Here’s how to become an entrepreneur in 2023
Entrepreneurship can be a tempting path. You get to be your own boss and make business moves that improve people’s lives. That’s a win-win. But getting a new venture up and running can feel like facing down a brick wall.
How do you get started? If you’re staring at that wall, keep reading. We’ll break down the skills and resources you need to decide if entrepreneurship is right for you.
What is an entrepreneur?
Did you know successful entrepreneurs are different from small business owners? Both own a business, but entrepreneurs create new business models and scale ideas.
Here’s an example:
Liz buys a successful salon. She puts in some new chairs and adds a coat of fresh paint. Someone like Liz is not likely to think of herself as an aspiring entrepreneur. She spends her time thinking about cutting hair, managing clients, and getting through the week. That’s hard work, but it’s not an entrepreneur’s career path.
Liz could become an entrepreneur with a shift in mindset. How will she convince clients to buy into a subscription model for haircare? Could she launch a line of hair products? What about a revolutionary way of renting chairs to hairdressers? That’s entrepreneurial thinking.
- The future
- Big ideas
- How to scale
- How to hire others to manage their business
- Taking on risks to maximize success
- Complex and challenging business problems
One Berkeley study found that entrepreneurs tend to focus on the future of their businesses. They think deeply about their business goals, and they are more likely to incorporate their businesses. They’re different from small business owners who focus on day-to-day operations.
Some new business owners want to launch a small business, and some want to become entrepreneurs. There is no one correct answer.
What are good qualities for an entrepreneur?
If it’s second nature for you to think about challenges, you might be a born entrepreneur. They’re more likely to:
- Want to be high achievers: Entrepreneurs often have an internal need to master complex skills. Their internal motivations center on accomplishment and goals.
- Want to control their success: People who see themselves as entrepreneurs are more likely to believe they are in charge of their business outcomes, not external factors.
- Tolerate risks: Studies show entrepreneurs are more likely to engage in illicit activities that involve risk. In any event, entrepreneurs don’t shy from a challenge. They tolerate uncertainties and are optimistic about big payoffs.
- Show commitment and obsession with finding opportunity: The equation for a successful business is obsession + commitment. It makes sense that people with these skills put them to use in the service of their own businesses.
- Think creatively as leaders: Entrepreneurs think about challenges rather than throw in the towel when obstacles crop up. They adapt and become role models for creative problem-solving.
Pros and cons of being an entrepreneur
The self-employed life comes with challenges and rewards. Here are some of the most common ones.
|You’re independent. You make your own hours and schedule.||Overwork is common, especially in the first year.|
|You can make more money. Your salary is logical, and it increases when you earn more. You can decide how much of your profits you keep versus reinvesting.||More than half of entrepreneurs earn more than they did as employees. But new businesses are fickle, and you could have inconsistent paychecks.|
|Satisfaction is high—more than 75% of entrepreneurs like what they do. Half learn something new every day.||You’ll face the pressure of being responsible for the business, employees, and your future.|
|You’re a leader. You can make all the decisions.||You’ll need to take responsibility when your ideas aren’t working. And you’ll bear liability for business mistakes.|
|There’s flexibility in which tasks you take on, when, and how.||There’s no one-size-fits-all roadmap for success, and you might feel like you’re flying blind.|
|You can share your passion and help your target market.||First, you’ll need to be seen and heard in your target market.|
When do entrepreneurs work?
“All the time!” is just a bad joke. There’s a stereotype that entrepreneurs work all hours, day and night, to realize their dreams. Luckily, that’s not entirely true. Gallup found that 60% of American business owners worked under 60 hours per week, and U.K. owners worked 50 hours on average. While that’s still more than the average desk-time for employed workers in the country, it shows plenty of entrepreneurs can have a work/life balance.
Promising entrepreneurs know the value of letting their talented employees solve problems they can’t. Instead of accepting overwork, here are some ways owners can focus on the most critical tasks:
- Use the Pareto Principle. The Pareto Principle states that 20% of your effort into something will produce 80% of the results. This means that, theoretically, 80% of the work you do accounts for just 20% of your business results. Take a look at everything you do daily and ask yourself: Does this have an actual measurable result? If you’re spending most of your time on things that don’t produce many results, it might be time to rethink your work schedule and free up some bandwidth for your real life.
- Fire bad customers. The customer is not always right. And while it’s essential to create as many great customer relationships as you can, trying to appease a customer who is always unhappy or who makes a ton of unreasonable demands can bring down your company and eat away at your schedule. The 80/20 rule can come into play here, too: not all of your customers bring equal value to your business. And by firing the ones who suck up your energy without providing value, you can free up time and reclaim your sanity.
- Get help. When your business is on a tight budget, it’s hard to justify paying someone else to do a task you can do yourself. But if you keep track of what you do daily, you’ll inevitably find work that could be done better by someone else. If your cash flow can handle it, delegate those tasks. Online services can do many of the tasks that chip away at your time. Doing a lot of back-and-forth scheduling time with clients? Calendly can help you. Drowning in payroll tasks? Square Payroll might help. These services are often cheap, especially when considering how much of your time they’re freeing up. (Be sure to spend some of that extra time in the outside world.)
