Over the past couple of years, there’s been a surge in startups and entrepreneurship in the United States. According to a study by the Peterson Institute for International Economics, the number of business startups grew 24%, from 3.5 million in 2019 to 4.4 million in 2020. The COVID-19 pandemic fueled this startup boom, as many entrepreneurs looked to address new consumer behaviors in industries like online retail, as reported by Harvard Business Review.
For today’s aspiring entrepreneurs looking to start new ventures, know that it takes a lot to compete in this landscape: Becoming an entrepreneur requires planning, strategizing and even risk-taking. This step-by-step guide will show you what it takes to turn your business idea into action, from creating a business website to developing a brand to making money as an entrepreneur.
How to become an entrepreneur
Use the following 10 steps as your personal checklist for success. Here’s how to become an entrepreneur:
01. Find a business idea
When trying to start a business, choose a business idea for your new venture that will set you apart from others. For example, if you start a clothing line, mull over how you’ll niche down: What products will you sell? Will it be sustainable or ethnically made? Once you’ve narrowed it down, you can think about potential business names or use a business name generator to get your creative juices flowing.
On top of finding your competitive edge, think about what you really love doing. What problems are you passionate about solving? Is it reducing waste from plastic straws? Your recipe for business success is sticking to what you love, know best, and feel the world needs.
Beyond just being passionate or determined, make sure you educate yourself on the topic. This could mean going back to school to get a degree, taking online courses or just doing some research by turning to a favorite blog.
Tip: Wix Learn is a specialized online learning hub for business owners, entrepreneurs and self-creators. From site building and design to creating your own eCommerce website, Wix Learn offers free courses, webinars and certifications for top professional and entrepreneurial skills.
02. Get to know your target audience
Although an idea can sound great, make sure that others will pay for it before you pat yourself on the back. A big reason businesses fail is because there is no market need, according to CBInsights’ 2021 analysis of 100+ startup failure post-mortems.
Researching your audience will allow you to see the profit potential. In addition, you will not only better understand your clientele’s needs, but you’ll also be able to effectively market your solution to them.
Perform market research then list out the characteristics that define your target market: For example, what age range do they fall in? What are their hobbies? Where are they located? And so on.
03. Test your idea
A trial period is important for gauging the interest around your product or service with your potential customers, getting first-hand experience understanding how you can best serve them, and seeing where you can make improvements. Treat this stage as the first step in selling your idea.
The more you get your idea into the hands of consumers, the more feedback you’ll get and can use to build on your concept and create awareness. For example, you can send out samples, host focus groups, or even work one-on-one. Your success depends on seriously taking in this feedback.
04. Use a business plan template
Becoming a small business owner requires a lot of planning, from picking a type of entrepreneurship, building your concept and understanding it, to turning your idea into a reality.
Start in an organized fashion with a business plan template that details your idea’s core components, from your mission statement to your marketing, operations plan and more. This document will help you visualize your goals and help you carry them out.
It’s advised to also create an executive summary, or a high-level overview of your business. This report is essential when you need to communicate your business in brief, such as when looking for partners or requesting funding.
05. Create a website
Whether you’re using it for online scheduling or eCommerce, or simply directing organic search visitors to your landing page, every business needs a website. You can get started by choosing a website template and customizing it to meet your needs.
From the Homepage and About Us page to a contact form, consider what type of pages you’ll want for your professional website. After you’ve selected your template, you’ll need a free web hosting provider to take your website online—and keep it there. Finally, pick a domain name, or online address, so people can find you online.
Tip: Wix offers free business tools for your website and to build your brand, including a logo maker, pay stub generator, QR code generator, invoice generator, and form builder.
06. Hire great partner(s)
Flying solo is great, but a supportive partner will help you see different challenges and opportunities you otherwise might have missed.
When looking for a partner, think of the qualities you would like them to have and the people you know who possess them. Have a semi-planned business proposal when you reach out to your chosen potential partner, (your executive summary, for instance).
Your first hire can set the mood for your company culture—the shared vision, norms and mores shared by your employees—even if you aren’t hiring a full team just yet. Such foresight can determine your business’s future success, as it ensures that everyone on your team will be in-sync.
07. Build your network
Business is not a solitary journey, even if you choose not to have partners. Having knowledgeable and experienced mentors will help you understand your market better, take advantage of opportunities and avoid costly mistakes.
To find this support system, attend relevant networking events, speaker series, fairs and expos. You can also host your own networking events or create an online forum community.
08. Plan your finances
Planning your business finances might not be the most exciting step, but it is mandatory. Begin by getting a good grasp of the cost of starting a business. How much do you need? Run through the costs of materials and production, supplies, hiring employees, promotion, office space, etc.
As a novice, it’s likely you’ll need to request help, so make sure to keep your expenses as low as possible to give yourself some financial room for external consulting. Once you have a good idea of how much funding you’ll need, check in with your financial situation. How much will you invest in yourself? If you’re looking for investors, having some of your own skin in the game will make them more willing to support you.
