Up and Running Blog

Are You Cut Out for Owning Your Own Business?

by Tim Berry on February 26, 2009

People often talk about traits of the entrepreneur. Things come up like passion, persistence, dreamer, leader and so on. Sometimes you’ll see direct opposites–as if, for example, entrepreneurs are always doers instead of dreamers.

I posted a couple of lists myself, this year: 10 signs you’re probably an entrepreneur as listed by Andrew Patrico on Twitter, and 10 traits of successful entrepreneurs a few days later. Note the distinction between probably being an entrepreneur and being a successful entrepreneur.

Kelly Spors, small business columnist of The Wall Street Journal, has another list of traits in her column this week: So, You Want to Be an Entrepreneur. She does it with a list of questions you should answer.

1. Are you willing and able to bear great financial risk?

2. Are you willing to sacrifice your lifestyle for potentially many years?

3. Is your significant other on board?

I had to add a special note to this one: It’s way more important than most people realize.

4. Do you like all aspects of running a business?

5. Are you comfortable making decisions on the fly with no playbook?

6. What’s your track record of executing your ideas?

7. How persuasive and well-spoken are you?

8. Do you have a concept you’re passionate about?

9. Are you a self-starter?

10. Do you have a business partner?

These are all worth answering for yourself and thinking about–a lot–as you do.

Tagged as: entrepreneur, entrepreneurship

About the author: Tim Berry is founder of Palo Alto Software and Bplans.com. Follow him on twitter @timberry. More »

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  • http://blog.publishedandprofitable.com Roger C. Parker

    Dear Tim:
    Great post: glad I discovered it on Twitter.com.

    As I read it, it struck me that the same list might be the basis of an “Are You Cut Out For Writing a Book?” post.

    The parallels are uncanny.

    Best wishes–Roger

  • http://kenpirok.com/2006/10/31/questions-to-answer-before-you-start-planning-your-business.aspx Ken Pirok

    I once wrote a very similar article. Click my name above to see it.

    I definitely try to encourage people to become new entrepreneurs. But, I also try to help them be realistic. Good reasons for starting a business include wanting to be in control of your income and owning some competitive advantage in a product or service that people want.

    Bad reasons to start a business include wanting to get rich quick, wanting to have more time available to spend with your family, and because you can’t get along with your boss.

  • http://www.bowbijou.com Sasha Nichols

    Tim, thanks for your great article. Now a days with the way the economy is, it is scary to start your own business. I am a driven individual and am very motivated. I left the corporate world 5 years ago to raise children, and sometimes miss the interaction with professionals. I wanted to have a sense of independence! My husband is in the corporate world and is very successful, and I wanted to have a piece of that without having to put the kids in day care and head into a stuffy office. I have two girls who love dresses and bows and all that fun girly stuff… they inspired me to create a hair accessory that girls would love. So I created a non-slip hair bow using a simple technique, and am now in several stores and just launched my website, http://bowbijou.com which I am really excited about. I am not sure what the future holds, but I will go for it and hope that I will have continued success. I also wish continued success for all the other brave individuals starting their own business.

  • NYGal

    Thank you for the post and the other three links. As a young person thinking about starting a family business I’m doing my homework! Thank you once again.

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  • http://oregonbusinessbrokers.org Eric Williams

    I thought Kelly Spors’ article, “So, You Want To Be an Entrepreneur” was a great checklist. However, I wanted to provide some clarification to your readers about one of her comments.

    The information I would like to share is related to small business risk. Research shows that commonly held perceptions of business risk and failure are often overstated. Much of this is a result of people not making a distinction between the concepts of “non-survival” of a business entity and “failure”. The two are not necessarily the same. Based on more rigorous studies that I have seen Ms. Spors is correct that about half of start-ups close within the first five years – but probably only around 1/3 of start-ups “fail” in that same time frame. Let me give you an example of why: my career is that I sell small businesses. Usually small business sales are structured as asset sales rather than stock sales, with the primary reasons being that this will help a buyer avoid contingent liabilities incurred by the seller and it may allow for re-depreciation of assets. In an asset sale, the Seller’s legal entity is terminated and ceases to exist. Consequently, the business did not “survive” but it may have been financially successful.

    Another example: a two-person architectural firm (the architect and an assistant) has cash flow of $250k. The architect wants to retire and shuts the business down. The business entity, therefore, fails to survive, but the architect would have described the business as successful.

    I have included a link to one of my blog postings that discusses the research behind the difference between non-survival and business failure. My post has links to three studies that provide more information on the topic:

    http://oregonbusinessbrokers.org/2009/01/20/starting-or-buying-a-business-may-be-far-less-risky-than-you-think/

  • http://timberry.com Tim Berry

    Wow, great comments here. Thank you all.

    @Ken I clicked and liked your list.

    @Eric that’s a great addition, I completely agree with you on the point of how those stats on business get distorted. I clicked your link and liked your research very much. I recommend it to others. Eric has good numbers on what’s wrong with the numbers people use so often.

    Tim

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