3. Judge your ability and desire to handle every aspect of the business. If you don't want to or can't pitch in wherever and whenever something needs to be done -- whether it involves manufacturing a product, dealing with customers, or keeping the books -- you should think twice about starting that kind of business.
   
4. Determine whether the business has a solid chance of turning a profit. After working in the field for a few months, you should have a good idea of whether the business is a potential moneymaker. To be sure, you should analyze your market and conduct a break-even analysis, a preliminary financial projection that shows you the amount of revenue you'll need to bring in to cover your expenses (this amount is called your break-even point). If you're able to bring in more revenues than your break-even point, you'll be in the black (that is, you'll make a profit).
   
5. Evaluate the risk this particular business requires. Even the best-laid plans can sour if you pick a business that is unusually risky, vulnerable to competition, or subject to financial failure. For instance, the following businesses have higher than average failure rates:
   
   

   computer stores laundries and dry cleaners florists used car dealerships gas stations

   trucking firms restaurants infant clothing stores bakeries, and grocery and meat stores.

If your business idea is on this list, don't despair -- it doesn't mean you should automatically abandon it. However, you'll need to be more critical and careful with the numbers when preparing your business plan.