The first step before starting a new company is to take a hard, objective look at your personality. Not everyone is born with skills to be an entrepreneur and you should know which ones you have and which you do not. To excel in your own business, you have to be creative and innovative and at the same time be comfortable reading financial statements and balance sheets.

You have to have leadership qualities, a strong insight and a good knowledge of all the different areas of your business. Most of all, you need to be at ease dealing with people – employees, clients, investors, suppliers, bankers and so on. If you want to start your own company, you should know your temperament and whether you are cut out for the challenge. Only you can answer this question.

When you start a new company, the first couple of years require hard work - much more than you ever did in a job and round-the-clock commitment. The work becomes more intense and you have to condense more and more of it into each day. Late nights are common as is working seven days a week. If you get tired or fatigued easily or you lack the ability to push yourself to the limit day after day, entrepreneurship is probably not for you. For the first couple of years, for most entrepreneurs, there is not much of a personal life and no time to socialise or indulge in romantic interests. It is only the determination to make the new company a success that keeps them going.

If you do not have enough money, start young. The ideal age for starting a new business is any where from 25 to 35. You are full of youthful energy and your main motivation is to prove yourself to the world. You look forward to hard work and derive a sense of achievement out of it. As you move into late thirties and early forties, the body undergoes a change. You hit a plateau and do not remain as physically active as you once were. Your personal priorities change and you look for some balance in your daily life and want a more predictable schedule. If you have to start a company at this age, you should start with enough capital so that you can hire bright young people who will take directions from you and work hard to fructify your vision.

Before you take a decision to start a new company, you have to face up to the big question – how much of a disaster would it be if the business folded up and you went broke? After all, over half of new businesses do not live beyond five years of their inception. Starting a new company is a big risk, financially. Will you survive the blow? Going broke probably would not matter if you started the business in your early twenties and washed your hands off it a couple of years later. But it will be a disaster in middle age and beyond if you lost all your savings in the venture and if the bankers were to declare you bankrupt to recover their dues. It is essential to keep a failure plan ready and a safety net that you can fall back on. It is difficult to make a fresh start when you are in your forties so you have to have a Plan B.

When you take a plunge into uncertainty to start a new business, remember you are not alone in taking that risk. Your whole family takes the plunge with you and their fortunes get linked with the outcome of your new venture. The risk is more so when the family is vulnerable and needs your support. For example, when the kids are too young or when they are in high school and need money for college admissions. A loss-making start-up would starve your family of money and may damage your personal life, especially when you are spending long hours at the office at their expense. Even if a new company is eventually successful, it is common for entrepreneurs to earn much less in the early years, than what they would, in a job. Therefore it is essential to think of a way to insulate your family’s fortunes from the success or failure of your new company.

The decision to start your own business should not be taken lightly. You should consider all the pros and cons, try to protect the downside and know your personality well before you decide to gamble everything on an idea.

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