According to the Small Business Administration, small businesses account for about 99 percent of U.S. employers, employ about half of the private-sector workforce, and generate somewhere between two-thirds and three-quarters of the country's net new jobs.
(article continues below)
Do you have what it takes to join those thousands of people who start their own businesses every year? Do you have the determination, persistence and thorough research? If you can answer the following questions—or when you can answer them—you'll know you have the right stuff to run your own company. Welcome to Entrepreneur Boot Camp!
1. Have you spent enough time researching your new business and its market?
Many new businesses fail because the business owner (that's you) didn't do enough research. Make sure that your business idea can work. Investigate the market carefully to see who the primary players are and how your new company fits in.
2. Do you have enough money to get your company up and running?
Don't underestimate how much it will cost to get your company through its start-up phase. If you didn't do enough research or were too optimistic about your product, you could find yourself under-funded. Don't believe even your own projections and make sure that you have money stashed away for unforeseen events.
3. Are you wasting money on facilities?
While it might be nice to have your own office with a fancy desk in a nice, new building, such comforts can eat into your start-up budget. Begin as simply and as cheaply as you can. Start the business in your garage if you have to, and don't spend too much on offices until you've actually sold some products or services.
4. Do you have a back-up plan?
Murphy's Law states that if anything can go wrong, it will. Believe it. Nothing ever goes according to plan, and for that reason, you must always develop a back-up plan. Even if your research was perfect, something or someone will certainly throw a wrench—even if just a small one—in the works. But if you have done your homework and created a back-up plan, you'll be able to stop, make adjustments and move forward more efficiently.
5. Do you have partners you don't need?
Before you take on a partner, think the decision over carefully. Have you chosen someone who will work as hard as you do? Partners should earn the privilege of owning a portion of the business. If they bring money to your operation, that's a convincing reason to keep them. If you're just lonely and want to have a friend to keep you company, though, re-think the partnership decision.
6. Are you hiring the right people?
When you hire people, you want to choose those with the right skills and the right attitude to help your business grow. Especially with a small business, you can't afford to employ someone who won't be a good fit.
As a general rule, don't bring friends or family into the business—unless, maybe, your nephew just graduated with an MBA from Stanford, your niece is a graduate of Harvard Law and both of them are at the top of their respective classes. Of course, if it's a family business, exceptions to the rule can be made.
7. Can you see the big picture?
Too often new business owners get caught up in the day-to-day running of the business and don't look at the big picture. You need to have both long- and short-term goals and you should review them every month to make sure that you and your company are on track. No matter what stage your business is in, you must have an idea of where you and the company are going.
8. Do you take "no" for an answer?
Successful entrepreneurs don't take no for an answer. When others tell them that "it can't be done" or "nobody's ever tried it that way before," entrepreneurs set out to prove those people wrong. As an enterprising business person, you must achieve a comfortable balance between stubbornly sticking to your ideas no matter what and accepting limitations that others would like to put on you. That is, if people declare that "it's not possible," don't accept their word for it. Do your own research and come to your own conclusions. After all, it's your company.
9. Are you looking for validation or are you looking for the truth?
Even wildly successful business owners can occasionally be uncertain about what to do next. In those cases, the ones who continue down the path of success aren't interested in simply having their ideas validated by people they turn to. They want the truth. So if you are going to run your own business and go it alone, find an impartial third party—an executive coach, a mentor or a trust advisor—to talk to about your concerns and your plans. Family members, employees and even your spouse may only tell you what they think you want to hear.
10. Do you know what you want out of the business?
Why are you starting a business in the first place and what do you want out of it? You have to know these answers before you can do long- and short-term planning. What is your exit strategy? It may seem an odd question to ask at the beginning of your start-up process, but you need to know how you are going to want to get out of the business. Do want to sell it and retire to the Greek Islands? Do you want to spin your first business off into another one?
Whether you want to work fewer hours, create a family legacy or do what you love to do, you need to know what you want out of the business before you can create goals and track them to fruition.
If you honestly—and thoroughly—answered all 10 questions, you should know now if you've got what it takes to start your own small business. But if you're still in an introspective, questioning mode, ponder these statements. Do they describe you?
- I am persistent.
- When I'm interested in a project, I need less sleep.
- When there's something I want, I keep that goal clearly in mind.
- I examine mistakes and I learn from them.
- I keep New Year's resolutions.
- I have a strong personal need to succeed.
- I have new and different ideas.
- I am adaptable.
- I am curious.
- I am intuitive.
- If something can't be done, I find a way.
- I see problems as challenges.
- I take chances.
- I'll gamble on a good idea even if it isn't a sure thing.
- I like to learn something new and to explore unfamiliar subjects.
- I can recover from emotional setbacks.
- I feel sure of myself.
- I'm a positive person.
- I experiment with new ways to do things.
- I'm willing to undergo sacrifices for potential long-term rewards.
- I usually do things my own way.
- I tend to rebel against authority.
- I often enjoy being alone.
- I like to be in control.
- I have a reputation for being stubborn.
If you answered, "yes, that describes me" to most of the questions, chances are good you've got the makings of a successful entrepreneur. (The Small Business Administration provides an interactive version of this quiz.) If you answered "maybe" or "no" to any of the questions, those may be areas of weakness that you can work on.
But remember, these kinds of questions cannot truly divine who will succeed in starting a business and who will not. That determination is in your hands and in your control.
Article provided by Socrates. Socrates is the leading source of do-it-yourself books, kits, forms and software that help small business and real estate property owners take care of legal and related matters themselves. Each Socrates solution is relevant, compliant, comprehensive and a lower cost alternative to traditional legal and professional services.
Winning Business Plans: Put Together a Comprehensive Proposal
Business Start-Ups Kit: Everything You Need to Start a Business
Incorporation Kit: 18 Forms for Incorporating a Business
Limited Liability Companies: Transition to an LLC Yourself
Deluxe Business Library: 4 Software Titles and 600 Forms