How to become an entrepreneur? Wish to start a business but have no clue where to begin? Don’t worry. You’re not the only one like this. Increasing g number of people are realizing that their dream job doesn’t exist. Some have concluded that they’d instead develop the work they love and tailor-made to suit their personal goals. Regardless of why you want to be your own boss, you may start today.
What Is an Entrepreneur?
An entrepreneur is someone who begins a new venture.
But, that’s not the only thing you need to do to become an entrepreneur. While each entrepreneur is the owner of a small business, not each owner is an entrepreneur.
We see entrepreneurs as individuals who have a knack of spotting opportunities. People who can turn these opportunities into profitable businesses.
Eight Tips for How to Become an Entrepreneur
Tip 1: Take Your Stand
If you’re not satisfied with the ongoing circumstances, know that only you can fix them. It’s no use blaming the economy, your partner, or your boss. The change will happen only when you take a determined step to make it happen.
Tip 2: Find the Right Business for Yourself
Be bold enough to explore. Look at different aspects of your personality and pay heed to your intuition. We usually ignore intuition, although deep down, we also know the truth. Question yourself. For example, ask, “what keeps me going even when I’m down?”
How to know if the business is meant for you? Here are three basic approaches to entrepreneurship:
Do what you know: Were you laid off? Or need a change? Reflect on the work you did for others in the past. Then think of how can you bundle those skills and present them as your own product/service.
Do What Others Do: Study other businesses which fascinate you. On identifying a suitable business, emulate it.
Resolve a common issue: Is there any gap in the marketplace? Would you like to introduce a new service/product to fill this gap? If you opt to do this, ensure that you first turn a student and acquire maximum knowledge. Only then invest your money. Remember that this approach is the riskiest of all three.
Tip 3: Engage in Business Planning. It Increases Your Chances of Success.
Most people fail to plan. But planning will allow you to get faster to the market. A business plan will give you clarity, confidence, and focus. Your business plan doesn’t need to be extended. One page would suffice. As you write your goals, action steps, and strategies, your business turns real.
Question yourself on the below things:
- What am I making?
- Whose needs will I address?
- What promise am I making to myself and my clients?
- How do I plan to attain my goals?
Tip 4: Find Out Your Target Audience Before Investing Anything
Before spending even a penny, find if people will buy your service/product or not. This can be an essential thing to do. You can do this by confirming your audience. In simple words, precisely who’ll buy your products/services besides your family and friends? How big is your target market? Who’ll be your consumers? Is your product/service meaningful to their life? Why they need it?
There is unlimited industry data you can access for free. Read Census data and trade articles to know. Simply, Google the relevant market insight reports and trade associations. But, the most useful way to get this data is directly asking your target audience.
Tip 5: Know Your Personal Finances and Pick the Right Type of Money for Your Business
As an entrepreneur, your business and personal life are linked. You’re likely to the first and perhaps the only investor. Hence, you must have a thorough knowledge of your personal finance and how to track them. This is why we suggest keeping your accounts in money management systems like Mint.com. It will simplify the process for you.
As you’re developing your business plan, you should consider the type of business you want to build. It can be a franchise, a lifestyle business, or even a high-tech business. Depending on your type, you’ll need suitable funds to launch and build your business. And the type of money you accept does matter.
Tip 6: Develop a Support Network
You have an internal commitment to your business. So, you also need to make a network of advisors, supporters, vendors, partners, and allies. You need to believe in your business for others to believe in it too.
Network nationally, regionally, locally and through social platforms. Join platforms like NAPW.com, the chamber of commerce of your city, or any other business group you deem fit. Below are a few networking basics:
- Ask questions when in a networking event. You should ask others about their profession. Then think about how you can be of help to them. The key is not to sell yourself but to listen more.
- Regardless of the group you join, help others. Be generous and make free introductions.
- When you become a generous leader, yours will be the first name on their mind if someone needs help.
Tip 7: Sell by Value Creation
Although we buy products/services every day, people don’t prefer to be “sold.” So, your focus should be on serving others. The more you serve, the more money will go down your pocket. When considering your target audience, ask yourself:
- What I’ve to offer them?
- How can I help them succeed in their pursuits?
This way, you can learn new ways to master your product/service and add more value. Your customers will surely appreciate this.
Tip 8: Spread the Word
Don’t hesitate to say who you’re and what’s your product/service. Say it with conviction and with no apology. Learn and use the most efficient online tools like Facebook, LinkedIn, YouTube, etc. to spread your news. Use these social platforms as “pointer” sites. This means pointing toward anything you feel may interest your followers.
Although social networks are essential, don’t underestimate the value of other methods. You can work wonders with blog posts, PR, newsletters, word-of-mouth marketing, and the age-old but still crucial telephone.
