Is starting an Online Business for You?

Here’s the test from the U.S. Small Business Administration to help determine whether you are ready to start a business. To have the SBA automatically tally your score, visit http://web.sba.gov/sbtn/sbat/index.cfm?Tool=4. This interactive tool will review your answers and make suggestions as to how to turn your answers from “No” to “Yes.”

 Answer “Yes” or “No” to the following questions:

 General

• Do you think you are ready to start a business?
• Have you ever worked in a business similar to what you are planning to start?
• Would people who know you say you are well suited to be self-employed?
• Do you have support for your business from family and friends?
• Have you ever taken a course or seminar designed to teach you how to start and manage a small business?
• Have you discussed your business idea, business plan, or proposed business with a business coach or counselor, such as a faculty advisor, SCORE counselor, Small Business Development Center counselor, or other economic development advisor?
• Do you have a family member or relative who owns a business?

Personal Characteristics

• Do you consider yourself to be a leader and a self-starter?
• Would other people consider you to be a leader?
• Are you willing to invest a significant portion of your savings or net worth to get your business started if you need to purchase inventory and equipment?
• Do you have enough confidence in yourself and your abilities to sustain yourself in business, if or when things get tough?
• Do you like to make your own decisions?
• Are you prepared, if needed, to temporarily lower your standard of living until your business is firmly established?
• Do others turn to you for help in making decisions?
• Are you willing to commit long hours to making your business work?
• Would others consider you a team player?

Skills, Experience, and Training

• Do you have a business plan for the business you are planning to start?
• Do you know and understand the components of a business plan?
• Do you know what form of legal ownership (sole proprietor, partnership, or corporation) is best for your business?
• Do you know why some consider business planning to be the most important factor in determining your business success?
• Do you know whether your business will require a special license or permit and how to obtain it?
• Do you know where to find demographic data and information about your customers?
• Do you know how to compute the financial break-even point for your business?
• Do you know how to compute the start-up costs for your business?
• Do you know about the various loan programs that are available from banks in your area and the SBA if you need money to get your business started?
• Do you understand how a business loan can impact your credit?
• Do you know how to prepare and/or interpret a balance sheet, income statement, and cash flow statement?
• Do you know why small business loans are considered more risky than loans made to large businesses?
• Are you sure your planned business fills a specific market need?
• Do you know your target market?
• Do you understand the tax requirements associated with your business?
• Do you know how to prepare a marketing strategy for your business?
• Do you know how to learn about your business competitors?
• Do you understand marketing trends in your business industry?
• Do you feel comfortable using a computer or other technology to improve business operations?
• Do you have a payroll process planned for your business?
• Do you have a customer service strategy in mind or in place?
• Do you know how to obtain an Employer Identification Number (EIN) for your business?
• Do you know whether your business should have some form of intellectual property protection?
• Do you know where to obtain information about regulations and compliance requirements that impact your business?