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Evaluating Your Entrepreneurial Potential

Evaluating Your Entrepreneurial Potential. 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?

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Evaluating Your Entrepreneurial Potential

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  1. Evaluating Your Entrepreneurial Potential

  2. 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?

  3. 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?

  4. 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?

  5. 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?

  6. 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?

  7. 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?

  8. 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?

  9. 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?

  10. 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?

  11. 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?

  12. Success Seekers A snapshot of who starts a business – and why

  13. New Business Owners 70% of all new businesses are started by a sole entrepreneur

  14. Gender of New Business Owner 35% 65% Women Men

  15. 32.9% 25.4% 24.9% 12.6% 4.2% Under 30 30-39 40-49 50-59 60 & over Age of New Business Owner

  16. PersonalityTypes 40% 34 Manager – enjoys operations side of the business Hero – puts the interests of customers first Rainmaker – thrives on obtaining new business Artist – passionate about creating the product Maverick – takes business risks for the adventure 30% 27 20% 16 11 8 10% 4 Manager Hero Rainmaker Artist Maverick Other

  17. Why a Business is Started No Answer 4.2% Carry Over Until Job Found 4.6% Grow to be a Large Business 28.6% Supplement Income 27.1% Provide a Decent Living 35.5%

  18. 100% 82% 66% 57% 50% 1 2 3 4 0 Years in Business Business Survival Rate

  19. 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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