Financial Literacy - How to Prosper
Are you a natural-born entrepreneur?

4. Do you know what you're getting into?

When clients come to Down with a business idea, he tries to find out whether they really understand the life of an entrepreneur.

"I advise them to go speak to some entrepreneurs ... so they can hear them talk about what it's been like in terms of putting in long hours, not drawing a regular paycheck," Down says.

Many businesses fail because their owners didn't adequately assess the market for their ideas. "They think it's the best idea ever, and maybe they are able to attract funding for it, but it turns out that ... there aren't customers out there who are willing to pay for it," Down says.

A poor match or lack of communication between business partners can also derail a startup, according to Down. Your mutual enthusiasm for the venture may not last if you don't each have a clear understanding of what you expect from one another and the business.

5. Will you stick it out?

You must be prepared to ride out each stage of your company's development. Once you've attracted seed money from investors who were impressed with your pitch, "You've got to deliver on what you've talked about," Down says.

Whatever your business is selling, says Carol Dougal, co-president of the Women's Business Development Center in Chicago, "You have to be able to stick with that product or service and not get bored with it."

You might think that your passion will be enough to keep you going, but Dougal says plain, old-fashioned perseverance is more important.

"You can have a three-week passion or a one-year passion, but (for a business to succeed) it's got to hang with you for the duration," Dougal says.

6. Is it in your DNA?

Finally, there's the question of whether you have to be wired with all of the right stuff to be a successful entrepreneur, or whether you can learn the necessary traits. The title of Koch's book spells out his view that entrepreneurs are born, not made, and others interviewed for this article generally agree.

Dougal says she has seen many people faced with job layoffs begin to discover their latent entrepreneurial talents with the help of business development programs. "I think need and support can push people into identifying those qualities in themselves," she says.

Learning accounting, how to write a business plan and how to approach investors can certainly enhance your chances for success. But as Koch says:  "It's very difficult for an M.B.A. program or an undergraduate bachelor's program in business to teach someone to be a risk-taker."

<< Back to Financial Literacy's "How to prosper" table of contents.

News alert Create a news alert for "investing"


Show Bankrate's community sharing policy
          Connect with us

CDs and Investment

Can heirs cash an old trust?

Dear Dr. Don, The youngest of 6 children, I am 48 years old. My father joined the Navy at 22. In Italy, he met his bride and my mother, and returned to the U.S. to raise our family. In 1959, he bought a trust certificate... Read more



Claes Bell

We love real estate, but does it really pay?

Economists think there's a better long-term investment. Who's right?  ... Read more

Connect with us