Questions for a new entrepreneur
A few things came up over coffee the other day. His idea is good, his funding is solid, there are many choices. Some of the questions that don’t usually get asked:
Are you aware of your cash flow? The thing about a fish in the stream is that it doesn’t care if the water is six inches deep or a foot deep. As long as it never (ever) goes to zero, it’s fine. What’s your zero point? What are you doing to ensure you get to keep swimming?
Are you trying to build profit or equity? A business that builds a brand, a footprint, a standard and an audience might end up being worth millions (witness Tumblr, which has many millions of value but zero profitabilty). On the other hand, a business with no exit value at all might spin off plenty of profit (consider the local doctor’s office). It would be great if you could simultaneously maximize both the value of your company and the profit it produces (in the short run), but that’s unlikely.
What’s your role? Do you want to be a freelancer, an entrepreneur or a business owner? A business owner is the boss, but it’s a job, a place that is stable and profitable. An entrepreneur is an artist of sorts, throwing herself into impossible situations and seeking out problems that require heart and guts to solve. Both are fine, but choose.
Are you trying to build a team? Some business owners want to minimize cost and hassle. Others are trying to forge a culture, to train and connect and lead.
Which kind of risk is okay with you? There’s financial risk, emotional risk and brand risk (among others). Are you willing to put your chips on the table daily? How about your personal reputation?
And finally, and most important, why? Why are you doing this at all?