are few to make a financial sense, they will shy away from putting their money in your business. They will fear that the money they offer you the entrepreneur will be spent on non-business activities. How much the business has gained tells of the worth of the business. The profitability realized from selling the products and offering services to the clients?
4. Can you pay yourself and the people who work with you?
It does not make sense if all you do as an entrepreneur is to pump money into the business. Paying bills, paying workers and servicing loans taken to boost the business. The business should be able to provide a consistent income that goes a long way to paying you the proprietor and the people that contribute to its success.
5. What’s your target market?
To succeed, every entrepreneur should identify a specific niche and offer products and services at a fee. The business should have a specific target market, say the pregnant women, brides, kids or the youth. The entrepreneur should know exactly what the market wants but are lacking then come up with a way of providing it.