As long as you think about becoming an entrepreneur, you have already started the journey. That’s because “being” an entrepreneur has less to do with specific accomplishments or accolades than with mindset.
You are likely to find dozens of videos, content, articles, blogs, and webinars discussing the secrets and characteristics of entrepreneurs who work to achieve success if you search for an “entrepreneurial mindset.” If you are thinking about it, you are probably motivated to explore it and, perhaps, pursue it more deeply.
It is important to develop a mindset because, to embody an entrepreneur’s essence truly, you must develop a fundamental understanding of how you think about a problem. If you encounter a problem you don’t know the answer to, following a checklist like “have some idea, get some loan, and then start a business” won’t do you any good. No list will give you the inspiration you need to get you through difficult times, no matter how thorough it is.
Even though not everyone has an intrinsic entrepreneurial mindset, the process and principles can be learned. After all, you were born with no ability to walk or talk, but you still learned how to do so. You need to learn how to recognize the knowledge that needs to be acquired and the steps you need to become an entrepreneur.
You may not even follow this below-mentioned list in order because it isn’t a set of “in-stone” directions but rather a list of touch points for your journey. You might be starting from scratch instead of building towards a great idea, or perhaps you’re already a member of a motivated team looking for a new challenge. When considering how to start an entrepreneur, keep these steps in mind.
Steps For Becoming A Successful Entrepreneur
Let’s discuss the core steps required to become an entrepreneur.
1. Build Your Skill Set And Knowledge Base
Entrepreneurs need to be adaptable and open to new information. You should always be curious, no matter what. There’s much to learn out there, more than someone will ever be able to master. Continual learning can seem daunting, but there are some easy steps you can take to make it easier.
- Rather than reasoning by analogy, take a “first principles” approach to solve problems. According to Elon Musk, first principles are a “good framework for thinking.”
- Get comfortable with research – subscribe to trade publications and see what’s trending within an industry. Get out and meet people who do the things you want to explore; they will provide you with good advice; they will be an invaluable part of your network. Research the market you’re interested in exploring.
- You can likely find greater success by focusing on an area of interest and specialization – while some serial entrepreneurs are regarded as a jack-of-all-trades and jump around from industry to industry, you will likely find more success by focusing on what matters most to you. The degree or program you should pursue should teach entrepreneurial skills and knowledge related to your chosen industry.
2. Build Your Network
Entrepreneurs never succeed alone. They have a network of investors, employees, partners, and mentors who help them succeed. After finding a mentor or advisor, it’s critical to seek out other sources of support.
- If you are unsure how to do it alone, try partnering with a cofounder or small team that can offer complementary skills.
- Not only can they provide additional support, but some might be able to provide low/no-interest loans or ‘seed’ funds.
- Never be afraid to ask for professional help! Find financial advisors and lawyers you can trust and rely on – you will need them someday.
- Ask others what they do in networking events and consider how you can help them rather than touting your skills.
- Regardless of what group you join, always be generous and help others.
- When someone you’ve helped needs your help or knows of someone who needs your help, you’ll be the first person they think of.
3. State Your Idea, Claim Your Niche
Consider what products or services you can offer and – more importantly – what will make you stand out if you don’t already have one.
- Entrepreneur magazine points out that the most innovative startups are often simple solutions to everyday problems experienced by friends, family, and your target market.
- Determine if you will meet underserved demands or improve on an existing service. The first allows you to secure a space within a market and differentiate yourself from your competitors. Alternatively, you can position your business as a new way to do things, which is disruptive.
- Always research the categories and fields you’re considering entering and ask questions about how a new product/service can fit within them. Consider hiring a marketing researcher if you don’t know how to do the legwork or if you need to devote time to other aspects of your startup.
4. Find And Understand A Market
If there is no space for your product, even the best product won’t succeed. In theory, starting broad seems like the best way to reach as many potential buyers as possible, but trying to sell to everyone means you are selling to no one. Identify your market by understanding what people are looking for.
- Would your service or product be of most interest to whom?
- Create profiles of potential buyers – what do they do for a living? What are their needs? What are their pain points?
- Decide which opportunity to start by narrowing your list to the best.
- If you want to continue refining that initial understanding, conduct surveys, ethnographies, or interviews with people who fit that profile. Which pain points are most important for them? Would convenience be more important than price? What benefits might your product/service be most exciting to them?
5. Design Your Business And Idea
To win over investors, you must outline a business structure and develop a viable product once you’ve decided what you want to do.
- It is time to start laying out the plans for how your business will move forward. As part of your business plan, you’ll need to detail how your business will be organized, a projected budget, and how you plan to make money. Check out Score and Hubspot for business plan templates if you’re looking for ideas.
- Establish a sales process for acquiring new customers. What is your marketing strategy – are you using social media accounts? Are you attempting a viral marketing campaign? What sales materials will you need? What is your process for converting those who show interest into customers?
- Build a proof of concept, or what’s also called a minimum viable product (MVP), to truly show off what your business is all about. No matter whether it’s software, a service, or a physical product, the MVP should be able to perform the most important and basic functions of your idea.
6. Know About Your Target Audience Before You Spend A Penny.
It might be most important to determine if your products will be bought before you spend money. You can do the same by validating your market. You can ask some questions yourself, like:
- Who will buy your product or service besides your family and friends?
- Ask yourself about the size of your target market.
- Who are your customers?
- Are your products or services relevant to their daily lives? (And never say, “Everyone in America will want my product.” Trust me – they won’t.)
