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Top 15 Startup Questions
bySCORE

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1. What kind of person makes a successful entrepreneur?
Research of successful entrepreneurs has documented that successful small business people
have certain common characteristics. This checklist can not predict success, but it can give
you an idea of whether you will have a head start or a handicap with which to work. How do
you measure up? Ask yourself these questions:

Can I persevere through tough times?
Do I have a strong desire to be my own boss?
Do the judgments I make in life regularly turn out well?
Do I have an ability to conceptualize the whole of a business?
Do I possess the high level of energy, sustainable over long hours, to make a business
successful?

Do I have significant specialized business experience?

While not every successful business owner starts with a “yes” answer to all these questions,
three or four “no’s” and undecided answers should make you think twice about going it alone
right now. But, don’t be discouraged. Seek extra training and support with help from a skilled
team of business advisors such as accountants, bankers, attorneys and SCORE counselors.
2. How do I determine whether I am capable of starting a
business?
Small business owners have many things in common. Below are some of the qualities you
will need to be successful.

Willingness to sacrifice—If you enjoy working 9-5, do not go into business for
yourself. Entrepreneurship often requires many more hours beyond the forty-hour
work week.
Interpersonal skills—You will be required to interact with a host of people other
than customers: lawyers, employees, salespeople. If you do not like talking to people
you do not know, better keep your day job.
Leadership ability—You will be the one everyone turns to for the answers. Are you
ready to call the shots?
Optimism—Being able to hang in there when business gets tough is an important
quality in small business owners.

Compare your skills and expertise with others who are successful in similar businesses. Can
you duplicate and surpass the capability of other successful businesses? What unique skills,
or “edge,” can you provide to obtain a sufficient share of total market?

Review business journals, trade magazines and other comparative studies that identify the
requirements to operate the business. From that information, derive a formula for the skills
and traits you plan to incorporate into the business operation.
3. Why is a business plan important and who should write
it?
A business plan is important because it summarizes both your vision for the company and
your blueprint for the company’s operating success. The business plan is a written guide that
details the start-up and the future direction of your company.Who should write the plan? You,
the entrepreneur. No one else knows your business idea and goals better. Yes, there are
services that can do the work for you. However, you must present this business idea to
bankers or other investors. Therefore, it is best if you are very familiar and comfortable with
the plan.Although there’s no set format, a good business plan typically includes:

Cover page—Identifies your business
Table of contents—Organizes information for the reader
Executive summary—Provides a “big picture” view of the plan, highlighting the
factors that will lead to success
Business background—If it is a brand-new business, include your background and
skills
Marketing plan—Relates the business’s marketing strategy
Action plan—Summarizes how you will create and deliver your product or service
Financial statements and projections—Illustrates how the business will perform

financially based on the plan’s assumptions
Appendix—Includes statistical analyses, marketing materials, résumés.

4. If I am not planning to apply for a bank loan, why do I
need a business plan?
The fact that a bank or lending institution requires a well-executed business plan is a
secondary consideration. The primary purpose of the business plan is to guide the owner or
manager in successfully operating the business. Preparing the plan forces the writer to
consider all aspects of the business and to confront any problems the plan highlights.For
example, a monthly compilation of all known costs, over time, will indicate the revenue
necessary to support these costs, plus a profit. This leads to the question of whether or not
this revenue number is reasonable. If not, it may cast doubt on the viability of the venture
itself.The business plan is a vital management tool that enables the manager to anticipate
situations before they become problems-or worse yet emergencies.
5. How do I determine my start-up costs and other
expenses?
It is wise to find out what start-up costs you will incur before starting the business. Many a
budding entrepreneur takes his or her life savings, or will borrow on the equity on their home
before figuring these financial factors, only to find that they don’t have enough money. There
are many web sites and other resources (including SCORE offices and Business Information
Centers) that provide guidelines and worksheets to help determine costs for your
business.Each item on your proposed budget sheet should be researched. Closely estimated
costs can be obtained from utility companies, trade associations, shopping and networking
with other business people who may have already gone through this experience. Do not start
buying until the investigation shows this venture is viable and you have all the information
needed.
6. What do I need to know about financial statements?
First, you need to know which financial statements are important. They are:

Balance Sheet—shows the financial conditions of your business at a point in time
Statement of Operations (Profit and Loss Statement)—shows whether you made a
profit during a specific period of time
Cash Flow Statement—shows what happened to your cash position during a specific
period of time

You should have a basic understanding of each of these statements. When compared with
statements from prior periods, you can determine whether something is happening in your
business that needs your special attention.

