How To Become an Entrepreneur in 7 Simple Steps (2024)

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Becoming your own boss is the ultimate dream for lots of people. Many crave the creative control, flexible hours, and freedom that comes with being an entrepreneur.

But there’s a lot of work involved behind the scenes, and much of entrepreneurship is about planning, strategy, and dedicated execution. If you’ve always wanted to get into the game but not yet taken the leap, here’s a seven-step guide on how to become an entrepreneur.

1. Find a profitable business idea

The product category you choose is at the core of your online business and will be one of the most important decisions you’ll make.

Although the “perfect” product may not exist, there are definitely ways to minimize risk by choosing a product and niche that have more working for it than against it. Use the criteria below as a guideline that can help you better understand the pros and cons of the product you’re considering—and hopefully increase your overall chances of success.

Does your product serve a passion or solve a problem?

It’s always an advantage to sell products that serve a passion or solve a problem. An additional benefit is that when you sell products that satisfy one of these requirements, your marketing costs tend to be lower since new customers are actively seeking out a solution as opposed to you having to heavily market your product to find them.

It’s always an advantage to sell products that serve a passion or solve a problem.

Is this a trend, fad, or growing product category?

Riding a fad can be dangerous. A trend can be lucrative. Stable markets are safe and growing markets are ideal. Understanding where your product and niche lay can play a huge role in your success or failure.

To better understand the differences, let’s look at the conceptual growth curves and then go through a real world example for each type.

Fad

A fad is something that grows in popularity for a very short period of time and fades out just as quickly. A fad can be lucrative if your entry and exit into the target market are timed perfectly, but this can be difficult to predict and a recipe for disaster—it’s better to build your business on a more solid foundation. Remember fidget spinners? The handheld spinning toys were all the rage in 2017, peaked in popularity, and then became irrelevant almost overnight.

Trend

A trend is a longer term direction that the market for a product appears to be taking. It doesn’t grow as quickly as a fad, it lasts longer, and it generally it doesn’t decline nearly as quickly. Trending products can sometimes also develop into long-term growing markets, although this can be difficult to predict.

Stable

A stable market is one that generally is immune to shocks and bumps. It is neither declining nor growing but maintains itself over long periods of time. Tea pots, for example, have maintained a stable level of popularity for the past 15 years.

Growing

A growing market is one that has seen consistent growth and shows signs of a long-term or permanent market shift. The athleisure market is a prime example: strong growth in the 2010s turned into accelerated growth during the COVID-19 pandemic, and the industry is now set to be worth $450 billion by 2028. 

What does the competitive landscape look like?

What does the competitive landscape look like for your selected product and niche? Are you first to market? Are there already a few competitors or is the market saturated with people selling the same product or targeting the same niche?

If you’re first to market, you’ll want to do a lot of market research to determine that there is in fact a market interested in your product. If there are a few competitors already in the space and they seem to be doing relatively well, this could be a good sign that the market has been validated.

If there are many competitors in the market, it’s also a sign that the market has been validated. However, you’ll likely have to determine how you can differentiate your brand and products from the sea of competitors in order to carve out your own spot.

2. Develop a product

Once you decide what you’ll sell, there are several options for product development. You can make your own products by hand, like the artisans at Heath Ceramics. Or you can find a manufacturing partner who will develop your product idea to your specifications, like the team at West Path does for their Mexican blankets.

You can also purchase wholesale products directly from independent brands. With this option, you buy ready-to-sell merchandise in bulk to resell on the retail market. Shopify has partnered with Faire, the leading online wholesale platform, to simplify this buying process, bringing together hundreds of thousands of independent brands and retailers from around the world. You can install the app, Faire: Buy Wholesale, to seamlessly sync products to your Shopify admin.

If you’d rather not hold inventory, you can look into dropshipping. Dropshipping is when a customer purchases an item from you and you, in turn, buy that item from a third party. The third party then ships the item directly to the customer so you never have to store, handle, or ship any products.

If you create your own designs for t-shirts, art prints, mugs, etc., a similar option is to offer printing on demand. Printing on demand is where you partner with a supplier to print your own designs on white-labeled items that are only created when a customer purchases them. This way you sell only as much inventory as there is demand for and never have to store or ship the products yourself.

3. Validate your product

The next step is to validate your product idea. This is the process where you figure out if you’re selling products that customers really want. Real product validation happens when you make your first few sales. So, before investing too much money or time into your new product line, it’s helpful to do a few low-cost tests.

You can build a coming soon page to drum up excitement. Or set up pre-orders to see if you get any interest. The owners of Jaswant’s Kitchen, a shop that sells natural Indian spices and cooking kits, validated their products by first selling at in-person shows.

Once you make a few sales, you’ll be better able to validate demand for what you’re selling.

4. Write your business plan

With some much-needed product validation, it’s time to write a business plan. A business plan is a document that outlines essentially everything about your business. Core ideas it will include are: who you can reach and market to, your business model, what you’ll charge for each product, the product lines you’ll start with, and your marketing strategy.

