How to Become an Entrepreneur
1. Identify profitable startup ideas.
Ask your friends what frustrates them.
Get inspired by other emerging startups.
Checking out what other people have come up with can be a great way to kick your own thought process into gear. Go to Product Hunt, a constantly updated curation of the newest apps, websites, and games, for digital inspiration. Meanwhile, Kickstarter is great for physical products.
Identify trends to future-proof your idea.
As the world changes, people need different products. As an example, the rise of Uber, Lyft, and other ride-sharing apps created a demand for a third-party app that will tell you the cheapest fares at that exact moment.
You want to get ahead of the curve. Read trend predictions for your industry or market, or check out universal trend forecasting publications like Trend Hunter and Springwise. Then ask yourself, “If these predictions come true, which tools will be necessary?”
2. Identify and focus on a growing category (or categories).
“I avoid industries that are notoriously challenging, like the toy industry. There are so many people creating in that space,” he explains. “You will have an easier time licensing your ideas if you focus on categories of products that are growing as well as receptive to open innovation.”
3. Fill an underserved demand.
You don’t need to reinvent the wheel if there aren’t enough wheels. Many people start successful businesses after noticing a gap in the market. For example, perhaps you learn there’s a shortage of high-quality sales outsourcing. Since you have experience in sales development and account management at early-stage sales companies, you might decide to offer this service to tech startups.
4. Make something better (or cheaper) than what’s out there.
You don’t always need to develop something brand-new. If you can offer an existing product at a lower price point, better quality, or ideally, both, you’ll have plenty of customers. Better yet, there’s clearly an existing demand.
- Network with other entrepreneurs: Use Meetup or Eventbrite to find events in the local startup community. Not only will networking with other entrepreneurs help you build valuable relationships, but it’ll also give you lots of ideas.
- Research patent applications: Patent applications are typically made public 18 months after they were filed. Although we don’t recommend outright copying any inventions, browsing through these documents can give you a good sense of where a particular space is headed.
- Have a brainstorming session: If you need to get your creative juices flowing, invite three to five other entrepreneurial-minded people to a brainstorming session. Ask everyone to come prepared to discuss a certain product category or question, such as, “What’s your favorite type of X and why?” or “Do you use anything to accomplish Y? Why or why not?” The answers may lead to some great ideas.
5. Validate your startup idea with buyer persona research.
Great, you’ve got an idea. But don’t quit your day job yet. Before you go all in, you need to know other people will actually want your product. (No, your friends and family don’t count.)
In order to safely gauge the viability of your product in the market, start by understanding your buyer persona, i.e. the real people you plan to sell to. If your product doesn’t serve a need, they won’t be interested, no matter how innovative or cool it is. That’s why buyer persona and market research are so important.
Once you’ve identified your ideal client, interviewing people who fit the bill should be an important component of your research. Show them a working demo of your product, ask what they like and what they don’t, how much they’d pay for it, how often they’d use it, and so on.
If you want to test the market’s interest before building anything, build a landing page that describes your product or service. Ask people to submit their email addresses in exchange for early access; a free subscription, membership, or product; a discount, product updates, or some other compelling offer. Then promote the video on social, paid search, etc., and see how many visitors convert to sign-ups.
6. Start with a minimum viable product (MVP).
Let’s say you want to build an app that will connect college students with virtual tutors. You might create a bare-bones version, manually invite 150 tutors you found online to join, and then post the link to the app on the local university’s Facebook page. If you get a decent number of sign-ups, that’s a sign you should move forward. If you get barely any, you should either rethink the idea or start fresh.
7. Create a business plan.
A business plan is a formalized document that details your business goals and the steps you’ll take to achieve them. This may include marketing strategy, budget, and financial projections and milestones.
How to Get Funding to Start a Business
1. Ask your family and friends to invest in your business.
Many entrepreneurs rely on their friends and family for an initial investment, typically called a “seed round.” You can exchange funding for a stake in your startup (i.e., your cousin receives 4% of the company after giving you $12,000), request personal loans (with or without interest), or even donations.
2. Apply for a small business grant.
3. Use a crowdfunding platform.
This method doesn’t just generate capital, it can also help you get early product feedback, brand awareness, and sometimes, if you have an interesting story or especially cool product, press.
4. Pitch to angel investors.
Angels look for early-stage companies that can 10X or more their investment. Typically, they put in $25,000 to $100,000. If you do the math, angels are looking for businesses worth 5000.5 to $10 million in the future.
They will be extremely diligent in making sure you understand your target customers, the product space, how you’ll make money, and how you’ll scale. Make sure you’re prepared with a solid business plan and early signs of traction (such as “the average user refers two additional users in their first week” or “we doubled our revenue from January to March.”)
5. Solicit venture capital.
Venture capital firms look for young, private companies. Like angel investors, VC firms are looking for high-risk, high-return investments. The returns they expect depend on just how mature your startup is. If they invest right before your company goes public or gets acquired, a 3X return is good.
