According to a Gallup survey, 72% of the people in the age group of 18-29 years want to start their own business rather than working for someone else. However, according to Kauffman Startup Index, only 0.31% people actually start their business. This means that only 310 people out of 100,000 start their own business which is way less than who wants to become an entrepreneur.
I am sure that at any point in time whenever you have typed in your search bar, “How to become an entrepreneur, you must have seen some really strange headlines like “How to become an entrepreneur in a week”, “How to be your own boss in a month” and so on.
Before going down a bit further on this topic, let me first ask you one simple thing. Do you really believe that being an entrepreneur is just a tag like being a doctor, engineer or a lawyer?
No, entrepreneurship is not just a tag or title, so first just forget about all those wrong commitments and false hopes of turning you into an entrepreneur within a prescribed time limit. For me,
Entrepreneurship is not a tag or destination, it is a mindset.
By this statement, I mean that the moment you think of running a startup, drawing your business plan or taking the vision to build something, you become an entrepreneur. Though it is a different thing whether you are a successful entrepreneur, a beginner, or just a struggling entrepreneur. But till the time you are working dedicatedly on your vision, whether for a second, an hour or for a decade, you are living the life of an entrepreneur in those moments.
Before going in detail to the process and steps involved in becoming a successful entrepreneur, let us clear the myths about the entrepreneurial journey so that you do not practice wrong things in 2018.
Myths Regarding Entrepreneurship
There are many myths associated with entrepreneurship, however, I am clearing some of the biggest ones.
Introverts cannot become Entrepreneurs
This statement is not correct, Mark Zuckerberg and Larry Page are the biggest examples for this. Though both of them have evolved a great deal over the time but initially they were quite introvert. So being an introvert is not a problem till you have the innate quality to change yourself whenever and wherever required.
Entrepreneurs are Born
There is nothing special in entrepreneurship which you cannot learn with practice. Though if you are born with entrepreneurial qualities, then this is always an add on. But it always is seen that hard-work always outranks talent, so focus on what matters the most.
You Should Start Business Only in Young Age
The average age when entrepreneurs start their first startup is 40 years and people who are above the age of 55 are more likely to launch high growth startups. Moreover, if we consider the average age of founders with a revenue of more than USD 1 million, then it is also 39.
Actually, age is just a number when it comes to entrepreneurship. On one side, we have people like Colonel Sanders (KFC), Ray Kroc (KFC), Chaleo Yoovidhya (Red Bull) who gained success during later stages in their lives while on the other hand we have Evan Spiegel (Snapchat) and Mark Zuckerberg (Facebook) who became successful even before turning 20.
College Education does not play a crucial role
It is the most widespread myth amongst many aspiring entrepreneurs due to some dropout successful entrepreneurs. Though I am not favoring college degrees here, I am favoring connection and knowledge you develop during the college.
According to a report by Manta, where they researched 1000 small business owners, it was found that 69% entrepreneurs have a college degree and 61% believe that college education is important.
Need Lots of Money to Start
You never need lots of money to start your startup, it can be started with very less money. Hewlett-Packard (hp) which is worth USD 13 billion as of today started off in merely USD 538 while Dell started off in just USD 1000. This infographic from Founders and Founders will help you in getting more insights.
Idea is Everything
Some young budding entrepreneurs think that being a successful entrepreneur is all about working on a unique and great idea, but in reality, ideas contribute to only 1% of the overall success of a business. The rest is pure execution.
There is not a single business idea which is tried by only a single entrepreneur. On every business idea, over 100s of entrepreneurs work at the same time but only a few succeed. Why? Because successful entrepreneurs outperform non-successful entrepreneurs by their execution efforts.
Entrepreneurs are Extreme Risk Takers
There is a lot of difference between extreme risk and calculated risk. Extreme risk is like gambling and entrepreneurs are data focused to such a great extent that they can never think of such things.
