With These 7 Questions, I Can Test Whether I Should Become an Entrepreneur

1. Am I Ready to Accept Financial Uncertainty?

As an entrepreneur, you say goodbye to a regular paycheck. Especially in the early stages, you must expect financial fluctuations and possibly extended periods without sufficient income. The question is not only whether you are financially secure but also how you emotionally handle this uncertainty.

Studies show that successful entrepreneurs are not necessarily particularly risk-seeking but rather take calculated risks. They usually have a financial cushion and a "Plan B" for difficult times. The crucial question is: Can you sleep peacefully at night knowing your income is not guaranteed for the coming months?

When taking over an existing business, this uncertainty is often lower than with a startup because established cash flows already exist. Nevertheless, you should check whether these cash flows are sufficient to cover both business financing and your personal living expenses. The question Do I have what it takes to buy a business? is an important self-test in this regard.

2. Can I Make Decisions and Take Responsibility?

As an entrepreneur, you are the final decision-maker—without the option to delegate responsibility upward. You must make decisions daily, often under time pressure and with incomplete information. This involves not only major strategic directions but also numerous operational questions.

Decisiveness is a core trait of successful entrepreneurs. You need to be able to gather information, evaluate it, and then act decisively, even if not all aspects are fully clarified. Hesitation and postponing decisions can have significant negative consequences in an entrepreneurial context.

Reflect honestly: Is it easy for you to make decisions and stand by them, even if it later turns out they were not optimal? Can you handle the pressure knowing your decisions directly affect your company, employees, and your own future?

3. How Do I Handle Setbacks and Failures?

The entrepreneurial path is rarely a success story without obstacles. Rather, it is characterized by setbacks, unexpected challenges, and sometimes real failures. The ability to handle these situations constructively is a crucial success factor.

Successful entrepreneurs are distinguished by resilience—the ability to get back up and keep going after setbacks. They do not see failures as personal defeats but as valuable learning experiences. This mindset is not innate but can be developed.

The psychological and emotional aspects of business management are often underestimated. When acquiring a business, additional challenges arise, such as conflict management between old and new or dealing with resistance within the team.

Ask yourself honestly: How have you reacted to failures in the past? Can you learn from mistakes without sinking into self-doubt? Do you have the emotional stability to remain capable of action even in crisis situations?

4. Do I Have Sufficient Technical and Business Management Know-How?

Entrepreneurial success is based on a solid combination of technical expertise and business understanding. You don’t have to be an expert in all areas but should at least understand the basics to make informed decisions.

For a startup, a deep understanding of the industry and the specific product or service is essential. When buying a business, lack of industry knowledge can sometimes be compensated by the existing team, which enables business acquisition without professional experience as a career changer.

Regardless of the chosen path, fundamental business management knowledge is indispensable:

• Understanding balance sheets, profit and loss statements, and cash flow statements
• Basics of cost calculation and pricing
• Personnel management and development
• Sales and marketing
• Legal and tax fundamentals

In a business valuation, additional expertise is required, such as knowledge of valuation methods like the multiplier method or the asset-based valuation method.

Be self-critical: Do you have the necessary expertise for your project? Where are the gaps, and how can you close them? Are you willing to continuously learn and familiarize yourself with new subject areas?

5. How Are My Resilience and Work-Life Balance?

Self-employment demands a high personal commitment, especially in the first years. Long working hours, constant availability, and a wide variety of tasks can lead to significant stress. Your physical and mental resilience is therefore an important success factor.

Entrepreneurial activity is often more a calling than a job—the boundaries between work and leisure blur. For long-term success, however, it is important to take care of your health and plan recovery phases. The best business idea is worthless if the entrepreneur is sidelined due to overload.

In a Management Buy-In (MBI) or Management Buy-Out (MBO), the workload can be reduced by distributing tasks across several shoulders. Also, employee participation as a succession model in SMEs can be a sensible option to share responsibility.

Ask yourself: Are you willing to give up leisure time and hobbies at least temporarily? How do you react to stress and pressure? Do you have strategies to maintain your energy and motivation even during demanding phases?

6. Can I Build and Maintain a Network?

Successful entrepreneurs are rarely lone fighters. Rather, they know how to build and maintain a network of customers, suppliers, employees, advisors, and other entrepreneurs. These contacts are often crucial for business success.

