More than 25 million Americans run their own businesses or are in the early stages of starting one. Most people go into business because they think there’s an opportunity.
Taking the leap of faith into your own business doesn’t guarantee success, though. If you’re thinking about joining the ranks of the entrepreneurs, you’re going to need a little bit more. Careful planning, know-how, and more will help you on your road to success.
As you think about getting underway, review the steps to becoming an entrepreneur. Paying attention to each step will give you a better chance of getting your business off the ground.
Start with an Idea
Chances are you’re thinking about becoming an entrepreneur because you have an idea. Like most other small business owners, you see a gap in the market.
You think there’s something to that. A new product or service could fill that gap and meet consumer demand.
Once you have an idea, the next steps will help you form a clearer vision of what your business is all about. Then you’ll address some of the logistics.
What if you don’t have an idea just yet? Take your time. The idea is the most important part of any new business.
Do Some Market Research
Whether you have an idea or are still searching for one, take the time to do market research. Market research is often key to a new business’s success.
Why is market research so important? You may think there’s an opportunity in the market, but research may show that the opportunity doesn’t exist.
If there’s a gap in the market, there may be a reason why. Maybe there are legal restrictions. A business with a similar solution has already folded because there’s no consumer demand.
Market research can show you these sorts of details. In turn, you can take that information and refine your idea. Maybe that other business didn’t offer their product the way you’re going to.
Think about what you do differently. Study other businesses and see what makes your proposed business idea unique. What are you bringing to the table that no one else has?
This is also important when market research tells you the market is competitive. If you want to bring a new social media app to life, you have to compete with Facebook, Instagram, Twitter, and dozens of other networks.
What makes your app different? Knowing the answer will help you capitalize on the opportunity.
Financial Steps to Becoming an Entrepreneur
The next move you’ll need to make is taking a look at your financial picture. How will you finance your new business?
Keep in mind that many businesses aren’t profitable for their first few years. You’ll need to figure out how to fund your business until it can achieve profitability.
Figuring out the finances early on is key to success. Most businesses go under in their first few years because of cash flow issues. Knowing when, where, and how you’ll get your funds can help you avoid these issues.
Where can you turn for money to start a business? You have a few different options to look into:
- Traditional loans from financial institutions
- Business lines of credit
- Loans from the Small Business Administration
- Personal savings
- Venture capital
- Peer-to-peer lending
There are other options as well. If you need to invest in a commercial pizza oven to start your new pizzeria, then you may be able to get an equipment loan.
Not every funding option will be available to you. Some banks won’t give loans to businesses unless they’ve been operating for a few years. You may need to be able to prove the business has income.
That’s why it’s important to do some research and discover all the financial options that may be available to you.
Legal Steps to Becoming an Entrepreneur
Next, you’ll want to take a look at the legal side of your business. How will you be structured?
Many entrepreneurs forget this step, which can cause problems later on. You should think about setting the business up as a limited liability corporation, or LLC. This can help protect you and your business.
Forming an LLC creates the business as a separate legal entity. It also means that if someone decides to sue your business, they can’t hold you personally liable. Your property and assets are protected.
Your legal structure also has a bearing on how you pay tax. Taxes are different for different types of businesses, so take a look at your options. You may also want to consult with a lawyer.
It’s also a good idea to become familiar with other legal obligations you may have. Do you need business insurance to operate in your state? You may need specific types of insurance to protect you and the business.
Employment law is another important area to look at. If you plan to hire employees, you’ll need to know all about different payroll requirements, how to hire, and how to terminate someone.
Finally, you may want to check out the legality of what you plan to offer. The food and beverage industry, for example, has restrictions on what you can sell in the US. Medical products have to meet certain standards too.
Write a Business Plan
Now you have a clearer idea of what your business does, what the competition looks like, and how you’ll be set up. It’s time to write your business plan.
A business plan is a good document to have on hand for a few reasons. First, you may need one to show to potential investors or financial institutions. Your funding may be contingent on having a solid plan.
The plan may also help you move through the next steps in getting your business off the ground. It may detail what you plan to do next to get products to shelves.
Finally, the plan also serves as a vision for your business. Where are you going in the next year? What about the next five years?
Moreover, the plan outlines how you’ll get there. Having a road map will keep you on the path to success.
Invest in What You Need
With your business plan and funding in hand, it’s time to bring your business to life. The next step is procurement.
You’ll need equipment and more to get started. If you’re opening a pizzeria, you may need that pizza oven. You’ll also need a space to operate from.
Most businesses need at least one computer, an email address, and a website. You may also want to invest in specialized software, such as accounting or payroll software. You may need other programs, depending on what industry you’re in.
You may also need to hire employees or contractors to help you with the work. You might need to buy inventory or supplies. Vendors may also be part of your supply line, so work on locating them and forming good relations with them.
Market Your Business
This is another step entrepreneurs sometimes skip. You need to get the word out about your business, so marketing is crucial to your success.
You should invest in a website and a business phone line. If you’re running a store, then you’ll need to invest in the right space so customers can find you.
Digital marketing is often the most affordable for small businesses. These tactics include:
- Search engine marketing
- Search engine optimization
- Content marketing
- Social media marketing
- Pay-per-click ads
There are other, newer options as well. If you prefer traditional media, you may want to consider:
- Local TV spots
- Radio ads
- Print ads in magazines or newspapers
Events, signs, and more also present opportunities for getting the word out about your business.
Understand Your Commitment
Running your own business might sound like a great idea. After all, you get to be your own boss. Not everyone has what it takes to become a successful entrepreneur, though.
What’s the difference between successful entrepreneurs and others? Traits to become a successful entrepreneur include:
- Creativity, for flexible thinking and new solutions
Motivation is also key. Businesses don’t become successful overnight. It takes many long hours and a lot of determination to make a business successful.
Passion, optimism, and motivation will help you stick with your business idea.
What other skills should entrepreneurs have? It might depend a bit on your field. You may want to think about specialized training for certain fields.
Most of all, you should have the drive to do whatever it takes to bring your business idea to life.
Success is Right Around the Corner
Now you know all the steps to becoming an entrepreneur. Some people think being successful at business comes down to being lucky, but it’s often the result of lots of hard work.
If you have an idea that has legs, then you too can take it to the next level of success by creating your own business.
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