For many, starting a business may sound like a daunting task that’s impossible to do. However, successful entrepreneurship is possible even as a student or when you’re starting your career. Read on to learn more about entrepreneurship and how you can start your own business from scratch!
Who is considered to be an entrepreneur?
Entrepreneurs are the business owners, creators, the risk takers, and the very people who evolve economies. They decided to start their own businesses and to be their own boss. Being an entrepreneur requires ambition, vision, and dedication to take on the financial, and oftentimes personal, risk in starting a company.
Entrepreneur: a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
Oxford Dictionary
Why do people become entrepreneurs?
Some people going into entrepreneurship are seeking more control over their own time, while others see a need they can fulfill. Others have different motives. Among all of these answers is a common goal to make money.
Entrepreneurs solve a problem that others are willing to pay for. While working for yourself can be a very rewarding experience, we must acknowledge that it’s not all joy and profits. There are many startups founded every year, but the truth is, not all of them can survive through economic changes.
“… 20 percent of all small businesses survive the first year, 30 percent survive the second year, and half survive the first five years.” (U.S. Small Business Administration)
Therefore, considering the following factors before starting your business will go a long way:
- Is there a viable market for your business idea?
- What kind of structure will your business have in place?
- How much capital is required to start your business?
- How will you get funding for your idea?
- Should you purchase an existing company?
When you can thoroughly understand the answers to these questions, you should take the leap to start your own business.
How can someone become an entrepreneur?
Entrepreneurship is already a huge risk; let’s develop and execute a plan instead of gambling on your potential. Here’s how to maximize your startup’s survivability within the first five years of business.
1. Research emerging startups
People inspire people and inspiration fuels motivation. Look into what other people are curating and the business model to help you brainstorm your own ideas. Product Hunt and Kickstarter are great avenues to find new developing products and services by successful startups or businesses. Product Hunt is more geared towards the digital space (e.g. games, apps, etc.) while Kickstarter’s focus tends to be on physical products (e.g. books, household tech, etc.)
Product review sites are great places to find what products people really enjoy, so you can give them what they want. You can also use the negative reviews to find a problem you can solve and avoid providing the same faulty “solution” to your market. Wirecutter, Werd, and Uncrate are a few good product review sites.
2. Choose a profitable startup idea
All successful businesses start with an innovative idea that solves a problem or benefits a passion. Problem-solving leverages the needs of your market while supporting a passion leverages your market’s wants. This significantly decreases marketing costs because now you’re not looking for your market, they’re looking for you.
OpenAI, to quote an example, has disrupted many industries with its newly released AI tool – ChatGPT. It can be used for a variety of tasks and industries, including customer service, social media marketing, e-commerce, and others. The power of ChatGPT is limitless. Its full potential remains to be discovered. The application of natural language processing can be used for a variety of tasks, including language translation, text summarization, text generation, conversation modeling, and linguistic understanding. The practical applications of ChatGPT are endless.
Let’s take Kdan’s e-signature and digital document solution as an example. With a major increase in remote work, businesses needed an efficient and secure way to send, receive, and sign contracts. Our e-signature service DottedSign fulfills this need. Through word of mouth and strategy, we’re able to solve this digital problem with relatively minimal marketing costs.
3. Complete a business plan
A business plan will organize your ideas into an actionable guide that can be referenced to assess your progress. Your business plan is the what, how, and why of your business. Asking the right questions about payroll, like which payroll software to use, how to partner with the courier service, or how to handle social media is a fundamental part of achieving your targets. Unfortunately, many entrepreneurs don’t write a formal plan and go into business with a “wing it” mindset. Whether you understand it or not, a written plan is absolutely necessary, and it will give you many advantages when you are applying for business ventures or loans.
Which type of business plan should you create? These are the most common plans successful entrepreneurs develop.
Products and Services
Use this plan to define what you offer and to illustrate its value.
- Who is your target market?
- What is your competitive advantage?
- What makes your solution unique?
Marketing
Use this plan to create a marketing strategy to help customers discover your offering.
- How will you advertise?
- Where will you advertise?
- Will you hire an agency?
Financial
Use this plan to identify the potential cost of starting your business.
- How much capital will you need?
- Will you need to purchase special equipment?
- Out of where will you operate?
4. Have a steady cash flow
Crowdfunding is a very popular method to get investments to maintain a steady flow of funds. Online campaigning on sites such as Indiegogo, Fundable, and Kickstarter will help you get the funding your business needs. This route opens the way for product feedback, brand awareness, and even press coverage if you have a compelling backstory.
There are potential investors like banks, non-profits, and government agencies looking to extend credit to startups. The best way to qualify for these business loans is to show proof of steady profits. Even if you aren’t profiting right now, a solid financial plan will show these organizations how a line of credit will influence your profits in a positive direction.
Kdan’s startup fundraising journey went from a Series A $5M investment in 2018 to a Series B $16M investment in 2021 from four organizations across the globe. The Series A backing provided the funds needed to expand our reach, deepen our understanding of our target markets, and develop our solution to support millions of members, hundreds of millions of downloads, and billions of document processes. Now imagine the impact we’ll make with our Series B funding.
5. Test your product idea
The only way to know an idea will work is to test it out.
For example, after identifying your market, take a survey to get a better understanding of where their major pain points are. If your product or service directly addresses the problem, your idea is more than just an idea; it’s a solution.
Another way to test your idea is to materialize it and provide an MVP (Minimum Viable Product) to a group of people who best fit your potential customers. Prototypes make the most sense with products. However, you can apply the same concept to services. Offer the product or service perhaps at a low cost, if not free, to gain feedback via live chat service that can be used to gain valuable insights and improve your idea in real time.
6. Launch your new business
With all the planning and product development, it’s time for the grand opening! Regardless if your business has a storefront, is solely online, or functions as a hybrid of the two, an official launch is important. This way your market knows you’re ready to sell and how they can buy.
Physical products might do best with a storefront for local traffic. However, every company should take advantage of an online storefront and grand opening event. Physical products can be purchased online via Amazon and other platforms. Depending on what you’re selling, you’ll need to decide which buying method makes the most sense.
7. Network with other business leaders
Getting out in public spaces to promote yourself and your business is a great way to build your contact list. Networking can increase your visibility potential easily by 200%, lowering your marketing costs. You can network in person with your local chamber of commerce and alumni associations or online through social media like Facebook groups and Meetup.com.
The sooner you build your network the better. It’s best to have the network and not need it than to need a network and not have one. So, get up and go meet other professionals in your industry!
Ready to get started?
Even with all of the stress and time invested, being an entrepreneur can be a very rewarding experience. Remember, there’s no such thing as failure. You’ve just found a way that won’t work. With perseverance, ambition, and a decent plan like the one we’ve laid out for you, successful entrepreneurship is inevitable.