7 Simple Steps to Becoming an Entrepreneur

Congratulations on wanting to become an entrepreneur, as it’s not about accomplishments but a mindset. Owning a business and becoming your boss is the ultimate dream for many people. People who want to become entrepreneurs mainly crave independence, flexible working hours, creative control, and freedom.

Only some people have a congenital mindset of becoming an entrepreneur, but the process can be learned.

Becoming an entrepreneur requires the ability to identify a problem and provide a viable solution. A checklist of a good business idea and a loan to launch the business isn’t going to cut it, especially when problems arise.

However, a lot of work is involved in making the entrepreneur's dream a reality.

You need proper research, planning, dedication, strategy, and execution. As an entrepreneur, you become a boss and set up your working hours as you please, giving you complete control.

If you’re reading this article, welcome to a conclusive guide that will help you understand what it takes to become an entrepreneur and what to consider to make your entrepreneurship journey successful.

Who is an Entrepreneur?

An individual who creates and runs a business is known as an entrepreneur, and the business activities they engage in are entrepreneurship. They take risks driven by passion and a drive to succeed in solving existing problems. Thus, if you want to become an entrepreneur, it’s imperative to understand how to go about your new venture effectively to reap great rewards.

An aspiring entrepreneur creates a business plan for a new project. The plan outlines the required resources, financing, and how the business will make money.

As a new entrepreneur, getting capital may be difficult. Hence, most entrepreneurs bootstrap to start small and then experience gradual growth. Some entrepreneurs start their journey alone, while others seek partnerships to help them get off the ground and grow faster.

What is entrepreneurship? Entrepreneurship is about taking risks to start and manage a business. It’s a combination of skills, innovation, and vision to create a new product or service that a target audience needs in the market.

If you choose entrepreneurship, these seven steps to becoming an entrepreneur will guide you through the entire process.

Simple Steps to Becoming an Entrepreneur

The term entrepreneur excites many as it can be the gateway to a fulfilling and rewarding career. The entrepreneurial path begins with a great business idea executed through the steps we’ll discuss below into the fruition of a fully developed business making profits.

1. Get a Business Idea that Offers a Solution

The idea you should have for your business is the core of your entrepreneurship career, making it the most important decision you’ll make in this journey. Creating the perfect product may not be viable, but choosing a product with much going for it than against it. A product that solves a specific problem in the market to increase the chances of success in your business. The business idea you choose should meet the following criteria.

• Does the idea serve a Passion or solve a problem? A product or service that solves a problem is more advantageous for a business as it increases the chances of success. Selling a product or service that satisfies these requirements means you’re offering something needed at a lower price, and people are actively seeking it.

Is the product a fad, trend or a growing category? Chasing a fad can be risky, a trend is lucrative, and a growing market is ideal for business. Understanding the category of your product and its niche plays a significant role in the success or failure of your business venture. Let’s discuss the possible product categories:

Fad

A fad is an idea that briefly grows in popularity and then fades out quickly, and if you enter the market and exit promptly, it’s lucrative. However, since you can’t predict when a fad is about to happen, it’s hard to predict and is also a recipe for disaster. For this reason, building a solid business is more viable than rushing to seize a short-lived business idea. A fad can become obsolete overnight, leaving you in worse financial situations.

Trend

A product can take longer in the market, with its demand hiking every other day. Products don’t trend quickly and die out like a fad but last longer. Sometimes, trending products can develop into long-term growing markets, but predicting isn’t easy.

Stable

A stable product in the market is almost immune to the shocks and bumps that all businesses face. The growth curve is neither declining nor growing, yet it remains relevant for a long period. Think of teapots; they have been around for decades, yet their popularity never dies.

Growing

A growing market is consistent and displays signs of a long-term market shift. Hence, products in this category have no sign of leaving the market but show constant growth every other day.

2. Competitive Landscape

Depending on the product or service you decide to sell, you must thoroughly research your niche's competitive landscape. In your research, endeavour to answer these questions:

• Are you the first entity to market the product?
• Are there competitors in the market selling the product you’re about to launch?
• Is the niche you’re targeting saturated?
• What will make your product stand out to guarantee sales?

As a first marketer, ensure you research to determine if the market is ready for your product or if they’re interested. If you find competitors dealing with the same product and are doing well, it may be a sign that it’s already validated in the market. However, you must find a way to make your product better or different to stand out and carve a spot for yourself.

3. Develop Your Product

As you decide the product or service to develop, settle for something that interests you—this can be anything. You can focus on your hobbies; for example, if you love to paint, you can offer such services or search for tools that make the job easier.

