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Tuesday, 02 May 2017 08:20

Completing a Self-Assessment (Blog 4) Featured

 

Blog 4 image Completing a Self Assessment

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*The following information was taken from East Bay SCORE’s manual, “How to Start and Manage Your Small Business”. All references lead to the full copy of the guide which is free to download.

Completing a Self-Assessment

Overview

Each year there are more than 800,000 small business start-ups in the United States and only 40% will survive their first six years*.

With more and more workers being impacted by downsizing and outsourcing of jobs in large businesses, people desiring more independence and a more flexible workplace and environment, self-employment has become increasingly attractive as an alternative to traditional employment. As most experts will tell you, it is the primary option of choice for risk takers.

Because owning and operating a small business is risky, those who are not prepared for the demands on time, effort, and skill that are inherent in operating a business are likely to be facing an almost impossible task.

You also need to understand the difference between an idea and a business opportunity. An idea is a concept that may not have a market. A business opportunity is a market-driven, profitable venture.

We begin this workbook at exactly the same point you should begin the process of exploring self-employment by determining if you have what it takes to successfully start and operate a business of your own.

Self-Assessment Test

Starting a business is risky at best, but your chances of making it will be better if you first understand whether you have what it takes. Below are some questions to help you evaluate whether you do.

Questions to Ask Yourself

1. Are you a self-starter?

____ I do things on my own. No one has to tell me to get going.

____ If someone gets me started, I keep going all right.

____ Easy does it. I don't put myself out until I have to.

2. How do you feel about other people?

____ I like people and can get along with just about anyone.

____ I have plenty of friends and don't need anyone else.

____ Most people irritate me.

3. Can you lead others?

____ I can get most people to go along when I start something.

____ I can give the orders if someone tells me what we should do.

____ I let someone else get things moving; then I go along if I feel like it.

4. Can you take responsibility?

____ I like to take charge of things and see them through.

____ I'll take over if I have to, but I would rather let someone else be responsible.

____ There is always some eager beaver around wanting to show how smart he/she is. I say let 'em.

5. How good an organizer are you?

____ I like to have a plan before I start. I am usually the one to get things lined up.

____ I do all right unless things get too confused; then I quit.

____ I get all set and then something comes along and presents too many problems. So I just take things as they come.

6. How good a worker are you?

____ I can keep going as long as I need to. I don't mind working hard for something I want.

____ I will work hard for a while, but when I have had enough, that's it.

____ I can't see that hard work gets you anywhere.

7. Can you make decisions?

____ I can make up my mind in a hurry if I have to. It usually turns out okay too.

____ I can if I have plenty of time. If I have to make up my mind fast, I think later that I should have decided the other way.

____ I don't like to be the one to decide things.

8. Can people trust what you say?

____ You bet they can. I don't say things I don't mean.

____ I try to be on the level most of the time, but sometimes I say what is easiest.

____ Why bother if other people don't know the difference?

9. Can you stick with it?

____ If I make up my mind to do something, I don't let anything stop me.

____ I usually finish what I start - if it goes well.

____ If it doesn't go right immediately, I quit. Why beat my brains out?

10. How good is your health?

____ I never run down!

____ I have enough energy for most things I want to do.

____ I run out of energy sooner than most of my friends.

Now total the number of checks you have next to the first, second and third answers. If most of your checks are beside the first answers, you probably have what it takes to run a business. If not, you're likely to have more trouble than you can handle by yourself. Better find a partner who is strong on your weak points. If most of your checks are next to the third answers, even a good partner will not be able to shore you up.

Characteristics and Skills Necessary to Successfully Operate Your Business

The information in this section will provide you with an overview of those management aspects of a business in which you must achieve competency. The following are the business skills essential to successfully operate a business.

Personal Characteristics of a Successful Entrepreneur

• Has commitment, drive, energy to complete tasks

• Totally self-confident

• Reasonable risk taker

• Highly involved and innovative

• A goal setter

• Very competitive

• A money maker

• Has the ability to compete against self-imposed standards

• Has job and management skills or is willing to learn

• Can manage resources, finances, materials, people, technology

Analysis of Personal Situation

• Condition of health

• Currently employed or self-employed

• Source(s) of current income or cash flow

• Other potential source(s) of income

• Future job or employment prospects vs. own business

• Support of family

Analysis of Financial Situation

· Nature and extent of personal assets

· Business or personal debts

· Possible outside assets/funds for a loan retirement

· How much is needed to cover personal needs

· Has a personal budget been developed

· Determination of net worth

The following are the basic business skills considered to be essential to successfully operate and manage a business.

I. Managing Money

A. Ability to borrow money

B. Record keeping

C. Purchasing

D. Handling credit

E. Budgeting

II. Managing People

A. Hiring employees

B. Supervising employees

C. Training employees

D. Evaluating employees

E. Motivating employees

F. Terminating employees

III. Directing Business Operations

A. Buying supplies, equipment, and merchandise

B. Managing inventory

C. Filling orders for products/services

D. Managing the facilities

E. Directing sales operation

1. Obtaining necessary sales to cover costs

2. Teaching others how to sell

3. Identifying customer/client needs

F. Marketing

1. Analyzing potential customers/clients

2. Establishing pricing for products/services

3. Advertising

4. Budgeting

IV. Setting Up the Business

A. Choosing location or site

B. Obtaining required licensing and permits

C. Determining initial inventory

D. Obtaining financing

E. Planning short- and long-term cash flow

F. Choosing type of ownership

G. Building a support system

1. Attorney

2. Accountant and/or bookkeeper

3. Lender (bank, financial institution, credit union, private investor, etc.)

4. Insurance broker

5. Industry or business association(s)
6. Networking group(s)

7. Counselor/consultant (SCORE, Marketing Consultant)

8. Business coach or mentor

This was extracted from East Bay SCORE’s "How to Start and Manage Your Small Business." The full reference manual can be downloaded by clicking here.

East Bay SCORE, a resource partner of the U.S. Small Business Administration, provides free business counseling and low-cost workshops at multiple locations in Alameda, Contra Costa and Solano Counties. For more information, and to use our services, see our website (www.eastbayscore.org), email us at This email address is being protected from spambots. You need JavaScript enabled to view it., or call our office at 510-273-6611.

*This blog is intended to provide information to support startups and existing small businesses. A sincere effort is made to ensure accuracy, but no warranty, express or implied, is provided in that regard and East Bay SCORE and the author will not be liable for any errors or omissions in this blog.

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