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Money Management (Distributed by the New Jersey Society of Certified Public Accountants)

Do You Have What It Takes to Make the Entrepreneurial Leap?


Many people dream of starting their own business. But working for yourself is not as easy as it seems. Before you take the big leap, it's a good idea to honestly assess whether you have the characteristics and skills it takes to make it on your own. According to the New Jersey Society of Certified Public Accountants (NJSCPA), the following traits are important for those who are thinking of striking out solo.

Self-Confidence - Self-confidence is critical for entrepreneurs who must face the risks involved in starting a business and make it through the natural dry spells. The confidence to make decisions quickly, independently and often under pressure is also essential.

Integrity - People like to do business with individuals they trust. To build your integrity, be honest, listen to people, treat them with respect, don't over promise and admit when you've made a mistake.

High Energy Level - Starting and running a business can be exciting, but it requires considerable energy and long work hours. Be sure you are prepared to make the physical and mental commitments.

Experience - Although some entrepreneurs have been known to defy this wisdom, it's best to start a business in an area in which you have both an interest and experience. This can minimize any learning curves.

Support - Does your family support your decision to work for yourself? As a new business owner, it's important to realize that your life is going to change in many ways, all of which are not positive. It's best if everyone concerned has realistic expectations of the time and money that will be required.

Passion - Passion is a characteristic that is difficult to develop. It's important to have a passion for your business from the beginning. When you have passion, your work is your play. The demands of running a business can wear you down, but passion helps transcend those feelings of burnout.

Adequate Resources - According to Dun & Bradstreet, one of the two most common reasons businesses fail is that the owner underestimates how much money it will take to get the business off the ground. You can count on needing more money than you think you'll need, so be sure you have access to extra funds through your own savings or another means.

Organization Skills - If you're like most small-business owners, it's likely that you will be filling many roles from chief executive officer to janitor. In order to make the best use of your time, you need to be organized and consider where it makes the most sense to delegate responsibilities.

Competitive Nature - From day one, you and your business will face competition from both expected and unexpected sources. To survive, a competitive spirit is a must.

Risk Taker - Starting a business can be a big risk, but it won't be the first or last risk you face. Entrepreneurs are not afraid of taking calculated risks. They learn from failures. Someone who is comfortable taking risks is more likely to make decisions that will result in company growth.

Flexibility - As an entrepreneur, you have to be flexible because things can change quickly. Successful entrepreneurs know how to adjust to the changing demands of a growing business and develop the skills to deal with change on a regular basis.

For the right person, starting and running a business can be a rewarding experience with endless challenges and opportunities for learning. For more advice about starting a business, consult with a certified public accountant (CPA) who can help you determine if the entrepreneurial life is right for you. If you don't have a CPA, you can easily locate one online using the NJSCPA Find-A-CPA service. Just go to www.findacpa.org and in a few clicks, you can locate a highly qualified professional who is right for you.

If you would like to receive more information on various financial matters, subscribe to E-CPA, the NJSCPA's free, monthly email newsletter. To subscribe, visit www.njscpa.org/finances or email a subscription request to e-cpa@njscpa.org.

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Money Management is a weekly column on personal finance distributed by the NJSCPA.

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