How To Become An Entrepreneur In 6 Steps
You would be surprised to know that one of the most frequent searches of 2021 was ‘How to become an entrepreneur?’
I like to call pandemic era as the Era of entrepreneurs. And it is true 100%. Let me show you why.
As per the data released by U.S center beurea, applications to start new businesses hit 5.4 million in 2021, a new record.
The number of business applications reached 5.4 million last year, surpassing the 2020 record of 4.4 million.
In India, the number of new companies incorporated under the provisions of the Companies Act, 2013 from April 2021 to June, 2021 is 36,191 as compared to 18,968 number of new companies in the corresponding period of last year.
Such a huge jump in just one year! And this is just two countries. For the sake of being on the topic, I’m just giving you a brief idea of how many people are going towards entrepreneurship now.
As dreamy as it sounds, entrepreneuship is not just a walk in the park, it’s actually a walk in a park full of thorns and mud.
It is exhilarating but at the same time debilitating.
So you should be prepared and know how to become an entrepreneur before you actually become one.
I know no amount of research seems enough when you are taking such a big career decision but when everything starts to sound similar, you should know your research is over.
Don’t keep procrastinating and after this article, you would know how to become an entrepreneur, rather a successful entrepreneur so get to it immediately.
Who is an entrepreneur?
The meaning of entrepreneurship according to Merriam-Webster is,
“one who organizes, manages, and assumes the risks of a business or enterprise”
This is true, word by word. But as you can see it is solely based on the risk factor involved in entrepreneurship.
It is not a complete definition. Yes they often take higher risks than other individuals and thereby possibly reaping more rewards.
From creating a product to finding investors and marketing the product, entrepreneurs have to do it all.
But at the same time, the kind of growth you achieve in the process is immense and unmeasurable. That is probably the best thing I like about entrepreneurship.
Guide on how to become an entrepreneur
1. Identify a problem
One thing that most entrepreneurs do wrong is they fail to understand how entrepreneuship works. They think just following your passion is enough to become a successful entrepreneur.
I wish it was true. But it is not. If your product or service doesn’t solve a problem, then it would be very difficult to scale the business. It would stay limited and wouldn’t create as much demand as a problem solving product would.
So before you do literally anything else, write down the ideas you have and ask yourself, does it solve someone’s problems?
If you can’t think of something, ask your relatives and friends, what frustrates them. What is something that they find difficult doing or what would make their lives easy.
2. Identify the profitability and growth
Now that you have the product, you would want to know how much money will be going in and how much will be coming out. You don’t want that figure to be in negative.
Even if it’s breaking even, it’s pretty good. The biggest of companies like YouTube struggle to make profits. But in the long term, your product should be profitable if you want your business to survive.
Next comes the growth. Your product should have the opportunity to grow when needed. The world is continuously evolving. You need one thing today and not tomorrow. So your business should be adaptable as per customer’s needs.
It’s best to try building a business where the competition is low. You don’t need to come up with a new idea always. You can even take an existing product and try to make it better. Sure your competitors are not going to be happy but as long as the customers are happy, you gotta do what you gotta do.
The three main things about a product that attracts a customer is:
- When it is personalised
- When it is better than all the other products and solves their problem more efficiently
- When it’s affordable
If your product solves all these problems, know you have a really good one at your hands.
3. Create an MVP
You obviously need a MVP( Minimum Viable product) before you go out and present your idea to the audience and investors.
Before going too deep and creating tons of products, you would want to create one prototype to test the idea, to see the reaction of your target audience.
An MVP is the most basic version of your product but it should be sufficiently functional enough to fulfill the basic needs of your customers, the reason you designed the product for.
If you see a positive reaction from the early customers, you should start improving it.
For example if you want to build a product for teachers that solve their everyday problems, you take your products to a few schools and ask for sign-ups if they are interested.
If you get a good number of sign-ups, that would mean you are moving in the right direction.
3. Create a business plan
Here’s a stepwise guide on how you can create a business plan/strategy:
A. Choose a unique and catchy name:
You want a name which people can easily remember and is easy to pronounce. Also, it should be available to use. Come up with something that defines your business in that one name.
B. Protect your business legally:
This is really important for your business because many times just a minor legal problem can lead to something serious.
C. Analyse your competition:
It’s extremely important to know your competition. Write down their strengths and weaknesses. Try to be stronger than their weaknesses and even stronger than their strengths. You don’t want to make the same mistakes as your competition. Learn from their mistakes and try starting a business which you’d like yourself to invest into.
Make sure your service or product has a good demand because having an amazing product with no demand is just useless. Having a good market is essential for any business. And don’t start practicing unethical business practices like these even if your competition is doing so.
D. Marketing and sales plan:
Marketing is sometimes even considered more important than the product or service itself. You need to have a strict pre decided budget for marketing too because many times we get overzealous with it.
5. Network, network and network!
I can’t stress enough on the benefits of networking. Networking helps your business create a presence.
It’s already so difficult to present your ideas and have people actually listen to them. Here the art of communication plays a huge role.
You need to build a support network of supporters, advisors, partners, allies and vendors.
Join a community of the businesses similar to yours or relevant to your space. Know about them and explain them how you can help them.
In a business, it’s always a give and take situation. Provide what others need in return of getting what you want.
A successful business is one which serves both the parties.
Try to build as many good business relationships as you can.
6. Raise money
Now that you have potential clients, a business plan and a good network, it is time to raise money which is one of the most important and quite difficult part of entrepreneurship.
How much money you can raise eventually comes down to networking. The more you network, the better investors you would be able to pull off.
But finding investors isn’t the only way to raise money, there are multiple ways like taking loans etc.
There must be hundreds of articles explaining how to become an entrepreneur. And most of them are entrepreneurs themselves so they know what they are saying. Go through a few of those and start your entrepreneurial journey. Remember not to fall for any unethical business practices because that would reflect on your business one day or the other.