Should You Start a Business?

Real entrepreneurs tell how to make the right decision

As honestly as you can, answer the following questions: Were you a high achiever in high school? Do you like team sports? Are you prone to optimism?

If your answers to the above questions amount to a resounding "who cares?" you may indeed have what it takes to start a business. Because the hard truth is that no quick quiz can answer the tough questions you have to ask yourself before setting off on your own. And even if a test confirms you have the traits of a risk taker, that still says nothing about those other prominent predictors of entrepreneurial survival: your skills, your idea, your financing, your motivation.

Those are just some of the difficult issues you need to contemplate before you make any moves. Contemplate? The very word probably contradicts most of what you already believe about entrepreneurship: that it's a spontaneous act fired by a blazing urgency. You start a company because you have to do it. You succeed because you know you will.

If only it really happened that way.

Truthfully, there are few people for whom starting a business is an inescapable destiny. For most, creating a company comes not through a self-fueling fire in the belly and an instantly recognizable brilliant idea, but as a slow revelation.

No one is suggesting that to start a company, you should think every ramification through to its potentially paralyzing conclusion. But the clearer your reasons for being in business, the better you'll feel about navigating the inevitable storms -- a vaporizing client, the defection of a key manager, a softening economy. "We almost lost our pulse," recalls Ken Dychtwald, whose consulting firm nearly fell victim to the recession last spring. "I questioned all my basic assumptions: Do I really care about this? Do I want to do it? That's what gets you into business, and that's what keeps you in it. You have to go deep inside and find out what matters to you and how much."

The closer you are to your values, the more in control you'll feel of your company's destiny. "However it is going to turn out," says Paul Hawken, cofounder and chief executive of Smith & Hawken, a $70-million direct-marketing firm, "the seeds are in the beginning."

These days, it seems, more and more people are thinking about entrepreneurship, from middle managers ousted from large corporations to graying baby boomers. With that in mind, here are some of the broad questions many company founders thought through -- or wish they had -- before they set down the first syllable of their business plans:

Is my idea good enough? Few entrepreneurs would dispute the role a spellbinding idea plays in getting a company off the ground: none whatsoever.

Maybe every generation or so, there's a revolutionary breakthrough -- the computer chip, for example, or the automatic garage-door opener -- that turns a tinkerer into a billionaire.

More typically, though, an entrepreneur simply follows a long-held fascination to the point of trying to make it useful and exciting to others. "Inside of me I had a feeling for 20 years about building an enterprise with this theme," says Dychtwald, cofounder and chief executive of Age Wave Inc., a marketing and training firm that focuses on researching consumers over 50. "If you believe in something, and you feel inside yourself that your belief is strong and rich, it will carry you forward." It's not as if all obstacles will bow before your devotion, but your commitment will enable you to derive tremendous satisfaction from solving those problems.

That's not to say, however, that you should follow your heart to the exclusion of thinking about whether there are any customers out there. Philip Crosby, the quality expert who founded, built, and sold Philip Crosby Associates Inc. (PCA), reduces his criteria for going into business to one neat question: Will anyone plunk down actual money for what you're planning to offer? "It doesn't matter if the product is great or inefficient," he says. "I knew I didn't want to start a company where I had to beg for business." Before leaving his job as corporate vice-president of quality at ITT Corp., Crosby spent weekends and nights tapping out a book on a portable typewriter. Published in 1979, Crosby's Quality Is Free is written in ninth-grade English and targeted at the country's top executives. When it garnered flattering reviews from the likes of Business Week, and phone calls from giants like IBM Corp., he plowed his savings into PCA. "I knew these people were out there," says Crosby, who built an $80-million public enterprise. "But I didn't quit ITT until the book was a hit."

Of course, the best-seller list is not the most logical place to test a business idea. (Crosby did so, he says, because "it's amazing, the credibility that writing a book gives you. People respond to books, even though they don't really read them.") Mo Siegel was barely 21 and almost flat broke in 1970, when he started Celestial Seasonings Inc., a maker of herbal tea.

A travel lover, Siegel had trekked to Europe to collect as much information about tea consumption as he could. Then he tested his flavored brews by serving them to customers in the health-food store he owned. "A person who goes out there and blindly attempts something is really making a mistake," warns Siegel, whose company now sells nearly $50 million worth of tea annually. "The world is sophisticated and tough, and it's ruthless. If I had a passion for a cup of tea that only I was going to like, then I should have made just one tea bag."

Siegel's advice, appropriately boiled-down: do as much market research as you can afford.

Do I have the management skills I'll need? The average entrepreneur usually lists among his or her distinctive skills the following management disciplines: every single one of them. And it's true that in the early days, entrepreneurs have to serve as a jack-of-most-trades. But they don't have to do everything equally well. "Often, people aren't complete," says Hawken. "It's important to know your limitations."

Most entrepreneurs possess an odd grab bag of skills, including some specific to their industries and others common to all business endeavors. You may, for instance, be great at coming up with ideas but have no head for numbers. Or maybe you have marketing, operations, and finance down cold, but you don't know the key variables to success in your chosen industry. Before launching Executive Temporaries Inc., in 1984, Suzanne Clifton sought out other entrepreneurs in her industry -- in regions far away from her home base of Raleigh, N.C. -- to find out "what it takes to operate this kind of business," she says. Keep a keen eye on cash flow, they warned her, because this is a payroll-intensive business. "A mentor can help you survive those first tough years," says Clifton, whose company now posts sales of $4 million.