Entrepreneurs are the lifeblood of every country’s economy. They run small retail shops, grocery stores, online businesses, etc. No matter how small or narrow the scope is, there is an entrepreneur behind every business or private organization in every country. In this blog post, we will discuss everything you need to know about entrepreneurship and how anyone can become a successful entrepreneur.
The Success Rate of Entrepreneurship
There are numerous examples of successful entrepreneurs around the world. For instance, huge giants like McDonald’s, Facebook, and Coca Cola are very successful business enterprises. Any famous business that you can think of has a renowned entrepreneur behind it.
However, not every entrepreneur is successful. Approximately 20% of new businesses fail during the first two years of operations. According to Gallop Polling, 50% of businesses usually fail after five years of operations. Moreover, Fortune Magazine states that nine out of ten startups eventually fail after setting up their business operations. These numbers may seem overwhelming and demoralizing, but it does not mean that you cannot become a successful entrepreneur in your life.
If you have the passion, a great idea, the thirst for learning, and the willingness to work hard, you can also become one of the greatest business owners in the world. But before you start thinking about various business ideas, you need to understand what exactly the term ‘entrepreneur’ means.
What Is An Entrepreneur?
The word entrepreneur is something we often hear around us but have you ever wondered what it really means? When we hear this word, we immediately think about business owners, such as café owners, photographers, digital business owners, etc. But what is it that clearly defines an entrepreneur?
“Entrepreneur” is derived from the French word “entreprendre,” which means, ‘to undertake.’ This usually refers to any person who takes a significant risk by taking the initiative with an aim to make large profits. However, making money is not the only factor that motivates entrepreneurs; rather, the concept of taking a risk in the form of making huge investments is the basic definition of an entrepreneur.
Another important factor about entrepreneurship is that business owners want to come up with strong ideas that will last for a long time and create an impact in the market. Their aim is to take the required steps and actions to establish a business entity that will continue to generate profits even while the owners themselves are not working. For instance, someone who runs a restaurant does not need to be present at the restaurant all the time in order for it to run smoothly.
Freelancers vs. Entrepreneurs
In today’s advanced world, thanks to modern technology and convenience, many people have started working online as freelancers. Freelancers usually take jobs according to their own preferences and terms and conditions. For instance, there are many freelancers who work in writing, web designing, and consulting. But the main question is whether or not freelancers are entrepreneurs.
Freelancers do possess several qualities similar to entrepreneurs; however, they are not considered entrepreneurs because they don’t actually take a break from their work. The two terms may seem very similar, but are quite different.
How Do You Know If Being An Entrepreneur Is the Right Role for You?
Have you ever wondered if the life of an entrepreneur is right for you? There are several traits, values, and qualities that are found in some of the most successful entrepreneurs throughout history. But this does not mean that anyone who has these qualities will be as successful as these men and women. They merely build a strong base or foundation for a life that involves a lot of risk-taking, quick decision making, and a lot of rewards.
The first thing that entrepreneurs value the most is independence. This implies being your own boss and controlling your own company according to your own terms. Entrepreneurs get to set their own schedules and hire people to work for them to run their business. But did you know that entrepreneurs also have someone overseeing their work? It’s their customers! The success of a business comes from great minds, but it also comes from your customers. Entrepreneurs take pride in paving their own paths and building success out of something greater than themselves. They are self-sufficient.
Entrepreneurs should also be capable of handling risk. For example, if the idea of not making enough money on a regular basis, failing to sell a certain product or service, or simply falling flat on your face really scares you, then handling an entire business might not be right for you. There are a lot of ups and downs in every business, especially during the initial years. It takes a while for things to settle down, and if you wish to be an independent business owner, you need to be ready to handle the challenges that come along the way.
Since there is a lot of risk involved in setting up a business, most owners are very careful with how they spend their money. Despite the popular stories that you hear about business owners taking expensive trips or partying on their yacht, some of them are actually savers, not big spenders. In a study by Dr. Thomas Stanley, it was stated that most millionaires in the world are small business owners who saved their money over the years rather than spending it on lavish parties and trips. This highlights the importance of smart saving and smart spending as an entrepreneur.
How to Become an Entrepreneur
So the following questions still stand: what should you do to become an entrepreneur? What are the necessary steps you need to take to become a successful entrepreneur?