If you smartly use a mix of these tools, you’ll be on your path to becoming a successful entrepreneur. Are you your own boss but still think you’re stuck? Then reach out and network with other entrepreneurs. You’d be surprised by the useful contacts you’ve.
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Traits of Successful Entrepreneurs
Do you’ve what it requires to become an entrepreneur? Below are ten characters which make successful entrepreneurs stand out:
- Motivation and Passion
Though there’re many characteristics which make a person a successful entrepreneur, motivation and passion are the most important.
- Is there anything you can work on repeatedly without being bored?
- Does something not let you sleep because you didn’t finish it properly?
- Is there anything you’ve created and wish to keep improving upon it?
- Does something interest you so much that you want to keep doing for all your life?
Success is a fruit of determination and passion whether it’s presenting your idea to angel investors or developing a prototype.
- Fearless and Risk-Takers
Entrepreneurs like taking risks. They’re ready to take the plunge into a future full of uncertainty. But, remember, not every risk-taker becomes a successful entrepreneur. So, what sets a successful entrepreneur apart from others in terms of risk? Well, successful entrepreneurs are ready to risk their money and time on the unknown. But, they also have a reserve of resources and back-up plans to deal with the unknown. When assessing risk, successful entrepreneurs will question whether the risk is worth their money, time, and career. They also think in advance that what they’ll do if the idea doesn’t pay off.
- Hard Work, Discipline, Self-Belief and Dedication
Entrepreneurs have faith in themselves and are committed to their venture. Their full confidence in and focus on their idea may be mistaken for stubbornness. But, it’s their readiness to work hard and challenge the norms which makes them successful.
- Flexible and Adapting
Being dedicated and passionate is crucial. But, if you’re not adaptable to market/client needs, then you’re likely to fail. Note, an entrepreneurial project isn’t only about doing what you think is right. Instead, it’s also about turning it into a profitable business. Successful entrepreneurs embrace all proposals for customization or optimization which may satisfy market/client needs.
- Market and Product Knowledge
Entrepreneurs know everything about their product. They even know the market inside-out. Most get success because they offer something which wasn’t there earlier. Some improve upon an existing offering. Being unaware of the market needs, competitive strategies, and other forces can make even great products a failure.
- Effective Financial Management
No entrepreneurial venture becomes profitable in a fortnight. Till it becomes profitable, capital is limited and should be wisely used. Smart entrepreneurs plan for both current and future monetary obligations. Hence, they keep aside a contingency fund. Even when they start getting funds or become fully operational, they keep a complete account of cashflow. This is because money is the lifeblood of any business.
- Effective Planning Skills
Entrepreneurs build a business from scratch while managing scarce resources. This demands planning. But, if you try planning for everything so that there’s a ready solution, then you may never take the plunge. Successful entrepreneurs do have a business plan, but they can still deal with unexpected situations.
- The Right Networks
Most people find comfort in sympathy. That’s why they complain to their friends/family about unfair competition, economic slowdown, etc. But, complaining isn’t going to improve the bottom line. Thus, successful entrepreneurs connect with mentors and other experienced people to get valuable suggestions. If they lack the needed technical skills, they’ll outsource it to someone who can do functional tasks. This way, entrepreneurs can focus on other areas of their business.
- Smart Enough to Exit
Every attempt can’t be a success. The rate of failure of entrepreneurial ventures is quite high. At times, the ideal solution is calling it quits and trying something else. It’s no use continuing to put money in a failing project. Most famous entrepreneurs weren’t necessarily successful for the first time. But, they were smart enough to know when to quit and move on.
- Ability to Question Themselves – Not Too Much Though
You can ask yourself if you’re an entrepreneur. This very question can give birth to doubts about the answer. It doesn’t matter if you don’t possess the skills of Elon Musk or Steve Jobs. But, if you can ask yourself intimidating questions, then you’ve what it takes to be an entrepreneur.
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How to Find a Cofounder
Conventional wisdom suggests you must find a co-founder when starting a business. There’re three benefits of having a co-founder.
Funding becomes easier. Several venture capitalists believe that multiple founders add to a company’s value. These investors are hesitant to support solo-founders.
Paul Graham (Y Combinator co-founder) believes solo-founder is the main reason for failure. He cites, “have you observed that very few successful startups had a solo-founder? It doesn’t look like a coincidence.”
You get emotional backing. Running a company is no cakewalk. It’s a blend of stressful, unique, and exciting experiences. It becomes tough to ride the emotional roller-coaster alone. You’ll have to face the tough times by yourself and even celebrate the good times alone. A co-founder exactly knows what you’re going through because he/she’s going through the same. This will make you less alone.
They can add different networks, skills, and knowledge. You might be exceptional at selling, but your co-founder is adept at the technical aspect. This way, two abilities are merging into one to produce something extraordinary. Selecting a co-founder who complements your resume is likely to increase the chances of success.
