Many people dream of starting a business - but are hesitant to start a business of

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1 Starting a Business Quiz Question 1 Question: You enjoy making decisions and being in charge. A. Definitely B. Most of the time C. Sometimes D. Not at all Wrong Answer Sorry, that's an incorrect answer. The correct answer to Question 1 is "A. Definitely." When you start a business, you re the one that has to make all the decisions, and live with the results of your choices. But this is one of the aspects of starting a business that would-be entrepreneurs look forward to. In fact, in an RBC Survey (conducted in August 2005), 81% of the people who said they wanted to start a business within the next five years chose being their own boss as the main reason they wanted to start a business. For more information on the qualities of successful entrepreneurs, see Thinking of Starting a Small Business? On to Question 2 of the Starting a Business Quiz. Starting a Business Quiz Question 2

2 Question: The most important quality for an entrepreneur to have is: A. A strong drive to make money B. Being a risk-taker C. Being well-organized D. Willingness to take the initiative Correct! Well done! Yes, the correct answer to Question 2 is "D. Willingness to take the initiative." While qualities/skills such as being well-organized are good to have when you re starting a business and to run a successful business, they are not rated that highly by successful entrepreneurs. When asked which traits contributed most to success, being willing to take the initative ranked highest of all the traits on the list above. A strong desire for money actually ranked near the bottom of the list. For more on this study, see Thinking of Starting a Small Business? You may also want to visit the collection of articles to learn more about the resources and qualities you need to successfully start a business. On to Question 3 of the Starting a Business Quiz. Starting a Business Quiz Question 3

3 Question: How much money do you have in savings? A. None B. Less than $10,000 C. $10,000 - $25,000 D. More than $25,000 Wrong Answer Sorry, that's not the best answer. The correct answer to Question 3 is "D. More than $25,000". While people like to talk about starting businesses on shoestrings, the truth is that starting a business costs money. In many cases, you will have a lot of outflow before any inflow. You will need something to live on while you get your new business off the ground. And while many people do get loans to finance starting a business, most lenders will expect you to contribute financially as well. You can get around this to a degree if you have collateral. For instance, it s not uncommon for people to mortgage their homes to start businesses. But starting a business is not for those who have no collateral or personal funding sources to call upon. If you are concerned about financing your new business, see 8 Sources of Business Start-Up Money and browse the Small Business Financing section of this website for sources of business loans and grants. On to Question 4 of the Starting a Business Quiz. Starting a Business Quiz Question 4

4 Question: You are flexible and can adapt quickly to changing circumstances. A. Definitely. B. Most of the time. C. Sometimes. D. Not at all. Wrong Answer No, that's not it. The correct answer to Question 4 is "A. Definitely". This is another of the traits that entrepreneurs themselves ranked very highly when asked which traits were most important to their success. (See Thinking of Starting a Small Business? for more on this study and other studies of entrepreneurial qualities.) You may also want to visit the collection of articles to learn more about the resources and qualities you need to successfully start a business. On to Question 5 of the Starting a Business Quiz. Starting a Business Quiz Question 5 Question: You are good at both short-range and long-term planning. A. Definitely

5 B. Most of the time C. Sometimes D. Not at all Correct! You got it! The correct answer to Question 5 is "A. Definitely". This goes hand-in-hand with being your own boss; bosses have to plan, and you need to be good at it if you re going to start a business. It s all part of managing your new business. According to Statistics Canada, most businesses fail because of weak general management or weak financial management and 45% of the small businesses started in this country don't survive more than two years. Business Management Basics will give you an overview of the four areas of management most critical to small businesses with links to articles with additional information. And, of course, when you re starting a business, planning starts with a business plan. My Business Plan Outline will lead you through the process of writing a business plan. On to Question 6 of the Starting a Business Quiz. Starting a Business Quiz Question 6 Question: You like to take risks. A. Definitely B. Most of the time C. Sometimes D. Not at all

6 Correct! Excellent! The correct answer to Question 6 is "C. Sometimes". There s a perception that successful entrepreneurs are wild risk-takers, always on the lookout for new wilder risks to take. But actually, successful entrepreneurs are always on the lookout for opportunities with acceptable risks that is, risks that can be mitigated or managed. On to Question 7 of the Starting a Business Quiz. Starting a Business Quiz Question 7 Question: You expect your total household income to rise within one year of starting a business. A. Yes B. No Correct! Unfortunately, the correct answer to Question 7 is "B. No". It probably won t. According to an RBC survey conducted in August 2005, only 34% of current business owners saw their income increase within the first year of starting a business. 35% of small business owners saw their income decrease within the first year of starting a business. Even more daunting, only 16% of the current business owners surveyed said that their business accounted for 100% of their household income. So realistically, you

7 can t expect your new business to replace or exceed your current income during its first year of operation. On to Question 8 of the Starting a Business Quiz. Starting a Business Quiz Question 8 Question: You are good at following through on your ideas/plans/projects. A. Yes B. No Correct! Good for you! The correct answer to Question 8 is "A. Yes". Several different studies of successful entrepreneurs have found that persistence is one of the most important traits that anyone starting a business has to have if they re going to succeed. (See Thinking of Starting a Small Business? for more on studies of entrepreneurial qualities.) And what is persistence? Simply the ability to follow through on what you start and get it done. If you are the sort of person who procrastinates or often find yourself not finishing things that you start, starting a business is probably not for you. On to Question 9 of the Starting a Business Quiz.

8 Starting a Business Quiz Question 9 Question: You have a good credit rating. A. Yes B. No Wrong Answer Sorry, the correct answer to Question 9 is "A. Yes". The reality of starting a business is that you re going to need money (for all kinds of things). If you don t have a good credit rating, you re not going to be able to get a business loan, a line of credit, or a credit card. And other businesses won t be interested in extending credit to you either. If you don t have a good credit rating and are thinking of starting a business, clean up your credit rating first. (Doing Credit Checks Can Really Pay Off includes information on how to get credit reports in Canada.) On to Question 10 of the Starting a Business Quiz. Starting a Business Quiz Question 10

9 Question: You have strong people skills. A. Yes B. No Wrong Answer Oops! The correct answer to Question 10 is "A. Yes". No matter what kind of business you chose to start, you re going to have to spend a lot of time dealing with people. Even if your new business doesn t involve dealing with customers and/or clients face-to-face each day, you ll still have to deal with staff, suppliers, salespeople and people making enquiries. Strong people skills are essential for anyone starting a business and anyone hoping to turn their startup into a successful business. Starting a Business Quiz Finish Congratulations on completing the Starting a Business Quiz! Although this quiz is not scored, working through the quiz should have given you a pretty good idea of how prepared you are for starting a business right now. I ve designed the quiz to give you an overview of both the personality traits of successful entrepreneurs and the resources necessary for starting a business. If you did poorly, don t despair. A low score doesn t mean that you should never start your own business. All it means is that there are particular areas you need to attend to before starting a business. You can always come back and take the quiz again when you feel more prepared. You may want to review the information in the links provided with the "answer" pages. You can also find much more information about starting a business in the Starting a Small Business section of this website, including the Steps to Starting a Small Business and the Business Plan Outline. Even not having the right personality traits to become a successful entrepreneur doesn t mean you have to give up your dream of starting a business. It just means you ll have to be even more determined and offset your wrong traits by establishing good habits. A procrastinator, for instance, can learn how to stop procrastinating, while someone who takes too many rash risks can learn to be more cautious.

10 The best of luck with your new venture!