Once you have the funds, open up a dedicated bank account to track your profits and expenses. It’ll streamline accounting and give you useful data to plan your business growth.
09. Develop a strong brand
Like Spotify’s distinguishing vibrant green and black or Dove’s subtle “real beauty,” a consistent brand identity helps generate recognition and build trust amongst customers over time. Verbally, it’s composed of your core values, language, employees, and customers. Aesthetically, it involves your brand colors, font choices, logo and more.
Editor-in-Chief of Entrepreneur Jason Feifer has a side business of his own. His website, podcast, newsletter and recently published book are all dedicated to teaching fellow entrepreneurs how to be more resilient to change. His podcast and book both have the same name: Build for Tomorrow. Similarly, he uses the same font and colors of his logo to decorate his website.
Tip: Use a logo maker and business card maker to showcase your brand identity.
10. Create value in your market
Now that you have a tested product or service, a strong network, and brand channels for promotion–it’s time to choose how you will go to market. Whether it’s through routinely publishing relevant thought leadership on social media or an elevator pitch that shows why your offering beats your competitors, a clear, defined go-to-market message will help your customers see the unique reason to choose your brand over another.
Are you ready to become an entrepreneur?
So, you may already know starting a business takes more than having a good business idea. According to the Kauffman Foundation, the survival rate for new businesses was 81.7% in 2021, indicating that not all entrepreneurs will see a second year. With entrepreneurship being a highly competitive and complex practice, you need to be prepared to deal with its ups and downs.
While the work may be fulfilling, it can also be incredibly stressful. You’re building a life around your business, possibly putting a strain on your p. And not only that, you will need both emotional and financial support systems to keep you on the path.
Here are some clear signs that show you’re ready to become an entrepreneur.
Learn to handle rejection
20% of new businesses fail in the first year of operations, according to the US Bureau of Labor Statistics. As an entrepreneur, one of the first things you’ve got to learn is how to handle rejection.
Whether you hear a “no” from a potential investor, client or publisher, having the right attitude about rejection can go a long way. Take the example of J.K. Rowling. The Harry Potter novelist has always been straightforward to fans about her own bumpy road to becoming a billionaire. In 2016, she tweeted two rejection letters she received, stating to her fans that they were an inspiration to keep going.
Another good way to deal with rejection is to take a step back and focus on self-care, writes Dr. Leslie Becker-Phelps in Bouncing Back from Rejection: Build the Resilience You Need to Get Back Up When Life Knocks You Down. Practicing self-care, Becker-Phelps explains, can be anything from meditating, running or even listening to music. Think of rituals that calm you down, thereby bringing you back to a balanced place.
Have a steady flow of funds
One of the most common small business challenges is lack of capital and cash flow, reported a recent Guidant Financial survey. At the early stage, a steady source of funding could mean either personal or family savings. If you need to search beyond your immediate reach, you could also apply for a public or private small business loan, business credit cards or extend your line of credit at the bank.
Aside from having a steady revenue stream, you’ll also need to ensure steady profits to grow a business once it’s launched. By doing extensive market research on your business idea, you’ll be able to say whether there’s an actual demand for your product or service and the size of your potential customer base.
Have a mentor
A poll by Kabbage, a global small business financial service platform, found that “92% of small business owners agree mentors have a direct impact on growth and survival of their businesses.” Not only are mentors essential to achieving small business success, some of the biggest entrepreneurs in history have said they would not be where they are without their own mentors.
In 2014, Oprah Winfrey said, “I’ve been blessed to have [poet] Maya Angelou as my mentor, mother/sister, and friend since my 20s. She was there for me always, guiding me through some of the most important years of my life. The world knows her as a poet but at the heart of her, she was a teacher. ‘When you learn, teach. When you get, give’ is one of my best lessons from her.”
Through proper mentorship, you will gain not only wisdom, guidance and perspective, but also all the necessary skills for professional growth, such as communication and self-awareness. Check out SCORE, SBDCs, and the Women’s Business Centers for mentorship opportunities online.
Be passionate about your idea
Some of the richest companies to date—Venmo, Instagram, Uber and WhatsApp — started in economic downturns, reported TechCrunch. Their founders were resilient in pursuit of innovation and creativity. Being passionate about what you’re doing can help you stay motivated, even when the stakes are high.
Be comfortable taking risks
Risk-taking plays a major role in becoming an entrepreneur. Without it, business leaders may not have gotten as far as they did. Facebook CEO Mark Zuckerberg famously said, “The biggest risk is not taking risks. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Get ready to be comfortable with uncertainty and step out of your comfort zone. Some risks you might face include:
Leaving a full-time job and a steady paycheck
Sacrificing time you'd normally take to enjoy your weekends or see friends and family
Using your personal finances with no guarantee you’ll see a return on investment
Miscalculating whether your product or service idea will take off
That said, if you’re not quite ready to follow through with your plan, take it slow. Instead, start with adjusting a tiny part of your career at a time with one of these successful habits.