Mind Your Business: A Magic 8 Ball for Entrepreneurs

Don't you wish there was some sort of magic formula to help you determine if your business will succeed? Perhaps a handy little biz calculator into which you punch a bunch of data and out pops the golden ticket to your entrepreneurial future?

There are business consultants you can hire and online tools that will give you a better idea of your odds for success, but there are also some basic questions you can ask yourself to help gauge your chances of making it over the long haul.

Anyone out there? - One of the best ways to determine whether you've got a good business idea is to see if anyone is already dealing from the same deck. Finding out if there's a demand for your product is as simple as finding out if someone else is already selling it. And make sure they've been around for a while. Endurance is the true test of a business's viability.

Flood insurance - While you need to know whether it's possible to make a living at your chosen vocation, it's also important to make sure there's not a glut of your goods on the market. How can you tell? If you can easily find more than three companies doing what you do – and if you don't have a definitive plan for how you're going to build the better mousetrap – you might want to rethink your plan (or at least your location).

The price is right - One of the fastest routes to insolvency is pricing your product too low. From the very inception of your business plan, be sure you're charging what you need to charge to make a profit. If you're able to command only bargain basement prices, then your business isn't worth starting. Without a profit, it's not a business. It's a hobby.

Wiggle room - Does your business plan allow enough room for you to change course if your initial offerings are no longer in demand? If, for example, you're selling Lady Gaga T-shirts, do you have a backup plan for what you're going to sell when your customers are no longer gaga over Gaga? If you don't have a Plan B on the back burner, you soon may not have a pot to… well, you know.

Social security - No matter what kind of business you're in, the arrival of Web 2.0 – in which consumers share and spread information, rather than you driving the marketing message about your company – has changed the way customers deal with you. You may not give a Tweet about social media, but they do. Word of your work and your business will spread faster than a cold in a kindergarten classroom. You'd better be ready to manage your reputation and deal with any unexpected bugs. If you're not prepared to run a business in this new world, you may not make it.

All or nothing - Your commitment to the business has a big impact on its chance of survival. Are you willing to do what it takes? Will you work nights and weekends, skip vacations and invest your own money in the business if necessary? It might not be a formula for achieving work-life balance , but I doubt you'll meet many successful business owners who took many days off in their first few years – if ever.

• The Great Myth of Work-Life Balance
• Learning to Delegate: Letting Go So You Can Grow
• Why Entrepreneurs Must Be Crazy

Jeanette Mulvey is the managing editor of BusinessNewsDaily. She has written about small business for more than 20 years and formerly owned her own e-commerce business. Her column, Mind Your Business, appears on Mondays only on BusinessNewsDaily. You can follow her on Twitter at @jeanettebnd or contact her via e-mail at jmulvey@techmedinetwork.com.