7 questions to ask yourself before starting a business

Jumping into the startup world is a double-edged sword. On the one hand, you might be completely convinced you have a billion-dollar idea. On the other, you risk a great deal getting started, and there's no guarantee you'll succeed.

Catherine Tan — who began her career at the University of Warwick then moved on to Barclays Capital London — took this leap of faith to found Notey.com.

She had the idea of a website and app that would apply machine learning and data science to deliver the most relevant stories and engaging content to millions of users based on who they were. It gathers information about people's interests, reading habits, languages, and location.

Today, Notey gets millions of monthly visitors and has offices in London, New York, and Hong Kong, but there were challenges Tan encountered along the way. She gave Business Insider an insight into how she kept confidence in her idea, and it's largely down to taking responsibility for the snap decisions you have to make.

"The biggest challenges are the uncertainty of knowing whether each decision was the best or not, and having to make decisions quickly," Tan told Business Insider. "In a corporate job there are a number of systems in place that dilute decision-making to the point that it's more of a committee decision. Running your own company, you need to take full responsibility for your decisions and learn how to optimise that decision process quickly."

When weighing up whether or not to go all in, she asked herself these seven questions:

1. What is my motivation for starting a business?

Tan said you need to ask yourself why you want to start the business in the first place. If you simply hate your job, or you're following a trend, it probably won't survive.

"Is it an industry you love and are passionate about?" she said. "Is there a big problem you're so frustrated about, that you can't wait to create a solution for it? That sounds like a business worth starting."

2. What problem(s) am I solving?

Tan started Notey to solve a problem she had encountered herself. When looking online for advice on travel, Google would show mainstream media websites and price comparison sites first, whereas she wanted to find bloggers who were sharing their experiences.

"I experienced it over and over again, and thought if I'm going through this, there must be many others with the same issue," Tan said. "At this point, I knew it was the issue I'll be addressing as it has massive potential, I know people who feel this issue regularly and knew technology could provide a scalable solution."

3. Am I willing to sacrifice my lifestyle?

It's a big decision to give up a high-paying job to follow your entrepreneurial idea. Tan and her husband founded Notey together, and they were both in well-paid jobs that gave them a comfortable life. It was really important that they both respected the decision they were making, and were both on board with potential changes to their lifestyle.

Tan says you should ask yourself what kind of life you would be comfortable with.

4. Are my family and friends supportive?

While the good days are busy and exciting, the bad days are hard, Tan says. So you need to have people around you who you can lean on when things are tough.

5. What savings do I need?

Tan says she and her husband were able to financially cover the launch of Notey themselves before going to external investors. However, it's a good idea to have a fund to fall back on when you start up a new business. It's unlikely you'll start making money straight away, so if you have the chance to save up some money beforehand, then take it.

6. Will I seek funding for a fast-growing startup, or take my time building a lifestyle business?

Once you've secured external investment, Tan says you have to move fast. However, if you're going it alone and you're not relying on funding, then you can take a little more time.

"With Notey, and given it's a consumer first platform, I wanted to build a product people love as quickly as possible so we went out and raised money to fund its growth," Tan said.

7. Am I in the right ecosystem?

Tan says it's important you get to know the industry and make contacts by going to lots of startup events. After all, nothing is more valuable than hearing the experiences of other people. This can help you work out whether you're in the right location to create a community.

"A good question to ask is whether you're in the right city to 'launch' your product," she said. "For example, we're in the tech/digital media space, so a presence in San Francisco and New York is important for our growth."