Guide
Before You Start a Business: 15 Questions to Answer
Most business ideas are not tested before money is spent on them. They are simply started, and the gaps surface later, when they are more expensive to fix.
These fifteen questions are the ones Jolt Consultants works through with founders. An idea that survives all fifteen is not guaranteed to succeed, but the founder will understand what they are committing to.
What should you decide before starting a business?
Before starting a business you should be able to state the problem it solves, exactly who the customer is, why they would choose you, the realistic market size, the competition, how the business makes money, what it charges, what delivery costs, how customers will find it, the resources and cash required, licensing and legal structure considerations, what would cause it to fail, and what evidence suggests customers will buy.
What problem does the business solve?
State the problem in the customer's words. If the answer describes the product rather than the customer's difficulty, keep going.
Who specifically is the customer?
Name a definable group, not 'everyone'. Specificity determines pricing, message, and where the business advertises.
Why would they choose this business?
Identify what is genuinely different — access, expertise, speed, price, selection, service, or convenience — and whether the customer values it enough to switch.
How large is the realistic market?
Estimate how many reachable customers exist within the area or segment the business can actually serve, not the total industry.
Who are the competitors?
List the direct competitors, the substitutes, and the option of doing nothing. Note how each prices and positions.
How will the business make money?
Define the revenue model: one-time sales, recurring fees, projects, retainers, subscriptions, commissions, or a combination.
What will it charge?
Set prices based on the cost to deliver, the value to the customer, and competitive reference points — not on what feels comfortable.
What will it cost to deliver?
Calculate the direct cost of one unit of the product or service, including labor, materials, fees, and delivery, and derive the resulting gross margin.
How will customers find the business?
Name the specific acquisition channels and estimate what each will cost per customer. 'Word of mouth' is a result, not a plan.
What resources are required to launch?
List people, space, equipment, technology, inventory, suppliers, and permits needed before the first sale.
What licenses or regulatory requirements may apply?
Identify federal, state, and local licensing, permits, registrations, and industry-specific requirements that may apply, and confirm them with the relevant authority or a qualified professional.
What legal structure should be evaluated?
Consider the entity options and their implications for liability, taxes, ownership, and future investment, then review the choice with an attorney and accountant.
How much cash will be needed?
Total the startup costs plus enough operating cash to reach break-even, and add a buffer for the ramp taking longer than expected.
What would make the idea fail?
Write down the three most likely failure paths honestly. Naming them early is what allows them to be managed.
What evidence suggests customers will actually buy?
Look for real signals — pre-orders, deposits, signed letters of intent, waitlists, prior sales, or competitors clearly succeeding with the same customer. Encouragement is not evidence.
How to use this guide
- Write the answers down. Answers that only exist in conversation tend to stay vague.
- Flag any question you cannot answer with facts — that gap is where the risk sits.
- Revisit questions 7, 8, and 13 together; pricing, cost, and cash are the ones most often wrong at the same time.