Last week I focused on what it takes to be a sole trader. This week, I am looking at - Entrepreneurship.
Be your own boss
What is entrepreneurship you ask? It is the process of starting (or improving upon) a business with the ultimate goal of making a profit. It often involves great risk and uncertainty, but it’s also an opportunity to overcome those challenges and to manage multiple aspects of a business operation. From marketing to accounting to logistics and beyond, entrepreneurs get to oversee the many facets of running a business.
But isn’t easy. In fact, data shows that 90% of startups fail. Despite this, entrepreneurship remains an extremely attractive path. Like many high-risk activities, it often draws people who see the risks as an exciting challenge — and not a disclaimer.
And while the risk might be great, so are the rewards. Entrepreneurship is easily one of the most creative forms of business — and it can be immensely satisfying on a personal level.
Now I have already scared you with my statistic that 90% of startups fail. Bullet point one may make you rethink your chosen path.
- 82% of entrepreneurs work 40+ hours per week. 19% work 60+. (source: TAB)
- In 2018, 75% of CFOs of mid-sized organizations reported that their job was becoming more strategic. (source: Forbes)
- 64% of entrepreneurs surveyed said they believe it is their duty to have a positive social and economic impact. (source: HSBC)
- 7.4% of all job seekers started their own business in 2016. (source: Fortune)
- Women were starting 40% of all new businesses, and persons of color made up 40% of entrepreneurs in 2016. (source: Inc)
- The United States is still considered the world’s most small-business-friendly country. (source: FitSmallBusiness)
- The U.S. also the best place to start a business as a woman. (source: HubSpot)
- 1 in every 18 people on the planet owns their own business. (source: HubSpot)
How to Start a Business
Determine the legal structure of your business
First, you'll need to figure out the kind of business yours will be from a legal point of view. Jump back to last weeks article Sole Trader 101, for more information.
Choose and register your business name
Next, it’s time to select and register your business name. This might sound like a fun brainstorming activity, but it’s actually a paperwork-heavy legal process with far-reaching implications for your business down the road. Our Useful Links page has the links for the steps you need to register business name.
Secure licences, permits etc
From here, make sure you have all the right permits and licenses to do business legally.
Build your mission and vision statements
What does your business do? What do you stand for? What problem do you solve? How do you plan to make the world better? These are questions your mission and vision statements will answer.
This step is a key component of your marketing strategy. Brands with a strong identity and mission statement have an easier time producing authentic and meaningful content that effectively communicates their core values.
Write your marketing plan
Once you have your license and your name, it’s time to start building an online presence and telling your story. To start, think about your target customer. Ask questions like:
- Who wants what I’m selling?
- Who would find it useful?
- Who would become promoters of it?
From there, dig
How to become successful
There is no one size fits all approach for success. So much of entrepreneurship is about blazing your own trail and doing what hasn't been done before. However, lets take a look at some things that will help you to success.
Do it for the right reasons
Don’t start by wanting to be an entrepreneur. Start by identifying a need or a problem and looking for a way to solve it. Focus on the process, not the potential outcome.
Learn over earn
Prior experience — whether from your day job or past startup ventures — is often critical. 98% of founders surveyed said their prior work experience was “extremely important” to their success (according to the Kauffman Foundation’s Making a Successful Entrepreneur). According to one UK Study, at least 50% of all startup ideas come from experience gained in previous employment.
Set yourself up for luck
Luck is a huge factor and one that nobody can fully predict. Luckily, there are all sorts of things you can do invite luck:
- Lucky people network
- Lucky people pitch often
- Lucky people make plans (and execute those plans)
Execution is EVERYTHING
Guy Kawasaki said it well: “Ideas are easy. Implementation is hard.”
If you’re the first to market with a good idea, your competition will have to play catch-up. Factors like brand recognition and switching costs will work in your favor and make it harder for others to replicate your success.
Execution is a habit, it’s something you can hardwire into the DNA of your business. Make it a priority to develop a culture of action and execution.
Embrace uncertainty and risk
Starting your own business is, by definition, a journey into the unknown. If you can’t handle uncertainty, you probably don’t have what it takes to be an entrepreneur. Risk is not only an essential element of entrepreneurship, it tends to be directly related to success: The bigger the risks, the bigger the potential payoff.
Survivor ship Bias
Studies have shown that one of the clearest indicators of future success for an entrepreneur is past failure. This may sound counterintuitive, but not when you think of failure as a teaching tool. Our Instagram highlight on survivorship bias gives some great examples.
How much risk you can take depends on your business and circumstances. Buying a domain name isn’t the same level of commitment as building a prototype, for example. What matters is that you grow from setbacks and maintain a willingness try things that might not work out.
I've said it before and I will say it again. We have a great team of business advisory experts at DC Advisory Group, if you want to start your entrepreneurship journey, or take your business to the next level, we can help. All you need to do is contact us.
The information provided in this BLOG is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.