We are now going go much deeper into you and what you bring to the table. The simplest and easiest way to do this is to carry out a personal inventory and that's what we're going to do now. You will be amazed at the resources and connections you actually have, and they could eventually make a big difference to the outcome of your business. This in itself can be really exciting and motivational. Try and make this as comprehensive as you can, even if you feel it's a drag having to do it – and to be fair, many entrepreneurs hate paperwork.

New entrepreneurs often underestimate what they will need to start their businesses. As we know, anyone can start a company, but we also know that only a small percentage of those attempting it actually succeed. In one way or another, the reasons for failure come down to 'resources', both personal and material. The businesses that fail, most often do so because they lack money (or financial knowhow), industry expertise, or a viable strategic plan.

Let's get started by completing a thorough, honest appraisal of you and your personal commitments together with your business needs and goals. We will focus on your strong points, identify your weaknesses, and deal with areas that need improvement. Most people have never completed this type of exercise. As a result you will have a much better chance of success from the outset.

Experience tells us that entrepreneurs have all sorts of different characters and abilities. Anyone can start a business and potentially achieve success, from the painfully shy Michael Dell (Dell), to Alan Sugar (Amstrad) without a formal education, the enigmatic Steve Jobs (Apple) or the outspoken like Oracle's Larry Ellison. But one thing that every successful entrepreneur will have to do is to manage counterproductive characteristics, and supplement missing capabilities, underdeveloped skills and psychological attitudes that could create roadblocks to their eventual success. They look for help from team members to make up for any shortcomings.

Some people don't want to acknowledge their inadequacies, but those that do will be massively increasing the chances of success. If the potential entrepreneur prefers not to face his human limitations, he might be better off staying in a traditional job.

I know that's not going to be you, so let's move on. It is important to be free from distractions to obtain the best results. If like me, you usually struggle a bit with these things, have a few goes at it until you feel you have uncovered everything as far as you can. You can also revisit it later as other ideas and people come into your head.

One of other key things we know is that many entrepreneurs leave their jobs out of frustration, but stay in the same field and start a competing business or just develop an idea their company didn't want to explore. In any case, the skills and resources you have gleaned from any work experience will probably be very important in your new business; indeed, they may be critical. So the first step is to explore in depth your work history.

Autobiography

Dig out your résumé/curriculum vitae if you have one, and use this information to write a summary of your own biography. Review in detail all the facets of your past, including work positions, projects you have done, education, credentials you have earned, family and personal relationships.

Include all your work experiences during summers, weekends or holidays. As with a regular CV, start with your current achievements and work backwards.

List all the roles you have assumed in your present or past jobs in order of importance (e.g. responsibility, authority, budgeting, selling).

Try and find matches between your past and your idea. How will your expertise in, say, 'accounts' help you start a business? What have you learned that has either general or specific use in the idea or venture?

At this point you may be wondering why we bother to fill out all these forms – good question. They are designed to help you either start a process of finding the best idea to suit you, or to find out if the idea you already have in mind will be a good fit or not. Hang in there, effort put in at this time will pay dividends.

How do you see these job role areas assisting you in your business goals?

Knowledge

What do you know about the business or idea you plan to start? List all the things you know about the business or idea in as much detail as you can. This will help create a checklist for more research or information.

Do your homework before you jump in. Even before I write a business plan I now do months of research in as much depth as I can. For example, with one idea I travelled to the UK, USA and Australia visiting hair salons and making notes. Then I worked in one for a while, simply observing before going on a relevant training course and spending lots of time with friends that owned salons ... all to understand the business before deciding to invest my time and money!

Try and find matches between your knowledge and direct experience and your idea. If you know about building aeroplanes and you think you have found a cheaper way to make them, explain why here.

How do you see your knowledge assisting you in your business goals?

Now let's look at core strengths and weaknesses with regard to executing your vision.

Again, this exercise is sharpening your personal awareness about areas for improvement, or where you need other team members to supplement your skills. This is a great way to get a team together, because you will be able to highlight what you like and want to do and things you wish to delegate to others who have their strengths in those areas – this empowers your team, and again improves your chances of long term success.

Choose your skill level from 1–3, and remember this relates to your goal, or business or idea, and not life in general. How developed is your skill-set towards achieving your specific business opportunity? Remember to be totally honest with yourself.

This list is not exhaustive, and you can add to it on your own – especially if you have a clear business idea in mind. It's aimed at a start-up business and is designed to stimulate debate rather than ask every possible question of your abilities. Some of these skills will not be relevant and some will be missing; update where necessary. Don't worry about ignoring ones that don't seem useful – just mark those 'not applicable'.

Overview of results

Now give yourself a quick rating on your specific skills.

Notes:

Note here any thoughts on how you could improve, team members or friends with skills you need, outsourcing or other ways to fill any skill gaps.

