Fifty percent of new small businesses fail within five years. That statistic has held steady for so long, it might lead you to conclude that business is a game of chance and success is as random as the outcome of a coin flip.
That's not the case. With research and preparation, you can push your odds of a successful launch well above 50/50.
1) Do your market research.
Too many entrepreneurs think with their hearts instead of their heads. Just because you love to do something doesn't mean people will pay for your product or service in sufficient numbers for you to turn your avocation into a vocation.
So before you quit your job and sink your life savings into pursuing your passion for cupcakes and baking, you'd better figure out how many people would be inclined to buy your cupcakes, how much they'd be willing to pay, and whether you can bake your cupcakes cheaply enough at scale to turn a profit. If the numbers work, then go for it. If not — and you need to be brutally honest with yourself — then don't quit your day job.