But the question that arises then is that why entrepreneurs are known as risk takers? The answer is very clear, they took the risk of leaving a normal career, they took the risk of their comfort zone which others fear to take. So if you want to become an entrepreneur, then don’t just take any risk, analyze all the situations first and then decide accordingly. Analyze your financials, your family circumstances, your strong and weak points and so on.
Now, since you are clear about the reality, let us move to the process involved in becoming a successful entrepreneur.
As I had discussed earlier that 72% people want to start a business but only 0.31% of them are able to do so. The question arises that why the percentage of people starting their business is so less?
It is because they are not familiar with the right process. They are only aware of a faulty process of becoming an entrepreneur.
Majority of the people believe that to be a successful entrepreneur, first, you should have an ultimate idea. Once you have an idea that is outstanding, investors fill feed you with lots of money which can then help you in taking a classic office so that you can put impressions on new hiring and can attract highly talented people. Also, a wonderful office will give a perfect impression on your client and they will get converted easily. After showing big setup, you can easily attract famous mentors who will guide you in scaling your business and after doing all those things you will be successful.
The 1st and 2nd ladder i.e. “ultimate idea” and “business needs lots of money” are the reason that 99% of the people who wish to start their business but never start in reality and always remain a wantrepreneur. (Wantrepreneur is a person who always wishes to start a business but never gets to do so).
So am I saying that you don’t need an “ultimate idea” and “lots of money” to start a business?
Yes, I am saying exactly the same.
In reality, having a great idea is just one side of a story, and that too a very miniscule part of it. You also don’t need lots of money to start a business. Let me share the right process of entrepreneurship to clear your confusion.
Now let’s discuss each step of becoming an entrepreneur briefly:
It is not the idea that should be ultimate, it should be you who needs to be ultimate. Ultimate enough to handle extreme pressure, take right decisions, hire the right core team, remain focused towards your vision, dream to create impossible things, diligent, persistent etc. If you are ultimate, then you can even make iron or aluminium fly into the sky just like Wright Brothers, which once seemed to be impossible.
No matter how strong or motivated you are, there will be bad times in your entrepreneurial journey that will surely make you weak. And the only way that you can bounce back in that situation is if you have a strong ‘why’. Your “why” should be so strong that you can stand against the whole world to prove them wrong and can actually do that.
Your “why” could be anything, it could be any feeling that can inspire you in the darkest of times. Just like the protagonist in the movie ‘Harry Potter’, make use of some good memory of being with your loved ones to fight black demons, aka any hardship that pulls you down in life.
If money motivates you, then being the richest person on the planet and owning luxury toys can be your “why”. If you are poor, then giving your parents the most luxurious life can be the “why”. If you are fed up with any problem like water crises or pollution, then solving these can be your “why”.
It is just because of a strong why that James “Buster” Douglas defeated Mike Tyson in boxing match who was undefeated till then. His why was very simple which he admitted after the match in an interview that his mom Lula Pearl told him that he could win the fight before her death as she was ill.
So just find your “why” that motivates you to do anything and everything in life.
Let us suppose you get a data that bitcoin (cryptocurrency) is the future of currency and in the next 2 years, its value will be 20 times its current price. On the basis of this information, you started a new business related to cryptocurrency and invest the majority of your money. But what if your information is wrong and within 2 years, the government of each nation gets united and refuses to accept any kind of transaction related to cryptocurrency.
On the other hand, what if it actually gets 2 times its current price? So this is the power of correct data, it can make zero to hero in no time or even vice-versa. This is the reasons that some people are stating “Data is new oil; fake data is marijuana”.
So whenever you start your business, first check what is the source of information and second, if the source is reliable or not.
And do you know we can easily avoid 42% failure rate by validating a business idea before actually launching it? If you validate your idea, not only it will save your money, it will also save lots of energy and time which you are going to invest in your business. So before starting your business, analyze your market properly.