Your accountant can prepare these statements for you from the business data that you supply.
There are also a number of computer software programs that will help you generate these
statements from your input of regular transactions—such as sales, collections, purchases,
payments and payroll.

A SCORE counselor can help you understand these statements and may be able to direct you
to a workshop on this subject. In addition, most community and business colleges teach
courses in financial statement analysis.

7. Why is it important to do a monthly cash flow analysis?
Your businesses cash-flow cycle may differ substantially from the income statement
projections. Even if the projected income statement shows a profit, it is possible that the cash
flow for the same period is actually negative.The analysis of monthly cash flow can indicate
whether your business will collect sufficient cash to pay operating expenses. It will point out
specific months during the year when the business may experience operating cash shortfalls
and, therefore, either require additional capital or excess cash reserves for payment of
expenses. It will also show when you may be able to make debt reductions and when there is
excess cash to make major purchases or expand operations.By developing a monthly cash
flow projection, you can time cash needs and quantify the amount needed. The cash flow
projection is an important management tool and must be developed with very realistic
expectations. Sufficient cash is critical for a business to pay its expenses and to enable it to
expand. If your monthly cash flow projections indicate frequent cash shortfalls, you should
review the type of products and services that you offer, the mix of sales, the pricing and terms
of the sale and your short-term borrowing needs.
8. How can I obtain cash to maintain and grow my
business?
Develop a positive business relationship with your bank. Seek your banker’s advice even at
times where you are not seeking funds. You may find that every time you go to your bank
you speak to a different loan officer, so you should know them all.When the loan officer gets
a promotion, you must start all over again with another person. If you want the bank to take
an interest in your business, then you have to take an interest in theirs. How?

Know your banker—Take an interest in your banker as a person. Ask your banker to
hold on to your account if he/she is promoted. When you go to see your banker, have
your business plan and financial papers ready. Make it easy for your banker to see
what you want and why. The bank wants to minimize its risk with regard to you and
your business. This is where you have to sell yourself.
Know your bank—Know and understand your bank’s annual report. Know your
bank’s business direction and plan. Know the bank’s lines of authority. Get on the
bank’s mailing list. It’s an easy way to keep up with bank news.
Go to a bank-sponsored seminar—Go to your bank’s seminars on commercial
lending. This will teach you how your bank operates in terms of lending policies. By
doing this, you also prove that you have an interest in what the bank is doing. Finally,
it affords you the opportunity to meet and make an impression on the loan committee.

9. Why is location the most important aspect of my
business?
A good location can make the difference between a profitable and a bankrupt business. There
are many questions to consider when choosing a business site. Use the questions below as a
checklist for potential locations and then compare several sites.

Are there parking facilities?
Is transportation available and convenient?
Is the quality of police and fire service adequate?
Will it be a quality site for the future—five, 10, 25 years from now?
Is nearby housing readily available for management and employees?
Is there nearby competition? Are those sites better or worse than yours?

What is the general business climate in the area? Is this a prosperous market?
Are merchandise and raw materials available? Are your suppliers easily accessible?
How is the traffic flow—can your customers reach you quickly and inexpensively?
Is your building suitable to your kind of business—will it need any major
renovations?
Is there an adequate community infrastructure for utilities (sewer, water, power, gas,
etc.)?
What is the tax burden—town, city, county, state? Will this impede your business and
growth?
What are the costs of operation in this location—will it be too high to offer you an
adequate profit?

