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People launch their own business for all sorts of reasons. Some are wary of the corporate settings in which they have previously laboured, and hunger for an opportunity to exercise greater control over their lives. Some want to make greater use of their skills and education, while others envision entrepreneurship/small business ownership as a path to a different lifestyle. Finally, many people start new business enterprises in hopes of improving their financial circumstances.

But before beginning a new business, economic and entrepreneurial analysts recommend that prospective small business owners take time to honestly assess not only the viability of their business idea but the level of motivation, talent, money and other resources that they can bring to bear to best ensure that their enterprise succeeds. For example, the would-be entrepreneur needs to frankly consider a number of aspects of his or her own personality before embarking on a small business venture.

These issues include:

assessing how you like to spend your time;

determining how compatible your skills and interests are with the proposed business;

deciding how much money you are willing or able to invest in a new business enterprise;

deciding how much debt you are willing to accrue in establishing a new business;

defining how many hours you are willing to invest in the business on a week-in, week-out basis;

determining if the allotment of time will be sufficient to make your business a success;

and assessing the level of support you can expect to receive from your family and other important people in your life.

It is important to be realistic in considering these issues; a decision to start a new business that is built on a foundation of best-case scenarios or unrealistic hopes is almost certainly doomed to struggle and ultimately fail.

In addition, one needs to ponder the following questions about the proposed venture itself:

What services or products will you offer?

How much time will be required?

What economic trends are evident in the industry which you propose to enter?

Who are your likely competitors, and how well-entrenched are they?

How can you wrest business away from those competitors?

Where will you locate your business?

What equipment or supplies will you need to start your business?

How many employees will you need?

What will be your start-up costs?

How will you finance your business?

How will you market your products or services?

What demographic group (or groups) do you intend to target with your business?

How long will it likely take for your business to become profitable?

Who will you seek to target as customers/clients of your products/services?

What kinds of insurance will you need to secure for your company?

Will your business’s legal and financial needs be addressed?

Each of the above factors has its own complexities and qualities that need to be fully researched and considered. A cursory consideration of any of these factors, warn business experts, is simply unacceptable in preparing to launch a business. For example, a prospective small business owner might include rent (including first-month rent, final-month rent, and security deposits), employee payroll (including benefits), equipment costs, inventory requirements, insurance, and leasehold improvements in calculating start-up costs for his or her business. But the prospective entrepreneur neglects to include such financial factors as product/service marketing costs, licensing costs, pre-opening payroll costs for painters, builders, etc.), and attorney and/or accountant fees, then that person is entering the small business world with insufficient data, which can disable a business from the very beginning.

Bernard Taiwo
I am Management strategist, Editor and Publisher.