While at it, steer clear of highly competitive categories, but look for a product on the market that you can make better or invent a new one. For instance, if you notice a shortage in high-quality circuits and are knowledgeable in engineering, you can fill this gap without reinventing new products. Alternatively, you can find a way to produce the same product at a lower price. In both situations, you fill a gap without reinventing the wheel. Here’s how to come up with a product idea:

• Carry a notepad with you constantly, and write a review every time you use a product of interest. You can do this for a week, and if you feel there’s anything you could do differently with a product, go for it.
• Filter through patent applications to ensure whatever you do is legal. Mostly, copyright applications are only publicised after 18 months of filing. Hence, Be careful! You can’t copy someone’s invention unless they agree to sell you a license. However, you can use patent applications to predict what’s coming in a particular tech space.
• If you have multiple ideas, brainstorm with other people (friends or family) to help narrow them down. You can invite them for dinner or lunch and ask them about specific products they use and what they wish was different. From the reviews you collect, you will have a deeper understanding of what people want, and you can find a way to provide it.
• Network with people in your line of business to help you learn their insights and experiences. You can attend entrepreneur events or join communities dealing with the same products in your area.

Once you’re clear on what you’ll be selling, decide how to create the product, and if it’s a service, get the office space. However, creating a product will take longer, and you must decide whether to build it or get it elsewhere. Alternatively, you can develop a product by combining different parts from other people or manufacturers.

4. Validate Your Product

How do you prove that your product is worthwhile? By validating your product idea, you can determine whether the product you plan to put on the market is what customers need.

How do you validate your new product? Validation means creating a few product samples (prototypes), testing them on potential customers, and seeing how fast you make sales.

Therefore, before you invest large sums of money and time in a product you aren’t sure will perform well in the market, do a few low-cost tests.

5. Write a Business Plan

Once your product is validated and you’re sure it will sell, it’s time to write a business plan.

What’s a business plan? A business plan is a document that explains everything about your business: the activities you’ll be involved in, how to make money, business model, target customers, pricing, and production methods. It should also include a marketing plan for the business and a financial strategy. A business plan should come before you create a website or social media presence.

6. Secure Funding

Money is required for any business to get off the ground, especially if you’re developing a new product. Before earning a dime from your new business venture, you need a lot of money upfront for production and marketing. Here are several ways to fund your new business:

• Bootstrapping (Self-funding) – If you have good savings, the money can help you start your new venture. Even without sufficient savings, you can take a second loan or sell one of your cars to ensure you have enough cash to support the business and yourself until you can earn a profit.
• Take a business loan—A good credit score will help you get a small business loan. Here’s where your business plan comes in handy, as the lender will want to know what they’re funding and whether the business is a viable idea.
• Try a venture capital firm – A bank loan might not be the right source for your business funding if you need a large sum of money. Reach out to a venture capital firm that specialises in funding startups. However, you must be careful because they own part of your business. Additionally, venture capital firms can go as far as wanting to have a hand in running the business.

7. Launch Your Business

Once you secure funding, please list everything you need for the new business and check each item after acquiring it. Go ahead and set up social media accounts and a website, and if you’re opening a physical shop, set up signage for the first day.

Now that your business is live, your primary focus is driving sales to your company for at least a year. As customers come in, have an after-sales customer service system to provide customer support. The first customers are crucial to the business as they’ll generate word of mouth for other customers. Hence, you must ensure they have a good customer experience.

If your business begins quietly and has little activity, becoming an entrepreneur will take a lot of work and effort. Therefore, don’t let anything discourage you, as you have a long way to go and much to achieve.

8. Market and Manage Your Business

Launching a business doesn’t make you an entrepreneur, but starting and running it does. While the two skill sets overlap, they’re distinct. You need to apply your unique leadership skills and study how to run a company to make yours a success.

Find resources like business podcasts or take a business class in a community college and anything else you can do for the business. Besides, you’ll learn more about business management as you go through entrepreneurship.

Networking with other business owners will give you more insight into business and help you avoid costly entrepreneurship pitfalls. You can work with a mentor, read entrepreneurship books or subscribe to business newsletters. Whatever works for you, ensure you never stop learning as long as your business exists.

Having an entrepreneurial mindset means combining beliefs and knowledge that help you approach challenges, act on ideas, and balance risks. Anyone can achieve entrepreneurship regardless of their innate strengths.

