How, exactly, does someone become an entrepreneur?
Some individuals instinctively know that they want their careers to follow an entrepreneurial path. They may go to school for an MBA or find that they have a knack for starting businesses as early in life as a childhood lemonade stand. Others find opportunities in entrepreneurship out of necessity. During lockdown amid the COVID-19 pandemic, many individuals started small businesses. This allowed them to pursue their passions and earn a profit.
Still, others discover entrepreneurship with a “Eureka!” moment for a new product or offering. Take the example of businesswoman Sara Blakely. Years ago, Blakely cut the feet out of her control top pantyhose to wear under a pair of pants to a party. Voila—the pants had no visible lines underneath. This remixed take on a traditional shaper allowed Blakely to create the patent for the shapewear we now know as Spanx. Today, Blakely is one of the world’s most famous entrepreneurs!
How does someone reach that point and decide that they are ready to become an entrepreneur? The best way to get started answering this question is to discover your why.
Discover your why
Why do you want to become an entrepreneur? Your “why” is the reason you want to start a business. One of these reasons below could be your “why” as an entrepreneur.
You want to make a difference in your community.
You dream of turning your passion into your life’s work.
You have an idea for a new offering or service that you know will change people’s lives.
You enjoy learning by doing.
You’re ready for a challenge.
You’re passionate about finding your purpose.
As soon as you know why, you’ll be ready to start setting short- and long-term goals for your startup.
What do you need to start a business?
Starting a small business is no easy undertaking. There are plenty of challenges presented to those that commit to becoming an entrepreneur. However, if you know what to expect ahead of time you will be prepared to address each one.
Let’s take a look at some of the most common challenges facing entrepreneurs in 2021 and suggested solutions for overcoming these issues.
What makes you qualified to start a business?
You may have several years of existing experience in the field. If you don’t have enough experience, or what is considered the right experience, consider upskilling. You can do this by enrolling in relevant online courses, watching webinars, and listening to podcasts to learn from experienced individuals.
Partner or solo?
Will you start the business on your own or would you like to go into business with a partner?
Remember that being in a partnership requires both partners to work equally together. Having a written partnership agreement can be a big help in smoothly running the company.
Can you wear many hats?
Becoming an entrepreneur, particularly in the early days in your startup’s lifecycle, means you will be doing the work of several people.
However, it can be difficult to manage this much work especially if it is outside of your skill set. If hiring full-time isn’t a feasible option right now, consider outsourcing work to contractors or freelancers that have the skills to complete it.
How will you acquire customers?
Your business idea should be viable and for an offering or service that customers actually want (and will pay for!).
Start conducting market research to determine your target audience and establish buyer personas to better understand your demographics. You may also collect customer feedback through focus groups and surveys conducted via social media and in e-newsletters.
How will the business receive funding?
How will you fund the business?
If you are planning to quit your job to start a business, you’ll need a significant financial cushion to become an entrepreneur and attend to your finances and expenses. Funding options may include financing from investors, taking out a business loan, applying for grants, using crowdfunding platforms, or attracting the interest of an angel investor or venture capitalist.
What does work/life balance look like?
While it is true that becoming an entrepreneur means putting plenty of energy, time, and commitment into the business and its idea, the end result should not be one where you feel completely overwhelmed or burned out.
Consider starting your small business as a side hustle before making the plunge to take it full-time. Use this time to grow the business and observe how you are able to maintain work-life balance.
Do you have a scaling strategy?
As sales rise and your business enjoys a steady influx of cash flow, consider putting together a scaling strategy. This may help ensure your business keeps growing its revenue through its business model and may allow you to expand into new markets over time.
Helpful tools for entrepreneurs
Becoming an entrepreneur requires having an entrepreneurial toolkit. Here are some of the most critical components to include in your toolkit for success.
Create a business plan
A business plan will act as the foundation for which you can build your business. Think of it as a roadmap to becoming an entrepreneur. You may use a business plan to set goals (both short- and long-term) for your business to reach and set timelines to get to these goals.
A business plan allows you to detail more about who you are and what the business does. You may use this space to analyze your competition through an industry analysis and your customers through a market analysis. A business plan allows you to share the financial projections of your company and outline a funding request from potential investors.
Remember that a business plan may be revised over time. Take note as you reach certain goals—and begin planning for how to reach your future goals.
Incorporate or form an LLC
Incorporating or forming an LLC for your business is one of the best tools an entrepreneur has in their business toolkit.
Incorporating as a business entity, like a limited liability company (LLC) or corporation, provides your business with limited liability protection. This creates a separation between your personal and professional assets. In the event of unforeseen circumstances, your personal belongings will not be impacted or used as collateral. Additionally, incorporating a business can provide tax benefits and allow you to establish credibility faster with consumers.
Entrepreneurship is not meant to be done alone.
You’ll need a network of the best and brightest in your corner. Some of these people may include mentors, close family members and friends, and other entrepreneurs that you admire—and that admire you in return! Remember to build your network as much as you continue to network and grow the business.
Act with confidence
Becoming an entrepreneur is hard work, but it is also rewarding.
You are doing it! You are working to create an offering or service that will change the lives of others for the better by bringing this idea to life. Despite the challenges, entrepreneurship gives you a path to where you are able to find your purpose. Believe in yourself, surround yourself with great people, work hard, and you can achieve your dreams and be successful.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.