1. Impeccable Credit
If you have any credit card debt, or your FICO credit score is not at least 720, you're not yet ready to take on this venture. How can you expect to have a successful business when your personal finances aren't in great shape?

2. Experience
If you're contemplating a total career change, work for someone who's already doing what you hope to do. It doesn't have to be full-time; it can be just a few days a week. The idea is to learn before you leap. Keep a start-up journal: Every day after work, write down what you learned that day, both good and bad. Those lessons are the template for your future success.

3. Basic Knowledge of Operations
You must know your way around a P&L statement. Not sure what that is? It's shorthand for profit and loss, and it's a crucial tool. You also need to understand the tax rules of being self-employed. Look for a Small Business Development Center in your region. These nonprofit outfits, typically housed at colleges or universities, offer classes, training, and materials to help you learn the ins and outs. Search for a center near you at the Association of Small Business Development Centers website.

4. 12 Months of Operating Expenses
It can take a year to establish your business and start getting paid on a regular basis, so you'll need a cushion—and these savings must be separate from your personal emergency fund. In addition, your start-up money should not come from your retirement accounts or home equity. Borrowing from your future or leveraging your home is not allowed.

Suze Orman is the author of The Money Class: Learn to Create Your New American Dream.


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