CareerExplorer’s step-by-step guide on how to become an entrepreneur.
Is becoming an entrepreneur right for me?
The first step to choosing a career is to make sure you are actually willing to commit to pursuing the career. You don’t want to waste your time doing something you don’t want to do. If you’re new here, you should read about:
Still unsure if becoming an entrepreneur is the right career path? Take the free CareerExplorer career test to find out if this career is right for you. Perhaps you are well-suited to become an entrepreneur or another similar career!
Described by our users as being “shockingly accurate”, you might discover careers you haven’t thought of before.
Entrepreneurial Spirit
Many books and other reference materials written on the subject will list ‘Find Your Industry or Niche’ as the first step in the process of becoming an entrepreneur. While the majority of these resources undoubtedly offer valid advice and information, they often neglect to include the quintessential requirement for entrepreneurship success: a genuine entrepreneurial spirit – a bent, an aptitude for managing the myriad of things that come with starting and operating a business. Impressive education and a diverse network are valuable assets. But without an innate sense of industrialism, of pioneerdom, success is more often than not fleeting or unreachable.
Niche Identification
In general, your niche will be something you have worked in for years or something that has inspired you for a long time. A professional organizer, for example, may see an increasing need for his/her services. A life coach may be motivated to develop and market a new paradigm or archetype in the field of human development.
Education
For prospective entrepreneurs, ‘education’ is not a clear-cut term. This is not to say that education is not worthwhile; it’s just that in the entrepreneurial world it tends to come in more forms than in traditional occupations. Some entrepreneurs – the minority, however – succeed with no formal education; they are born business leaders, self-motivated, self-taught, and driven by their vision and natural talents. For the majority, though, their learning track is composed of three tiers. These tiers may be comprised of different kinds of education, from formal programs to various targeted courses.
Tier One
This education, also known as industry education, is directly related to the field in which their business is focused.
Of course, tier one/industry education can be in any discipline at all, based on the focus of the proposed business. The learning that takes place in tiers two and three is more generic; it applies to all entrepreneurs across all niches. It is about launching and operating a start-up. Let’s take a look at the typical education components of these tiers.
Tier Two
Entrepreneurship education teaches the foundational skills needed to launch a business.
Consider this example from Harvard Business School.
Tier Three
This is education is related to business and finance. Every entrepreneur needs to be versed in management, finances, taxes, and other business-related topics. Depending on individual skills and abilities, this knowledge may come in the way of a degree, a certificate, or standalone courses in the following subject areas:
• Business Administration
• Business Management
• Business Analytics
• Economics
• Accounting
• Advertising
• Marketing
• Communications
• International Business
• Hospitality Management
• Project Management
Business Concept & Plan
A business without a plan is a business that will fail. Following are the basic components of a stable business plan:
Develop Your Idea and Research Your Market
• Determine why your idea is a good one and how it can help or change people’s lives.
• Determine who makes up your target market.
• Conduct market research; test your idea against the competition.
• Ensure that you are offering something different and distinct.
Create a Business Plan
• Develop a pitch to help focus your goals; demonstrate how your idea solves a problem.
• Conduct research to clearly identify and define the competition.
• Clarify your financial position; establish a budget; determine likely investment requirements.
• Estimate the phases/stages of growth of your business; set some milestones.
Finalize a Marketing Strategy
• Invest in promoting your product or service.
• Start thinking about your brand and the message/story you wish to convey; ensure consistency across all of your messaging, from logos, to taglines, and online/social media presence.
Seek Funding
• All start-ups need capital. Most do not make a profit at the beginning of operation. Funding typically comes via loans or from investors.
• Bank loans require regular repayments.
• For many entrepreneurs, investors are the better option because they take equity in lieu of regular repayments; on the other hand, they may have unrealistic expectations.
Talk to a Lawyer
• Launching a new business is a serious undertaking. It is imperative to ensure that you are legally protected.
Build a Rock-star Team
• Hire people with strengths different from your own.
• Hire people who share your vision and relate to the culture you are creating.
Networking
Networking is a critical part of entrepreneurship. Meeting the right people can be the difference between failure and unimaginable success. Here is a list of several associations and groups dedicated to supporting entrepreneurs:
• Entrepreneurs’ Organization
• Vistage
• Startup Grind
• The Association of Private Enterprise Education (APEE)
• Young Entrepreneur Council (YEC)
• International Council for Small Business
• Score
• International Franchise Association (IFA)
• U.S. Small Business Administration
• United States Patent and Trademark Office
How to become an Entrepreneur
There is no single standard answer to the question, ‘How do I become an entrepreneur?’ The reason for this, of course, is that there are many different types of entrepreneurs. The path taken by a life coach, for instance, will differ significantly from that of an interior designer or a dog groomer. Still, there are some aspects of the becoming process that are generic and therefore pertinent to all entrepreneurs, regardless of the specific business sector in which they operate. All entrepreneurs need to find their industry niche, research their market, and educate themselves.
While there are stories of vastly successful, self-made business leaders that never graduated from college, research shows that over 95% of entrepreneurs in high-growth industries have at least a Bachelor’s Degree. The educational track for many entrepreneurs is often threefold, including:
• education directly related to the field in which their business is focused, also known as industry education
• entrepreneurship education to learn the foundational skills needed to launch a business
• education related to business and finance to learn about management, finances, taxes, and other business-related topics
This does not mean that entrepreneurs need to pursue multiple degrees to be successful in their undertaking. But it does mean that those who thrive understand that the professional path they have chosen is multifaceted and demands learning the intricacies of their industry, of launching a start-up, and of managing a business.
It should also be noted that becoming an entrepreneur and having a successful business generally do not happen at the same time. Most businesses are built slowly, over years and even decades. This is not a bad thing, because building and growing slowly presents opportunities to learn and make adjustments. Handling new situations provides invaluable on-the-job entrepreneurship training that no degree program can offer.
In short, the best entrepreneurs start with an original idea; a plan and the ability to execute it; passion and relentless determination; and perhaps most importantly, a great deal of patience.