6. Use a credit card for a short-term cash option.
It’s typically not a good idea to use your credit card to pay for business expenses — unless, of course, you can pay the balance. Sometimes, you have no choice: You need money, and fast. But sacrificing your credit score and racking up credit card debt will hurt your business in the long run (not to mention, your personal financial health).
7. Get a microloan.
You can’t apply for a loan in your company’s first year, as lenders are unwilling to make such a high-risk investment. However, you can take advantage of the Small Business Administration’s microloan program. Small businesses can receive up to $50,000; the average SBA loan is $13,000.
8. Bootstrap it.
You don’t need to accept money from anyone else if you don’t want to. Some companies never raise funding at all — their founders pay for initial costs by themselves, and then, when the company becomes profitable, its revenue covers all expenses.
This option allows you (and your co-founder, if you have one) to hold on to a much bigger percentage of your company. But you may grow less quickly without big infusions of cash. If you do decide to bootstrap, keep your budget as lean as possible to extend your company’s lifetime.
Potential Earnings for Entrepreneurs
Your earnings potential as an entrepreneur will depend on various factors, including the type of business you start, your skills and experience, and the amount of effort you put in. That said, there are some general things to keep in mind. Many entrepreneurs earn a good living by starting their businesses. In fact, according to a study by the Kauffman Foundation, 20% of all entrepreneurs earn more than $100,000 per year. And in some cases, entrepreneurs can earn even more than that.
These days 9-5 jobs are becoming less and less common, and more people are turning to entrepreneurship to make a living. It takes a lot of hard work, dedication, and determination. Here are a few steps to help you become an entrepreneur:
Do Your Research
Before you do anything else, you need to research your industry. What are the current trends? What are the major players? What is the competition like? This information will help you determine whether or not your business idea is viable, and it will also help you come up with a plan for how to succeed in your industry.
Figure Out Your Passion
Passion and skills are two of the most important factors to consider when it comes to entrepreneurship. Figuring out your passion can be difficult, but it’s not impossible. Once you’ve identified what you’re passionate about, you need to ask yourself if there’s a way to make money off of it.
Build a Strong Team of Experts
Building a strong team of experts is one of the most important steps in becoming an entrepreneur. Surrounding yourself with people who have the skills and knowledge you lack will help you grow your business. A great team can help you overcome any obstacle, while a weak team can hold you back.
Plan and Execute
Sign Up With Our PGP Program Today!
This article provides a step-by-step guide for becoming an entrepreneur. Follow these simple steps and sign up today with a special PGP Design Thinking & Innovation course, and you will be on your way to entrepreneurship.
1. How do I start to be an entrepreneur?
The first step is to educate yourself about what it takes to be an entrepreneur. Read books, listen to podcasts, and attend seminars. There are a lot of great resources out there to help you get started. Don’t wait for the perfect idea or the perfect time. You’ll never be 100% ready, so go for it. The last step is to stay focused and motivated.
2. Are there any educational requirements?
There are no specific educational requirements to become an entrepreneur. Some of the most important skills and traits that are helpful for entrepreneurs include critical thinking, creativity, risk-taking, problem-solving, networking, leadership, and communication skills.
3. How do new entrepreneurs advertise their business on their own?
4. Do entrepreneurs need to be creative?
The answer to this question is a resounding yes! Entrepreneurship is all about creating something new, which can only be done with creativity. It helps them come up with new ideas, and it’s essential for problem-solving.
5. How do new entrepreneurs start a business on their own?
6. What are the common barriers to becoming an entrepreneur?
7. Can you start a business in college?
Yes, you can. But make sure that your business is aligned with your academic goals and interests. Next, be realistic about the amount of time and energy you can devote to your business while still taking classes.
8. Can a normal person become an entrepreneur?
Yes, anyone can become an entrepreneur. However, it is not easy. It takes a lot of hard work, dedication, and sacrifice. But if you desire to be an entrepreneur and are willing to put in the effort, you can make it happen.
9. How do I start a startup with no money?
10. How can I make money from home?
Starting your own business is a great way to make money from home. You can start a blog, an online store, or a freelance business. Freelancing is a great option if you have skills that businesses need, such as writing, programming, or design.
11. What is the best business to earn money?
There is no “best” business to earn money. Different businesses will be more successful in different parts of the world. Currently, some of the most profitable businesses include online marketing, information technology, and e-commerce.
How hard is entrepreneurship? Is it worth it?
The bottom line is: successful entrepreneurs aren’t born overnight. It takes time, hard work, and plenty of discipline to experience entrepreneurial success. You may not feel your success right away if your business idea doesn’t turn out the way you’d hoped.
One challenge that can impact any entrepreneur of any experience level is stress. Small business owners can feel the weight of their business on their shoulders every day. The pressure can be overwhelming.
Being aware of what can negatively impact your well-being can help you build strategies to protect it. Your hard work and dedication will be worth it when you’ve valued your well-being and energy. Remember, you can’t do your best work if you aren’t taking care of yourself.
That’s where BetterUp can be a helpful support system as you tackle your first entrepreneurial venture. Through a relationship with a BetterUp coach, you can get insight into how to prioritize your wellness, face setbacks with grace, and grow a successful startup.