Try and identify specific people and skills if you can along with who you could see yourself working with as the "team" for your new venture.

OK, now let's consider a bit more about our own lives and our personality. This exercise is useful for understanding how we work with others, but also once again in choosing a business that will suit us.

In this exercise, think about who you really are. Don't try and make something up that's not totally honest; this is for your eyes only!

Consider your responses in various situations and in working with others; choose from the options below, or make up your own. Remember, this is only designed to help you decide on how to plan your business, or perhaps your best role in the start-up team. There are no right or wrong answers. You will react differently in different situations, so apply this to a work situation.

In my case I find that I am more reserved, dominant; a little shy, driven, self-assured and objective. So my personal work from this process is to try and be better at working with people. I try harder to overcome the shy and reserved part of my personality when running my businesses – what would you work on? Having seen the attributes of successful entrepreneurs you can see that being shy isn't ideal as you have to get out there and sell yourself, your business and to meet many people! Being shy hasn't stopped me, and your personality shouldn't stop you.

Put a circle around one or more in each category (Jane's are underlined):

Response to people

Warm, outgoing, attentive to others, kindly, easygoing, participating, likes people, cool, reserved, impersonal, detached.

Dominance

Dominant, forceful, assertive, aggressive, competitive, stubborn, bossy, deferential, cooperative, avoids conflict, submissive, humble, obedient, easily led.

Socially

Socially bold, venturesome, thick-skinned, uninhibited, shy, timid, hesitant.

Self-reliance

Self-reliant, solitary, resourceful, individualistic, self-sufficient, group-oriented, a joiner and follower dependent.

Openness to change

Experimental, liberal, analytical, critical, free thinking, traditional, attached to familiar, conservative, respecting traditional ideas.

Drive level

Tense, high energy, impatient, driven, frustrated, relaxed patient, placid, tranquil, torpid.

Confidence

Self-assured, unworried,confident, self-satisfied, apprehensive, self-doubting, worried, guilt-prone, insecure, worrying, self-blaming.

Sensitivity

Objective, unsentimental, tough-minded, self-reliant, no-nonsense, sensitive, aesthetic, sentimental, tender-minded, intuitive.

Dependability

Empowered, caring, dependable, trusting, honest, truthful, uncaring, confrontational, unreliable, suspicious, dishonest.

Fairness

Appreciative, impartial, tolerant, ungrateful, biased, intolerant.

This quick process should make it clear to you what type of personality you are in the work situation. Are you an introvert or extrovert? This will help you decide if you are happy being the front man or woman, or whether you would rather manage things from a back seat. Are you assertive or passive – will you drive things or would you rather be a member of a team? Using these examples and the categories above, work through your personality profile and make notes on how this affects your view of your role in a start-up or for the life as an entrepreneur.

(Adapted from Cattell's Sixteen Personality Factor Model)

List your accomplishments. Try and be specific and pull from memory relevant things that you think are useful, fun or important. Anything goes – did you win a prize as a kid, or did you contribute to helping people, help someone cross the road, raise funds for charity, captain the football team, write a great piece of work, paint, sing, or whatever! Whatever comes to mind that made you think, 'I loved doing that'?

At work, did you win employee of the month, get a compliment from management or a customer, win a sales or customer service award, organize or contribute to something special, sell to a big client ... whatever comes to mind!

Review the accomplishments and observe your talents

The exercise above is trying to highlight what you are good at from both a work and social point of view. It also points to things that you enjoy and could potentially develop into a business skill or long term asset. These are important, compared with skills you have had to learn, as they tend to be things you have a special talent for that you may not have really noticed before. These talents will help you focus yourself on what's best for you.

Now let's look at the physical factors. In order to take on a start-up or life as an entrepreneur, you will be exposing yourself to extremes of everything from stress to loneliness, from long days to lots of frustration. It's important you are aware of your overall health and mental stamina.

General health

Is it good? Are you prone to illness? How do you cope with stress? Do you have high blood pressure or any other health issues you should consider?

Physical stamina

Can you work long hours without sleep? Do you have a lot of energy and can you sustain your concentration in tough situations? Does your idea require lots of stamina?

Physical exertion

Be honest – are you a lazy type physically or do you struggle to sit down? Are you generally fit and using exercise regularly? Do you prefer to be outside or inside?

Mental strength

Can you relax easily? How do you cope under pressure? How do you cope with having to make lots of decisions at once, sometimes without much supporting information? What's your propensity for risk and how do you cope when you make a mistake?

In considering these factors you should not only think about your role but also the type of business you think you might want to start. It's no good being a couch potato and hating exercise if you want to market a health product, for example. You may laugh, but I have seen issues like this come up again and again. There needs to be a good fit between your health and the business you are planning.

