5 Questions Every Business Owner Should Ask Before Starting a New Project

When he returned to Apple in 1997, Steve Jobs found himself dealing with countless projects spread across hundreds of teams. His first job wasn’t to sanction a new, groundbreaking project. Rather, it was to cut out every non-essential undertaking. Later at WWDC, he rationalized the culling with these now-famous words:

Focusing is about saying ‘no.’”

As an entrepreneur, your toughest job often isn’t to come up with new project ideas. Instead, it is to figure out whether the project is worth investing in. And if it is, what will it take to be successful.

Before you start any project, here are a few essential questions you should ask yourself:

1. What is my target market?

Andy Rachleff, co-founder of Wealthfront and Benchmark Capital, has been quoted for saying, “If you address a market that really wants your product, then you can screw up everything in the company and you will (still) succeed.”

Your target market defines who will buy your product, as well as what you’ll sell them.

It’s a complex, two-way interaction. Sometimes, you’ll need to change your original idea to fit your ideal market. Other times, you’ll have to find a new ideal market for your idea.

Before you start any new project, create a sketch of your ideal customer (i.e. your customer persona). This should include the following details:

  • Demographics data (age, education. marital status and gender) of target customers.
  • Psychographics data (interests, hobbies, favorite websites, TV shows, etc.) of target customers.
  • Market size of largest customer segment (such as “jeans”).
  • Market size of smallest customer segment (such as “raw denim jeans for bodybuilders”).
  • Market size of most attainable customer segment (such as “raw denim jeans”).

This will give you an idea of whether the project is worth pursuing. If the target market is too small or hard to reach, you might want to choose another project.

2. Where do I see this project in 20 years?

In the adrenaline rush of starting a new business, it’s easy to shoot for short-term goals and completely miss the bigger picture. You want a business that has staying power, not a fad that will disappear in five years.

Imagine what this project will look like in 20 years’ time. Write short, pointed answers to the following questions:

  • Will there still be a demand for this product or service? If not, how will this demand change?
  • What new products/services can we introduce to expand the market?
  • Will there be new technologies that could potentially disrupt demand for this product?
  • What will my target customers look like in 20 years?
  • How long will my current set of customers continue buying this product/service? If they’ll leave, then why?

The goal of this exercise is to determine the long-term viability of the idea. If you can sustain the business for 20+ years, it is likely an evergreen idea and not a fading trend.

3. What are the potential risks?

From poor management to unstable economic conditions, anything can derail a project. You can divide risks into two broad categories:

  • Internal risks like limited resources, incompetent leadership, or poor management practices.
  • External risks which can include political instability or regulatory hurdles.

As bad as it might sound, you’re actually lucky if the project has only internal risks. These risks are usually under your control and thus, easy to avoid. Of far more interest are external risks. You can’t easily fight political issues and a hostile regulatory environment.

Before you start any project, it’s a good exercise to identify any potential external risks to it.

The most common approach to do this is to use PESTLE analysis. PESTLE classifies risks as Political, Economic, Social, Technological, Legal, and Environmental.

For instance, if a new tech changes the demand for a product, it would be a ‘technological’ risk. If a looming financial crisis affects credit availability, it would be an ‘economic’ risk.

Identify these risks early and you’ll be in a much better position to understand if a project is worth your time and money.

4. What processes does this project need to be successful?

Drill into the heart of any successful project, and you’ll find that it has a robust set of processes at its core.

These processes bring order to its chaos. They tell you what to do, what not to, and guide your people towards better decisions. You might not need comprehensive business plans, but you certainly need concrete processes to handle the vagaries of business.

Before you start your new project, consider these questions:

  • What is the process for finding new customers? What channels, messages, and value propositions will I use?
  • What is my process for onboarding new customers? Will I need specific documents — reports, briefs, whitepapers — to deliver results?
  • Will I need any special tools or software to deliver the project? What is the process for selecting and using these tools?
  • How will I find new employees? What is the process to hire and onboard them?

5. What is the competitive landscape like?

Your competitors are your biggest source of insight. The ease (or difficulty) of a market and the upside of success all depends on your competitive landscape. If your biggest competitor is a billion dollar company, it means that you have a massive market. It also means that standing out will be tough.

This is why running a thorough competitor analysis should be a top priority before starting a project.

Here’s what you should look for when analyzing competitors:

  • SWOT analysis of your competitors’ key products.
  • Market size and earnings trends for competitors. Are revenues up/down? Why?
  • Gaps in the market that competitors aren’t currently fulfilling.
  • SWOT analysis of your competitors’ marketing channels. Are there any channels they aren’t utilizing?
  • Key investors in the competitor. Can you pick up funding from these investors’ competitors?
  • Key competitor employees (usually C-level execs). Is the competitor too dependent on a few top employees? What could you do to lure them away?

It’s tempting to dive right in when starting a new project and figure things out along the way. But if you do your homework right, you’ll avoid lots of pain later. Plus, you’ll greatly increase your chances of backing the right project.

Jeff Sullivan is a marketing manager at Workamajig, a leading creative project management software. Workamajig helps agencies and in-house teams run exceptional projects by streamlining the project management process and enabling better collaboration.