Many entrepreneurs make this mistake that they always keep looking for the perfect team members who are highly talented and hence end up with some kind of disputes. You never need team members from Microsoft, Apple, or Facebook who always ask for more resources, more salary, more equity. You need a person who can even work in the humblest scenarios to complete the project on time, who puts efforts to save resources of the company and can manage with even meagre salary during tough times.
To become a successful entrepreneur, you need not start from a luxury office, even the biggest companies like Apple started from the garage while Facebook started from the dorm room. I am not saying that luxurious set up doesn’t put a good impact on clients but it is not the top most priority for them. The first priority for any client is the product that they are getting, the price at which they are getting and the services they will be ensured with the product. All other things are secondary.
Having a mentor is like being on steroids without any side effects. But you never need a famous mentor; all you need is someone who has faced all these situations, which you are going to face in coming time, before and emerged out strong and successful. Also, I have never understood the concept of having one mentor for every problem and I have seen this concept is in trend, especially in incubation centers and in co-working spaces. And this is the reason that failure rate of incubation center is more as compared to normal startups.
How is it possible for a technical mentor to guide you on spirituality, a law related mentor on app technicality and so on. So I would suggest you have multiple mentors for multiple situations so that your knowledge can get diversified and your business could achieve better results.
Yes, you need money too to start a business. But does money come so late in the series? And my answer is, yes, in the majority of the cases, you don’t need lots of money from the very first day.
I kept the money aspect for the last because if you have all the things which come before money in the series, then you can easily arrange for the funds. Either by borrowing, or by loan, or through investor and that doesn’t matter. All that matters is that you are creating actual sales in the market and generating revenue and it doesn’t necessarily have to be the profit. You could think later about increasing your profits. In the beginning, you just have to focus on increasing your revenue and some bit of the profit to make others believe that your business model is actually working in the market.
How to Find the Best Business Idea?
There are two ways to start a business: one, work on disruptive business ideas, second, work on regular business ideas. If you are the one who is looking for a normal business idea, then you can click here but this is not an entrepreneur style, it is a businessman style to work on the old idea.
If you believe that you are an entrepreneurial personality, then you need to adhere to the following 4 steps to find an amazing business idea that can disrupt the market.
The first step is to identify a problem that is prevailing around and is making a large mass of people suffering from, like pollution, water crises, renewable energy, AIDS etc. I personally suggest never to work on an idea from which you or your loved ones haven’t suffered because then it would be really tough for you to develop a “strong why”. Disruptive ideas never get successful in one or two years, they take at least 5 years and in some cases, they even take decades to show results. And in that time you cannot remain in the game if you don’t have an extremely strong “why”.
The next step is to find a solution which is applicable and affordable. If your idea is not affordable, then also it is fine because you could make it affordable with time but it should be applicable from day one. Applicable in terms of government laws and clients’ perspective.
Once you have found the solution to the problem, validate it in the market. To validate your business idea, you need to take care of following factors.
You could seek help from professionals also in validating your business idea or can discuss other successful entrepreneurs in the same industry that how they validated their idea.
Pro Tip- Take reviews about your product from actual users of the market, not from your friends or family members.
Three Circles of Knowledge
Knowingly or unknowingly, each and every successful entrepreneur possesses this extremely special quality. The quality of increasing their “knowledge circle”.
There are three types of circles:
Things You Know
Anything which you know comes in this circle. Like I know my name, I know content marketing, I know how to work on a computer etc. This circle is extremely small.
Things You know that You Don’t Know
Anything which I have heard or watched but haven’t given a heed to learn come into this circle. Like I don’t know how to do plastic surgery, I don’t know how to make a mobile phone etc. This circle is fairly big as compared to the 1st circle.
Things You Don’t know that You Don’t Know
Things which I don’t know that even existed comes in this circle. Like I don’t know about which species live deep in the Pacific oceans and I don’t know how their ecosystem works. This circle is extremely big; you could say this circle is infinite times bigger than the above two circles.
Every successful entrepreneur from Bill Gates to Ratan Tata to Jeff Bezos has this personality trait that in their each second they drew knowledge from 2nd and 3rd circles and added on to their 1st circle.
