Evaluating Your
Entrepreneurial Potential
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Should I Be An Entrepreneur?
• Is starting a business the best way to achieve my goals?
• Will the demands of starting a business take time away
from, rather than add to, the other commitments in my life?
• Do I have the personal resources of money, time and talent
to start and run my own business?
• Do I have the physical and emotional stamina required?
• Are my skills in this particular area balanced by general
business know-how and management savvy?
• How will my business affect the other aspects of my life?
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Personal Considerations
Answer the following questions Yes or No:
• Do family & friends approve of and support your decision?
• Are you willing to work 12 to 16 hours a day, six days a
week, even on holidays, to get your business off the
ground?
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Personal Considerations – cont’d.
• Do you have the physical stamina to work these hours?
• Are you prepared to lose your financial investment?
• Will the business generate enough income to meet your
financial goals?
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Personal Considerations – cont’d.
• Are you prepared to lower your standard of living for
several months, or even years, until your business is a
success?
• Do you know which skills are critical to making your
business succeed?
• Do you possess these skills?
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Personal Considerations – cont’d.
• Does your business idea effectively utilize your personal
strengths?
• Can you find and afford personnel to provide the skills you
lack?
• Will your business fulfill your career goals?
• Can you tolerate the loneliness of working alone while
building your business?
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Management Ability
• Do you like to make your own decisions?
• Do you like competition?
• Are you self-disciplined?
• Are you an effective planner?
• Are you well organized?
• Do you get things done on time?
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Management Ability – cont’d.
• Can you take advice from others?
• Are you adaptable to changing conditions?
• Can you delegate responsibility?
• Could you fire an ineffective employee?
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Financial Considerations
• Do I know how much of an investment it will take to get my
business off the ground?
• Can I support my personal obligations without an income
for three months to a year, or longer, if necessary?
• Do I have a good personal credit history?
• Can I borrow money from friends or family?
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Financial Considerations – cont’d.
• Am I willing to assume debt to start my business?
• Will my spouse support the acquisition of debt tied to our
jointly held assets?
• Am I willing to take on equity partners to fund the business
start-up or growth?
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Financial Considerations – cont’d.
• Do I know the average rate of return on investment for a
business of the type I am starting or for the type of growth I
plan?
• Is it sufficient to support my personal income goals?
• Is it sufficient to support the goals of my investors?
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Success Seekers
A snapshot of who starts a business – and why
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New Business Owners
70%
of all new businesses are started by a sole entrepreneur
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Gender of New Business Owner
35%
Women
65%
Men
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Age of New Business Owner
32.9%
25.4%
24.9%
12.6%
4.2%
Under
30
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30-39
40-49 50-59
60 &
over
Personality Types
40%
34
Manager – enjoys operations side of the business
Hero – puts the interests of customers first
30%
27
Rainmaker – thrives on obtaining new business
Artist – passionate about creating the product
Maverick – takes business risks for the adventure
20%
16
11
8
10%
4
Manager
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Hero
Rainmaker
Artist
Maverick
Other
Why a Business is Started
Carry Over
Until Job Found
4.6%
No Answer
4.2%
Grow to be a
Large Business
28.6%
Supplement
Income
27.1%
Provide a
Decent Living
35.5%
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Business Survival Rate
100%
82%
66%
57%
0
1
2
Years in Business
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3
50%
4
Top 10 Reasons Businesses Fail
50% of all small businesses fail within the first
four years, due to:
– Procrastination
– Ignoring the competition
– Incompetent employees
– Lack of versatility
– Poor location
– Cash flow problems
– A closed mind
– Sloppy or ineffective marketing
– Ignoring customers’ needs
– Inadequate planning
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