2.2 Self Assessment For Entrepreneurs

Self-Evaluation Exercises

Here’s a question to ponder: Are you the right person for your business? Because running a business is a very demanding endeavor that can take most of your time and energy, your business probably will suffer if you’re unhappy. Your business can become an albatross around your neck if you don’t have the skills and temperament to run it. Simply put, I’ve learned that no business, whether or not it has sound financial backing, is likely to succeed unless you, as the prospective owner, make two decisions correctly:

• You must honestly evaluate yourself to decide whether you possess the skills and personality needed to succeed in a small business.
• You must choose the right business. (How to select the right business is covered extensively in Chapter 3.)

A small business is a very personal endeavor. It will honestly reflect your opinions and attitudes, whether or not you design it that way. Think of it this way: The shadow your business casts will be your shadow. If you are sloppy, rude, or naively trusting, your business will mirror these attributes. If your personal characteristics are more positive than those, your business will be more positive, too. To put this concretely, suppose you go out for the Sunday paper and are met by a store clerk who is groggy from a hangover and badmouths his girlfriend in front of you. Chances are that next Sunday will find you at a different news stand.

I’m not saying you need to be psychologically perfect to run a small business. But to succeed, you must ask people for their money every day and convince a substantial number of them to give it to you. While providing your goods or services, you will create intimate personal relationships with a number of people. It makes no difference whether you refer to people who give you money as clients, customers, patients, members, students, or disciples. It makes a great deal of difference to your chances of ultimate success if you understand that these people are exchanging their money for the conviction that you are giving them their money’s worth.

The following self-evaluation exercises will help you assess whether you have what it takes to successfully run a small business. Take out a blank sheet of paper or open a computer file.

Your Strong and Weak Points

Take a few minutes to list your personal and business strengths and weaknesses. Include everything you can think of, even if it doesn’t appear to be related to your business. For instance, your strong points may include the mastery of a hobby, your positive personality traits, and your sexual charisma, as well as your specific business skills. Take your time and be generous.

To provide you with a little help, I include a sample list for Antoinette Gorzak, a personal friend who has what she hopes is a good business idea: a slightly different approach to selling women’s clothing. You’ll get to know her better as we go along. Her strengths, weaknesses, fantasies, and fears are surely different from yours. So, too, almost certainly, is the business she wants to start. So be sure to make your own lists, don’t copy Antoinette’s.

Antoinette Gorzak: My Strong and Weak Points

Strong Points (in no particular order)

1. Knowledge of all aspects of women’s fashion business

2. Ability to translate abstract objectives into concrete steps

3. Good cook

4. Faithful friend and kind to animals

5. When I set a goal, I can be relentless in achieving it

6. Ability to make and keep good business friends—I have had many repeat customers at other jobs.

Weak Points

1. Impatience

2. Dislike of repetitive detail 3. Romantic (is this a weak point in business?)

4. Tendency to postpone working on problems

5. Tendency to lose patience with fools (sometimes I carry this too far— especially when I’m tired).

Your list of strong and weak points will help you see any obvious conflicts between your personality and the business you’re in or want to start. For example, if you don’t like being around people but plan to start a life insurance agency with you as the primary salesperson, you may have a personality clash with your business. The solution might be to find another part of the insurance business that doesn’t require as much people contact.

Unfortunately, many people don’t realize that their personalities will have a direct bearing on their business success. An example close to the experience of folks at Nolo involves bookstores. In the years since Nolo began publishing, they have seen all sorts of people, from retired librarians to unemployed Ph.D.s, open bookstores. A large percentage of these stores have failed because the skills needed to run a successful bookstore involve more than a love of books.

General and Specific Skills Your Business Needs

Businesses need two kinds of skills to survive and prosper: Skills for business in general and skills specifi c to the particular business. For example, every business needs someone to keep good financial records. On the other hand, the tender touch and manual dexterity needed by glass blowers are not skills needed by the average paving contractor.

Next, take a few minutes and list the skills your business needs. Don’t worry about making an exhaustively complete list, just jot down the fi rst things that come to mind. Make sure you have some general business skills as well as some of the more important skills specifi c to your particular business.

If you don’t have all the skills your business needs, your backers will want to know how you will make up for the defi ciency. For example, let’s say you want to start a trucking business. You have a good background in maintenance, truck repair, and long distance driving, and you know how to sell and get work. Sounds good so far—but, let’s say you don’t know the first thing about book keeping or cash flow management and the thought of using a computer makes you nervous. Because some trucking businesses work on large dollar volumes, small profit margins, and slow-paying customers, your backers will expect you to learn cash fl ow management or hire someone qualified to handle that part of the business.

Antoinette Gorzak: General and Specific Skills My Business Needs
1. How to motivate employees
2. How to keep decent records
3. How to make customers and employees think the business is special
4. How to know what the customers want—today and, more important in the clothing business, to keep half-astep ahead
5. How to sell
6. How to manage inventory
7. How to judge people.

Your Likes and Dislikes

Take a few minutes and make a list of the things you really like doing and those you don’t enjoy. Write this list without thinking about the business—simply concentrate on what makes you happy or unhappy.

If you enjoy talking to new people, keeping books, or working with computers, be sure to include those. Put down all the activities you can think of that give you pleasure. Antoinette’s list is shown as an example.

As a business owner, you will spend most of your waking hours in the business, and if it doesn’t make you happy, you probably won’t be very good at it. If this list creates doubts about whether you’re pursuing the right business, I suggest you let your unconscious mind work on the problem. Most likely, you’ll know the answer after one or two good night’s sleep.

Antoinette Gorzak: My Likes and Dislikes Things

I Like to Do
1. Be independent and make my own decisions
2. Keep things orderly. I am almost compulsive about this
3. Take skiing trips
4. Work with good, intelligent people
5. Cook with Jack
6. Care about my work.

Things I Don’t Like to Do
1. Work for a dimwit boss
2. Feel like I have a dead-end job
3. Make people unhappy.

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   Caution!   

if your list contains several things you really don’t like doing and nothing at all that you like doing, it may be a sign that you have a negative attitude at this time in your life. If so, you may wish to think carefully about your decision to enter or expand a business at this time. Chances are your negative attitude will reduce your chances of business success.

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Specific Business Goals

Finally, list your specific business goals. Exactly what do you want your business to accomplish for you? Freedom from 9 to 5? Money—and if so, how much? More time with the children? Making the world or your little part of it a better place? It’s your wish list, so be specific and enjoy writing it.

Antoinette Gorzak: My Specific Business Goals
1. Have my own business that gives me a decent living and fi nancial independence
2. Work with and sell to my friends and acquaintances as well as new customers
3. Introduce clothing presently unavailable in my city and provide a real service for working women
4. Be part of the growing network of successful business women
5. Be respected for my success.