You've finally had your "a-ha" moment. It's an idea that could make you millions or simply make you happier in your career. You're ready to put your nine-to-five day job behind you and officially learn how to become an entrepreneur. Who do you have to call to make this happen?
If only it were so simple! Pretty much anyone can call himself an entrepreneur, but becoming a successful entrepreneur requires fierce dedication, practical optimism and perhaps a healthy dose of luck.
In short, not everyone is cut out for entrepreneurship and not just because you might lack the funds to launch your idea. A certain type of mindset is required as well. Some of the key traits, skills and resources you'll need as you learn how to become an entrepreneur have nothing to do with book smarts and everything to do with attitude and personality.
How to Become an Entrepreneur
All business owners are not entrepreneurs, even though all successful entrepreneurs end up being business owners. An entrepreneur is someone who has an idea for a business and puts that idea into motion despite some financial risk.
The idea doesn't have to be something the world has never seen before. You don't even have to be the one doing most of the day-to-day work. However, the business itself needs to be new to the world. Taking over ownership of an existing business — even if you completely revolutionize it — doesn't quite fit the definition of entrepreneurship.
Don't spend too much time worrying about whether you are or aren't an entrepreneur as you go about your business endeavors. You'll never be issued an official stamp of approval that says you're part of the "entrepreneur club". Feel free to call yourself whatever you like, especially if it gives you confidence.
Important Qualities of Entrepreneurs
Entrepreneurs make big changes in their lives even though there's no guarantee of success. Therefore, some of the most important qualities an entrepreneur can possess include optimism, determination and dedication.
Starting a new business can be an overwhelming process if you struggle to focus on each day as it comes, so knowing how to manage anxiety and worry can help keep an entrepreneurial venture on track. This is especially important if the financial risk is high. Did you withdraw your retirement savings to fund this new business? If so, you'll certainly feel the pressure of needing to succeed, which makes it important to have optimism balanced with knowing what you can realistically do each day.
Determination and dedication will help you put in the hours of work that turn an idea into a reality, even when you hit bumps in the road. Unlike skills that you can practice and improve, a quality like dedication must be present within you from the very beginning. No one will crack the proverbial whip behind you to keep you focused. This is your project, so you need to have a deep sense of purpose and motivation to see it through.
Skills Aspiring Entrepreneurs Should Learn
Even though drive and motivation are qualities that successful entrepreneurs possess intrinsically, there are plenty of useful skills that entrepreneurs can learn. For example, if you're not very confident speaking publicly or conversing with strangers, you can learn. If accounting or fundraising leaves you scratching your head, you can learn. If you have no idea how to generate leads or land a sale, you can learn.
One of the best ways entrepreneurs can learn how to run a business is to get hands-on experience behind the scenes. For example, aspiring entrepreneurs who want to open a retail store should work in a retail store or find a mentor who already owns such a store. This experience gives valuable insight on how stock is ordered and managed, how customer complaints are handled, how to account for money, how the store itself is cleaned, how marketing or advertising campaigns are developed and many other protocols.
Entrepreneurs also need to learn how to stay organized, how to manage their time, how to solve problems efficiently, how to delegate tasks once they have a team and how to assemble a good team in the first place. Entrepreneurs should always be humble enough to admit that they don't know how to do something and insightful enough to ask for help.
Types of Entrepreneurship
What if you have a great idea and maybe even have the money to fund it but don't have the time or desire to leave your day job to pursue a new venture? Can you still be an entrepreneur? Yes, you can still be an entrepreneur because there are different types of entrepreneurship. In this case, you can be an investor who funds the venture and manages it from a high-level perspective.
If you have a revolutionary idea, you'd be considered an innovator. Other types of entrepreneurship include small businesses and social or nonprofit entrepreneurship, in which your business aims to address a social, environmental or cultural problem with a product or service.
One type of entrepreneur you don't want to be called is a copycat entrepreneur. This label implies that you're riding on the coattails of another entrepreneur and stealing her intellectual and tangible property. Although it's important for innovations to inspire competitors to avoid a monopoly (think about how Uber and Lyft both offer the same service in the same way), it's never OK to mimic someone's web design, newsletter content or videos down to the last detail. If you're going to be an entrepreneur, you need to develop an original brand.
