If you’re on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
Credit Cards
Banks
Brokers
Crypto
Mortgages
Insurances
Loans
Small Business
Knowledge
by DP Taylor | Updated Aug. 5, 2022 – First published on May 18, 2022
Image source: Getty Images
One of the chief challenges entrepreneurs face is simply knowing where to start. Once you’ve started, the path forward becomes clearer, but it’s daunting to take that first step toward creating an adventurous new chapter in your life.
If you want to work for yourself and be your own boss, you must learn how to become an entrepreneur. That requires a lot of research and planning — not to mention some serious introspection to determine if you have what it takes.
Many types of entrepreneurs exist, but whether you want to become an infopreneur or the next Steve Jobs, you must take the following 10 steps to increase your chances of developing a successful business.
The first step in becoming a business owner is to look deep inside yourself and ask whether it’s really what you want. Do you have the entrepreneurial mindset? Can you market yourself? Evaluate your field or sector and determine what value you can add and what opportunities you see to beat out the competition. Ask yourself what resources you need and whether you can acquire them.
Tip: Ask yourself whether this idea you have energizes you. Is it something you’d be willing to fight for years to achieve, or do you see it as a get-rich-quick scheme? If it’s the latter, you’re probably going to get disappointed.
Successful entrepreneurs have to dedicate a lot of time to the business and understand the competitive landscape, so put a lot of effort into selecting the right venture. Determine how you must network or where you will go to find customers. Evaluate the financial metrics to determine if this is really a profitable venture worth pursuing.
Tip: Avoid industries you’re not familiar with. Instead, focus on improving a product or process in an industry where you already work.
The number one reason new businesses fail is undercapitalization, so you must figure out your capital requirements right off the bat and be generous with those estimates. Will your venture require significant investment? Would you need equipment or office space? How many employees would you realistically need to make things happen? How much would you have to spend on outside contractors?
What will be your monthly expenses? How will you attract capital or outside investment? Do you have enough savings? All of these questions must be answered before you even think about launching your business.
Tip: Keep your day job. No matter how confident you are in your idea, you are venturing into uncharted territory and therefore should have a backup plan.
Generally, you’re going to struggle trying to succeed on your own. A business must hire employees to grow because you can’t do everything yourself. Hire an administrative assistant, at least part-time, to handle all of those miscellaneous tasks that eat up your time. Find a good salesman who can bring in new customers.
Hiring the right people is crucial and may single-handedly determine your failure or success. Seek to empower staff to make decisions so they don’t always have to come to you asking for direction, and don’t be afraid to make staffing changes when necessary.
Tip: Hire an assistant first before you hire anyone else. This person will handle your most essential tasks and help you learn how to delegate before you try hiring other people.
What does success look like to you? Do you need $10,000 per month to break even? Or is it OK to focus on branding for six months before you even start to bring in revenue? You must lay out a realistic plan for how to achieve success and, to do that, you must define what success looks like.
Define clear metrics, or you will be like a ship without a rudder. Identify the numbers that indicate success and use them to determine which opportunities to pursue.
Tip: Use specific numbers, such as the amount of money you must be making by a certain date. Vague goals will only create problems.
Incentivize team members for performance to boost your chances of success. Use financial incentives, such as a bonus, or try other rewards, like extra time off. Recognize team members for outstanding work. High morale will increase the productivity of your organization.
Promote and develop talent accordingly, and give employees the chance for improvement so they can seek promotion down the line. You can do this even if you only have one or two employees, so don’t just save these steps for when your business grows to a certain level.
Tip: Tie monetary rewards to revenue increases to avoid hemorrhaging money for activities that are helpful but don’t actually move the needle on profits.
You won’t achieve success without taking some risks, so embrace calculated risk in chasing legitimate opportunities. Just have a backup, like a day job or savings, in case things don’t pan out. And don’t just take chances with business opportunities.
Take measured risks with hiring talent by looking for employees with a high upside. Develop a balance between risk-taking and prudence, and always learn from failure — without being afraid to take another shot down the road.
Tip: Don’t put all your eggs in one basket. Focus on the core of your business and branch out into more risky endeavors that can fail without disrupting your business.
Business seems like it’s all about the numbers, but at the end of the day you’re working with human beings to produce things for other human beings. You must have emotional intelligence as a boss, so seek to understand people and social landscapes, which can be more important than financial capital and assets.
Don’t become rigid or inflexible, and always demonstrate patience and empathy to your employees, as well as to your customers. You will build loyalty in both groups toward your business. Develop your communication skills, and you will be rewarded.
Tip: Have regular conversations with your employees where they do most of the talking. And when you tell them, as many managers do, that your door is always open, actually mean it.
Not being honest with yourself is a recipe for disaster for any entrepreneur. You must be brutal with self-assessment. Be your own worst critic. Seek 360-degree feedback from everyone around you to supplement your own assessment. Be honest about what were successes and what were failures, and why. Remain open to change and new approaches, and continue to improve.
Tip: Invite anonymous feedback from your employees on a regular basis. Many online services will make it easy to do this. Anonymous feedback is more likely to be honest.
Thanks to technological advancements, entrepreneurs have almost endless tools to choose from when it comes to software. These platforms can track business metrics to help you spot ways your business can improve. They can organize your sales team, or help you run a project. They can even help you with e-commerce or email marketing.
Tip: Check out the many top software options reviewed by The Ascent to help you find your next software tool.
Preparation is key to becoming a successful entrepreneur. Too many people are sucked into books from self-help entrepreneur success stories that promise overnight success as long as you have grit and determination. The truth is it takes most people years of failure and gradual growth to find success, so it’s wise to have a solid plan in place for slow development of the business — along with a day job to lean on in the meantime.
Rather than rush to quit your job and jump headlong into entrepreneurship, take the time to develop a cautious plan to launch your business. As a result, you will be more prepared and increase your chances of success in the business world.
DP Taylor is a business software expert writing for The Ascent and The Motley Fool.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 – 2022 The Ascent. All rights reserved.
About Author