So if you also want to become a successful entrepreneur, then you also have to learn new things every second, you also have to draw knowledge from the 2nd and 3rd circles and have to add into the 1st circle. The day you will stop learning new things, you will start degrading and hence will face the downfall.
Entrepreneur Vs Businessman Vs Self-employed
A lot of people remain confused between an entrepreneur, a businessman, and a self-employed person. Starting of each one is almost same in terms of their struggling life, 365-day work etc. But the biggest differences are the intentions, visions and end results. So if you want to be a successful entrepreneur, then you should be very clear about all the three terms else you might become self-employed and will remain in an illusion that you are an entrepreneur.
|Entrepreneur Vs Businessman Vs Self-Employed|
|Definition||A person who took initiative to solve a market problem and make the huge profit from the solution||A person who started a business that is already performing in the market just to earn more and more profits||A person who started something basically to feed himself and his family, has no big intentions in mind|
|Risk Factor||Calculated but Very High||Calculated and Medium||Very Low|
|Vision||Disrupt the Market||Bring Profit from the Market||Earn each Month|
|Way of Working||Always Creative||Conventional and Already Performing Well||Majorly focus on spending less and earn more, whether results come or not|
|Competition in Market||Low||Very High||Medium|
|Money Needed to Become||Very Less Money||Too Much Money||Medium|
|One Best Quality||Can arrange required resources anyhow, whether it is a tool or employees||Great understanding of finances, profit, and loss||Bringing maximum from available resources|
|Intention||Benefit of Everyone||Self and Company’s Benefit||Self-Benefit|
|Initial Struggle||Exceptionally high||comparatively low||low|
|Result||Become Influencer, Earn Lots of Money||Earn Lots of Money||Make Living for his Family|
Traits and Qualities of Great Entrepreneurs
All the successful and leading entrepreneurs learn from each other and have few common personality traits and qualities. So if you also want to become a leading and successful entrepreneur, then you should also have to work hard to inculcate these qualities and traits in you.
Entrepreneurs are somewhat stubborn towards their dreams. They don’t take decisions without a deep and quality thought. They are always moving with facts, but once they have taken any decision then they don’t take their steps back. Goof entrepreneurs know it very well that if you have to be successful, you have to be stubborn.
Thomas Alva Edison failed 900 times before devising the electric bulb. Colonel Sanders knocked 1000 houses before selling his first chicken. Elon Musk’s two companies Tesla and SpaceX were about to crash, he got new funding few hours before his companies were going to crash. Steve Jobs was fired from Apple Inc. then he was invited again and he gave new heights to Apple Inc.
Take a look at any great entrepreneur, they all have a high grit level in them and are highly stubborn towards their vision. Likewise, you also have to be stubborn like them towards your vision.
Great entrepreneurs can predict future and this is the reason they put so much energy and efforts to things even if everyone is opposing them, even if results are not coming.
Google, the biggest search engine company, was knocking everyone’s door to get funding or to get acquired but no one supported them. Even Yahoo, once the biggest search engine company refused to buy them, but Larry Page and Sergey Brin were confident about themselves and kept working hard. If we talk about them today, then Google holds 90% market share in terms of total searches.
Similarly, Facebook (February 4, 2004) today’s biggest social networking website was started with Orkut (January 24, 2004). Orkut was funded by Google and became successful in acquiring the complete market. But Mark Zuckerberg was highly confident in what he was doing, he was somewhat aware of the future and kept working hard on Facebook. If I talk about today, then Facebook is the market leader with 2.2 billion active users and outcompeted Orkut on September 30, 2014, when Google finally closed Orkut.
So do as much as market research you want to do and according to that predict the market future.
Bigger dreams can never be attained by fewer resources. The bigger the dream is, the more it requires resources. Resources can be talented people, infrastructure, money, or it can be technology. But the majority of great entrepreneurs are first time entrepreneurs of their family and are not resourceful. But they never complain about anything because they have this unique quality that they can arrange any resource which is crucial for himself and his company’s growth.
