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Stephen was anxious to own a company close to where he lived. He became excited when he realized there were no fish supply stores in the area, so he began to pursue the idea of opening one.

He borrowed money from family and friends and tapped his own personal finances and credit cards for a total of $18,000 to cover start-up expenses. He found a location, signed a lease, stocked the store with tanks, supplies, accessories and exotic fish of all kinds. He opened the doors for business. Stephen was feeling really exhilarated. But one year later, his business had to close due to lack of customers. By the time he extricated himself, losses amounted to almost $18,000.

What went wrong? For starters, Stephen knew nothing about the fish business. He never even owned a fish tank! It was not a hobby or a passion of his. Exotic fish are difficult to care for, and many died because of his lack of knowledge. There may or may not have been a local need. He didn't really know. In any case, customers were quite dissatisfied when they could not get him to answers their questions.

Stories like Stephen’s are not uncommon among new entrepreneurs who fail to assess how well they fit with the businesses they are considering.

Check the Fit between You and Your Idea

Yes, you have an idea for a business, but is it really the best business for you? Here’s a checklist of issues to consider:

Passions and interests. Do you have boundless enthusiasm for your venture? If not, chances are you won’t make it.

Risk tolerance. If your idea requires a large infusion of capital, is that too risky for you? If your business fails, will you be able to rebound financially and emotionally?

Task match. Is the business a good match for what you like to do most - and least? Consider: operations, product development, bookkeeping, finance, travel, sales and management.

Skills match. Do your abilities and experience equip you to run the business?

Technology. If you are contemplating a business that requires technological expertise - such as one that relies heavily on Internet marketing - do you have what it takes?

Your values. Does your business idea support your beliefs about what is good for people and for the world, or does it work against them?

Lifestyle. If you are committed to enjoying a quality life with your family, will your new business allow it?

Customer value. Are you the right person to add unique value for your customers?

Answer the questions above patiently and honestly. The time you invest on them can save you from failures like Stephen’s. Even more important, you'll make sure that the business you start will be successful because it's the one that’s right for you.

Why Not Get Started Today!

If you are developing a business idea, Trump University is now offering special packages that provide up to $1,000 worth of additional entrepreneurship training and support when you enroll - at no extra cost to you. CLICK HERE or call 1-888-668-7867 to learn more.

Bootstrapping is the process of conserving financial resources to the extreme during a business’s startup phase. It means pulling yourself up by your bootstraps by doing most of the work yourself.

Because you want to go into any new business enterprise with your eyes wide open, let’s take a look at some of the pluses and minuses of bootstrapping:

Upside: You can get started, even when you lack the money to hire others to handle the tough work.

Downside: You run the risk of making the wrong decisions and wasting time on tasks that could actually have been done more cheaply by specialists.

Upside: You don’t need to take on extra debt or cripple cash flow during your critical startup phase.

Downside: Designing your own marketing literature and applying other “homegrown” solutions can limit your growth just when you need it the most.

Upside: Once you get through the startup period, you own more of your company - and it might be worth more because you preserved more of your financial recourses. That can pay off if you later decide to sell the enterprise.

Downside: Competitors with deeper pockets can spend money on advertising, salespeople, product development and other assets to gain a critical advantage in the marketplace.

So should you bootstrap, or not? I wish I could pull a rabbit out of my hat here on the Trump Blog and offer you a reliable, one-size-fits-all answer to that question. Every start-up needs to think long and hard about how to allocate its resources, including the abilities and time of its owners. The right kind of knowledge and guidance can make all the difference between enterprises that flourish and enterprises that fail.

Is your company healthy or unhealthy?

One of the easiest, most effective ways to answer that question is to create a classic balance sheet for your business. It is a simple document to put together, yet it can reveal small “illnesses” in your business that will lead to larger problems later on.

A balance sheet is really a snapshot that shows the financial condition of your company, as expressed by its net worth:

The net worth of your business = Assets - Liabilities

Assets are everything that is owned by your business, plus everything that is owed to you. Assets include property owned, equipment and machinery, company vehicles, cash, accounts receivable, inventory and supplies, short-term investments and all other current and future assets.

Liabilities are everything that your business owes. Liabilities include long-term debt load, loans and notes payable, payroll owed, accounts payable and deferred income taxes.

Net worth is what your business is worth after all the liabilities have been satisfied. It is also referred to as your equity or book value.

The healthiest enterprises have robust assets and net worth - and minimal liabilities. The weakest are just the opposite, with skimpy assets and net worth and life-threatening liabilities.

So, is your business healthy or not? As a rule of thumb, the ratio of your current assets to your total current liabilities (sometimes called your current ratio) should be greater than 2. For another perspective, your ratio of total liabilities to net worth (your debt to equity ratio) should remain below 1.

Create a projected balance sheet for the way your company will look a year from now too. That will be a revealing exercise indeed. And remember, the smallest steps you take today to increase your assets and reduce your liabilities will determine how robust your enterprise will become in the years and decades to come.

This blog post is adapted from Dr. Gordon’s new book Trump University Entrepreneurship 101. 

1. Generate ideas incessantly.
2. Select the real opportunity from the heap of ideas.
3. Build and empower the team.
4. Mobilize and control necessary resources, whether or not you own them.
5. Develop an astute strategy to capture customers and to generate sales and sustainable profits.
6. Develop a compelling business plan.
7. Assess personal and business risks.
8. Launch the venture.
9. Manage the growing venture.
10. Harvest the rewards of success: sell your business, take your busi­ness public, or continue to build your venture and pay yourself ap­propriate and generous compensation.