The 10 commercial questions you must answer before starting a business.

Most business failures are not caused by bad products, insufficient effort, or bad luck. They are caused by avoidable commercial errors made before the business launched — errors that would have been identified if the right questions had been asked at the right time.

Here are the 10 commercial questions that every business owner should be able to answer clearly before they commit significant time or money to starting a business. If you cannot answer them, it does not mean the idea is bad — it means there is more work to do before you are ready to launch.

Question 1: What specific problem does your business solve?

Not "I sell candles" or "I provide IT support." The specific problem. "Businesses in the local area struggle to find an IT provider who responds within 4 hours and does not charge for call-outs" is a specific problem. The more precisely you can describe the problem, the more focused your product, pricing, and marketing will be.

If you cannot describe the problem in one clear sentence, you do not yet have a commercial proposition — you have a product looking for a customer.

Question 2: Who specifically is your customer?

"SMEs" is not a customer. "Companies House Ltd with 10–50 employees in the professional services sector within 20 miles of Birmingham, paying £500–2,000 per month for IT support" is a customer. The more specific your customer definition, the lower your cost of customer acquisition and the higher your conversion rate.

Question 3: Why would a customer choose you over the alternatives?

Every market has alternatives — whether direct competitors, substitute solutions, or the option of doing nothing. Your answer must be specific and defensible. "Better service" is not an answer. "We respond within 2 hours, guaranteed, or the visit is free — and we have 12 years of manufacturer-certified experience in your specific software" is an answer.

Question 4: What is your true gross margin?

Before launching, you must know the gross margin you will make on every product or service — using the correct landed cost calculation, not just the supplier invoice. Target gross margins vary by sector (55–70% for services, 35–55% for products) but the principle is the same: your gross margin must cover all your overheads and leave a net profit that justifies the risk and effort of running the business.

Question 5: When does your business break even?

Your break-even point is the revenue level at which your gross profit exactly covers your total fixed costs. Below break-even you are loss-making. Above it, every additional pound of gross profit is net profit.

If your break-even revenue is higher than what you can realistically achieve in year 1, you need to either reduce costs, increase prices, or reconsider the business model before launching.

Question 6: Do you have enough cash to reach break-even?

Most businesses lose money in the early months. You need enough cash to fund your losses, your fixed costs, and your working capital until you reach break-even — plus a buffer for the unexpected. Running out of cash before reaching break-even is the most common cause of early-stage business failure.

Question 7: How will you reach your first 10 customers?

Not 1,000 customers — 10. Name them if possible. Where will you find them? What will you say? What will it cost to acquire each one? "Social media" and "word of mouth" are not answers — they are aspirations. A specific route to your first 10 customers is a plan.

Question 8: What does success look like in year 3?

Not vague ambitions — specific commercial targets. Revenue, gross margin, headcount, net profit. A business without a clear 3-year destination tends to drift. The destination shapes the decisions you make today about pricing, investment, and team building.

Question 9: What are the three things most likely to stop this working?

Every business has risks. The question is whether you have identified them and have a response to each one. The most common early-stage risks are: customers taking longer to buy than expected, costs higher than forecast, a key person leaving, and a competitor response to your entry.

Acknowledging risk is not pessimism — it is professionalism. It is also what every bank and investor will ask you about.

Question 10: Are you the right person to build this?

Not whether you have the passion or the idea — whether you have the specific experience, network, and skills that give this business a competitive advantage. A business built by someone with 10 years of direct industry experience is significantly more likely to succeed than the same business built by someone entering the sector cold.

If you have gaps — in finance, operations, sales, or technology — identify them now and build a plan to fill them before you launch.

Ready to validate your idea?

If you have worked through these 10 questions and have clear, specific answers to each one, you are in a strong position to launch. If there are gaps, use them as a to-do list — each unanswered question is a risk to the business that is better addressed now than after you have committed.