David Lucier, is a Rhode Island CPA who specializes in Rhode Island small business, gives some advice about determining your level of risk tolerance for small business success.
Doing a self-evaluation is a critical step in deciding if you should start a business.?
Determining Factor #2:? Risk Tolerance
Owning and operating your own business can have the appearance of either being a stable long-term opportunity or an extremely risky endeavor.? Risk tolerance, which is the measure of uncertainty a person is willing to accept in respect to the perceived benefits, is why there is such a wide range of perceived risk in owning a business.? The realization of owning your own business does have risks, and those risks can be mitigated by making good decisions and by being prepared.
Many studies indicate that entrepreneurs have a low-tolerance for risk, which can appear contradictory to most people?s perceptions.? This appears to be so counterintuitive because most entrepreneurs also tend to be overconfident in their ability to be successful.? This overconfidence give the entrepreneur the ability to adapt and commit to tasks that most people would consider crazy, like working eighty hour weeks for weeks on end without any form of compensation.? So, if you are risk averse, owning your own business might become very stressful and unmanageable unless you also possess a great deal of confidence in the success of your endeavor.
Your personality and risk can be assessed many different ways to provide a self-evaluation.? The assessments generally consist of a series of questions and can be done by using a reputable online source or ordering a package that allows you to take and score the test.? One of the most detailed is the DiSC Assessment, which can be reviewed and purchased online from a number of sources like www.diSCPersonalityTest.com.? Another good tool to consider is a career assessment test.? These also can be researched and accessed online.? One to consider is the Myers-Briggs test, which is a career, personality and leadership test.? The last area of test you can consider is a hiring test for yourself.? These will also provide good information on your personality and goals and help direct you to your areas of strengths and weaknesses in business.
No doubt entrepreneurship is not for everyone.? Be sure to do a self-evaluation so that you can assess what you are willing to risk to make your business successful.
David J. Lucier CPA is an entrepreneur, real estate investor, RI Accountant and business advisor. He has worked with hundreds of start-up and emerging companies over the past 30 years. His management advice encompasses strategy, marketing, sales, finance and operations. He has served as a board member on numerous non-profit organizations and has received various awards including the prestigious U.S. Small Business Administration ?Accountant Advocate of the Year ?.
Lucier CPA, Inc. ?1308 Atwood Avenue?Johnston RI 02919?United States (401) 946-1900
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Source: http://www.rismallbusinessrecovery.com/archives/self-evaluation-for-small-business-success-2
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