The Pros and Cons of Entrepreneurs

Entrepreneurship is about risks; those who understand risk management reap better rewards. When assessing if entrepreneurship is a path you can manoeuvre, here are the pros and cons to help you make the right decision:

PROS:

1. Work flexibility - Getting into entrepreneurship means you’re self-employed and can set a work schedule.
2. Do what you love to make money - Entrepreneurship allows you to do something you love and make money. You can transform a hobby or passion into a career and establish a business.
3. Be a boss—Entrepreneurs have more control over their business and can make decisions that affect the company quickly.
4. Maximise creativity - Although you’re starting small, you may be free of the barriers of bureaucracy that mature companies experience. Entrepreneurs can fix problems creatively and experiment whenever a moment presents itself.
5. Unlimited earning potential - Once your business picks, the sky’s the limit on what you can earn.

CONS:

1. Take on financial risk - As an entrepreneur, you put your money into the idea to try a business idea. If the business doesn’t turn out as expected, the entrepreneur is responsible to investors or lenders.
2. Long working hours—Starting a business means working overtime or long hours wearing different hats to get the business off the ground.
3. Take on greater responsibility—As you start your new business, you take leadership. Everyone in the business will look up to you for direction, which can stress you out.
4. Forgo a steady paycheck—Once you start your business, Getting a paycheck from the onset may be difficult. Before your big payday, you may have to take lean allowances as your dream grows into a business.

The entrepreneurial path has pros and cons, which you have to weigh before taking it. Regardless of what you may be thinking, understand that even the most successful entrepreneurs had to endure related challenges to make it.

Types of Entrepreneurs

Entrepreneurs are bold individuals who turn ideas into reality. From these ideas, they start a business, create jobs, and contribute to the economy. Let’s discuss the different types of entrepreneurs, the roles they take on, and how every type affects business success:

1. Innovators

Innovators are entrepreneurs who develop new ideas and turn them into thriving businesses. Entrepreneurs usually have the capability to change how people think and do things. They achieve success by being extremely passionate, obsessive, and highly motivated to succeed in business. Innovators also find new ways to market their products using different strategies that make their businesses stand out from the competition. Sometimes, it’s about standing out and creating a new following for the new product.

2. Hustler Entrepreneur

Unlike innovators guided by a vision, hustler entrepreneurs work harder and are willing to get their hands dirty. Hustlers start small and put in all the effort instead of raising capital or getting funding to grow their businesses.

Although they start small, hustler entrepreneurs focus on becoming a bigger force in the future. Dreams motivate hustlers, and hard work fuels their engines to achieve their goals. Hustlers are focused; they eliminate all distractions, favouring risks over small comforts for bigger rewards.

3. Imitators

Imitators copy existing business ideas but improve them. They look for ways to improve a product to ensure they gain an upper hand in the market. Imitators are partial innovators and partial hustlers. They work on their terms and have a lot of self-confidence.

4. Researchers

After conceiving a business idea, researchers take their time to collect all relevant information about it. Researchers have no room for failure since they analyse an idea from all perspectives and angles to ensure they get it right.

Research entrepreneurs start businesses they believe have high chances of success because they put detailed work into growing them. As a result, research entrepreneurs take a long time to start a business or launch a product because they can only do so after deep understanding. They mainly rely on gathered data and facts, following instincts and intuition, leaving no room for speculation or mistakes.

5. Buyers

Buyer entrepreneurs are wealthy individuals who buy any promising business. They identify a business, assess its viability, and then acquire it. Once the company is in its name, it hires someone to run and grow it for more profits.

Reasons for Becoming an Entrepreneur

Many people prefer to become entrepreneurs as a way to work for another company or change careers. As an entrepreneur, forgoing a fixed salary, working hard, and taking risks are many things you must do to succeed when pursuing a viable business idea. People choose the entrepreneur path for these reasons:

1. Achieve set goals, challenge norms, and learn new skills
2. Earn independence and autonomy running a business
3. Get income security and financial success doing something you love
4. Recognition and success in a specific industry
5. Motivation by family to gain financial and social stability by providing a product that resolves an existing problem
6. Turnaround dissatisfaction in the current workplace
7. Community and social motivation to help resolve issues by filling the gap with needed products or services

Traits of a Successful Entrepreneur

Entrepreneurship is only fit for some, but anyone can become successful with dedication and hard work. How can you know you’re cut for entrepreneurship? Understand that you’ll run the show and do most of the tasks yourself. If you have employees, they’ll expect guidance from you, and you will also make big decisions.

An entrepreneur must have leadership skills, and if you’re unable to lead yourself in a small business, the entrepreneurship shoe might be too big for you.