How do you see your physical profile assisting you in your business goals?

Make more notes in the downloaded sheets, see Jane's note for any guidance.

In this section we need to list your hobbies, activities, the times you are most happy or joyful. What do get passionate about? Sports or books? Working inside an office or outside in the sunshine? What do you wish you could do or would do with no limits?

In the previous section I stressed the importance of matching your lifestyle and interests to your idea. A great example of this issue is a former mentee, who had a big plan for a software start-up; it was a good idea and really had possibilities. However, there were a few big issues when he brought the plan to me. The first questions I asked were those in this book, and to cut a long story short, he was a former champion skier, loved car racing, running and being outdoors! He wanted an active lifestyle and to be out of the office.

How do you think this squared with his plan for a new business? It was totally wrong, and after we completed these exercises he realized he didn't want the life of a software start-up, i.e. in the office on a PC eighteen hours a day in a cube! He also didn't really like the risks and time commitment away from his important sports and hobbies. In the end he decided to take a job with a big consulting company and this was the right decision for him.

Recreational activities/hobbies

List the recreational activities in which you participate in order of importance, (e.g. hiking, jogging, tennis, skiing, sailing, cycling, skating, exercise classes, dancing, reading, flying a kite, computer gaming, travel, eating and drinking, singing, yoga ...).

How do you see these areas of activity assisting you in your business goals?

Don't worry if your hobbies have nothing to do with your idea or you don't have a relevant hobby. This whole process is meant to be simple and fun. If you don't have a fit here, just skip the section and move on. If you can do it though, it's worth it as sometimes you find that your original business idea isn't the right fit for you; and this process can make you think of new and interesting business possibilities.

Love what you do, do what you love ...

So why did I get you to look at your hobbies and favourite pastimes? If you end up choosing a business that is closely related to what you love and enjoy doing, then you have a great chance of success. Many strive for this goal, but it's a lot more complex than the words allow us to believe.

The core message is sound, however, and one of the greatest things about being an entrepreneur, in all its many guises, is that we are more likely than any other group to achieve this.

If you have taken the concepts in this book to heart and you now know what it is you want out of life and what you think you want to do that gives you that 'fire' in your belly, then the life of an entrepreneur will be something you just love doing.

Don't get me wrong; it's like anything else in that some days are better than others, but there is a reason why so many people leave a safe job and never go back – they find their passion and do what they love by doing their own thing.

So what do you love then, what is your passion? You should have a good idea by now. Do you think you can express it in a simple statement now? Have a try...

In this context, what we are trying to discover is the extent of your 'people' connections. Do you have any role models, and people you can bounce ideas off, people who will provide expertise, experience, money, support or contacts? We should list as many of these people that are relevant, and we will try and organize them in areas of usefulness.

This is a really important section as this is the most likely place where you will find essential start-up resources like money and help. Many people don't 'mine' their readily available resources, and that just makes their lives harder and their idea less likely to succeed. A huge number of businesses are founded on money from friends and families – so don't miss out.

Network

List all the people you know; friends, family, colleagues, old school chums etc. List the types of business they are involved in, where relevant. How do you view them and their self-employed roles? Have you talked to them about how they enjoy their business?

In considering those that own a business or have created a start-up, how do you see these people and 'resources' assisting you in your business goals?

This is another critical area. For a start, what are you going to try and achieve with your business? Is it your plan to have a nice little business that allows you to keep up your family time and hobbies? This is probably a lifestyle type of business or a micro business. If your ambitions are larger and perhaps you see a big company employing lots of people, then this will be a totally different proposition. If you have a big idea that you think will take off and grow, but requires lots funding, we have another, and different challenge.

The key here is whether you will decide to build a 'lifestyle business' or something on a more ambitious scale. If it's a lifestyle business (often these are family businesses) then you will have different issues of control, growth, scale, and so on. In a very general sense, lifestyle businesses tend to be smaller by virtue of the fact the owners want control, and are focused on different things from those faced by the person who wants to rule the world. The latter will probably have to give a lot more of their life to the job and take a great deal more risks with the attendant issues. Of course, if successful the rewards will match this life investment and risk.

There's nothing wrong with lifestyle businesses, and most small enterprises fit into this category.

So consider what you want from your business and your life – are you likely to want a lifestyle business or a more aggressively focused one?

At this stage you probably have at least one idea buzzing around your head. I want you to maintain that momentum, so I would like you to record your idea/ideas and then write your next five steps personal action plan. This can consist of any five things that will move you a little closer towards your business idea. If you are still filtering ideas at this stage, revisit the action plan after you have completed the next session.

You probably have a surprising amount of people and resources available to assist you, don't you? And maybe an idea that has been born from your passions or been crafted to meet these? Let's keep up the momentum and dig deeper into your life goals and 'wants'.