There are several types of entrepreneurs who take different paths and have different approaches to becoming successful in what they do. For example, the owner of a clothing store will not take the same path as that of a restaurant owner. However, there are a few similar steps that every aspiring entrepreneur should consider:
- Find the industry you want to set up a business in
- Research and identify your target market
- Get the required qualified
- Build your business slowly and gradually
Find the industry you want to set up a business in
This is the most obvious first step while thinking about starting a business. You need to figure out which industry you want to belong to or get involved with. Ideally, your industry would be something you have worked for previously and are familiar with. For example, if you want to start a construction business, you might have previously worked as an architect or a builder. Or if you previously worked at a restaurant as a waiter or a manager, you might be familiar with the food services and how the business runs. Starting a business on the basis of your current experience is the best course.
Moreover, if you choose something you are familiar with and have sufficient know-how about it, you will love your business. This is because money eventually loses its value when you have to grind at work for at least sixty to seventy hours every week. Some businesses fail because the owners no longer enjoy running them, and they don’t really see money as a motivating factor. Having a strong purpose behind the idea of starting a business should not be overlooked even if making sufficient money is your motivation.
However, if you don’t have any prior experience in the business you want to start, that’s okay too. If you have the passion and the desire to go the extra mile and make an example for others, you should go for it. The important thing is to believe in yourself and knowing that you can do it.
Identify and research your target market
The next important step is to identify and research your target market to analyze the needs and demands of people. You should also conduct substantial research on your product or service and how it will draw the attention of your customers.
For example, if you wish to open an Italian restaurant in your city, you will have to conduct hefty research on it and ask the following questions:
- Are other restaurants doing well in the area?
- What is the success rate of restaurants in your city?
- Are there any other Italian restaurants around?
- Will the customers like the idea of Italian cuisine?
- Will the customers be able to afford the food?
- Should it be a fine dining restaurant or a moderate place to eat?
Getting answers to these questions will help you understand your target audience better so that you can tailor your products according to their needs.
Another important factor to take into consideration here is researching your competitors thoroughly. You should go through their websites, newsletters, annual reports, each and everything that you can find on them in order to make your business ten times better. Researching your competitors is a very important part of your overall market research.
Get the required qualifications
The next step is to get qualified by getting an education related to your potential business. You might have heard many stories about some of the most successful self-made businessmen who never went to college and are in a great place without a college degree. However, if you dig a little deeper, you find out that this might have worked out for a few, but the majority of successful entrepreneurs have an excellent educational background and have graduated from some of the best schools around the world.
Entrepreneur Education and Training
There are three main types of qualifications you should be looking for if you are an aspiring entrepreneur. They might not seem very relevant to your field, but they will deficiently give you long-term success. Let’s take a look!
Education in your industry
The first type of qualification should be in something that is directly related to your area of work and expertise. For instance, if you are considering opening up an auto shop, you should have first-hand knowledge about car repair and mechanics. If you want to become an electrician, you will need an education and training related to electrical engineering that can help to teach you everything about circuits and wires, or if you want to open up your own restaurant, getting the certified training in food services would be a great way to go about it. A bachelor’s degree will provide you with ample knowledge to help you understand how a business should be run.
Once you get through with the basic education about the industry you want to be in, you should consider getting a degree, diploma, or a certified course about something directly related to your work. If we consider the above example again, opening an auto shop would require you to at least complete a couple of training sessions and certifications. Certificates are a great way to help entrepreneurs learn the basic foundation skills that are required to start your career as an independent business owner. Shorter courses can be completed quickly and help you kick start your business very efficiently. Check out some of the short courses on entrepreneurship that you can consider taking.
Business and Financial Education
Every entrepreneur, whether it is someone running a food stall on the corner of a street or someone in a fancy corporate office, must have thorough knowledge about business management and financial responsibility, including taxes. You don’t necessarily need to have a master’s degree in order to learn these basic skills, but having a degree in business management or finance will be very helpful. This is because an entrepreneurship degree can help you actually run your business like a successful entrepreneur. The qualification will prepare you to meet the daily challenges of running a business and how to move forward with your career.