Transitioning From Employee to Entrepreneur
Unless you're lucky enough to graduate college with a great business idea, chances are that you're balancing life as an employee while also trying to bring your entrepreneurial side to fruition. If only you had more hours in a day to devote to your business plan. So, how do you successfully transition from an employee to an entrepreneur?
Securing funding is crucial. You have personal bills to pay, and once you develop a business, you'll also have business bills. Therefore, you need startup funds for your business account and enough money to give yourself an income while you work on turning a profit and creating a sustainable business. Put personal money into a savings account to help you pay rent in the future while also seeking funding from startup incubators, investors, grants, fundraising platforms, etc.
Don't be in too much of a rush to transition to a full-time entrepreneur. What can you learn in your current job that will help you as an entrepreneur? Jump on new opportunities as they become available and be curious about every aspect of the business. However, keep in mind that proprietary information may be illegal for you to use later, so be careful if your entrepreneurial ideas will be in direct competition with your current employer.
Pros of Being an Entrepreneur
Why would you want to risk your full-time job in order to be an entrepreneur in the first place? One of the major advantages of being an entrepreneur is getting to pursue your passion. As an entrepreneur, you are your own boss and have complete freedom to choose what kind of business you set up, and more than likely, you're going to pick one that you absolutely love. Even though the hours may be long, you're going to feel great tackling this project, and that's reason enough for many people.
When you own your own business, you also enjoy other freedoms, like choosing your own schedule and hand-picking your co-workers. If you feel most focused at night and like to sleep in until noon, there is no one to stop you. If you regret hiring someone who turned out to be difficult, you can let him go.
Cons of Entrepreneurship
Some of the advantages of being an entrepreneur can turn into disadvantages if you don't proceed with caution. With no one else holding you accountable, it can be easy to turn into a procrastinator and never get anything done. Managing employees, especially when you need to have difficult conversations or fire them, is a skill you may need to learn even if you despise every minute of it.
Sometimes, the pressure of being the final voice for every decision can build tension and anxiety inside you if you don't develop ways to manage your stress. Although you'll have a business plan, there is no step-by-step guide that guarantees you'll make money, and this can be overwhelming. It can feel like every misstep is your own fault, so it's important to take care of yourself and have a great support system.
Other cons of entrepreneurship include having to grapple with new types of taxes. If you start out as a one-person show, you'll need to take into account the self-employment tax, which ultimately means setting aside about 30% of your total income to satisfy all your tax obligations. If you decide to incorporate your business, the tax structure will change but can still be confusing. You can either learn the skill of accounting or hire a business accountant to take this load off your shoulders.
Resources and Networking
Especially in the early stages of entrepreneurship, you'll end up spending your days researching, learning and networking. Seek out local organizations for entrepreneurs so that you can make meaningful face-to-face connections with people who could possibly mentor you, fund your business or introduce you to the right folks. Attend regional and national conferences with the same idea in mind and consider joining online communities as well. You can even use social media to find and chat with entrepreneurs in your industry.
As for finding funding, you don't need to appear on a TV show like Shark Tank to get it done, but you do need to actively pitch your idea to investors. Investigate startup incubators and angel investors who specifically focus on your industry. You can also consider peer-to-peer lending platforms, and there's nothing wrong with an old-fashioned business loan if you have a solid business plan that will help you realistically pay it off.
Creating a Business Plan
Speaking of a business plan, you'll want to write one that's pretty detailed so that it serves as a viable road map once you're able to launch your business. However, entrepreneurs need to stay flexible and adaptable because there will be many surprises that pop up during the journey. Don't necessarily assign dates to each task; instead, give yourself weekly or monthly windows. Your business plan should lay out the general order in which the business development should take place, such as finding a physical location to rent before you hire employees.
A successful business plan also needs to clearly define your unique selling proposition, mission, vision and company culture or values. Create a sample budget as well so that you know how much funding to secure, how much profit for which to strive and what your cash flow will look like.
Don't get too hung up on creating a "perfect" business plan. Remember that an entrepreneur not only has an idea but also acts on it. Planning will only get you so far. Following through on your plan is what will turn you into a successful entrepreneur.