Your business will likely grow from a startup to employing future workers, and you should be able to lead them toward growth and success. Additionally, entrepreneurs find it highly rewarding if risks and challenges excite them. Suppose this sounds like you, my friend, you’re made for this. Let’s look at the traits that make a successful entrepreneur.

1. Strong leadership qualities
2. High self-motivation
3. Integrity and a strong sense of basic ethics
4. Willingness to embrace failure
5. Serial innovators
6. Desire to learn what you don’t know
7. A competitive spirit
8. Understanding and valuing strong peer network

The Pitfalls of Entrepreneurship

Only some businesses are set for success. About half of all new businesses fail within the first few years. Others return investor capital quickly, while the rest barely manage to sustain themselves if they don’t go off the map completely. If you’re wondering why a business wouldn’t succeed after all the work has been put in, here are some reasons for it:

1. Money shortage – No business is guaranteed to take off. However, a solid plan, openness to change directions, and readiness to embrace risks and failures will give your business a chance of survival. Although market trends will change occasionally, a business must be agile to ensure continued growth and sustainability.
2. Too much debt – Debts can cause you to run out of money, and if the situation is extreme, the business can cripple and scare off investors. Securing funding when starting a business means entrepreneurs might settle for high-interest loans, yet there’s no guarantee that the business will take off. However, this devil’s bargain can ripple a business before it gets off the ground.
3. Failure to separate personal and business matters – It’s easy for an entrepreneur to mix business and personal life in a small business. For instance, using your credit to fund your startup can ruin you financially. Plus, not registering your business as an LLC makes you liable for all its actions, good and bad. Entrepreneurs who treat their small business as a private account also lower the business's success rate.
4. Internal conflict – Misunderstands with a partner or workers can lead to a go-slow, interrupting production and leading to business dissolution. Thus, resolving conflicts before escalation is crucial to avoid hurting your business. As a business owner, you’ll encounter a lot of uncertainties even when the business isn’t doing great to ensure there’s no disruption of productivity.
5. Incompatible culture – In a business, people from different backgrounds work together to grow a company. However, it’s sometimes challenging to blend different workstyles and expectations. Committing to what has worked before can be challenging to pivot when market trends dictate so. For this reason, entrepreneurs must be able to manage their business culture effectively to ensure everything keeps moving forward in a disciplined yet flexible manner.

The Future of Entrepreneurship

Since the COVID-19 pandemic struck the world, entrepreneurial spirit has surged, offering people an opportunity to supplement work loss and boredom.

Technology has made it easy for people to trade across the world, propelling new forms of entrepreneurship. Emerging technologies have also inspired innovation, but workers view technologies like AI as a threat to their jobs. However, technology should be viewed as a plus, not a threat, as there will always be new entrepreneurial opportunities and employment creation.

A shift in social and economic landscapes will also necessitate varying income streams, encouraging people to take the entrepreneurial path. New career paths have emerged in the creator economy in different support roles, such as content consumers and creator managers. As a result, more opportunities are created for those seeking to make money online, but on their own terms.

Frequently Asked Questions

How can I define a successful entrepreneur?

Self-motivation, leadership skills, basic ethics and integrity define a successful entrepreneur. They should also be willing to embrace failure creativity, be risk-takers, persevere, have the capability to adapt, and have effective communication and networking with peers. Entrepreneurs should be able to package and sell themselves and the products or services they create.

Who is an entrepreneur?

An entrepreneur identifies a problem in the community and then creates a product or service to address and fix it. Entrepreneurship transforms a profitable idea into a business product that disrupts the market. It can start small with a long-term vision to become great, capture the market, and realise high profits.

What is the meaning of SWOT in entrepreneurship?

In entrepreneurship, SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is the analysis set out in a four-square grid. The first two (Strengths and Opportunities) focus on the good in a business idea and how to capitalise on it, while Weaknesses and Threats warn the entrepreneur about anything that could go wrong during execution.

In summary

Entrepreneurship allows you to explore your hobbies or passions and transform them into a viable career. You can start a small business and become self-employed, offering the community a needed product or service.

Regardless of how you approach entrepreneurship, you create job opportunities in the community. Once you launch a business, hard work, determination, and passion will help you design a bright future in entrepreneurship. Success in entrepreneurship will create employment for yourself and others and give you financial and social stability.

Starting a business is a tall order, but growing it is even harder. However, if you’ve come this far reading our guide, it’s time to make that business idea a reality. It could be a product or service the world has been waiting for, so go ahead and make your business idea a reality! Do you have any questions on how to become an entrepreneur or register your business? if yes, kindly contact one of our experts here.