Planning to Make the Switch to Entrepreneurship? Follow These Steps to Be Successful
Choosing to start a business is a big undertaking involving major risks, but the payoff can be great as well. Additionally, making the switch from being an employee to a business owner is not an easy one, but with good planning, time and effort, it is surely possible. Running a business is an endeavor where you will truly learn on the job from the challenges you’ll face daily in terms of managing finances, customer relationships, product management, marketing, and more. Moreover, you’ll need to wear multiple hats and develop the skill of delegation to ensure all aspects of the business progress simultaneously and result in the achievement of set goals.
Based on this short introduction, you will have already understood that your business will have various moving parts, and the key to managing each of these correctly will be strategic decision-making rather than guesswork. In this article by Beta Mods, we’ll explore the step-by-step process you as an entrepreneur need to take for establishing a successful long-lasting business.
Find Your Niche
A niche is a specialized segment of the market that you will cater to through products and services. As a new business with limited resources and non-existent brand awareness, your strategy will be to find a targeted group of customers, educate them on your products and sell them as the perfect solution to customer problems. With a niche, your efforts will be focused, resources will be utilized efficiently, and brand awareness will build fast and easily.
For instance, if your plan is to start a meal prep business, the target audience could be young adults who do not have time to cook daily but aspire to eat healthily. As reported by Statista, as of 2021, there are 21.52 million young adults (aged 20-25) in the United States. Given that you’re a new business, it is nearly impossible to serve this whole market. Hence, you’ll need to specialize it further based on your location.
Start by catering to young adults in your town/city. If business picks up, expand to neighboring areas, and so on. But, at the start, channel all your efforts toward creating a local audience who can become loyal customers.
Find Ways to Fund the Business
One of the biggest challenges facing new businesses is finding the initial capital needed to get off the ground. There are a few different options available when it comes to funding your new business:
- Bootstrapping: As reported by CFI, bootstrapping involves using personal funds to meet business needs. This is a good option for businesses with a low capital requirement, such as Dropshipping, freelance services, etc. Bootstrapping allows entrepreneurs to overcome the need of undertaking debt or giving up equity which is a big positive for the long run.
- Business Loan: This is a common avenue of funding used by businesses to meet financial requirements for the short and long term. Receiving a loan requires entrepreneurs to have strong financials, good financial projections, and collateral. Additionally, you’ll need to make provisions for making monthly repayments. But, as interest payments are tax-deductible, it helps to lower your tax burden.
- Venture Capital: Venture capitalists (VC) are wealthy individuals or companies that invest in new businesses. In addition to money, a VC can provide connections in the industry, access to manufacturers/suppliers, and serve as a mentor to guide new entrepreneurs on how to run a successful business. However, in exchange for VC money, entrepreneurs need to give up a share of equity. Hence, it is important to ascertain how much equity you’re comfortable distributing.
Establish an LLC
When starting a new business, one of the first things you’ll need to do is form a limited liability company (LLC). LLCs are popular among small businesses because they offer personal asset protection in the event that your business is sued. Additionally, it allows business owners to use business expenses as tax write-offs, potentially saving you thousands of dollars annually. This money can be re-invested in the business to increase production, conduct product research, hire professionals, and more.
States have different regulations around forming an LLC, so be sure to check the rules in your state before moving ahead. If you want to avoid the hassle of managing paperwork and filing requirements, hire a formation service to do the job for you. They’ll also provide ongoing support related to documentation and annual tax filings.
Be Open to Hiring Freelancers
As a small business owner, you’ll quickly learn that you can’t do everything yourself! When it comes time to delegate some of the tasks on your to-do list, consider hiring freelancers instead of full-time employees. Not only will you be able to complete hiring faster, but freelancers are also often more cost-effective than hiring full-time employees. This is because, in addition to the base salary, full-time employees need to be paid benefits and other contributions.
In comparison, freelancers are open to work on a per-project basis and only be paid compensation for their work. Moreover, based on the project, the compensation can be hourly or a flat rate. Here’s a list of common projects that small businesses hire freelancers for:
- Blog writing to generate content for their website and rank pages higher through SEO.
- Social media management to create brand awareness and establish a strong reputation.
- Website design for creating an aesthetic and functional website to create a good first impression on customers.
- Administrative assistance for completing numerous daily projects such as screening emails, mailing, scheduling meetings, and more.
When looking to hire freelancers, try posting on job boards such as UpWork, Fiverr, Guru, etc., or reaching out to people in your network who might be able to recommend someone with the skills you’re looking for.
Improve Your Business Acumen
While experience is the best teacher, there is no better way to accelerate the process of developing business acumen than to further your education. By pursuing a degree in business, you’ll be able to improve your expertise in the areas of communication, client relations, human resources, accounting, supplier management, and all other areas of running a business. Additionally, you do not need to spend a lot to earn your business bachelor’s degree, as there are plenty of reputed colleges providing affordable online programs.
Along with affordable costs, an online program will allow you to strike a balance between running a business and pursuing further education. What’s more? You’ll be able to instantly apply learnings to your business and enjoy its benefits in real time!
As you can see, starting a business is no small feat, however, don’t let the fear of undertaking responsibility deter you from the goal of being a successful entrepreneur. Planning will play a key role in your success in the present and the future. Hence, remember to complete these formalities before going all-in on your business idea – form an LLC to protect your personal assets, hire freelancers for areas where you lack expertise and create a financial plan to stay on top of costs and revenues. Additionally, you can always consider improving your business acumen by pursuing a degree in business.