INTRODUCTION

The "Entrepreneur?" questionnaire, which you recently completed, asked you questions about yourself, your values, about things which are important to you, and about how you work with other people.

This report is individually prepared for you personally, based on your responses to those questions, and discusses a number of factors about you in relation to self-employment. It is not a statement of absolute truth, but rather a series of observations, deductions, and inferences and should be studied carefully to see what lessons can be learned to assist you in deciding whether or not, and how, to go ahead with your new venture. We recommend that you discuss the results in some detail with someone (or some people) whose judgement you value, especially where the comments appear to conflict with your own opinion of yourself. One or two of the comments may indeed be inaccurate, but don't let this distract you from the overall meaning of the full report.

What this report does

The main purpose of this questionnaire is to help you appraise your strengths and analyse your weaknesses more carefully before you embark on the next stage of your career. The report aims to assist you to build on your strengths and to enable you to seek back-up, training, the support of others, or other services to support those areas of your personality and skills/experience needing attention. This applies whatever you decide to do, but especially if you are pursuing some form of self-employed option.

The nature of Self-Employment

Note that many aspects of being a self-employed/independent consultant or interim manager are closely equivalent to other self-employed options. However, in some ways such self-employment can also be close to the role of a professional employed manager in a commercial enterprise. Similar comments may also apply to the self-employment of those considering the purchase of (or buying a major stake in) a significant employing company as (part of) a management buy-in or buy-out. Some of the attached comments may therefore need to be read with caution if you are considering one of these options.

Please bear in mind that many people aspiring to self-employment have a tendency to see themselves through rose-tinted glasses and answer this questionnaire visualising themselves as they would like to be rather than as they are. This is particularly so with the 'social acceptability' questions (e.g. "Are you good with people" or "I learn from my mistakes") where there is a high temptation to say "Yes, very like me" when the truth may be somewhat less positive. Many find it hard to be totally objective about such issues. The comments included in this report assume you have answered all the questions truthfully and objectively.

Please read the complete report before you consider the implications for you and your potential new venture. Many of the comments may apply very closely the second time you read them!

Finally, a word of caution...

We have purposefully set the criteria for success fairly high. Our benchmarks are set for people who can start and run very successful and profitable enterprises - indeed, 'making millions' is taken as the interpretation of being very successful indeed - only the top very few taking this questionnaire will fit this profile. If you receive a 'lower than average' or 'average' result in the next section 'Your personal profile', it does not mean that you cannot be successful, but rather that your level of success based on the above criterion is unlikely to be 'very high indeed'. However, many people run independent businesses that they themselves consider to be successful e.g. where the business provides them with employment, or meets a need such as topping up a previous employer's pension (adequate or less than adequate), or a role which covers the costs of a 'grown-up hobby', or indeed one which represents a very satisfactory second income to support a main income stream earned elsewhere. We each have different criteria for our own success and you must apply these to your own situation. What we have done is to paint the overall canvass.

The section which comes after 'Your personal profile' is entitled 'Areas for further consideration' and sets out some comments we believe you should find helpful if you decide to proceed with establishing your new business.

SECTION 1 - YOUR PERSONAL PROFILE

INTRODUCTION

The personal profile of the successful entrepreneur can include a wide range of qualities, skills, and experience which in part depends on the business sector of the venture he/she has started and method of entry for the operation. Even where budding entrepreneurs have similar profiles, some will succeed and others fail as fate or external circumstances play their part. Self-employment may suit some people and be a disaster for others for reasons only discovered long after the decision to start up the venture has been taken. However, a careful review of your strengths and weaknesses and of this profile will indicate your general potential for success. Remember - if you are serious about your new venture, it's better to face some perhaps unwelcome truths now, rather than meet them and their consequences a few months after you start.

Some key factors for success include resilience, persistence/determination, hard work, having selling and marketing skills, showing sound judgement, having a 'killer instinct' or 'ruthless streak', showing sufficient flexibility, being customer aware at all times, having the ability to play hunches successfully, with creativity and self-confidence, coupled with some previous experience in the same business area. You certainly also need to like the work you do, as it will form a major part of your new life.

Your Responses

Your responses to the questionnaire could be described as an 'average result' when compared to other people undertaking it, but there are significant gaps when comparing your results to those of people who are seen by the world to be 'running very successful businesses'. You need to consider whether these factors are critical for success in the field you have chosen and against your own criteria for success. A commonly held view is that anything other than wholehearted determination to run your own business is unlikely to be successful (against a general success criterion of 'making a lot of money'). In this event, you would do well to consider carefully whether you are indeed wholly committed to making a success of your own business or whether something else, more in the line of traditional employment will be a better option for you. Would this offer you sufficient reward, power, and satisfaction instead? You should also consider whether to seek a partner who can complement your missing skills and experience.