The biggest examples are Richard Branson and Henry Ford. They are not highly educated, they both dropped out of school but still managed to disrupt their respective companies. Henry Ford was the 1st person who introduced assembly line in the automobile industry and Richard Branson is the founder of Virgin Group and had invested in more than 400 companies.
Look Average instead of Peak
You must have heard the phrases and said to yourself at times, “Once I worked for 16 hours”, “Once I worked without having food”, “Once I studied without sleeping”, “Once I became the best employee of the month”, “Once I remained awake for 24 hours” and so on.
But successful entrepreneurs never use such terms, they never believe in one-time performance, they believe in the average performance instead. They check what was the average per day work during the whole year and how to reduce their average per day sleep but they make sure to sleep daily. Also, they believe in continuity and not in the discrete pattern.
Impossible doesn’t Scare Them
If you want to become a great entrepreneur, then you need to learn how to get comfortable with dreaming impossible things, working for the impossible thing, and then finally achieving those impossible things.
If we talk about dreaming impossible things, then Elon Musk tops the list. His first dream was to reuse the rocket which even NASA couldn’t dream of. Then he drove the car into the orbit (space). And now he is working to make liveable colonies on the Mars.
Entrepreneurs spend a lot of time thinking about future and I believe, “Future is the second home of Entrepreneurs”
Make Hand Dirty
You can never become a great leader until you make your hands dirty. Don’t avoid the groundwork of your business, whether it is about making a sale, writing a code, approaching investors, or handling customer service, you need to do everything at some point of your business. If you will try to avoid these groundworks, then soon you will realize that it was your biggest mistake and you might face circumstances that your startup failed miserably.
It is very essential to bounce back after every failure. You are not working on anything that the world is already familiar with, so it is pretty obvious that you will make mistakes. Not only a mistake but a lot of mistakes. And after every big mistake, you will fall flat on your face but that’s okay, it’s just a part of the journey. But what’s not the part of the journey is losing hope, giving up and not trying again.
No matter how hard you receive the punch on your face, you have to bounce back with more energy, with more efforts, with more focused attitude.
Take a Stand
Entrepreneurs take stand for their decisions and their people. They never act like an audience, they always act like best performing players and believe in actions. Not only this, they stand against everyone when they are right and accept their mistakes when they are wrong.
So learn to make fast decisions and remain true to your words, no matter what the circumstances are. You can learn this thing from Mark Zuckerberg, in the recent data breach case, he was guilty and being the great leader, he accepted his mistake and apologized for the same. He even said, “I am responsible for what has happened”.
Plan before Doing
Benjamin Franklin once said,
If you fail to plan, you are planning to fail.
If you have to run a business, then you have to manage a lot of things, from hiring to marketing to product launch to lead generation. Above all, you have only 24 hours in a day and unlimited work to do. This can only be achieved if you plan your day properly.
I am not saying that you have to become attorney or accountant but a basic understanding of finance is a must. You should be aware of basics of how startup valuation in done, what are the tax rates, when taxes are filed, what are the tax rates on your products.
To technical founders, financial education looks as tough as a mountain but it is not that hard. And most importantly, investors don’t fund any business just on the basis of a product, they majorly look at the financial data. And when you understand that data, then you can easily play with it to ask for the higher valuation.
It is one of the most important qualities that entrepreneurs must possess. You should know how to set priorities amongst two things. As I mentioned in the above point that an entrepreneur has to do a lot of work and our day has only 24 hours. So being an entrepreneur you should know which task to complete first and which task can be left for later due to the shortage of time or which task can be delegated to others.
Emotional Intelligence (EQ)
If you have a low IQ, then that’s okay in entrepreneurship but if you have a low EQ, then this can create great problems. The biggest task of a founder is to manage people, divide work as per the skills and qualities, prevent ego clashes etc. And when the company grows to a good level, then understanding office politics adds to the list. Always beware of the fact that you can never avoid office politics completely, you only reduce it to a certain level. And to handle all these things properly, your EQ should really be high.
