I had a very interesting discussion today with a “retired” entrepreneur who had started several successful ventures in his hometown. We were discussing the topic of starting a business; in particular, how can a person know that this is the right business to start and succeed with it.
According to him, he only ask himself three questions:
1. Is this a business that I can do? He basically looks at whether he has the resources, skills, knowhow and right support to start the business. If he feels that the business is way over his head (and budget), he takes a step backwards and looks again why he is attracted to the business in the first place and what he can do to make it easier for him to start the business.
2. Do I understand how to grow and run this business? He never starts a business that he has not researched. Before embarking on the business, he reads whatever he can about the business from books, magazines or other sources of information he can get his hands on (even talking to current business owners).
3. If the business fails, how will it affect me and my family? As a family man with 3 kids, he always looks at the risks involved and the odds of his success. While he doesn’t believe in playing it safe, he also does not want to go blindly into something and lose everything his family has.