Becoming an entrepreneur means more than just being your own boss. Yes, being your own boss will be one, if not the largest, benefit of becoming an entrepreneur, but there is much more to being an entrepreneur than just self-employment. This, along with many other aspects, is exactly what we are going to explain today.
In addition to defining the steps it takes to become an entrepreneur, we will dive deeper into what being an entrepreneur looks like and the pros and cons that come along with the job title.
Being an entrepreneur is more than just a job title. An entrepreneur has to know the ins and outs of running a successful business. There is a lot of training and education that can go into becoming an entrepreneur, and it can be an overwhelming process if you’re unfamiliar with all of the demands that being an entrepreneur requires.
What is an Entrepreneur?
When you become an employee at a company, your employer has taken all of the risks involved when starting and running a business. This means when you become an employee of the company, you simply have to arrive at work and perform your assigned job duties. There is essentially no risk that you have to take outside of the job duties that have been assigned to you.
An entrepreneur does not have this luxury. An entrepreneur is responsible for taking on all of the risks of starting and running your own business.
As Thomas Jefferson stated, “With great risk comes great reward,” and being an entrepreneur is no exception. Just because there are risks you have to take when becoming an entrepreneur doesn’t mean that there aren’t rewards that come with it.
An entrepreneur is a business owner, financial officer, human resources manager, marketing consultant, and any other job title compiled into one. An entrepreneur is responsible for ensuring their business operates successfully on a day-to-day basis, all while turning a profit.
What Are the Roles, Duties, and Responsibilities of an Entrepreneur?
An entrepreneur is responsible for starting and running a successful business while often performing different roles during the process. An entrepreneur will often perform different roles, especially when the company is just beginning.
These roles include but are not limited to:
Over time, after the business has grown out of its infantile stage, an entrepreneur can hire employees to manage these various roles. However, in the beginning, it is essentially the entrepreneur’s responsibility to
Entrepreneurs are also responsible for funding all of the costs that are required when operating a business. This means either finding investors or taking out loans to fund your business’s operating costs.
Being an entrepreneur means you will have to have all of your ducks in a row. You can’t afford to overlook any detail simply because you didn’t know.
Let’s use taxes as an example.
When you become an employee for an employer, you will typically fill out a W2 tax form required by the Internal Revenue Service (IRS) in order for your taxes to be appropriately calculated, deducted, and paid to the IRS through the payroll process.
As an entrepreneur, you have to provide the appropriate forms when you file your taxes, and this can be tricky if you’re unfamiliar with the forms. What’s more? You could find yourself in hot water with the IRS if you fail to file these required tax forms. So, you’ll need to make sure you know all of the big picture requirements that an entrepreneur is responsible for, in addition to the normal day-to-day job duties.
Steps to Becoming an Entrepreneur
As we mentioned, becoming an entrepreneur is more than just being your own boss. An entrepreneur has to understand the various aspects it takes to run a business, and you must follow the right steps to become an entrepreneur if you want to be successful.
Step One: Choose Your Business
The first step in becoming an entrepreneur is to choose the type of business you want to start. Entrepreneurs can go into any field they choose, so it’s important to identify the field in which you will want to become an entrepreneur and then choose the type of business you want to start.
Step Two: Examine the Requirements
The type of business you are starting will determine if you need additional training or education to help you become a successful entrepreneur.
For example, if you are interested in starting your own real estate firm, you will need to take a real estate exam to become a licensed real estate agent. You may also want to consider taking Department of Revenue courses in the state where you live as property taxes play a role in real estate. This can give you an advantage and allow you to create a business that stands apart from the rest.
Step Three: Create a Plan
Once you have chosen your business and taken any of the courses or training necessary to run a successful business, it’s time to create a business plan. Creating a plan for your business is important because it will help you know what to expect by giving you a guideline to follow when it’s time to get started.
A business plan will include objectives, strategies, and outlines for the business you have in mind.
It is recommended to have a plan in place when you are ready to ask investors to get behind your company. Investors will need to know what type of business model you have outlined, and this plan should include objectives and strategies in place to make the business successful.
Step Four: Target Your Audience
You will need to choose your target audience and make sure that your business model appeals to them. There are many different criteria you need to consider when choosing your target audience. Age, gender, region, and culture are the main factors that will go into determining the audience you will be targeting. Once you have decided your audience, you will need to target them.
Targeting an audience consists of building your business model around the best way to attract your audience to your business so that your business continues to grow.
Step Five: Network, Market, and Sell
This is the final step to becoming an entrepreneur when everything comes together. At this point, you are ready for your business to take off. Unfortunately, networking, marketing, and selling your business means working slowly for the first year so that your business gets started on the right foundation. Use this time to connect with various resources, networks, and partners within your target audience so that your business gets more exposure and continues to grow within its first year.
