1. Do you have the courage to take the entrepreneurial leap? Forget about the cozy comfort of the corporate environment where you can have someone else take out the trash, clean the bathroom, get you coffee, pick up your dry cleaning, etc. The buck stops with you, and you need to take 100% responsibility for everything.
2. Do you have adequate working capital for one or more years? If you are a start-up, forget about making any money for a long, long time. If you are buying an existing business, the best laid plans of mice and men can sometimes become undone. Most, if not all, under capitalized businesses fail eventually. I have seen some fail in months while others have a painful death of years.
3. Is your spouse behind you 100%? If not, either get a divorce and do it alone or don’t go into business by yourself. You cannot imagine how lonely it can be with an unsupportive spouse. You will grow tired of “I told you so” when things go against you and “waiting for the other shoe to drop” when things are going well.
4. Do you want to manage employees or just yourself? Using subcontractors or independent contractors is a great way to operate a business if you are sure they will perform to your expectations and standards. Having employees forces you to worry about issues dealing with sick children, childcare, pregnancy, health insurance, retirement benefits, etc.
5. Do you know what your strengths and weaknesses are? Are you strong at selling, strong in finance, strong in operations, strong in marketing, strong in supervision, strong in organization, strong in customer service, strong in planning, etc.? It is highly unlikely that you can do all the preceding well. So you better know how to fill in the blanks with other resources.
6. Can you leave something that is not broken alone for at least 3 months? If not, you will probably self-destruct, scare off your customers and run off your employees. Don’t mess with your newly purchased business for at least 3 months. Have regular meetings with employees during this time to keep communication open. Solicit their advice, counsel and suggestions for improvement and change as they see it. (What a novel idea.) Then, as you make changes, be sure to explain why you are “trying them out” to see if things improve. If they don’t, put your ego aside, admit your mistake and return to the basics. A little humility goes a very long way.
7. Are you willing to share your financial statements with your banker, CPA and attorney? Your banker can give you a line of credit, your CPA can give you excellent tax advice and help you understand the numbers, and your attorney can help you avoid litigation, and in a worst case scenario help you file bankruptcy (just kidding.)
8. Can you admit when you have made a mistake? Are you willing to take full responsibility for it and do whatever is necessary to correct it? Or will you stay in denial until the bitter end, when there is no way to recover from it? This is probably the most important thing to remember. You will not have a boss leaning over you to correct you. Either you see it or you don’t, and if you don’t, you’re not long for this world.
