While many people can envision the idea of owning their own business, some do not have what it takes to start and successfully sustain a company. Most small enterprise failures can easily be avoided if business owners would simply be aware of the challenges that lie ahead and evaluate within themselves if they are fully prepared to start their own business.
Of all the things that any wannabe entrepreneur hates about running a start-up, the customers seem to be the most irritating part of the puzzle. Everyone has a problem with the product, and people are constantly complaining about things that the novice businessman cannot possibly fix. Then there is the fact that everything is done for the first time. This is a situation that creates a terrible sense of uncertainty, as well as a persistent fear that a single bad decision could doom the whole enterprise. There are squabbles with co-founders and combative negotiations with investors and that gut-wrenching period when you realize that success isn’t going to come quickly or easily.
Generally, people who start their own businesses can be grouped into two broad categories:
The first group consists of people who know exactly what they want to do and are merely looking for the opportunity or resources to do it. Usually, these people have already developed many of the skills necessary to succeed in their chosen field. They are also likely to be familiar with industry customs and practices, which can help during the startup phase of a new business.
The second group consists of people who want to start their own business, but don’t have any real definite ideas about what they’d like to do. While these people have developed skills in the course of their employment or education, they may not be interested in opening a business in the same field of endeavor.
How you proceed will depend, in large part, on which group you’re in. For those who know what they want to do, the task is a bit easier. There’s no need to research business ideas and opportunities to decide which might be suitable. Instead, these people can jump right in and assess their chances for success in the type of business they’ve selected. Those who look out of the traditional corporate world have an extra step to make: They must choose the right business.
To evaluate your own aptitude for small business ownership, you need to test yourself.
Source: The American Small Business Administration (SBA)
The Small Business Administration conducted a survey of more than 100 California business owners. Their comments about small business success were used in creating the following quiz. Choose the answer you think is best for each question. Use the sheet at the end to determine your total point score and then see where you stand in the Success Quotient Ratings.
There are no “wrong” answers.
Each answer listed represents a segment of the responses to survey questions–and the final rankings correspond with the importance successful owners gave to different answers.
Questions 1 – 5
1. What is the key to business success:
a. business knowledge
b. market awareness
c. hands on management
d. sufficient capital
e. hard work
2. If a relative ever asks me for advice about starting a business I will tell them to:
// a. work for someone else in the field first
b. write a business plan
c. study marketing
d. give up the idea
e. learn about budgeting
3. Which is the largest potential trouble spot:
a. too much growth
b. too little growth
c. too fast growth
d. too slow growth
e. sporadic growth
4. I trust: (select as many as apply)
c. my partner
d. a few key employees
e. my customers
5. I am unhappy when my employees are:
c. abrupt with customers
e. less dedicated than me
Questions 6 – 10
6. My customers are: (select as many as apply)
a. always right
b. too fussy
d. worth listening to
7. Rank these in order of importance for small-business marketing success:
e. community events
8. When it comes to money I am:
b. too carefree
9. Financially my firm:
a. has trouble with cash-flow
b. has a good line of credit
c. is financed totally by receipt–no credit
d. is making better profits this year than last
e. knows exactly where it is all the time
10. In hiring people:
a. I take far too long
b. I look for the cheapest person
c. personality is more important than experience
d. I look for the best person, and am willing to pay
e. I only hire at the trainee level
Questions 11 – 15
11. With my employees:
a. I treat everybody the same
b. I try to talk privately to everybody once a week
c. To whatever extent possible I tailor assignments to personalities
d. I encourage them to talk to me about the business
e. I try to work alongside them whenever possible
12. The real key to business success is:
a. hard work and perseverance
b. fine products and service
d. knowing the fundamentals of business
13. Competition is:
e. a constant threat
14. The best competitive advantage is:
b. understanding what the market wants
d. conducting a business ethically
e. a detailed plan
15. I keep:
a. careful financial records
b. in touch with my customers
c. in touch with my employees
d. trying new techniques
e. wanting to retire
Questions 16 – 20
16. My dream is:
a. to grow the business until someone else can run it
b. to work until I drop
c. to give up these headaches and have more fun at work
d. to try another business
e. to take a vacation
17. I think business plans are:
a. for the birds
b. nice but not necessary
c. something I can do with my accountant
d. useful and informative
e. essential–wouldn’t do business without them
18. What makes a terrific entrepreneur?
c. consumer orientation
d. technical proficiency
19. What does a business need most?
b. market research
e. a solid business plan
20. What is essential to marketing?
a. “a sixth sense”
b. market research
c. customer awareness
Find each question in the scoring box. Write the score for the answer you selected in the margin next to every question, (If you didn’t select the highest scoring choice, take a look at that one and try and figure out why it scored so well.) When you’ve worked through the entire quiz, go back and add up your points. Then compare your total with the Success Quotient table to see how you compare with some of California’s most successful business people.
1. a = 5, b = 4, c = 3, d = 2, e = 1
2. a = 5, e = 4, b = 3, c = 2, d = 1
3. c = 5, a = 4, b = 3, d = 2, e = 1
4. b = 5, e = 4, d = 3, c = 2, a = 1
5. b = 5, d = 4, c = 3, a = 2, e = 1
6. d = 5, c = 4, a = 3, b = 2, e = 1
7. a = 5, d = 4, c = 3, b = 2, e = 1
8. a = 5, d = 4, e = 3, b = 2, c = 1
9. e = 5, d = 4, b = 3, a = 2, c = 1
10. d = 5, a = 4, c = 3, b = 2, e = 1
11. c = 5, d = 4, e = 3, b = 2, a = 1
12. e = 5, d = 4, a = 3, b = 2, c = 1
13. e = 5, d = 4, c = 3, b = 2, a = 1
14. a = 5, b = 4, c = 3, e = 2, d = 1
15. b = 5, a = 4, c = 3, d = 2, e = 1
16. e = 5, a = 4, b = 3, c = 2, d = 1
17. e = 5, d = 4, c = 3, b = 2, a = 1
18. c = 5, a = 4, b = 3, e = 2, d = 1
19. b = 5, e = 4, a = 3, d = 2, c = 1
20. c = 5, b = 4, e = 3, d = 2, a = 1
Score Your Business Success Quotient
75-100 You are a successful entrepreneur whose operations reflect tried and true business practices.
50-74 Your business is probably headed for long-term success. But success will come sooner if you sharpen your awareness of solid management skills and marketing techniques.
25-49 While you may be enjoying customer loyalty and repeat business, never forget that savvy competition is always looking for ways to take the lead. Don’t let comfort lull you into false security. Be creatively assertive!
0-24 You may well have the right product. But to sell it successfully, you need to increase your market awareness and improve your operating philosophy. Reach out for practical classes, seminars and advice from people who have good business track records. And – keep persevering. It’s the key ingredient to winning!