Here is a list of some of the most common business-related courses:
- Business Administration
- Business management
- Business Analytics
- Economics and Finance
- Marketing and Advertising
- Business Communications
- International Business
- Project Strategy and Management
Build your business slowly and gradually
Many entrepreneurs believe that quick and rapid growth is a sign of a successful business. However, the truth is that every business should be built gradually, which can often take years or decades. Most entrepreneurs start to build slowly by measuring each and every step they take along the way. This allows you to learn, gain knowledge, observe, and make relevant adjustments before moving your way forward into the growth of a business. When you encounter and deal with several practical business situations, you learn valuable skills and get the required training that you can’t get from a formal degree. In some cases, most entrepreneurs continue to keep their typical day jobs while working on their business on the side.
How Much Do Entrepreneurs Earn?
Every entrepreneur earns a varying amount of income. There are several factors that determine how much entrepreneurs make. For example, the size and scope of a business, the demand, how expensive the products are, etc. A study conducted by Business News Daily stated that, on average, the salary of an entrepreneur ranges between $68,000 and $72,000 in a year. The study also highlighted that some entrepreneurs also work in the morning and handle their business in the evening, which adds to their earnings too (but they have lower profits).
Other factors that affect the salary of an entrepreneur include taxes, investments, product purchasing, certifications, employee salaries, etc. All of these factors can quickly reduce the earnings of an entrepreneur because without meeting these expenses, the business would fail. So if you end up selling a product for a million dollars, it is not necessary that you will earn a million dollars. There will be first-hand expenses that you will have to pay off before you can calculate your profit.
Essential Tips for Becoming a Successful Entrepreneur
There are several things you can do to increase your chances of becoming a successful entrepreneur. Here are a few essential tips:
Entrepreneurs require several skills and traits to run a business, and one of the most important traits is positivity. This does not mean being happy all the time or having happy thoughts. It only means that business owners should stay positive and hopeful even when things get tough or challenging. If something goes wrong, a person with a negative mindset will start calling themselves a failure and consider quitting the game. But a person with a positive mindset will try to figure out what caused the problem and how it can be fixed.
Learning and Growing
A good entrepreneur will always think about learning and growing in every way possible. This includes personal as well as professional learning. This includes taking extra classes to hone some skills, taking certifications, or working on communication skills, and reading industry newsletters or publications to keep abreast. This can provide vital information for many decisions that will have to be made in the future. Actively trying to improve themselves and evolving according to the market is one of the great qualities of every entrepreneur.
Keeping Personal and Work Finances Separate
In order to avoid any hassle, inconvenience, and inaccurate results, a business owner must maintain a separate bank account for income derived from the business and a separate account for personal money. This factor might not seem very significant to some people, but it can make an important difference in the success of a business.
Another important tip is to build strong networks for emotional as well as professional support. Entrepreneurs have a lot of things to worry about at the same time, and having someone to talk to in order to take off some of the load is essential for running a business. Plus, you should also have someone to help you out with business-related issues, such as having an accountant, a financial advisor, a marketing consultant, or a mentor for guidance.
Things to Avoid
There are many things that entrepreneurs should avoid, and some of them may be very obvious. Conversely, other things can be very difficult to avoid and can often sneak up on you and spoil your success. These downfalls can come way before you even start to sell your product or right after selling an initial product.
If you think about it practically, many entrepreneurs advise that getting into the spiral of business debt should be avoided at all costs. Some entrepreneurs say that if you start your business by borrowing money, your business is probably doomed to fail if you don’t pay off that money very soon. Therefore, debt should always be kept at a minimum whenever possible.
Moreover, having rapid success can also become a problem for entrepreneurs if it is not handled and managed properly. For example, if a business gets super busy, there may not be enough time to manage everything at the previous pace. You will have to increase your pace and start working faster or start hiring more people.
Another downfall that should be avoided is depending on a single course of income. For example, a successful entrepreneur will avoid this by not letting a single customer be responsible for more than 25% of the income. This is because if one customer starts to represent too much of your sales, your business is going to shatter if the customer decides to leave.
There are several other pitfalls that should also be avoided at all costs, including internal conflict, employee turnover, poor management, and business planning, etc.
It is never easy to become an entrepreneur, but fear is often the most common reason why many people don’t even think about pursuing entrepreneurship. But if you follow the above guidelines, you can think about your business and even put your plan into action. If you manage your business properly, becoming an entrepreneur can actually be one of the best options for your career and your long-term future.