Wednesday, October 26, 2005

Self Test: Should you run your own business

Yes, it is another "quiz" to determine if you should consider running your own business, but it leaves out all of the political correctness (in other words, you won't see this type of quiz in BusinessWeek) and I'll tell you in advance that if you don't answer "A" to all but the bonus question, you should really not consider running your own show.

1. Which do you prefer?
A. Pain
B. Drudgery
2. Do you have a high tolerance for uncertainty?
A. Yes
B. No
3. Can you spin? Can you simultaneously manage multiple conflicting business and personal relationships - lenders, suppliers, workers, customers, spouse, partner, investors.........
A. Yes
B. No
4. Do you have a strong support system and understanding spouse?
A. Yes
B. No
5. Are you blissfully ignorant (i.e. unconsciously incompetent - you don't know what you don't know) about everything that could/may go wrong with your business?
A. Yes
B. No

Bonus Question (Not essential, but it really helps)

Do you have access to a trust fund/inheritance?
A. Yes
B. No


(Source: Prescott Thackery Merchant Group Ltd.)

We have found, through rigorous pseudo scientific testing, that the majority of people we know that have built themselves up a nice business from scratch often come across like they would have trouble getting dressed in the morning. So if you have trouble reading a letter from a lawyer or just don't understand all that "financial mumbo-jumbo", congratulations, you are on the road to success.

As for all of you who can point out all the risks to a venture, tell people why something won't work and feel at ease working the details, be nice to those people you consider idiots, there is a good chance you could be working for them in a few years.

2 Comments:

Anonymous Daniel Nerezov said...

Great post there!

Yeepee! I passed! (didn't take the bonus questions though)

In as much as they're pseudo scientific observations- they actually coincide with the scientific stuff. Who would have guessed?

For example, over the last 20 years people like Daniel Kahneman have shown that the human brain is awfully bad adapted to do complex things like running ventures. Their work turned out to be true - Kahneman won a Nobel prize for economics, and founded the whole subject of behavioural finance.

The other bit of science was just reported this morning in "Nothing to lose but fear itself", where field studies reported in the Psychological Science Journal showed that brain damaged people make better investors than the physiologically unimpaired.

Ideed....emirically speaking, you have to be either lucky, or exceptionally irrational to really make it big in business. Normally, the succesful people are both. For example; when the rational decision may be to abandon an underperforming venture, the irrational people keep going with it- untill one day, something good happens and everything works out. There are many more examples like this.

Link: http://www.smh.com.au/news/opinion/nothing-to-lose-but-fear-itself/2005/10/25/1130237354430.html

There is a lot more on this topic....and it does lead to very useful and practical conclusions...everything from how people should finance their retirement to how to buy furniture. It's behavioural finance. Loan sharks have been using it for centuries, for example (the human brain can't calculate effective rates of interest, amongst other things....which leads to a whole bunch of things).

2:18 PM  
Anonymous Canadian Headhunter said...

"That's how a Type E thinks: `Today, my garage; tomorrow, the world!' He's either so dumb — or so optimistic — he doesn't think he can fail."

Are Entrepreuneurs Mental?

How Smart Is An Entrepreneur?

Entrepreneurial Personality

5:46 PM  

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