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by John Boitnott | Updated Aug. 5, 2022 – First published on May 18, 2022
Image source: Getty Images
Freelancers, gig workers, franchise owners, or small business owners — no matter what they call themselves, these individuals are entrepreneurs. From freelance writing services and Airbnb hosts to small grocery stores and tech startups, entrepreneurs power much of the U.S. economy and have done so for decades.
Even that lemonade stand on the corner of your block is run by an ambitious entrepreneur who is only ten years old. Some of today’s most successful businesses, such as McDonald’s, Starbucks, Amazon, and Facebook, were started by entrepreneurs.
Although there are many entrepreneurial success stories, many business ideas also fail. Any entrepreneur runs the risk of financial struggle, but there are things you can do to reduce that risk while pursuing entrepreneurship.
There is no reason your age, gender, or background should stop you from achieving your dream of being your own boss. Passion, an innovative idea, hard work, and resilience can all power a future successful business. However, there are also many other steps aspiring entrepreneurs need to take in order to become a successful business owner.
What these people share in common is a desire to create a career on their own terms. They’re willing to take on the risk of earning money the hard way, instead of opting for the more traditional route of a guaranteed paycheck by working for others.
Becoming an entrepreneur is also about creating a legacy by building something that can sustain the entrepreneur now and in the future. Truly successful entrepreneurs may even help sustain their descendants.
Many outdated definitions of the types of entrepreneurship omit freelancers and gig workers. However, these business owners share many of the same characteristics of those traditional entrepreneurs who run a startup or a small business. In today’s work environment, freelancers generate income by being their own bosses and should be considered entrepreneurs in their own right.
Before diving into starting a new business, make sure that being your own boss is a good fit. If you feel confident and disciplined enough to work for yourself and put in the necessary work and time, then entrepreneurship may be for you.
The entrepreneurial mindset approaches risk with confidence. It includes accepting the idea that you may not get a paycheck for a while and that it may take time to convince others to buy your product or service. As 2020 illustrated, staring down risk means being able to handle the unexpected while staying flexible enough to pivot.
In my case, I hired an expensive coach some years back to help me plan out and execute my freelance business. The price tag scared me, but I felt confident enough that, with the help of the coach, I could attract enough new clients to pay her fees and more. I took the risk and ended up thriving. If you think you can overcome the fear of failure like that, then read on to learn more about starting your entrepreneurial journey.
You should always begin by thoroughly researching your online business or storefront business idea. Otherwise, how do you know if it has the necessary ingredients to achieve success? Primarily, you want to make sure there is a sufficiently sized target market with a key problem or pain point that you can solve with your product or service.
Without that sustainable audience in need of your help, no amount of passion will lead to a profit. If you’re pursuing a social entrepreneurship pathway, you will want to research whether your idea will make a difference in solving the targeted social challenge.
In your market research, consider other factors that could impact cash flow and profitability, including legal and regulatory issues, environmental impact, competitive pressure, and long-term viability. If these factors support your business idea, it’s time to move on to the next step.
As this is your first business, you should create a formal plan for every decision and action that you will need to take, both now and in the foreseeable future. The business plan becomes your working road map for what you need to do to grow and manage your business.
As a secondary benefit, you can also present this document to potential investors, such as venture capitalists, should you need to raise money to get your business off the ground.
If you don’t know how to create a business plan, you’ll find numerous online resources and books with templates and samples. Or, work with a coach or mentor, as I did. The examples you find will show you exactly how to develop a detailed guide for the tactics and financial forecasts that will help you launch and grow your business.
You should also consider how to protect your intellectual property, especially if you’ll be sharing proprietary information with others.
Although you may know the type of business you want to start, you now need to consider what legal structure to use. If you are a freelancer, you may elect a sole proprietor or LLC structure, whereas a startup should consider using a corporate structure.
The Small Business Administration offers a good summary of each framework, including both the strengths and risks of each. You’ll also find instructions on how to adopt a particular business structure.
Your structure will help you decide how to organize your company. You’ll probably be wearing many hats initially and won’t need to develop departments — yet. Still, it’s important to understand the eventual need for marketing, sales, IT, finance and accounting, and HR departments.
Taking the time to understand these functions now helps you create effective processes and efficient workflow from the start.
At some point, you’ll probably consider hiring additional help. But it’s never too early to establish best practices for hiring and onboarding. That means creating formal job descriptions, adhering to legal requirements for hiring and paying employees, and beginning to develop a work environment and culture that reflects key values.
Putting that framework in place early on helps you attract and retain talent as your business grows.
You’ll need to then do some testing and experimentation to see how your target market reacts to your product or service offering.
Testing early and often helps minimize problems that could slow cash flow. The right testing early on can ensure good reception upon launch, instead of revenue struggles. There are many ways to test various aspects of your new business, including surveys, focus groups, and split, or A/B, testing.
One of the most critical ways to promote business success is to persuade your target market that they want what you offer. Marketing is an integral step both before you launch and after you establish your new business. As part of your business planning process, develop a marketing strategy that details the messaging and tactics appropriate for your target demographic.
While social media and blogging will reach some potential customers, you’ll likely need to add offline tactics like direct mail, product demos, and pop-up events as well. Use the research collected in your planning process to shape your marketing strategy.
Although many entrepreneurs have been successful without making a pit stop at a college or university to pick up a degree, today’s institutions of higher learning now offer entrepreneurial degrees as well as startup accelerator programs that help fund and build new businesses. It is worth considering adding this level of education to your entrepreneurial journey.
As you go, you may also want to keep learning by adding online courses and certifications that expand your entrepreneurial skills. These learning mechanisms could be industry-specific or they may involve broader business and technology subject matter.
A good way to hustle to find customers, talent, investors, and revenue opportunities is to build your professional network. Both online and offline networking events can help you add people to your network. Join professional networking sites like LinkedIn to connect with others while also building your own credibility through thought leadership content that you share on your profile.
I always approach networking with the intent to be a connector. I don’t recommend going to events with the sole intent of pitching people or selling them on your product.
Be ready to listen, provide feedback to what others say, or introduce any contacts you know who might be helpful to people you meet. Look for those who would do the same for you. Great entrepreneurs help others achieve their business goals, creating mutual success.
Keep a constant focus on how to take your new business to that next level of growth. That involves going back to the first step on this list and working through the steps again as you explore growth opportunities, whether that’s an additional product line or new geographic locations.
This recipe for becoming an entrepreneur can be applied to your new business, perhaps with a few adjustments along the way. It’s a road map of your personal entrepreneurial journey and will help you transform your business idea into a sustainable way to make money and create your legacy.
John Boitnott writes about human resources, marketing, and small business software solutions for The Ascent and The Motley Fool.
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