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Updated on July 6, 2007.

BACK IN THE LATE 1990s, as then-corporate accountant Glenn Fromer meticulously studied quarterly reports detailing the price of hotel carpet, he had a dream of starting his own software business. He knew the idea was risky: He'd be giving up the steady paycheck offered by Extended Stay America, a hotel chain aimed at business travelers — as well as stock-options and other benefits.

"You'd have to be an idiot not to be nervous," says the now 43-year-old president of Weston, Fla.-based Treasury Software, which has 11 employees. "It was a lifestyle shift that meant, for a while, I was writing computer code at my dining room table." Yet Fromer says it has been worth the sacrifice.

Owning your own business is perhaps the quintessential American dream. In a survey of 1,000 Americans by Federal Express (a corporation with an obvious penchant for small-business owners), more than half of the respondents said they wished they were running their own companies.

But while plenty of people want to start a business, not all of them have what it takes. Entrepreneurs — like the ones we spoke with for this article — will tell you that launching a business is one of the most stressful and gut-wrenching professional endeavors imaginable.

Are you prepared for the late nights, the cash crunches, and the endless unforeseen problems that most small-business owners struggle with? Ask yourself these six basic questions to find out. 

1. Are You Starting a Business by Choice, or Necessity?

Many people begin toying with the notion of becoming their own boss after some sort of falling out at their current job. They should think long and hard before proceeding.

Research by the London Business School and Babson College in Massachusetts found that people who start a business because of a lack of alternative job prospects set their sights far lower than those who start a business based on passionate belief in their idea. The study revealed that just 2% of so-called necessity entrepreneurs expect to have 20 or more people on their payrolls within five years, vs. 14% of the passionate believers. The inertia can be costly: If the founder of the company doesn't expect — and demand — gangbuster growth, you can bet its employees won't, either.

"You need to approach a new business from a proactive standpoint," says Julian Lange, a professor of entrepreneurship at Babson. "If you really believe that your product is good for consumers as well as investors, that kind of passion will carry you through the tough times. People who are in business for the money, or because it's interesting, are much more easily discouraged." 

2. Do You Like Risk?

When starting a business, you should be prepared for more ups and downs than a Hollywood marriage.

Just ask Jimmy Zeilinger, a 41-year-old former marketing executive at the Beachwood, Ohio, retailer Magic American. Last year, Zeilinger decided to quit his marketing gig and tap much of his personal savings to create the Crafty Cooking Kit, a just-add-water baking kit for kids. So far, so good: Zeilinger has met warm receptions at retailers like Target and Kroger, and the first kits will begin selling in Midwestern grocery stores next month.

But for Zeilinger and his wife, Andrea, the last few months have been nerve-wracking. "So much of my personal money is invested in a warehouse in Chicago, and I don't have a plan B," says Zeilinger, who reports waking up at 3 a.m. worrying whether he'll have enough money to pay for his daughters' college bills.

While it's enough to make a financial planner cringe, risking all is often par for the course among first-time business owners. Sure, there are strategies for mitigating risk — like splitting startup investments with a partner, or securing a grant or small-business loan. Even so, not everyone has the constitution to sustain the stress of worrying that if their fledgling business fails, little Suzy might be saddled with more college loans than originally planned. 

3. Do You Have the Patience of Job?

Small-business owners say it repeatedly: Starting a business takes a lot more time than they initially anticipated. Stretching out seed money requires the ability to maintain composure — and faith — under pressure.

Rich Sloan, a former entrepreneur who now runs an advice-giving organization and radio show called StartupNation with his brother Jeff, says entrepreneurs often misjudge their ramp-up times, mainly because they're so excited about their idea. Sure, if a new product or service addresses a "screaming need" in the marketplace, say the Sloans, the company will take off immediately. But a more likely scenario is that the idea will require more marketing dollars than the entrepreneur ever dreamed of, and then, even after consumers have expressed interest, the product or service could need months of tweaking before it begins to sell.

Sketching out some sort of preliminary business plan can help, of course. Formal business plans — which often require an MBA to create (or decipher) — usually aren't necessary unless you're hoping to receive outside investment from a bank or a private venture group. Still, it's important to stake out your six-month, one-year and two-year financial projections. Make an estimate of when your business could realistically begin to generate cash — and then figure out how you'd survive if it takes twice as long. 

4. Are You More Flexible Than a Yoga Instructor?

You might think you have a great idea. But ultimately, your success or failure will depend on whether other people agree with you. You need to be prepared to collaborate, bend your will and make major changes as necessary.

Modifying your product or service based on the feedback you get from consumers, industry experts, your employees and potential investors is the key to success. "You have to be extremely energetic, but you also have to listen a lot," says Rich Sloan. "Communication skills are very important." 

5. Do Your Organizational Skills Put Martha Stewart to Shame?

The Sloans say staying organized is one of the most uncelebrated, overlooked traits of successful entrepreneurs. Once you've set out your basic financial goals, you must evaluate your progress on at least a weekly basis.

The Sloan brothers find that small-business owners who enjoy long-term success are usually people who manage information well and are comfortable receiving reports from many different sources. In the course of an hour, a successful small-business owner might receive an update from his or her accountant, attorney, administrative assistant and top sales manager. Being able to collect and process all of this disparate information can be plenty helpful. 

6. Are You Prepared to Tap Your Inner Workaholic?

Most business owners say they work a lot harder now that they call the shots. But almost to a person, they'll tell you it's worth it.

Just ask Dennis Swartzlander, who in 1996 quit his job as a health-care IT expert for the state of Ohio and spent two years working from the basement of his house. He now runs HTP, a Columbus company that helps health-care businesses automate their paperwork and claims-processing systems. Last year, HTP, which employs 37 people, was one of the fastest-growing private companies in the nation, according to Inc. Magazine. And though Swartzlander says he has never worked harder in his life, he has also never felt so fulfilled.

"My hours are certainly longer now, but they're more enjoyable," he says. "When you're enthused about the opportunity, it doesn't feel like stress to work until 1 a.m."