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Do You Have What It Takes to Start a Small Business?

Starting a small business may sound like a great idea, but do you really have what it takes to be successful? Small business ownership can be a wonderful way to earn a living. But we've all heard the statistics about the number of new business startups that fail in the first year. The truth is that many of those small-business failures could have been avoided if their owners had asked themselves some hard questions before they launched the business in the first place.

If you are thinking about starting a small business, here are some hard questions you need to ask yourself:

What are my qualifications to start a small business?

The first question you need to ask is whether or not you are qualified to start the type of business you are thinking about starting. If you plan to open a restaurant, what do you know about the food service industry? If you plan to open an auto parts store, what do you know about cars? You get the idea.

If you don't have a background in the industry, you're going to have a difficult time making your business successful. Lack of experience doesn't necessarily mean that you shouldn't start your business, but rather that you should wait until you have the knowledge you need to make it a success.

Am I ready to be my own boss?

For many people, the reality of running a small business is much different than what they thought it would be. Remember, as the business owner you will be your own boss. If you don't possess qualities such as personal drive and self-motivation now, then what makes you think you will possess those qualities once you're in charge?

Ask people you trust whether they think you are ready to be a small business owner and give them permission to speak freely. The truth might be painful, but it's better to hear it now rather than after you have made the leap.

How comfortable am I with risk?

By nature, small business startups are risky ventures. Starting a small business will require you to risk your time, your reputation, and quite possibly your financial security on little more than a dream and a potentially good idea.

If you are not comfortable living with a significant amount of risk — especially during the first few years of the business — then you need to reconsider whether small business ownership is right for you. There is no shame in admitting that small business ownership involves more risk than you are willing to take on.

How will starting a business impact my family?

Small business ownership will change your life in many ways, some of which you probably haven't even considered yet. The demands of starting and operating a small business are intense. You will be called upon to give everything you have — your time, your effort, your life — to make the business successful. Make sure your family is prepared for the demands of small business ownership and that they are behind your decision.