These are some great thoughts.
The one thing I would change is that step 7 should be much earlier, or rather through out the whole process.
I also wouldn't just read about business and entrepreneurship, just read intelligent material on a variety of subjects. You may recognize opportunities that you would never have seen otherwise. However, that said, it's important to do something that you are passionate about.
Honestly, the advice about reading doesn't just go to aspiring entrepreneurs, it goes to everyone. Want to to be a more creative problem solver and strategic thinker? Read!
I was recently inspired by an article about building bridges. You never know what will help you with a problem.
Chris Bennett - Chief Operating Officer - Hyperion Code - A developer of productivity improving software