Questions every entrepreneur should ask themselves before starting their own business

With an estimated 100 million new businesses launched globally each year, the chances of coming up with an entirely unique business idea literally become slimmer by the second. However, even if a similar product or service, you can still offer a unique experience that gives you an edge over your competitors.

Today’s challenges have forced businesses big and small to pivot and appeal to the new needs of their customers. Businesses that fail to clearly demonstrate value to their target consumers are destined to have short shelf lives. And in the economic downturn, reduced spending power means a business idea that might have worked a year ago may be less successful, or vice versa.

Rich Vogel, founding partner and CFO of Loeb.nyc believes aspiring founders need to find a balance between catering to consumers during the crisis and making sure their product will still be valuable five years from now. “New entrepreneurs should think about whether they are just starting a business for the problems of today, or whether the product will extend beyond the crisis. They have to understand the long term potential of their business.”

These four questions can help you assess if you truly have a lasting edge, and how best to use it to gain a definitive advantage over your competitors.

1. Am I solving a new problem? 

As market dynamics change, you want to concentrate on where consumer needs are heading. Essentially, to use a hockey metaphor, you want to be skating toward where the puck is going, not to where the puck is right now. One of the perks of being a startup is that you’re more agile — you can pivot faster than big companies and shadow the movements of the puck more easily.

According to Accentureconsumer trends surfacing at the moment include people shopping more consciously, buying from local retailers, and using digital tools to connect with one another. With these in mind, think about what difficulties customers might face — perhaps the cost of sustainable goods is too high, maybe local retailers don’t offer home deliveries or people have new doubts about privacy online.

To determine whether or not your product can offer a solution to one of these new problems, test yourself: Can you clearly explain your business idea and why it’s valuable in today’s market? If you’re struggling to articulate the value of your product, it might be because you haven’t yet made it fit snugly into a defined niche.

You can refine your business proposal by putting yourself in the shoes of your target market. Empathize with your potential customers, consider how your idea would improve their lives, and whether people would miss it if it stopped existing. When it comes to articulating your business’s value to others, don’t be afraid to draw from your personal experience. You might want to explain your own journey and how the product has helped you through certain scenarios.

“Some of the best businesses were founded by people who really suffered a problem,” said Richard Singh, Executive Director of Growth at Loeb.nyc. “They ran into a wall and found a way around it.”

2. Am I solving an existing problem in a new way? 

Some companies will gain a competitive advantage by tackling an existing problem with a novel approach. Many consumer problems that were around pre-quarantine still need to be addressed, but the way they expect businesses to do so may have changed.

For example, most consumers believe they will now have to reduce their spending on most goods. Pricing is a time-old pain point; you could solve this problem in a new way by bringing lower or more flexible pricing to the market without compromising on product quality. Already during the pandemic, pricing has been used to establish an advantage across multiple industries. Microsoft Office 365 E1 is free for six months, CTO Academy has reduced its annual subscription by over 80% and HubSpot cut package prices by up to 50%.

These discounts are boosting companies’ subscribers and positive exposure. While you may not be in a position to offer cheaper prices than your competitors so early on, you can set yourself apart by tiering prices or having “buffet style” options, where consumers get unlimited use of your product for a set amount.