This is a guest post written by Forrest at Don’t Work Another Day. His goal is to help others learn ways they can build wealth, save money, and develop streams of income so they can quit their job and live life on their own terms.
Have you ever wanted to be your own boss? Most people will at some point in their careers! In fact, some sources claim that there are more than 582 MILLION entrepreneurs worldwide! That’s quite a lot.
While nearly everyone would like to be their own boss, it isn’t quite that simple. Starting a business takes a lot of planning and hard work, and it isn’t for everyone.
You might be wondering what exactly an entrepreneur is or how to become an entrepreneur. This article will discuss how to become an entrepreneur, as well as different types of entrepreneurs and the steps you should take if you’re looking to start your own successful business.
What is an Entrepreneur?
An entrepreneur is defined as “a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.”
In simple terms, this means that they own businesses. It’s worth noting that the size of the business doesn’t matter, either. Whether you own a business with a few thousand dollars of revenue or a few million dollars, you’re still an entrepreneur.
What is a Solopreneur?
Recently, the term “solopreneur” has become mainstream among entrepreneurs. It describes the many entrepreneurs who work alone and fully own a business by themselves.
Whereas many businesses may have several owners, solopreneurs work alone and may choose to outsource any additional work as a way to keep full control of their business.
Keep in mind that all solopreneurs are entrepreneurs but not all entrepreneurs are solopreneurs.
People choose to become solopreneurs for many reasons. Perhaps they had a poor experience previously while working with other business partners or they prefer to keep 100% of the business anticipating large profits. Often a small business is able to be managed easier by one person, and thus there’s no need to seek additional partners or supports.
What is a “Serial Entrepreneur”?
The phrase serial entrepreneur is used to describe entrepreneurs that are constantly developing new ideas and businesses.
They often will work on multiple projects at once while moving at a rapid pace. Some of the most famous serial entrepreneurs include the likes of Oprah Winfrey, Mark Cuban, and even Donald Trump.
Serial entrepreneurs don’t just stop at one business, they are continually looking for new opportunities and ways to make money. Some even sell their businesses once they reach a certain level of success in order to start a new venture.
Getting Started as an Entrepreneur
So, how do you become an entrepreneur? While there is no exact process to become an entrepreneur, there are a few steps that many business owners take which we’ll describe below.
Define the Business Concept
When you decide to start a business, you probably have an idea of what it will accomplish and how it will make money. Whether your business will sell a product or complete services, it all starts with an idea.
In this phase, you should clarify your idea and craft a business plan detailing it.
This is the first step in forming your business on your road to becoming an entrepreneur.
Define the Business Operations
After you’ve defined your business idea, you’ll need to formulate a plan on how the operations will be completed.
In this phase, you should clarify your idea and craft a business plan detailing every step of your business.
Business plans are typically contracted with several pieces:
- Executive Summary – explains the basics of your company and how it will become profitable
- Company Description – adds more detail to the executive summary
- Market analysis – provides information about the competitive environment surrounding the business
- Organizational Structure – details the responsibilities of any individuals involved in the business (if applicable)
- Product Line – offers insight into your products or services offered
- Marketing & Sales Plan – explains how you plan to market your business and acquire customers
- Financial Projections – presents your financial projections for the business
During this step, you should also have a financial plan for your business. You should know exactly how much money you will need to get started and any ongoing costs to operate. This part is absolutely critical because you don’t want to get in over your head and possibly damage your financial situation.
Obtain Funding (If Required)
Now that you’ve outlined how your business will operate, this is your opportunity to raise capital for your startup. It could be your own money, a relative, or an outside investor looking to make a profit.
Either way, this money will be used to get your business up and running.
Not sure where to get funding? Here are a few places to get started:
- Local bank or credit union
- SBA Loans
- Personal Loan
- Friends and Family
You should aim to get anywhere from 6 months to over 1 year of operating expenses to get started. Because many businesses will not profit in the first year of operating, you may have to tap into your cash reserves to keep your bills paid.
Register the Business
At this point, your business should be fully funded and ready to operate. The last step before it’s full steam ahead is registering your business with the state you live in.
Depending on the structure of your business, this can be a relatively simple process and for some, may not be required.
You can find resources to register your business here.
Start Your Operations
It’s go time! Your business is now ready to get started. You have now become an entrepreneur. Congratulations!
Growing your business can be a challenge, but can spawn tremendous opportunity. The most successful entrepreneurs are well rounded in their business skills. They are capable of leveraging their skills in marketing, sales, operations, and finances to generate long term cash flow for the company.
Side Hustles and Entrepreneurship
When most people think of entrepreneurs they think of traditional business owners, but there are other ways you can become an entrepreneur as well.
Don’t count out your side hustle as a business itself. In fact, the IRS requires that you disclose any money you make from your side hustles. Whether it’s 7 figures or a little more than $600, you are required to report any income to the IRS over $600.
Because there are no guidelines defining entrepreneurs, your side hustle could absolutely make you a “solopreneur” as described above.
Whether you are flipping furniture, or are using a 3D printer to make money, growing your side hustle can become a lucrative full-time initiative for some and is a great way to dip your toes into entrepreneurship.
How to Succeed as an Entrepreneur
Because many businesses will fail within the first few years of operating, becoming an entrepreneur can bring extreme stress and financial pressures. To succeed, you should have a solid understanding of the following business basics.
- Operations – understanding how your business operates is critical to its’ success. You should look for methods to boost efficiencies and cut costs to keep your bottom line in the green.
- Marketing – it is difficult to bring in revenue if your business is not known to the public. You’ll need to craft an engaging marketing strategy to make your audience aware of you.
- Sales – once people are aware of your product or service, you should know how to close the deal. Depending on how long your sales cycle is, this can take anywhere from a few minutes, to a few years to complete.
- Finances – knowing how your finances are performing is essential to running a profitable business. You should be able to understand your business’s revenues, profits, and operating expenses at a minimum.
You might be wondering what to do if you aren’t skilled in these various areas. Another option is to outsource some of the work to a third party or perhaps a business partner. This is where the phrase “do what you do best and outsource the rest” comes into play. By utilizing a third party, you can achieve superior results by leveraging their skills
Becoming an entrepreneur is quite simple. Becoming a successful entrepreneur is the difficult part. With 22.5% of businesses failing within the first year, creating and growing your business can be a challenge.
But with that risk can come great rewards. Creating your own schedule with the possibility of making tremendous amounts over the life of the business has many entrepreneurs willing to do what it takes to succeed.
Are you an entrepreneur? We’d love to hear your story. Comment below!
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