Difficulties of Entrepreneurial Journey
On the road to entrepreneurship, you are going to face millions of problems and difficulties, I am mentioning few most commonly faced problems which you should be aware of before starting your business.
Wait! Wait Wait!
Come back from your past, I am not talking only about love breakups. I am talking about something which is worse than that.
You cannot create an empire all alone, you always need a great team, great associations, great partners etc. But when you find out that your best friend, whom you have helped from childhood didn’t pick up your call just because you need some help and he was the last hope, it actually pains.
When you lose a contract by just few hundred dollars because one of your top performing employees leaked the quotes and got associated with competitors, it pains. When after 2 failures you launch your rocket for the 3rd time by investing every single penny of life and it also got failed (this happened to Elon Musk), it hurts. And the worst is when your co-founders, who are the core of your business and are handling those parts of the business which you are not aware of, the one for whom you left your job, with whom you dreamt everything of everything together, leave you in between (this happened to me), it really hurts a lot.
So start doing some cardio exercise and make your heart stronger so that you handle all such stressful and heart breaking situations with ease. If you want to read how I successfully handled the situation when my whole team left me, click here.
Mountain of Rejections
Only a few people are lucky enough to get their initial sales and investors easily but the majority of the entrepreneurs have to struggle a lot. Don’t know how you handle your rejection but if you get furious after facing a rejection then you need to work a lot on your attitude.
I believe that rejection is one step before the success, so if you feel that you have been rejected by someone, then feel proud instead of getting furious because you have covered all the steps and just one step is left, after that, you will enjoy your success.
Zero Comfort Zone
If work and enjoyment are two different words for you, then there is a great chance that in your entire journey you won’t be able to get your desired comfort zone. But if you enjoy what you are doing then there is no problem for you at all. In such a scenario, even performing the most difficult tasks seems like a cakewalk.
Pro Tip- Don’t stop after attaining your first success, it might be a coincidence, so prove it that it is not a coincidence and always start from the zero so that every success remains the first one.
Extreme Financial Crises
No matter how good you are at planning, your initial budget will surely end before the expected time. It might happen that people are loving your product; they are getting engaged with your product but you are not able to raise funds nor even able to earn enough revenue to survive. In such situation, you neither can shut nor you can run your business. So whenever you start your business, make sure about this point that who is going to help you in times of financial crisis. In the majority of the cases, in such situations, ex-bosses, family member, friends’ parents can become your angel.
Pro Tip- Be sure from the day one that who all are on the list of angels of financial crises. Talk to them before starting that whether they support you if such situations occur. If you won’t ask until the last situation, then don’t forget my 1st point of difficulties i.e. “Heart Breaks”. Then there is a great probability that you will face one.
My Advice to My Friend Entrepreneurs
I will only give 2 advise as per my experience, hope it will help you all.
1. Never have the disease of “Paralysis by Analysis”. There are lots of people who just dream but never take real actions. So conduct a small research, then take small actions, again conduct a small research and do a small action. After some time, you will be educated enough about your field and be in a better position to understand what to do and what not to do.
2. Before starting your business, write each and everything on a piece of paper in exactly the same manner in which you want to do it. From raw materials to logistics, processing to employees, finances, lead generation, delivery, and profits. Write each and everything on a piece of paper. If you do so, you can become your own mentor and can easily find loopholes in your business. (My 1st business failed because I missed out on doing this thing). For more personal advises you can click here.
Becoming an entrepreneur is not that hard, it only demands process based systematic progress of all the steps which have been mentioned in the article. Most importantly, entrepreneurship is a mindset and not a tag that you have to achieve. So start working on your business idea from today itself and whenever you feel tired, just take rest, instead of quitting the journey.
If you have any doubt or query, feel free to ask me in the comment section below.