If you're interested in becoming an entrepreneur, you're in good company. According to one estimate, there are 582 million of them in the world.
But as you might imagine with that staggering figure, most haven't hit it big. And you've undoubtedly heard horror stories of businesses going under. Still, there’s this idea that’s stuck in your head you can’t get rid of. You’re sure it’s the next big thing.
But where do you start? How do you go from being an employee working 40 hours per week to an entrepreneur running their own business?
It's not something that's going to happen overnight, but there's a well-trod path you can follow that will maximize your chances of success. Whether you’re selling business to business or are going with a direct-to-consumer model, the steps toward entrepreneurship are largely the same. Here’s how to get started.
Come up with an idea
First, you have to have an idea. This is probably why you’re here, so this should be the easiest step. However, not all ideas are created equal, so be careful which idea you go with. It should be a problem that a) you’re suffering from currently and b) would pay money to solve.
This seems obvious, but a lot of would-be entrepreneurs come up with what they think is a great idea without questioning whether it’s really a problem people want to spend money to solve. For example, opening up packages is somewhat of a pain for me, but would I spend $25 on a special package opener? Probably not.
Quick tip: Instead of building a product for a theoretical customer, develop it for yourself. Make it perfect and start using it. This will help you refine and describe its benefits to a potential customer. Letting them know how you’ve made it a part of your life will help them imagine it becoming part of theirs.
Develop a business plan
This sounds intimidating, but it’s not. In fact, I would discourage coming up with a 30-page proposal that no one is going to read and will get thrown out the window in a few weeks. You’re going to have to figure this out as you go along, so extensive forward-looking business plans are generally a waste of time.
But it is a good idea to do some market analysis and put on paper exactly how you’re going to build this product, how you’ll market it, and how you’ll find your first customers. This gives you a gut check of whether you’re onto something or not.
Your business plan should describe the following things:
- Your idea (a detailed description of what your product is and how the customer would use it)
- Your target market (a breakdown of what type of customers would use your product and how big a market it is)
- Your price point (justify this with similar products if possible)
- Your marketing plan (how would you get this product in front of customers and how much would it cost?)
- Your sales goals (this is impossible to predict with accuracy, but see if you can come up with a conservative plan that is believable — provide just enough detail so that your idea passes the smell test)
Quick tip: Forget about an exit strategy. Investors love this, but it’s pointless this early in the game. In fact, avoid investors altogether. They’ll take control of your company, and that’s probably not why you got into entrepreneurship. Unless you’re building a factory, you probably don’t need investors anyway.
Try to prove it’s a terrible idea
My big mistake with my first business idea was trying to prove it was brilliant. Bad idea. That results in asking leading questions to nice people who will tell you, “Yeah, I’d love something like that” when in reality they’d never pay a dime for it. That’s not because they’re lying to you — they probably really believe that. But when there’s no money on the line, people feel pressured into being “nice” to you about your product.
If you try to prove your idea is terrible and will most likely fail, you’re much more likely to spot fatal flaws in the plan, giving you the option to abandon it before it’s too late or make necessary changes to ensure it succeeds. Remember, you’re not marketing your product — you’re creating it.
Quick tip: Some brutally honest questions you could ask potential customers include:
- Why would your organization ever need something like this?
- Isn’t your current method of solving this problem working just fine?
- What are this product’s biggest flaws?
Find a way to keep your day job
If you’re like me and gobbled up every book by successful entrepreneurs you could after getting the itch, you’ve probably been bombarded with advice to throw caution to the wind and go all-in on the idea. Don’t fall for it.
The road to entrepreneurship is littered with the wreckage of the financial lives of those who made the mistake of believing that they could build a successful business in just a few months. For most entrepreneurs, it takes years to gain a foothold, so you should keep your day job and focus on building your business during nights and weekends.
Quick tip: You don’t need an enormous amount of time to start working on the business. Just find an hour each day, perhaps first thing in the morning or after work is over, to start fleshing out your idea and developing your product. After a few months, those hours build up. Slow and steady wins the race.
Just go for it
Overplanning is a paralytic disease that befalls just about every entrepreneur. We want to map out our steps before we take them, but it’s just impossible to do. Action is the only thing that matters when you’re an entrepreneur.
Before you act, you are in a place of ignorance. You have no idea what kind of externalities or obstacles you will encounter when you do act, so plans made at this stage tend to be pointless. After you act, you have a ton of information and can plot your next step.
Quick tip: Identify one big step to take this week. You will be tempted to look at the totality of your actions and try to accomplish too much, making yourself overwhelmed in the process. Instead, identify a step that would move you closer to your goal and just focus on that this week. Then, repeat the process next week. When you take a big step, the next logical step becomes obvious.
Tweak, adjust, modify
Starting an online business is a journey of constant adjustment. As you gain new information, you will need to modify your plan. Where you end up six months from now will look nothing like where you expected to be. And that’s OK.
Be flexible and ready to tweak your plans every week. See your business as a boat sailing to a distant point on the horizon. Every now and then you may drift off course. But as long as you’re regularly correcting your direction, you’ll reach your destination. It’s a lot better than staying anchored at the shore for months trying to come up with the perfect plan.
Quick tip: Get a mentor to help you along the way. If you run into problems, you’ll be grateful to have an experienced entrepreneur who has been down this road before and can help you identify the next action to take. It could be someone you know, or you could reach out to your local small business development center to find one.
As long as you’re careful, this is a journey worth taking
Despite its reputation, entrepreneurship is no place for recklessness. However, just because there are risks and you won’t become a billionaire overnight doesn’t mean this isn’t a path worth taking. Developing a new product is exciting and fun, and it gives you something to look forward to.
As long as you temper your expectations and make smart decisions, entrepreneurship is a fulfilling endeavor. After all, even if it takes you years, wouldn’t you agree that a successful company would be well worth it?