Though it may seem exciting to start with the fun stuff like setting up your social media accounts or creating your logo, a business plan ensures that you’ll stay on track and that you have a solid, well thought out strategy going forward. Use our free business plan template to guide you through the process. 

5. Secure funding

Businesses cost money, especially if you plan on selling your own product. While you can reinvest early profits back into your business, many businesses need cash flow of some kind. A few popular options include:

• Self funding. If you have the means, you can fund your own business. Just make sure that you’ll be able to shoulder the cost for a while. While some businesses become profitable quickly, depending on the business, it can take some a few years to see a return on investment.
• Take out a business loan. Another option is to take out a small business loan. Shopify Capital is an option for those who qualify, and it’s based on your sales.
• Get money from venture capitalists. Capital investment comes in the form of an angel investor or venture fund. These accredited investors provide funding for startups and early stage companies. In return for their investment, they receive equity ownership or convertible debt, which is a loan that can be converted into equity in the future.

Shopify research shows that in their first year of business, entrepreneurs spent the most amount of money on product costs (raw materials, inventory, supplier, manufacturing, patents, etc.).

Learn more: How to Write a Compelling Elevator Pitch That Sticks (Plus 3 Templates You Can Steal)

6. Launch your business

Don’t overthink things: you’ll become an entrepreneur through action and hard work. Set up a store launch checklist for opening day. You’ll also want to make sure any launch day marketing activities, like organic social posts, are set up and ready to go. And you should have a plan for customer support or at least an easy way for customers to contact you if they need help.

After that, spend all of your time and energy on getting your first sales. You can expand your acquisition efforts later.

7. Manage the business

You’ll learn more about business by managing a business than you will through any business class. But, successful business owners always become students of entrepreneurship.

The more time you dedicate to learning, especially from those who have blazed the trails before you, the more you’ll be able to avoid costly mistakes and innovate where others haven’t. You might choose to work with a mentor, read books for entrepreneurs, take courses, listen to business podcasts, or even subscribe to email newsletters. Choose whatever method works best for you, but just make sure that you never stop learning.

Where to find entrepreneurial support

The world of entrepreneurship can be tough. But there are resources and groups available to you to get the help, tools, and advice you need.

Resources

1. Shopify: Many entrepreneurs don’t have a formal education, they took the leap and made it up along the way. This is why it’s important to build intentional learning into your business practices. Shopify offers free entrepreneur resources, including courses and video resources, you can use to build your skills and knowledge and reach your goals.
2. Small Business Administration: Get information and resources to help start your small business. You can also find SBA-guaranteed loans.
3. SCORE: SCORE helps you find a mentor so you can get free counseling and advice, in person or online. Its mentors are successful entrepreneurs looking to help other small businesses owners become stronger and more successful.
4. Small Business Development Centers: Tap into the expert advisers for free at SBDCs to help you with starting and growing your business. Contact your local SBDC for no-cost business consulting and training.
5. Small Business and Self-Employed Tax Center: Can’t forget about paying taxes! Stay compliant with the IRS with the latest tax news and forms for your business.
6. FindLaw Small Business Center: Find legal forms, get answers to legal questions, and find small business lawyers on this site.
7. International Franchise Association: Entrepreneurs don’t always start a business from scratch. The International Franchise Association (IFA) helps you find franchises for sale.
8. SeedInvest: Find potential investors for your business using SeedInvest. You’ll discover angels who will invest in your business in exchange for equity.

Groups

1. Entrepreneur’s Organization: The Entrepreneur’s Organization is a global support network with over 14,000 entrepreneurs and leaders. The EO offers mentorship and networking opportunities perfect for new entrepreneurs.
2. Vistage: Founded in 1957, Vistage is a mentoring membership program for CEOs and business owners. It has 24,000+ members globally and offers coaching and peer advisory services to entrepreneurs.
3. Startup Grind: Startup Grind is a global community built to educate, inspire, and connect entrepreneurs. The group hosts many events that bring over 3.5 million entrepreneurs together to connect, learn, teach, build, and belong.
4. Young Entrepreneur Council: This group offers support from vetted entrepreneurs aimed to help overcome challenges and grow your business. While it has tight restrictions to get into the community, it’s a good place to network and find potential business partners.
5. International Council for Small Business (ICSB): The ICSB was the first non-profit membership program dedicated to small business growth worldwide. It brings together educators, researchers, and practitioners from around the world to share insights through programs, workshops, training sessions, and more.

Becoming the best business owner you can be

Starting a business is not easy. Growing it is even harder. You may feel like you’re not ready to own a business, but if you’ve made it this far, you are. It all starts with an idea, one that you are connected with and passionate about. If you can turn that idea into something that solves real-world problems, you’re on your way to becoming a successful entrepreneur.

Illustration by Gracia Lam

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Credit: Original article published here.