Self-assessment is a tool that involves performing a critical analysis of one's own goals, interests, skills, and experience. Among its many applications in the business world are employee development, team performance, and organizational change efforts. But self-assessment is perhaps most valuable for would-be entrepreneurs considering starting a new business. "A business is merely an extension of the people managing it and mirrors their abilities," notes the Entrepreneur Magazine Small Business Advisor. "As an entrepreneur, you have to know your strengths and weaknesses so you can compensate in some way for the areas where you will not be proficient. You can determine your strengths and weaknesses by evaluating the major accomplishments in your personal and professional life and the skills required to complete these tasks." In other words, entrepreneurs may be able to improve their chances of success in business by undertaking an honest and detailed self-assessment. By evaluating such personal traits as business skills, experience, and knowledge, financial goals, likes and dislikes, willingness to expend effort, and ability to meet challenges, entrepreneurs may be able to identify the business opportunities for which they are best suited. In some cases, self-assessment may even lead to innovative new business ideas. In addition, completing a self-assessment can help entrepreneurs recognize areas where they will need assistance or training. By increasing self-knowledge, it may also help entrepreneurs to attract investors and impress lenders.
A good place to start in performing a self-assessment is to prepare a detailed resume. This document should list the entrepreneur's educational background and professional experience—describing the requirements and responsibilities of each job in detail—along with hobbies and outside interests. Using the resume as a guide, it may then be helpful for the entrepreneur to separate his or her professional attributes by functional area—such as marketing, accounting, or human resource management—and assign a competency level to each one. Finally, the entrepreneur may wish to create a list of personal attributes—such as ability with numbers, common sense, communication skills, organization skills, people skills, etc.—that may be useful in starting and running a small business. The mere process of thinking about and categorizing one's skills and experience can be informative. Viewed objectively, these documents can assist the entrepreneur in myriad ways.
Not surprisingly, the tool of self-assessment can be applied to a wide variety of other business situations as well. For example, it can be used as an aid in employee development as part of a company's performance evaluation and training efforts. A common application is "360-degree feedback" systems—in addition to being evaluated by supervisors, peers, and subordinates, employees evaluate their own performance and participate in setting goals. Self-assessment can also be applied to teams of workers or even overall organizations to help identify strengths and weaknesses and improve performance. Teams might evaluate such elements of team performance as goal setting, communication, decision making, problem solving, and conflict management. At the organizational level, self-assessment performed with the participation of employees can help clarify a company's mission and goals, identify shortcomings, and generate ideas to increase competitiveness.