The Importance of Self-Assessment and Self-Reflection

A couple of students in one of my entrepreneurship classes this fall have had surprising outcomes from their foray into this topic. Through the process of self-assessment and self-reflection they realized that entrepreneurship is just not the path they want to take in life after all. And this is good.
I never view my job as being a cheerleader. Certainly I will give them encouragement when appropriate, but my goal is never to create the most entrepreneurs I can. Rather, it is to create the highest number of successful entrepreneurs I can. And if their hearts and heads are not suited for this journey, then it is good that they find out before they start a business. It is surprising how many entrepreneurs don’t think about these issues and end up feeling trapped and unhappy.
Beyond understanding if entrepreneurship is the right path, self-assessment helps entrepreneurs better define the ideal size and scope of the business before it even begins, by integrating their personal financial, family and other personal goals into the mix.
I even find that successful entrepreneurs with multi-million dollar companies benefit from self-assessment and self-reflection. Often they have lost track of their own goals and aspirations as the business takes on a life of its own. Many talk about becoming servants of the business rather than the business serving their needs.
Here are some of the questions that I encourage all potential and all active entrepreneurs to think about from time to time.
What gets you excited, gives you energy, and motivates you to excel?
What do you like to do with your time?
What drains energy from you in your work and in your personal relationships?
How do you measure success in your personal life?
What do you consider success in your business/career?
What are your specific goals for your personal life?
What are your goals for your business/career, including income, wealth, recognition and impact on your community?
What do you want to be doing in one year? In five years? In ten years? At retirement?
I feel very strongly that examining one’s core values is essential in planning a business and consciously developing its culture as it grows. I ask entrepreneurs to list their core personal values that they intend to bring to their business (for example, treating people fairly, giving something back to the community, etc.). Where does each of these core values come from (religious faith, family, etc.)? Why is each of these important to them? How will they put them into active day-to-day?
Here are some more questions that I have folks who are planning to become entrepreneurs reflect on before getting too far into their planning.
What are the major reasons you want to start a business?
How many hours are you willing and able to put into your new venture?
How would you describe your tolerance for uncertainty and risk?
Do you easily trust other people working with you on a common activity? Why or why not?
How much financial risk are you willing to take with your new venture (personal assets, personal debt, etc.)?
Assume you decide not to start your business. A short time later, you see that someone has started the same business and is doing well. How would you feel? Why?
What are the non-financial risks for you in starting a new business?
How do you react to failure?
How do you react in times of personal stress? How do you deal with stress in your life?
How much income do you need with your current lifestyle?
How long could you survive without a paycheck?
How much money do you have available to start your business?
Which of your personal assets would you be willing to borrow against, or sell, to start your business?
Whose support (non-financial) is important for you to have before starting your business (family, spouse, etc.)?