1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.

Thinking of Starting a Small Business?

Three Questions to Ask Yourself Before Starting a Small Business

By

Starting a small business.

Are you ready to start your own business?

Image (c) Jetta Productions / Getty Images

Thinking of starting a small business? You're on the right track. There's a lot of thinking to be done before starting a small business of your own.

Starting a small business is one of those huge, life-altering events. Think of it as a marriage; running a successful small business takes the same depth of commitment and desire. As in a marriage, you're going to be living with your business 24 hours a day, 365 days a year. Like any relationship, if you want it to be successful, you're going to have to work at it. And it's going to have its ups and downs and surprises.

But on the positive side, if you're the right person with a solid plan, starting a small business of your own can be the most satisfying, exhilarating experience of your life.

This article looks at four aspects of starting a small business so you can make an informed decision about whether it is right for you:

  • basic questions about running a business
  • the characteristics of an entrepreneur
  • necessary abilities for successfully operating a business
  • reasons for business failure

Let's get started.

Examine Your Heart: Basic Starting a Small Business Questions

The first step is to examine whether or not starting a business is right for you - not your neighbor, friend, coworker, or whoever else is trying to tell you that you should start your own business.

The main quality that you have to have to start your own business is a burning desire to do it. Running a business isn't for the ambivalent or indifferent. You have to really, really want to be your own boss, transform your dream into reality, or market your product or service.

Look inside yourself and ask these three basic questions

1) Do you really want to operate independently and be the person making all the decisions and shouldering all the responsibility?

Some people need the more "cocoonish" environment that working as a regular employee can provide.  Your bosses make the management decisions, you do your job and (hopefully) receive regular wages and benefits in return.  Your responsibilities and boss's expectations of you are clearly defined. 

Running your own business is completely different.  You are the company, and as such the success (or failure) of the business depends entirely on you.  There is no one to tell you what to do, make decisions for you, and your "wage" is dependent on your ability to attract customers for your product or service.

2) Are you willing to work hard and make the sacrifices starting a small business entails?

As anyone with experience will tell you, there is no eight to five shift when you run your own business.  Particularly during the startup phase (which may last months or years), you are likely to be the manager, worker, receptionist, payroll clerk, bookkeeper, and whatever else is required.  This means late nights, long hours, and the end of weekends off and three week paid vacations. In the case of a retail business, you will be required to have the premises open during regular business hours. (In a mall this may mean extended time to conform to mall hours.)

If you have a family, they must be prepared for the additional demands on your time.  The best way to manage this, of course, is to get them involved in the business.  Perhaps your spouse can assist you with payroll or bookkeeping.  If your children are old enough they can participate as well and perhaps eventually take over the business.  For more information see:

Small Business Tax Deductions: Spouse or Child Employee

Income Splitting

Family Business Succession Planning

3) Do you have the self-confidence and self-discipline that will enable you to persevere and build your new enterprise into a success?

Few new businesses are overnight successes. It takes hard work, patience, and perseverance to build a successful business.  Some types of businesses can be profitable in as little as a few months (see Should You Buy a Franchise?), while others may take years to build up a client base and become successful.

Initial failures and setbacks are to be expected - you must be able to think like a quarterback, that is quickly forget the last incomplete pass or interception you threw and be confident about the next play.

So Are You Ready?

If you have answered "no" to any of these, you're probably not ready to be your own boss. Overnight success stories are just that... stories. The reality is that success is won through hard work over time. And you want your business to be a success, don't you?

If you answered all three of these basic questions positively, then you're on the right track.

To find out more about whether you have the "right stuff" to start your business, see:

6 Traits You Need to Move From Employee to Self-Employed

Starting a Business Quiz

Do You Have the Characteristics of an Entrepreneur?

©2014 About.com. All rights reserved.