Look Before You Leap

The goal of most entrepreneurs is to achieve financial independence and free up time for other pursuits. Most would-be entrepreneurs are aware of the common downfalls and mistakes others in the same industry have experienced. As such, these entrepreneurs begin their business armed with moderate industry familiarity and a first-hand knowledge of the pitfalls that could hamper their progress.

However, this industry familiarity and knowledge are often insufficient to shield a business in its infancy against the dangers of the marketplace. As a future entrepreneur, it would behoove you to know why many businesses fail. These mistakes may often be easily avoided with the proper upfront guidance and planning. Dun and Bradstreet suggest the following are common reasons for business failure:

Improper management practices, including poor cost controls.
Inadequate or poorly executed marketing.
Poor location.
Failure to invest in new products and efficient technology.
Lack of adequate financing.

One of the reasons not typically mentioned in management literature for business failure is the lack of knowledge about the entrepreneur. Try asking yourself:

Do I really have what it takes to be an entrepreneur?
Do I know what business skills are required to be a successful entrepreneur?
What is my understanding based on?
What specific personal characteristics do successful entrepreneurs have which help them flourish?
Do I know what level of risk I feel comfortable with?
How much do I know about ALL of the functions of being a business owner?
What specific strengths and weakness do I bring to the table?
Based on my strengths and weaknesses, what types of business opportunities most align with me?