But, having a co-founder has its share of drawbacks too.
High chances of a conflict. Conflict is inevitable when two people are running a business. A healthy disagreement can be productive. But, if you fail to find the solution fast, you’ll waste both energy and time. Besides, you’ll damage your team’s morale.
You’ll need to divide equity. If you own the business solely, you begin with 100% equity. Over time you hire more people and get funding, you’ll disburse the capital. But the division will be somewhere between .005% to 35%. In contrast, if you have a co-founder, you’ll take a cut of 40-60% directly in a single swoop.
Finally, you need to find a co-founder. It’s quite challenging to get someone who has the same working habits, business ethics, and matching the personality. Plus, they ought to have faith in your vision and contribute the needed skills. Most importantly, they must have the intention to be your co-founder. The list goes on.
However, it’s noteworthy that an assessment of many successful startups revealed that over 50% had solo-founder. Hence, don’t blindly follow traditional advice, and instead, decide as per your situation.
Where to Find a Cofounder
If you decide you want a cofounder, the next step is finding one. Look within your own network first. Choosing someone you already know, or whom your connections can vouch for, is much less risky than a stranger.
This concept works in reverse as well: You’ve also got a better shot of convincing them to join you if they’re a first or second-degree connection.
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How to Get Funding for Your Startup
You should spend money to earn money. Hence, to fund your new business, consider the options given below:
- Family and Friends
Many entrepreneurs depend on family/friends for the first investment. This is typically called “seed funding.” You may provide a stake in your business in exchange for funding. For example, your cousin gets 5% of the business after lending you $12,000. Or you can even ask for donations and personal loans.
- Small Business Grants
Local, State, and Federal governments run programs to aid small businesses. These programs include grants, low-interest loans, and venture capital. Check out Grants.gov to find programs your business is eligible for.
Many companies do not provide quality. So, it’s possible you may not find anything. But, it’s worth a try.
Fundable, Indiegogo, Kickstarter, GoFundMe plus many other crowdfunding mediums help you gain funding via an online campaign.
This approach not only generates capital but also helps you obtain early feedback and brand awareness.
- Angel investors
Angel investors seek an early-stage business which can give them a return of 10X or above. Normally they invest $25,000 to $100,000. So, if you do the math, they’re seeking companies worth $2.5-$10mn in the future.
They’re highly involved in ensuring you understand your target market, how you’ll earn, and how you’ll grow. So, ensure you’re ready with a strong business plan and quick signs of traction. For example, “we tripled our profits from Jan to June” etc.
Besides an angel’s money, you’ll gain access to their connections and expertise. In return, they’ll get equity.
- Venture Capital
Venture capitalists seek private, young firms. Akin to angel investors, VC look for high-return, high-risk investments. They expect returns depending on the level of maturity of your start-up. If they put money just before your firm goes public, a three-times return is good.
But, if a VC invests too soon, they might be thinking of a 7 or 10 times return.
To understand more about venture returns, read Fred Wilson’s blog on the same.
- Credit Cards
It’s usually not a great idea to use a credit card for paying business expenses. Unless you can pay off the balance. At times, there’s no other choice. You need funds and fast. But increasing your credit card debt and sacrificing the credit rating will damage your company in the long run. Your personal financial health will also get hurt.
It’s difficult to apply for a loan during the first year of your company. This is because lenders don’t want to make such type of high-risk investment. But, there’s the micro-loan program of Small Business Administration. Under this, a small business can get around $50,000. An average SBA loan amounts to $13,000.
Non-profit lenders and micro-lenders are other choices. Such lenders seek disadvantaged or minority entrepreneurs. Their terms and conditions are also very fair.
NerdWallet’s guide to the leading American non-profit lenders is a useful resource.
You shouldn’t take money from others if you don’t wish to. Some firms don’t raise any funding. Their founders bear the initial costs, and when the business turns profitable, the revenue covers all expenses.
Through this option, you can keep a more significant share of your business. But, your growth will be less quick due to the lack of enormous cash infusions. If you choose to bootstrap, keep the budget as lean as possible. This will extend the life of your company.
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Inspiring Quotes to Motivate and Encourage
Being an entrepreneur is a ride full of ups and downs. There would be moments of joys, just like there would be times of disappointment. But, at times, good advice from someone can help you swim through the rough waters.
Entrepreneurship is a journey which begins with oneself. So, if you wish to be your own boss, don’t think about having a big idea. Instead, begin with a small idea because we tend to have them every day.
Having read this article How to Become an Entrepreneur: Tips and Characters for Success, what do you think? Can it help you to make better preparation for becoming a successful entrepreneur? Please feel free to share your view with us!
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