Everyone has ideas. They’re what make the world go round. However, what differentiates a good idea from a marketable business venture? If you want to start your own business, then learning how to become an entrepreneur may be a wise career step for you.
What Is an Entrepreneur?
You’ve heard the word before, perhaps in sixth grade, while selling friendship bracelets to your classmates during a lesson on products and services. Entrepreneur. What does it really mean to become one?
The word stems from the French word meaning “to undertake” or a person who undertakes risk with the goal of financial profit. An entrepreneur can be anyone who is taking a chance with the ultimate goal of making money. Another goal of an entrepreneur is to create a company that will continue to make them money full time even when they’re not working.
What Does Being an Entrepreneur Mean?
Calling all the shots and being your own boss is the ultimate goal for many people. As great as this may sound, it is a complicated venture, and you must be passionate and perseverent throughout the process. It is essential to understand the stresses that will come with starting your own business since 75 percent of startups fail.
Entrepreneurs are more likely to be anxious and experience more day to day stress compared to other people due to the responsibilities they will face. While it can be challenging and chances of success may be low, it is also gratifying to start your own business.
The career of an entrepreneur is one of the most exhilarating, awarding, and interesting opportunities you will ever go through. Now that you are aware of the risks and rewards of becoming an entrepreneur, below are some best tips to follow to ensure that your company is not another business failure.
How to Become an Entrepreneur: A Step by Step Guide
Step 1: Do You Have an Idea? Start With That
Of course, the first step to starting a business is an idea. If you are contemplating becoming an entrepreneur, then you most likely have ideas all the time.
Picking the right idea for you and your business will be the hard part. You can be an entrepreneur in any area, but it is best to choose an industry or niche that you identify with. It would be best to build your business in an area that you care about.
If you do not already have an idea for your business, there are a few great exercises to figure out what may be best. Ask your friends and family what annoys them throughout their day-to-day lives. Many business owners find their inspiration from frustrations.
For example, the owners of Uber, Travis Kalanick and Garret Camp, started Uber after getting a cab. The owner of UNTUCKit created his business after getting frustrated with how wrinkly his button-down shirts were when he did not tuck them in. It is excellent to keep in the back of your mind simple issues that make you or your friends angry or frustrated throughout the day.
Another great exercise is to keep up with the trends. As the world is continuously changing, so are products that people need. You will want to get ahead of the curve by reading trend predictions for your chosen industry. While looking through predicted trends, ask yourself if the predictions you are reading will come true, what will be the tools needed?
A great example of successful entrepreneurs and businesses starting through this exercise is a third-party app that was created after Uber and Lyft to tell you the lowest prices at that exact moment before booking your ride.
Of course, looking online is an excellent option for sparking the next great idea. Look into ideas that other people have come up with and elaborate on or improve from there. You do not always have to develop a brand new concept for a product. If you can create a similar product but better or cheaper, ideally both, you will receive a lot of customers.
There must be an existing demand for that product as well. As you go throughout your day, look into and make a list of everything you use; later that day or week, review the list and find something to improve.
Step 2: Learn What it Takes. Is any Educational Background Necessary?
Now that you have your idea, you need to determine the next steps necessary to bring the concept to life. You do not need any formal education to become an entrepreneur, but that does not mean you should completely ignore education. If you want to start a business in the tech world or similar, it is a great option to receive as much education as you can.
The more knowledge you have on your field, the better you will be set for success. Additionally, aspiring entrepreneurs may fall for the myth that entrepreneurs have no formal education. This fact couldn’t be further from the truth. In actuality, according to a group of researchers, over 95 percent of entrepreneurs in high-growth industries have at least a bachelor’s degree.
Step 3: It’s Just Business. Create a Business Plan
Before you begin your business, you’ll need to create a business plan. A business plan will lay out any objectives you need for your business, along with your strategy for achieving the objectives. A business plan is an essential part, especially for getting investors or business partners on board.
A part of creating your business plan is finding your target group and audience. Not every business will appeal to every target market. You will need to figure out the gender, age, income, and culture of the specific target market you would like to appeal to.
After finding your target market, research what is ideal for that group, for example, to grow your business from opening a brick and mortar shop or having a strictly online presence. Successful businesses can answer these questions early on: What kind of company am I building? Who am I serving? What are my objectives and goals?
Step 4: Meet the Right People and Create a Support Network
Networking is vital in all fields but especially for entrepreneurs. Networking is how you meet people that might have the contacts or skills you can use for your business. You may also find potential investors to help you get your business model off the ground through networking.
Building a support network is essential when going into business for yourself. Supporters, advisors, vendors, and allies are just a few of the people that you will need in your corner cheering you on. You can find opportunities to network locally, nationally, and even online through social media.
Step 5: Finance Your Dream
Like you may have heard before, you typically have to spend money to make money. However, using your own money for your startup is not the only option. There are many different possibilities to consider.
Friends and family will likely buy your products but If possible, ask them to invest in your business in other ways as well. In fact, many entrepreneurs rely on their family and friends for the first investment. You can exchange funding for a stake in your business or request a personal loan.
If asking your friends and family is not possible, then applying for a small business grant is also an option. State, federal, and local governments all have programs designed to help small businesses with low-interest loans, venture capital, and grants. Many businesses are not eligible, but it is worth looking into; you can check it out at grants.gov.
Getting a microloan is another option for getting funding for your business. You can not apply for a loan in your company’s first year, but you can take advantage of the Small Business Administration microloan. While some businesses can receive up to $50,000, this program’s average loan is $13,000. Microlenders and nonprofit lenders are options as well. These two types of lenders typically look for disadvantaged entrepreneurs to help, and their terms are usually fair.
Of course, the option of not accepting money from anyone else is always there. Some businesses never raise funding, and the entrepreneurs pay initial costs by themselves. When the business becomes profitable, the revenue will then cover any expenses that were paid. This option will allow you to hold on to your percentage of the company.
Step 6: Test and Market Your Idea
Throughout the whole process of starting your business, you should be focused on marketing. Concentrating on marketing before, during, and after starting your business is critical. You could have the best store in the entire city, but nobody will visit if they do not know it exists.
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It would be best if you direct your marketing efforts to what works for your target audience. For example, millennials will be more likely to see an ad on social media than on a billboard.
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