10. Why is competition important?
No business operates without direct competition. There also may be indirect competition,
which has a significant impact on customer’s buying decisions in your market.Direct and
non-direct competitors try to convince customers to buy their products or services instead of
yours. It is in your best interest to learn more about the companies that are trying to reduce
your take-home pay. List the strengths and weaknesses of each competitor. Talk with friends,
visit your competition, call for information about their products and analyze how they
advertise.Next, take a sheet of paper and list the major competitors. Give each a rating, on a
scale of one to 10, for product quality, process, advertising, price and customer satisfaction.
You can add other ratings that you feel are important.Your business can become more
profitable by adopting practices you admire in competitor operations and by avoiding their
mistakes. Some of your competitors have been in business successfully for many years.
Certainly, as a new or relatively new business, you can learn a lot from them.
11. How can I better market my business?
To market your business, you must define your customer. To maintain consistent sales
growth, you must become knowledgeable about your market. Develop an outline of your
“typical” consumer:

What exactly is your market?
Where do the consumers come from? (city centers, suburbs, tourists, international)
What are customers buying patterns?
Why should they buy from you? (convenience, price, quality, service)
Should you try to appeal to a niche market segment or the entire market?
Have you missed a new customer segment or special market?
How large is the potential target market (in units or dollars)? Is it growing, stable or
decreasing? What percentage of the market do you have?

Research will provide answers that are not available from your business records and a
financial analysis. Conduct research through trade associations, your local chamber of
commerce, libraries or even ask for the help of a SCORE counselor. Pay attention to how
competitors market to their customers. Perhaps, some of their marketing strategies can be
adopted for your business, or you may find examples of what not to do.
12. What makes a successful marketing strategy?
When creating a marketing strategy, keep in mind the four P’s of marketing:

Product—What good or service will your business offer? How is that product better
than those offered by competitors? Why will people buy/want it?

Price—How much can you charge? How do you find the balance between sales
volume and price to maximize income?
Promotion—How will your product or service be positioned in the marketplace? Will
your product carry a premium image with a price to match? Will it be an inexpensive,
no-frills alternative to similar offerings from other businesses? What kinds of
advertising and packaging will you use?
Place—Which sales channels will you use? Will you sell by telephone, or will your
product be carried in retail outlets? Which channel will economically reach your
market?

The marketing strategy should summarize your findings about the key target buyer
description, market segments the company will compete in, the unique positioning of the
company and its products compared to the competition, the reasons why it is unique or
compelling to buyers, etc.
13. What do I need to know before creating a marketing
brochure?
A marketing brochure can be long-lasting or short-term. It can represent your business to
potential customers and it can be a referral piece for existing customers. Decide the purpose
of and goals for the marketing brochure before you begin to design and write. Remember,
this brochure represents you and your business; be sure its look and feel complements your
business. Here are few tips for when you are ready to begin.

State your message up front—The selling message should appear on the cover of
the brochure. For instance, “The XYZ Company—Consultants on Doing Business
Overseas.”
Include artwork—If you have space limitations, one large photograph or graphic is
better than several small images that might not clearly portray your services or
products.
Photo captions—Photo captions are read twice as often as the main copy.
Create a keeper—Make your brochure worth keeping. Include a calendar of events
in your specific industry or some data that will be useful to potential clients in the
future.
Quality is key—Your publications reflect you and your business. Using one to four
colors in the brochure will make it stand out over one that is black and white. A good
quality paper stock is also important (and comes in many colors and shades if you
choose to use black ink). Remember to consider the weight of the paper stock in
relationship to mailing costs.

It is wise to have your brochure professionally designed. Even if you have computer graphic
skills, design is best left to professionals.
14. How can I improve customer service in my business?
Develop a strategy that puts the customer first. Customers will receive the best possible
service when employees are empowered to make this happen. This is not to say that you
should be lenient with your policies, but have a degree of flexibility. Just remember, a lost
customer could spread the word of their discontent, resulting in more lost customers.Review
the most common reasons for poor customer service. Use these insights as a way to improve
your customer service:

Too many rules—Employees lack creativity in problem solving. Rules are followed

and good solutions are not developed because employees do not want to jeopardize
their jobs.
Lip service, not customer service—Customer service is really only a name for
customer complaints. Time is spent trying to fix problems rather than preventing them
from occurring in the first place.
Unempowered employees—Approval is needed by a manager for small problems
that can easily be solved by a good employee. This problem leads to long lines and
time-consuming waits by the customer, who then refuses to come back-business
operations turns a small problem into a large one.
Unmotivated employees—Personnel are not encouraged to please the customer
because there is no merit in it for them.
Bad communication—Coordination of functions does not exist-one person may
write an order while another picks it off a warehouse shelf and someone else delivers
it to the customer. This can result in miscommunication, incorrect goods or services,
and time delays.
Arbitrary policies—Policies that are followed blindly without room for situational
allowances may result in angry customers. For example, a store’s return policy of 30
days prevents a customer who, with good reason, could not get back to the store in
time from receiving a refund. That customer will refuse to do business there anymore.

15. Is there anyone who can answer questions specific to
my business?
SCORE “Counselors to America’s Small Business” provides free and confidential business
advice and mentoring services to entrepreneurs nationwide. SCORE is a nonprofit association
consisting of 10,500 business counselors who donate their time and business expertise to
guide small businesses via face-to-face mentoring or online counseling.SCORE, a resource
partner with the U.S. Small Business Administration (SBA), has assisted millions of start-up
and growing businesses since 1964.You can visit the SCORE web site and find a wealth of
small business information. A popular online service is Email Counseling, which allows you
to choose a counselor from a bank of more than 800 SCORE counselors.Usingemail, your
counselor will answer questions, give advice and otherwise provide valuable support—all for
free. Also on the SCORE site, you will find articles written by industry experts and
successful small business owners.

About the author: SCORE "Counselors to America's Small Business" is America's premier
source of free and confidential small business advice for entrepreneurs. Formed in 1964,
SCORE provides a public service to America by offering small business advice and training.
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Informational-Interview Questions for Entrepreneurs

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Compiled by Katharine Hansen, Ph.D.

Informational Interviews are a wonderful networking tool, as well as for learning more about careers
in which you are interested.

What if you're more interested in starting your own business than working for someone else?
Informational interviews are terrific for finding out more about what it takes to be a successful
entrepreneur.

Here are questions to consider asking entrepreneurs when you interview them:

What ignited the spark in you to start a new business venture or to make significant changes
in an existing business? How did the idea for your business come about?
How do you find people to bring into your organization that truly care about the
organization the way you do?
How important have good employees been to your success?
What three pieces of advice would you give to college students who want to become
entrepreneurs?
If you had the chance to start your career over again, what would you do differently?
What would you say are the top three skills needed to be a successful entrepreneur?
What have been some of your failures, and what have you learned from them?
How long do you stick with an idea before giving up?
How many hours do you work a day on average?
Describe/outline your typical day?
How has being an entrepreneur affected your family life?
What motivates you?
How do you generate new ideas?
How far are you willing to go to succeed?
What is your greatest fear, and how do you manage fear?
What are your ideals?
How do you define success?
What is the best way to achieve long-term success?
Is your company profitable or what is your profit for last year?
Where did your organization's funding/capital come from and how did you go about getting
it? How did you obtain investors for your venture?

How do you build a successful customer base?
How did you decide on the location for your business?
Do you believe there is some sort of pattern or formula to becoming a successful
entrepreneur?
If you could talk to one person from history, who would it be and why?
Who has been your greatest inspiration?
What book has inspired you the most? (OR What is your favorite book?)
What is your favorite aspect of being an entrepreneur?
To what do you most attribute your success? What would say are the five key elements for
starting and running a successful business?
What has been your most satisfying moment in business?
What do you feel is the major difference between entrepreneurs and those who work for
someone else?
How do you go about marketing your business? What has been your most successful form
of marketing?
What kind of culture exists in your organization? How did you establish this tone and why
did you institute this particular type of culture?
In one word, characterize your life as an entrepreneur.
What are some of the biggest mistakes you've made?
How can you prevent mistakes or do damage control?
What are your hobbies? What do you do in your non-work time?
What makes you happy?
What sacrifices have you had to make to be a successful entrepreneur?
Excluding yours, what company or business do you admire the most?
Where you see yourself and your business in 10 years? 20 years?
If you were conducting this interview, what question would you ask?

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