Skills Needed to Become an Entrepreneur
There are a variety of entrepreneurial skills that you can possess that will help you become a successful entrepreneur. You need to be organized, have great communication skills, and understand the overall ins and outs of running a business.
Because there are so many aspects to running a business, you will need to have strong organizational skills so that you can manage the different areas of your business. Being organized will help you manage all of the different areas of your business so that the business runs smoothly.
Organization skills will help you manage scheduling, payroll, purchasing, meetings, and various other responsibilities with deadlines.
If organizational skills are not a strength, you should consider investing in training or software that will help you stay organized to successfully manage your business.
Being an entrepreneur means talking to many different people, vendors, employees, venues, etc. You need to possess excellent communication skills to effectively speak with different people. Great communication skills will take you to the next level, from being a good entrepreneur to a great entrepreneur.
Running a business often includes negotiating rates or costs. You will need to get the best deal for your money, whether it’s for the cost of supplies, inventory, or pay rate. Having great negotiation skills can ensure that you get the best deal for your business. This will help your business maximize its profits and minimize its losses.
Accounting and Payroll Skills
You don’t need to have an accounting degree to manage accounts payable, accounts receivable, and payroll, but it will be beneficial to your business if you have some experience in accounting. You can use many different accounting programs to help manage the different accounting aspects of your business.
Marketing and Networking Skills
A business is often successful because of how popular and well-known it becomes, and the best way to help grow your business is to market and network. Marketing and networking include advertising, word-of-mouth, reviews, and various other publicity to let the community understand what your business is and what you have to offer.
Resources for Becoming an Entrepreneur
If you’ve got the personality skills that it takes to become an entrepreneur, but you want to fine-tune your entrepreneur qualifications, you can use resources and training to help you. We are going to explain those in detail.
Take a Business Course
Being an entrepreneur means running your own business, so there is no better training for you to get than by taking a business course.
Business courses are offered at local colleges or universities, and you can take the course in-person or online.
Business courses will help you learn how to run a business. One of the main areas of the business course will focus on financial management. This will help you make the most out of your business so that you maximize your business’s profits.
Take an Entrepreneur Workshop
Entrepreneur workshops are similar to business courses. Instead of the workshop being offered by a college or university the way the business course is offered, the workshop is offered by a corporation or other entrepreneur firms.
Entrepreneur workshops can be offered online, in-person, as a webinar, or as a podcast. This gives you the option to choose the best workshop for you.
Read Entrepreneur Books
There are many books on entrepreneurship available for you to read and study on how to become an entrepreneur.
Entrepreneur books will cover both the struggles and the successes of becoming an entrepreneur.
One of the main areas that an entrepreneur book covers is how difficult it can be to start a business. Entrepreneur books will help you navigate those waters to prepare you to become a successful entrepreneur.
Entrepreneurship Education is an online program that is designed specifically for entrepreneurs. The Office of Entrepreneurship Education is a department of the U.S. Small Business Administration. It provides a variety of entrepreneur resources to those interested in learning how to become an entrepreneur.
The U.S. Small Business Administration offers various online resources, including online learning courses, financial information, and leadership workshops. These three areas are all areas that you will need to be familiar with if you are going to become an entrepreneur.
What You Need to Know When Becoming an Entrepreneur: Benefits and Drawbacks
Being an entrepreneur has its benefits and drawbacks. The rewards are worth the risks, but it’s important to understand what the risks include before you begin your journey into entrepreneurship.
We’ll go ahead and knock the drawbacks out of the way. After all, you become an entrepreneur for the benefits, and there are plenty of them! There are just some drawbacks that you need to be aware of when becoming an entrepreneur.
As we mentioned earlier, there are many risks you will have to take when becoming an entrepreneur, including making sure that you are familiar with profit and loss statements and filing your company’s taxes timely and correctly. Still, there are more considerations you need to take when becoming an entrepreneur.
When you become an entrepreneur, you are responsible for your company. This means you will likely be working more than 40 hours a week. The glamorous side of being an entrepreneur typically doesn’t happen in the first year. You will typically have to work long hours and put in a lot of hard work to finally reap the benefit of becoming your own boss and having your own freedom.
You should also consider the likelihood that you may not be able to take a vacation during the first year of entrepreneurship. Your first year will be filled with late nights and hard work. Additionally, your business’s first year will likely be the least profitable. This will also reduce the likelihood of being able to take time off during the first year.
The last drawback you should heavily consider is that there is no pre-defined road map for your business to take. Ultimately, you are responsible for laying out the path you want your business to take, which can be difficult for someone unfamiliar or lacking in this area.
Give yourself grace, patience, and understanding that your first year will probably be more difficult than you imagine, but the results will make the journey rewarding.
Now it’s time to talk about the benefits of becoming an entrepreneur.
Freedom, control, and versatility are at the top of the list of benefits you get when you become an entrepreneur.
Let’s talk freedom first.
Freedom in entrepreneurship means that you are free from having a boss micromanage you on a daily basis. You can set your own hours, assign respective duties, and choose the path you want your business to take.