In the tough business world out there, you cannot afford to be complacent! Your self-appraisal has identified areas where additional training or experience could be useful. Furthermore, it would be sensible for you to evaluate your proposed business venture carefully - and then to check your evaluation against the benefits of full-time employment and any other options you have. It could also be that your criteria for success are not as high as the 'very successful entrepreneurs' considered as role models. Carefully evaluate what you want to achieve out of the new venture and your chances of achieving success in your terms.

In getting ready for your new business, the preparation of a comprehensive business plan, whether or not anyone else is involved in your decisions, could make a significant difference to the chances for success. Business plans are not just for banks and do not require extensive financial analysis. More important is a review of the key strengths, weaknesses, opportunities and threats for your planned venture, considering the 'what if' questions and what you can do about them (e.g. "What if sales are half what I expect?" or "What if there is too much work for me to handle?") The most important part of the plan is the thinking that you put into it; it is far better to consider problems and possible actions to compensate well ahead of time. Planning is hard work, if done properly, but invaluable for a new venture.

AREAS FOR FURTHER CONSIDERATION

Determination

Most believe that a key determinant of creating a successful business is a fiery determination in the founder to be responsible for an independent business and a keenness to make a lot of money. Your responses to the questions show a lower than average determination and, whilst this does not mean you cannot be successful in running a business to your own satisfaction, it seems unlikely that other people will describe it as very successful, especially in financial terms. Does your commitment measure up to your business needs?

Hobby

Turning a hobby into a business may be a sensible idea - but equally, sometimes something which is enjoyable as a relaxation from work and/or for a short period of time may prove a millstone if it takes up all your time. Perhaps a good example of this is those people who enjoy cooking and decide to open a restaurant, but find the business of running a restaurant and coping with the administration, staff, and customers too demanding - as well as taking them away from the pleasure of cooking.

Work-rate

Experience seems to show that the work rate required in starting and running your own business is often much higher than it is in employment. This seems particularly so in the early years of the new venture when the entrepreneur has to cover a multitude of tasks, not only for the base business, but all the support services as well. Your responses indicate this increase may not be to your liking, (unless you are already working all the hours available and cannot work more!), so perhaps you should rethink your objectives to allow you to meet lower targets or accept a higher work rate.

Operating Style

Self-employment also brings with it some added responsibilities and you may not be able to operate completely as you wish. Customers, staff, suppliers, the bank, etc. all make demands on your time - some of which may not have interfered with your previous working or social life.

Plans v Action

In considering the options of planning or action as a first step, your responses to the questions have not indicated a real preference. In a new business, both planning and action are required, but a balance is needed between the time needed to prepare detailed and costed plans and getting 'out there' to win business and achieve sales.

If you are going to be in business on your own, you will need to provide all the expertise - which means being able to swing easily from planning to action - and back again if results do not meet your plans.

Stress

Stress can be caused by many factors. Problems seem to arise if someone has too much or too little stress in their lives (measured against their own individual standards). There is no doubt that embarking on any new venture can be stressful, especially when starting up your own business, and someone with your scores should be aware of the risks and use stress management techniques accordingly.

For most people, the stresses and strains of running their own business will exceed those of employment - although this may be compensated for, or even overcome, by the 'buzz' gained from owning the business and deciding the policy and action. It is unlikely too that a new business will reach 'steady state' for a few years (some would say "It is never in steady state") so perhaps stress levels may remain higher.

People skills

One of the key attributes of the successful entrepreneur is the ability to 'sense' other people's needs, emotions etc. and to manoeuvre his/her way through to success as a result. You see your people skills as one of your strengths, but don't forget that while you are out there having fun with people and building relationships etc. that you also need to get orders, deliver products/services, get invoices paid and meet targets!

Fairness

Operating your own business may not allow you the time or luxury of giving the importance you believe is required to being fair to your employees, customers, suppliers and others. That is not to say that you should stray outside the law or good commercial practice, but the saying "It's a hard world" was coined with the self-employed in mind. Be prepared to be adequately hard-nosed to achieve the objectives you have set yourself, even if it entails not being totally fair to all others. Of more concern perhaps is the required need to keep your customers happy - which may at times feel that you are being less than fair to yourself (or your business).

Determination

It may not be possible to meet your criteria of being both tough and fair if you want to achieve your business objectives and carry your staff, customers and suppliers with you every step of the way. You will need to strike a careful balance between being tough and fair. You will need to be adequately hard-nosed to achieve the business objectives you have set - even if it means not being totally fair to all others (and yourself). You will also need to rein-in your desire to be tough when the business need is to carry people with you - especially people who can go elsewhere.

Effective

We all like to think that we can and do learn from our mistakes, but often we are not being totally honest with ourselves when we say we do. If you truly think you learn from your mistakes, this will usually stand you in good stead - but sometimes it is important to get things under way and not to worry too much about mistakes - as long as you take prompt, effective action to minimise the damage. Remember the adage that "Being 51% right is enough to be successful". Immediate change may be another mistake!