- Make a “No Matter What” list for your life and stick to it. If you’re an entrepreneur, you’re going to miss some stuff. You won’t be able to go to every party, reunion, or dance recital, especially while your small business is getting started. So figure out which events and activities you’ll attend no matter what, list them out, and stick to the list.
For Susan Wojcicki (CEO of YouTube), family dinner is on the No Matter What list. She goes home to eat dinner with her husband and kids every day, even if she works after dinner. Your list will be personal to you.
While you’re getting a business off the ground, it makes sense you’ll work long hours. You’ll be setting up your social media channels, doing market research, and trying to hit your first-year milestones. But according to FreshBooks, 39% of entrepreneurs work shorter hours and say they’re more productive than full-time employees.
Another bonus? Entrepreneurs have more control over when they work, so they can conduct business early in the morning or late at night to accommodate the rest of their lives.
Do entrepreneurs get paid?
An entrepreneur typically brings home $70,300. But looking at the numbers can be misleading. Entrepreneurs are a varied bunch. While 80% have no capital to start their businesses, others have day jobs, bank accounts, or savings to start their businesses. They’re not getting paid at all—they’re spending money to bootstrap their businesses.
There are other options. Digital entrepreneurs can work with startup incubators to find venture capitalists or angel investors to get started. Local business owners can look to the Small Business Administration (SBA) for small business loans. It begins with an idea and a business plan.
A bootstrapped business owner will need to consider profits and how much money to take to outsource tasks, hire help, and grow the business.
Business owners who want to fund their new business as a startup will need intellectual property, a startup team, incorporation structure, and licensing agreements to participate in a pre-seed funding round, which can take 12-18 months. Pre-seed investors are typically family, friends, or angel investors. These companies will need to produce a minimum viable product (MVP) and show business traction before advancing to a seed round.
Costs to be an “internet entrepreneur” can be less than starting a brick-and-mortar business. Online businesses require less capital. They can get off the ground quickly and scale globally.
It’s also easier to get into entrepreneurialism as a young person. An entrepreneur in college just has more time to invest.
Want to be an entrepreneur at 18? Use time, not money, to make connections, develop ideas and products, produce content, and talk to customers. You’ll be in a better position to start your own business without the time and expense of a partner, children, or a home.
What skills make a great entrepreneur?
In addition to all the qualities that make a confident leader, some learnable skills can guide you to success:
- Finance: You’ll be running the business and making the business plan, so start on the right foot by teaching yourself how to read a balance sheet, profit and loss statement, and cash flow statement. Learn how to calculate future return on investment so you can make the best decisions with any amount of money.
- Technology: An MBA teaches business leaders the financial know-how to make decisions. But there’s no program to help understand tech problems and solutions, grow an online business, or launch an app. Educate yourself on what tech can do for your business.
- Networking: Do you like to spend more time coding your future solution than meeting people in your target market? You’ll find it hard to get feedback, find partners, and serve an audience. Instead, get comfortable reaching out to networking events. Join LinkedIn groups for your industry. Contact potential mentors in your existing network.
How to become an entrepreneur online
Entrepreneur degree programs
The good news is that a growth mindset shows us that all these skills are learnable. Want to develop the skills of entrepreneurialism before diving into a business? Universities are increasingly offering entrepreneurial programs that teach the mix of skills you’ll need to run a business. Online options include Purdue, Arizona State University, the University of Arizona, and Southern New Hampshire University.
Entrepreneur online learning
There are also plenty of opportunities to learn best business practices without a degree – and without any money. Try CodeAcademy for product development, HubSpot Academy for marketing, edX or Coursera for business courses from university partners free online. The MIT open-source platform has a bounty of entrepreneurial classes for free.
When searching for leads and running a business feels isolating, try joining an established support network. Many business networking groups take place in-person, but you’ll find online support at the Young Entrepreneur Council, which supports founders up to age 45 with private Facebook and LinkedIn groups. LinkedIn itself offers hashtags and groups where you can engage, comment, and connect to get some word-of-mouth advertising for your business. And don’t forget to seek out Slack channels in your industry to find other founders—you’ll find channels for industries, like SaaS and startups, and your target audience.
Incubator and accelerator programs
An incubator can support your business at the very beginning as you build an MVP. Accelerators are for products that have some traction and a team ready to execute growth strategies. Both can connect entrepreneurs to potential investors and offer advice on how to find new customers. Check out alumni and ask how many companies find investors, are acquired, or feel the program was worth it.
Many of the tools you need to become an entrepreneur are online, and you can find communities to learn about business unknowns, your target market, and how to find a unique idea. With so many free and online options, you can become an entrepreneur at 13 or 20 (or 75!) All it takes is a little vision and a lot of learning. And no matter when you start, Huckleberry will be here for your small business insurance needs.