- Why would someone buy your service or product?
7. Secure Funding
Your business will only be able to start up and run if you secure the funding you will need.
- In order to start, you can seek out initial funding and loans from your family and friends. Funds can be received without paying interest or offering too much of your company in return for them, and trust levels are high. Of course, this depends entirely on the wealth and assets of the people you know.
- You will be more likely to be able to secure funding from venture capital firms (VC) or angel investors by presenting a pitch. With the promise of owning stakes in startups, both can provide large amounts of initial funding to startups. The Angel Investment Network and National Venture Capital Association are two organizations that connect entrepreneurs with funders.
- Small business grants and loans are also available. There are specific requirements associated with these investments, which differ from venture capitalists and angel investors. The loans must be repaid with interest over time, while the grants must meet certain criteria – i.e., assisting minority or underprivileged communities. Visit the Small Business Administration for more information on business grants and loans
- Instead of securing a few large amounts of funding, you could try crowdfunding your business by raising hundreds, or thousands, of smaller donations. Fundable and WeFunder allow you to run a crowdfunding campaign using modern technology.
o Get To Know About Your Finances And Choose The Right Amounts Of Money Required For Your Business.
Your personal and business lives are intertwined as an entrepreneur. It is important to have a well-defined and detailed understanding of your finances and be able to track them to seek out outside funding or potential investors for your business. For ease of operation, It is recommended to set up your accounts in a money management system since you may need to be your angel investor.
Suppose you are building a a franchise (moderate investment depending on the franchise), lifestyle business (smaller startup funds), or a high-tech business (significant capital investment. In that case, you will need to consider this while creating your business plan. It depends on where you are on the continuum of how much money you need to launch, market, promote, and grow your business and what kind of money you accept.
8. Build Your Business
As soon as you’ve finished this step, the real work begins. Set up that funding, develop your first real product, and market it.
- Whether you lease a building in a downtown location or rent an office space for your staff, you will need to establish a business location. Perhaps you run an online business, and all your employees work from home. You’ll need to claim a website at the very least so your customers can learn about your product and contact you.
- The structure of your organization and your plans for incorporation will be important to you. To build credibility for your business and protect your finances, you should consider registering as a limited liability company (LLC).
- You’ll still need to reach out to fresh, new, and active prospective customers and announce to them the latest updates and developments of your product after the initial buzz dies off. Identify what is suitable for your business and what is not, and what can be done to effectively advertise your business by reviewing the peeerformance metrics of your social media channels and campaigns.
Business Planning Improves Your Chances For Success.
Your business model will become real as soon as you jot down your goals, strategies, and action steps. A business plan will help you gain focus, clarity, and confidence.
Here are some questions to ask yourself:
- In what am I investing my time and energy?
- Which person will I serve?
- What are the promises I make to my customers/clients in my personal and business life?
- Describe my objectives, strategies, and action plans (steps) for achieving them.
What Are Some Common Entrepreneurship Pitfalls?
Approximately 15% of startups manage to achieve a large venture return for their investors. 50% of businesses fail within the first few years of operation. There are dozens, if not hundreds or thousands, of specific reasons a business doesn’t succeed, even if they don’t go out of business. They survive (break-even) without generating real returns for their investors and owners. The following are the most important considerations for aspiring entrepreneurs:
- Running out of money – This is the first killer of startups – in fact, all businesses – and is almost impossible to plan around because there are no guarantees/sureties that a product or service will succeed. Get a solid plan, and then be open to shifting your focus or direction as needed. Businesses must adapt to changing markets and environments; initial success does not guarantee sustained growth and sustainability.
- A high level of debt – This is about running out of money, as it can cripple businesses, preventing them from getting additional income from lenders or investors. Some businesses accept high-interest loans, but this sort of devil’s bargain can hamstring a company before it even gets a chance to establish itself. You can easily overleverage yourself as an entrepreneur if you don’t keep your personal and business separate. You could end up ruining your financial situation if you use your own credit to obtain funding. If you incorporate or register as an LLC, you may become personally liable for the actions of your business. Entrepreneurs who regard their company’s assets as their personal piggy banks are undermining their success. Taking a loan for your business is recommended, which you can pay-bac. You can first calculate the tools, requirements, and business expenses to know how much you will need. The same will save you from any issues which might happen in the future.
- Disputes with a cofounder or disgruntled employees may delay production, disrupt communication, or even end the business. Do not let hurt egos sabotage your working relationships, and try to resolve conflicts amicably. Your business owner or CEO will need to deal with a lot of uncertainty, even when things aren’t going well, as too much uncertainty will adversely affect productivity. Therefore, be happy and friendly with your business partners and mates, keeping the business environment peaceful.
- Culture incompatibility – Each person has a different background, employs a different work style, has a different value system, and expects different things from others. It can be difficult to pivot when change is needed when people are committed to “what has worked before.” Managing the culture of an organization will require entrepreneurs to be disciplined but flexible at the same time.
You don’t want to sell people your products or services; you want to serve them. Cash flow increases as you serve more people.
- Is there anything I can give them?
- In what ways can I assist them in becoming successful?
This way, you can improve your product or service and deliver more value to your customers.
Remember, if you follow these steps, you are not alone and will be ready to become a successful entrepreneur. You may be surprised by the invaluable contacts at your fingertips if you connect with other entrepreneurs in various ways. If you want to work freely with no pressures and want to be your boss but feel stuck, connect with other entrepreneurs in various ways.