Freedom and control are similar benefits. Freedom falls more under the boss or manager umbrella, whereas control covers more of the decisions you can make for your business. Being an entrepreneur means you will have the ability to control the decisions you make for the business. This can include anything from designs, purchasing, events, etc. As an entrepreneur, you can control any and all aspects of your business.
Being an entrepreneur is also a very versatile role. Entrepreneurship gives you the versatility and flexibility to choose where, when, and how you want to work. You can choose the role you want to have in your business, and you have the ability to change the path your business takes at any time.
Common Barriers to Becoming an Entrepreneur
Like any business adventure, there will be hurdles you will face. It’s important to understand what these barriers and hurdles may be before you reach them.
These are three of the most common barriers to becoming an entrepreneur.
Barrier #1: Cash Flow
Cash flow is probably the most difficult barrier for entrepreneurs to overcome. After all, the main reason you have entered entrepreneurship is to make money, so when the cash flow is virtually inexistent during the first year, it can make you question why you even became an entrepreneur in the first place.
The lack of cash flow is often experienced within the first two months of entrepreneurship. This is what makes cash flow arguably the biggest barrier you can face as an entrepreneur.
Don’t let this discourage you.
You need to expect this barrier and try to plan accordingly so that you can be prepared.
Your cash flow can stop by forces that are beyond your control. Your vendor could run out of a supply. Your bank account could become frozen. Many unpredictable situations could unexpectedly happen, all of which could halt your cash flow.
Try to have a plan in place for how you can prevent a lack of cash flow from defeating your business. You may need to have an emergency credit line on hand just in case an emergency happens that temporarily halts your cash flow.
Barrier #2: Delegation
It can be difficult for entrepreneurs to let go of their control and perform certain job duties. This may not sound like a significant barrier; however, in reality, this can keep your business from running as smoothly as possible. This becomes a barrier when it affects how well your business performs, ultimately resulting in a loss of cash flow or profits. And if your business isn’t making money, it will almost always create a challenge.
Barrier #3: Staying Humble
You want your business to do well. That’s the goal. But you don’t want your business to do so well that you become arrogant, conceited, or egotistical. Remember that your business can change on any given day. As an entrepreneur, it will be your responsibility if the business has a bad day; just like your credit, your business is thriving.
These are some of the most common questions that are asked when researching how to become an entrepreneur.
How Much Do Entrepreneurs Make?
The first year of entrepreneurship will likely be your business’s least profitable year. It won’t be until your business’s second year of establishment that it will start to show a profit.
Entrepreneurs will typically make around $25,000/year in the beginning, with the potential for the business to grow to make $100,000/year or more.
How Old Does an Entrepreneur Have to Be?
An entrepreneur can be any age. A young entrepreneur doesn’t have to be a high school graduate or possess a college degree. In fact, the youngest CEO in the world is 15 years old. Hillary Yip entered entrepreneurship at 10 years old, and five years later, she is now the youngest CEO in the world.
At What Age Can I Own My Own Business?
Being an entrepreneur is slightly different than owning a business. Federal laws in the United States require that individuals be 18 years old to legally form a business. This means that you have to be at least 18 years old if you want to form a legal business entity.
Does an Entrepreneur Need a College Degree?
Entrepreneurship does not require a college degree, but it is highly recommended. A bachelor’s degree in business will help you better understand how to manage all areas of a business. If you cannot attend a college or university to obtain a bachelor’s degree in the business field, don’t let that hold you back from pursuing your dream of entrepreneurship.
Does an Entrepreneur Have to Delegate Responsibilities?
Entrepreneurs aren’t required to delegate responsibilities, but it makes their life so much easier if they do. Because you are an entrepreneur, you will have many responsibilities. Some of these responsibilities will fall directly onto your lap and will require you to manage them. This can make it extremely difficult to manage small, everyday tasks, not because the task is difficult but just because you may not have time to manage the task.
For this reason, we always recommend delegating as many responsibilities as possible. It will help you as an entrepreneur.
Entrepreneurship is a rewarding career path you can take that allows you to be your own boss while also pursuing your dream.
The first step in becoming an entrepreneur is to choose the business you want to start. Then you will need to examine the requirements needed to start the business you want to start. Next, you will need to create a plan to make the business successful. This may include taking necessary courses or obtaining the necessary certification to legally perform the job for the type of business you are starting.
Finally, you will need to identify your target audience and then market your business to them. These are the steps you need to take if you want to become an entrepreneur.
Keep in mind that there will be struggles you will face along the way. Your cash flow will be limited within your business’s first year, especially the first couple of months. Because of this, you should have a financial plan in place for emergency situations when the cash flow of your business is limited or inexistent.
The main takeaway is that you prepare for the struggles you will have when you plan to become an entrepreneur. This, along with proper education, training, and resources, will help you become the best entrepreneur you can be.