Entrepreneurs face many questions each day, but there is one question that is as important post-launch as it is the moment the new business idea is conceived.
The Question in Ideation: How will I make money?
So you’ve encountered a real world problem and you have an idea on how to solve it. How do you know that your new business idea is a business and not a hobby? The answer to the question “How will I make money?” will tell you everything you need to know. If you’re building a for-profit business, define how you’ll generate revenue and a path to profitability. If it’s a not-for-profit you’re developing, outline how you’ll get funding. If you can’t answer this question clearly, then you need to re-evaluate your idea.
Having a clear path to revenue at the beginning of your ideation phase will keep you from making the wrong decisions and from wasting time and money on inconsequential things that won’t impact the business.
The Question in Daily Operations: How will this affect how I make money?
The “How will I make money?” question morphs to ““How will this affect how I make money?” once your business is operational. Asking yourself how a decision at hand affects your revenue streams will ensure you’re making choices that have the long-term health of the business in mind. With new startup Founders and CEOs making hundreds of decisions a day, it’s easy for this focus to get lost.
I have a post-it on my computer as a reminder. If post-its aren’t your thing, I’ve heard reverse forehead tattoos work, too.