Advice for Starting a Small Business: 35 Questions to Ask

Advice for starting a small business usually comes back to one question, which is whether this is the right business for you. The 35 questions on this page will help you answer it before you invest your savings and your time, and the free tools at the end of the page can help you put a plan together.

starting a small business hero: a storefront with a gold awning

Choose a business you know you'll enjoy running on a daily basis, because owners spend long hours planning and managing, and the work is much easier to keep up when you have a true passion for it.

If you don't know the business well yet, the most useful advice for starting a small business is to take the time to learn it from the ground up. Ideally, you work for someone already in it, or you can learn from someone who recently retired from it.

While some business owners can be hesitant to share details of their business, others are often glad to offer advice. Most of them got advice when they started out, and many enjoy talking about what they've built. In some industries, such as wineries and craft breweries, owners compete hard and still share what they know, because helping each other raises the quality of the whole trade.

If you're buying an existing business, the seller is a good source too, but verify what you hear. A seller wants to close the sale and may not mention every problem, so check the numbers against the books and talk with a few customers and suppliers.

Jump To: Example | 14 Questions | 21 Questions | Tools | FAQ

Small Business Startup Advice in Action

Gina has worked as a dog groomer at a pet store for eight years, and she's been thinking about opening her own grooming shop. Before she looked at any leases, she followed the advice for starting a small business on this page and worked through both question lists.

GINA'S GROOMING SHOP DECISION

The 14 questions: Gina drove 90 miles to meet two shop owners in another city, far enough away that she'd never compete with them. Both told her to plan on about $48,000 to open, including equipment, the first three months of rent and a cash cushion, and both said it took them about 14 months to break even.

Checking the numbers: She entered her startup costs, a sales forecast of 18 grooms a week at $65 each and her monthly expenses into the free Business Plan Financials Workbook. Her projection came out close to what the owners told her, with break-even in month 15 and her lowest cash balance in month 6.

The 21 questions: Picturing a full day showed her that a shop would mean opening at 6:30 a.m. and working every Saturday, which would cut into the time she spends with her two kids.

Gina kept her job and started a mobile grooming van two days a week instead. The van cost about $22,000 to set up, and she plans to look at the shop again once she has a steady list of clients.

14 Questions to Ask Owners Already in the Business

These are the questions to ask before starting a business, and the best people to answer them are owners already in the trade or people who've recently retired from it. Write down what each person tells you so you can compare their answers later.

What special skills does this business require?
What knowledge do you need that most people don't have?
What's the hardest part of running this business?
What skills matter most for success?
What do you like most about owning this business?
What do you like least?
How much should I expect to make in my first year?
How much could I expect to make after five years?
How much money should I set aside to start?
How long did it take you to break even?
How seasonal is the business, and how much do sales change from month to month?
What does the future look like for this kind of business?
Is there proposed local, state or federal legislation that could affect it, for better or worse?
Which trade journals, industry groups or other resources would you recommend?

Questions 7 through 11 cover the money side of the business. The free Business Plan Financials Workbook can turn those answers into a startup budget, a monthly cash flow projection and a break-even month, so you can compare what owners tell you with your own numbers.

Once you've heard their answers, pay attention to how you feel about the business. If you're already thinking about ways to improve on what these owners are doing, that's a good sign, but if you're not excited by what you heard, you may want to look at other business ideas before you commit.

"Chase the vision, not the money; the money will end up following you."

- Tony Hsieh

Picture a Day in Your New Business: 21 Questions

These 21 questions walk you through an ordinary day in your new business, from the time you get up to the time you go to bed. Write your answers down as if the business were already open and notice how each one makes you feel. You'll probably feel excited about some answers and uneasy about others, and it's worth noting which ones are which.

It's time to get ready for your business day. What time is it?
You get dressed for work. What do you wear?
Does someone depend on you before you leave for work? Who is it, and what do they need?
You open the door to your business. Where is it, what does it look like and what's the monthly rent?
You look around. Who's there with you? Are they on payroll or independent contractors?
Do you make or handle the product yourself? What is it, and where do the materials come from?
How and where does a customer buy your product or service? Who is your typical customer?
How long did it take to build a steady customer base? Why did customers choose you, and how did they hear about you?
What does your product or service cost, and is your price competitive? Did the customer pay cash, use a credit card or buy on account?
You look at your customer list. What will each customer buy next, and when? Can you count on repeat business?
It's lunchtime. What are you eating?
Where are you eating, and with whom?
What are you doing in the second half of the day? Are you making something, selling something or going somewhere?
It's time to close up shop. What time is it?
You count the day's sales. How much did you make today? How much came in as cash, and how much is still owed to you?
It's time to go home. Are you going straight home, or do you still have work to finish for tomorrow?
You've arrived home. What time is it? What household responsibilities are waiting for you?
Is there bookkeeping or other paperwork still to do? When do you do it?
You want to talk about your day. Who do you talk to, and how often do you eat dinner with the people you love?
You think about what you want to accomplish tomorrow. What do you do?
It's time to sleep. What time is it, and are you sleeping well?

When you're done, read your answers back. If that day sounds like one you'd be happy to repeat most of the week, you're probably on the right track. If parts of it leave you confused or uneasy, take a closer look at those answers before you move forward. That's what Gina did when she realized a shop would mean working every Saturday.

Tools to Plan Your Next Step

Once you've worked through both lists, these free tools help you turn your answers into a plan. Each one comes with a filled-in example.

Business Plan Template: A ten-section plan with a step-by-step writing guide. Many of your answers to the 35 questions fit right into it, and lenders and investors will usually ask to see one.
Business Plan Financials Workbook: Enter your startup costs, sales forecast and monthly expenses, and it shows how much cash you need to open, your break-even month and your lowest cash month.
Mission Statement Template: Write down why your business exists in a sentence or two you can share with customers, employees and lenders.

For the personal side of the decision, the Personal Financial Statement Template shows what you own and owe, which most lenders ask for with a small business loan. The Household Budget Template helps you plan how your family will live while the business gets going.

The Life Balance Wheel helps you see how the business would fit with the rest of your life, and the Master Action Plan helps you map out your first steps once you decide to go ahead.

Advice for Starting a Small Business FAQ

The questions below address what leaders most commonly ask when they’re looking for small business startup advice.

Click on the (+) sign below to expand each question. Click the (-) sign to collapse it again.

What's the best advice for starting a small business?

Learn the business from people already in it before you commit your money. Ask experienced owners about startup costs, break-even time and the hardest parts of the work, then picture an ordinary day in the business to see whether it fits the life you want.

What questions should I ask before starting a business?

Ask owners in the trade about the skills required, first-year income, startup costs, break-even time, seasonality and the future of the industry. Then ask yourself practical questions about your day, such as what time you'd open, who would work with you and how much time you'd have left for family.

How much money do I need to start a small business?

It depends on the business, so ask several owners in the same trade what they spent and how long it took them to break even. Then build your own estimate from your startup costs, a sales forecast and your monthly expenses, and set aside a cash cushion for the months before you're profitable.

How do I know if a business is right for me?

Picture an ordinary day in the business from morning to night and notice how each part of it makes you feel. If you're excited and already thinking of improvements, that's a good sign, and if the hours or the work leave you uneasy, it may be worth looking at other options first.

Should I talk to competitors before starting a business?

Owners in your own area may be reluctant to help someone who could compete with them. Owners in the same line of work in another town are often glad to share what they've learned, and they can give you honest numbers and advice.