Particularly important is the ability to build trust and maintain authentic relationships. Superficial networking is not enough—it’s about long-term, mutually valuable connections. Communication and stakeholder management are central success factors here.

In a business acquisition, external communication with customers and partners as well as internal communication with employees are of great importance. Especially in the first 100 days after the takeover, the new owner’s communication skills often determine success or failure.

Consider: Is it easy for you to approach people and build relationships? Do you already have a relevant network in your target industry? Are you willing to continuously invest in building and maintaining business relationships?

7. Do I Have the Support of My Personal Environment?

Entrepreneurial self-employment affects not only you but also your personal environment. Partners, family, and friends will experience the ups and downs of your entrepreneurial journey and ideally should support your decision.

Financial uncertainty, long working hours, and mental strain inevitably impact private life. Family support is therefore a success factor not to be underestimated. Studies show that entrepreneurs with stable family backing can better overcome professional crises.

In a business acquisition, the question also arises of what role the family plays in the business sale—both on the seller’s and buyer’s side. Especially in family-internal transfers, emotional aspects can play a major role.

Ask yourself honestly: Does my partner/family support my entrepreneurial ambitions? Have the possible impacts on family life been openly discussed? Is there a joint plan for dealing with potential crisis situations?

Practical Self-Test: How to Evaluate Your Answers

Answering these seven questions honestly already gives you a good indication of your entrepreneurial suitability. To deepen your self-assessment, you can take the following steps:

Strengths and Weaknesses Analysis

Based on your answers, create a personal strengths and weaknesses analysis. Identify areas where you are already well-positioned and those where development is needed. For the latter, define concrete measures for improvement—whether through further training, building networks, or involving external expertise.

Seek Feedback from Trusted People

Share your self-assessment with people who know you well and whose judgment you trust. Often, others see our strengths and weaknesses more clearly than we do ourselves. Feedback from people who are themselves entrepreneurs and understand the demands of entrepreneurship from experience is especially valuable.

Gain Practical Experience

Test your entrepreneurial skills before fully committing. Possible options include:

• Part-time self-employment
• Taking on entrepreneurial responsibility in your current job
• Working in a startup or small business
• Participating in startup competitions or business plan seminars

These practical experiences give you a realistic insight into the demands of entrepreneurship without having to burn all bridges immediately.

Seek Professional Advice

The involvement of external consultants can help you assess your suitability more objectively and find the optimal path to self-employment. M&A advisors support you in finding the right acquisition candidate and structuring the purchase process.

Also, the question of whether a startup or the purchase of an existing business is the better path for you should be decided based on your personal strengths and preferences.

Alternative Paths to Self-Employment

If honest answers to the seven questions raise doubts about your entrepreneurial suitability, this does not mean you have to give up the dream of self-employment. There are various alternative paths that can ease your entry:

Gradual Takeover or Partial Participation

A gradual takeover allows you to initially acquire only parts of a business and take on responsibility gradually. This enables you to grow into the entrepreneurial role while limiting entrepreneurial risk and financial burden at first.

Partnership Models

Starting or taking over a business together with one or more partners can be ideal for combining different skills and distributing the workload across several shoulders. In a Management Buy-In with partners, commercial, technical, and sales expertise can complement each other optimally.

Franchise and Licensing Models

Franchise systems offer a structured entry into self-employment with a proven business model, established processes, and continuous support from the franchisor. This can be particularly attractive for people who want to work independently but do not want to develop all aspects of a business from scratch.

Intrapreneurship

As an intrapreneur, you take on entrepreneurial responsibility within an existing company. This can be a first step to develop and test entrepreneurial skills before taking the leap into full self-employment.

Conclusion: The Honest Self-Test as a Foundation for Your Success

The question of whether you are suited to be an entrepreneur has no one-size-fits-all answer. Entrepreneurial skills are not innate but can be developed. Honest engagement with the seven questions presented is an important first step to identify your personal strengths and areas for development.

It is not about a binary decision of "suitable or not," but about finding the path to self-employment that fits you. Whether startup or business acquisition, full commitment or gradual takeover—the important thing is that the chosen path matches your personal circumstances, strengths, and life goals.

With a realistic self-assessment, targeted preparation, and the willingness to continuously learn and develop, your chances of successfully mastering the path to entrepreneurship are good. After all, a thoughtful start is already half the success.