Small business owner self-evaluation guide for potential small business owners and entrepreneurs.
Self-evaluation is a tool that helps in the analysis of one’s goals, interests, skills and experience.
For potential small business owners, this a critical analysis that would help you in recognising your strengths and your weaknesses.
The importance of small business owner self-evaluation
Self-evaluation should be an important item on your checklist for starting a business.
Small business owner self-evaluation is also a useful analysis that should be done at regular intervals after you start your business.
Although you may have the resources needed to start your business or you’re confident about your business idea.
Without a self-evaluation, you may not know the strong areas you need to enhance and the weak areas you need to develop.
A small business owner self-evaluation is a checklist of questions. These questions address factors that help to determine how well you are able to identify and exploit business opportunities.
- What business skills do I have?
- Where does my passion lie?
- Where is my area of expertise?
- How much capital do I have?
- How much do I have in savings?
- Do I really want to start a business?
List of questions for small business owner self-evaluation
In this section, we’ll go through the lists of questions that will guide you in making a self-assessment of your ability to start a successful business:
What business skills do I have?
As a small business owner, you’ll need to do a lot of things by yourself. Therefore, you will be a jack-of-all-trade.
In order to be successful, you’ll need the following essential skills.
Delegation skill allows you to effectively assign responsibility to others. However, at the same time, you are effectively in control of the business.
Team building skills
Another important skill you need is team building skills. This is the ability to gather support for your business and work together with employees, partners and investors.
This skill is about knowing how to gather, review and evaluate data into useful information.
The skill would help you to objectively assess the state of your business at a current stage. And to make necessary changes for the future.
Being able to motivate others towards a common goal and getting things done.
Also, leadership skill would help you take charge and manage important business relationships such as those with employees and investors.
Effective communication skills is important for being able to clearly express the business goals and vision to employees and investors. You also need good communication skills to be able to effectively satisfy your customers.
Other important skills needed for small business success are; negotiation skills, planning skills, time management skills, sales and marketing skills and general management skills etc.
Where does my passion lie?
This is another important question to ask when carrying out a small business owner self-assessment.
Passion is important in entrepreneurial engagement because it can fuel motivation.
When you are a passionate business owner, your mental mental activity is enhanced.
In addition, passion provides meaning to everyday work – particularly for small businesses that don’t want to live small and die small.
Your passion may lie in entrepreneurial activities, such as:
- Exploring new market ideas
- Sourcing founding capital
- Establishing and developing new products
A passion for entrepreneurial activities would make you interested in starting a small business and to become an entrepreneur.
The discovery of new opportunities helps to differentiate a business from others because not all owners/managers of small businesses are entrepreneurs.
However, passion alone will not make owner/managers to engage or be successful at being entrepreneurial.
In addition to being passionate and willing to engage in entrepreneurship, owner/managers also require resources (both capital and human) in order to discover, evaluate, and exploit opportunities.
The small business owners/managers who are passionate would still require access to resources in order to effectively transfer their passion to actual practice and engage in entrepreneurial activity.
Where is my area of expertise?
What are the things you’ve done in the past? For example, the skills you gained in your previous employment might be transferable to your business pursuit.
Make use of your resume to answer this question.
There would be things you’ve done in the past that would help reinforce your expertise in a certain area or areas.
The skills you gained through prior experience coupled with hardwork and resilience will make you successfully turn your passion into a business.
How much capital do I have?
Carefully consider how much capital you have raised personally or through family and friends.
Are you considering raising funds formally?
Do you have a business plan?
Have you customised your business plan for the funders you are targeting?
How much do I have in savings?
Considering that most businesses fail, ask yourself how much you can afford to spend.
In addition, realistically consider the sort of lifestyle you want to live in relation to what you might get from the business.
Do I really want to start a business?
Considering the challenges of being a business owner, if you don’t earn a salary for months would you be able to survive?
Would you rather have a business as a side hustle or even better, invest in other people’s business?
Are you better off being an employee? Entrepreneurship is not for everybody.
Proper self-evaluation before you start a business or at regular intervals will help to prevent a waste of resources and a poor management of your business.
Also, you will be able to improve your chances of access to better credit and gain mutual trust with business partners.
It will help you identify areas where you lack the necessary skills and adequate knowledge. This will also help you identify your training needs.