Are You Ready To be an Entrepreneur?
Are you a self-starter? It will be entirely up to you
to develop projects, organize your time, and follow through on details.
How well do you get along with different personalities?
Business owners need to develop working relationships with a variety of
people including customers, vendors, staff, bankers, and professionals
such as lawyers, accountants or consultants. Can you deal with a demanding
client, an unreliable vendor, or a cranky receptionist if your business
interests demand it?
How good are you at making decisions? Small business
owners are required to make decisions constantly - often quickly,
independently, and under pressure.
Do you have the physical and emotional stamina to run a
business? Business ownership can be exciting, but it's also a lot
of work. Can you face six or seven 12-hour work days every week?
How well do you plan and organize? Research indicates
that poor planning is responsible for most business failures. Good
organization of financials, inventory, schedules, and production can
help you avoid many pitfalls.
Is your drive strong enough? Running a business can
wear you down emotionally. Some business owners burn out quickly from
having to carry all the responsibility for the success of their business
on their own shoulders. Strong motivation will help you survive slowdowns
and periods of burnout.
How will the business affect your family? The first
few years of business startup can be hard on family life. It's important
for family members to know what to expect and for you to be able to trust
that they will support you during this time. There also may be financial
difficulties until the business becomes profitable, which could take
months or years. You may have to adjust to a lower standard of living or
put family assets at risk in the short-term.
Reasons Small Businesses
Fail
Success in business is never automatic. It isn't strictly based on luck
- although a little never hurts. It depends primarily on the owner's
foresight and organization. Even then, of course, there are no guarantees.
In his book Small Business Management, Michael Ames gives the following
reasons for small business failure:
1:Lack of experience
2:Insufficient capital (money)
3:Poor location
4:Poor inventory management
5:Over-investment in fixed assets
6:Poor credit arrangements
7:Personal use of business funds
8:Unexpected growth
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
9:Competition
10:Low sales
More Reasons Why Small Businesses Fail
These reasons aren't meant to scare you, but to prepare you for the
rocky path ahead. Underestimating the difficulty of starting a business is
one of the biggest obstacles entrepreneurs face. However, success can be
yours if you are patient, willing to work hard, and take all the necessary
steps.
On the Upside
It's true that there are many reasons not to start your own business.
But for the right person, the advantages of business ownership far
outweigh the risks.
- You will be your own boss.
- Hard work and long hours directly benefit you, rather than
increasing profits for someone else.
- Earning and growth potential are far greater.
- A new venture is as exciting as it is risky.
- Running a business provides endless challenge and opportunities for
learning.
For more information on assessing your readiness download the SBA's:
Do You Have What it Takes?
Accessing Your Skills, Education, and Experience
Know Yourself
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