Criticism

Criticism comes naturally to some people, particularly when faced with someone starting a new business. Learn to pick out the good elements from the bad and review these carefully. You must decide which, if any, to take on board and to adopt those which will improve the business. It can be just as much a mistake to adopt any and all criticism offered as to completely ignore all criticism. Often too, a helpful comment from someone can sound like criticism to the recipient - check it out!

Time management

Time management in the smaller business can be a real issue for the founder. You have indicated your preparedness to tackle many issues - you should not forget that your valuable and limited time might be better spent in earning fees or achieving sales or possibly in planning for the future. This may entail delegating some of the more manageable tasks to employees or sub-contractors.

Alternate views

Two major benefits often seen by those who are about to start their own businesses are the time saved by the absence of meetings, and no longer needing to persuade colleagues before taking action i.e. being able to operate quickly on one's own. The converse is that there is no longer anyone with allied interests with whom to 'chew the cud' on major issues or changes. If you enjoy being able to discuss problems with others prior to taking action, or you rely on the skills of others to some extent, you will need to consider putting these in place for your new business - whether on an informal or formal basis. However you will need to remember that other people will no longer have the allied interests that your former business colleagues had.

SECTION 2 - SPECIFIC ISSUES

The next part of the questionnaire asked you about three specific areas which will impact on your new business venture - money, family issues and business skills; detailed comments on each area follow.

SECTION 2(a) - MONEY

Many new businesses fail for financial reasons, although the causes behind these financial reasons may be nothing directly to do with money. In any new business, more attention than usual will need to be given to the financial side of things as the business has no reserves generated in previous years to fall back on should problems be met. In the specific area of money, your responses indicated the following key concerns:-

You were asked whether you would sell your house to remain in business. There is no suggestion that you should do so, nor that this is a requirement in any way, but we are drawing to your attention that it could become the only way to continue in business. Professional lenders are very likely to seek personal guarantees from the owners of a newer business, who are then at risk if the business falters. Conversely, until the business is reasonably well established, equity investors may be uninterested; even when they will consider investing, they will be seeking sufficient reward for their perceived risk. You should evaluate most carefully how much cash is needed to sustain the business over the next three years, where it will come from, and how much is required for a sufficient contingency fund. It is VERY DIFFICULT to raise additional cash later, especially if the need for cash arrives when you hit problems and if you have not been meeting the agreed targets.

SECTION 2(b) - FAMILY ISSUES

In this section, the word 'family' is used to describe those close to you, whatever the relationship. It includes people who will be affected by your decisions, people with whom you relate regularly, and those who have concern for your welfare.

Moving into self-employment can cause a number of stresses and strains to emerge in your personal life, if only because the divisions between personal and business life become more indistinct. Be aware that what seems obvious to you may not be clear to your family (and vice versa) and pay particular attention to the following:-

Experience has shown that it is an undoubted advantage for those intending to start a business if they are born into a family where this is customary. If your family does not have this history, there is clearly little you can do now except seek to be the first in the family who does it successfully!

SECTION 2(c) - SPECIFIC SKILLS

In this section of the questionnaire you were asked about specific skills related to the running of an 'own business' rather than about the specific skills you would need for the business idea itself. In general, the establishment and running of an 'own business' requires a wider range of skills than in employment; you identified the following as worthy of further review:-

Probably the key activity in any 'own business' is selling. If you cannot sell at all, perhaps you should not consider going into business on your own as all businesses require a selling operation. You have identified this as an area of weakness for you and it should probably be addressed before almost anything else. Consider attending sales training courses in your specialist area - or indeed in any area - read widely, talk to others who need to meet customers in a similar way. Seek to learn from other people's experience rather than waiting to learn from your own.

Professional advisors will be needed in most self-employed situations, if only for accounts and any legal issues (e.g. contracts). To identify someone suitable, the best recommendation is a personal one from someone operating a business of similar size. Try to line up your advisors before you need them desperately, and remember that in most cases they charge for their time on an hourly basis - so prepare well for meetings.

If you cannot identify a lawyer through your business or personal network, you could contact the Law Society for suggestions and if you similarly cannot locate an accountant, get in touch with the Institute of Chartered Accountants, the Institute of Chartered Management Accountants, or the Institute of Certified Accountants.

Before you spend too much time, energy and money on your projected business, you should establish whether there really is a market for it. This does not necessarily mean engaging the services of a market research agency or purchasing expensive reports. It is more a matter of proving your hunch that the business can survive and prosper by asking potential clients/customers and other contacts for their views. Most of your contacts will be only too happy to comment, and you should carefully prepare the questions you want to ask - to obtain as much information as possible whilst you have their attention. Collect and analyse data of a qualified and quantified nature on the market, competition, customer views, preferences and experiences, etc.

In your new business there is no-one but you to 'make it happen'. You recorded a doubtful response to the question about this and must consider whether you have the ability to get your new business off the ground sufficiently quickly. The market you are entering will provide some competition for your business and you will need to be fleet of foot to stay ahead.

This is the end of your report.

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