We asked Allon Raiz, the founder of Raizcorp (a company that supports entrepreneurs and grows businesses), what he considers the most important questions you should be able to answer before starting a new business.

1. Why this specific business?
To be an entrepreneur, you must have something to sell. This may sound obvious, but Raiz says that at least 50% of would-be entrepreneurs simply don’t understand what they are selling, and unless you have a definite product or clear business idea, you don’t have anything to design, market or sell effectively.

2. Is there a market or need for my idea?
Often, entrepreneurs don’t do their homework regarding their target market and potential customers. Instead, they rely on friends, family and their own experience to verify an idea or concept when what they should be doing is finding out what the market really needs.
So, get out into the world and find out if your new business idea, whether a product or service, is truly going to solve a problem or meet a demand before you go any further.

3. Can I sell my product?
Entrepreneurs and business owners often don’t know how to market their product or service themselves and pay others to do it for them. Mastering the skill of selling is crucial if you want to succeed. Not only does it save you money, it gets you in front of your customers, and they are your richest source of feedback.

4. Do I know how to make a profit?
Too often, new business owners don’t cost things properly and make poor calculations. As a result, it is impossible to keep making a profit. It’s especially important if you want to sell a service that is paid by the hour, for example.
Have you included travelling time to and from clients? And the cost of travelling to and from a job? Do you know what the delivery costs will be? What if a job runs over and takes up more time than you had planned? It’s essential to get all of your calculations right, upfront, to determine if you can make money from your idea without pricing yourself out of the market.

5. Can I grow my business?
It is relatively easy to survive, but if you want to expand, your business model has to be designed for growth from the very start. It is something prospective investors always look for, too. Just one factor is how business growth will affect your expenses and production costs. You really wouldn’t want your costs to grow in line with your revenue, because you won’t be making anything extra that way.

How to maintain your financial wellbeing

As an entrepreneur it is critical to protect your financial wellbeing. Lesley Waterkeyn, CEO and founder of Over the Rainbow, a social enterprise that provides entrepreneurs with information and support, has the following tips:

• Have a flight plan
  Your budget is your basic business travel plan – you can’t fly a plane from A to B without knowing the route.

• Know your future wallet
  Ensure you have a cash-flow projection so you don’t run out of money.

• Make space for new customers
  Make sure you have a proper pipeline for incoming business and manage it carefully.

• Keep your friends close
  Foster a good relationship with your financial adviser and bank.

• Watch your money
  Invest and save when you can.

This article originally appeared in Today Issue 1 2018.