It’s the ultimate American dream: to be your own boss. The kind of boss you want to be and the kind of business you want to start will be unique to your goals, values, talents and interests. But whether your vision is to open a pet boutique or a coffee shop or run an IT firm, all paths to successful entrepreneurship have a few things in common: a good idea, hard work and some solid know-how when it comes to running your own business.
Let’s look at some ways one might become an entrepreneur. As well as what skills, education, and other training can be beneficial, especially in today’s highly competitive market.
If you look up the description of a freelancer and compare it to the definition of "entrepreneur" or "entrepreneurship," it may be hard to parse the two. A freelancer is a person who generally works independently, makes their own hours and sometimes works for multiple clients.
An entrepreneur’s role may be similar. The difference is that they have customers for whom they provide a product (think food, apparel, software and even a membership to a club or fitness center), an idea or a service.
Ideally, whatever an entrepreneur is offering is also something that can scale, or grow, beyond the limits of what that business owner can personally do or deliver day-to-day. Scale can be relative, of course, and isn’t reserved exclusively for entrepreneurs. Generally, a freelancer delivers a service or product to clients as needed, whereas an entrepreneur seeks to build something larger than themselves.
According to Indeed, there are nine major types of entrepreneurship:
This is the type a solo entrepreneur starts with; if you’re the only employee, you’re a small business owner! You may create this company from the ground up and make it into a …
Entrepreneurs running large companies have often scaled quickly due to demand from eager customers, or they have successfully raised seed funding from wealthy investors. Major household-name corporations, including Fortune 500 companies, would be considered examples of large company entrepreneurship.
Some app-based startups (like ride-sharing services or social networking companies) are scalable startups. They often start out in the technology space, raise money through venture capital firms and then scale up from small to massive over several years as they continue to add users and funds.
As a social entrepreneur, you won’t necessarily be starting a social media empire, but you may be doing something much more important, like saving the environment or humanity (or both). Social entrepreneurship likely means a nonprofit or, in some cases, a for-profit company with a goal to create positive social change.
This is a rarer type of entrepreneurship dedicated to constant innovation. An example is someone who starts a video game company and then pivots to create an innovative online legal services agency or virtual therapy practice. Entrepreneurs who are drawn to starting new companies in many industries over time are sometimes referred to as "serial entrepreneurs."
Do you have a sales mentality? If wooing, convincing or motivating people is in your blood, hustler entrepreneurship may be more your thing. Hustlers are working the phones and their network to drum up business and sign on new clients.
There's nothing wrong with being an imitator — if you put your own spin on things. Imitators look at successful entrepreneurs (or failed ones) and figure out which unique talents and ideas they could bring to the same field or idea to give it an entirely new spin.
This type requires spending months or even years studying a given industry before coming up with the idea for your company.
Did you accumulate some wealth as part of an inheritance or in another career? If so, you may become a buyer entrepreneur when you put that money into funding a new entrepreneurial endeavor. Or you might invest in a startup and other viable business ventures with exciting business plans or ideas.
One of the hardest parts about becoming a successful entrepreneur is taking that first step. While there are many complexities inherent to becoming an entrepreneur, some parts are quite straightforward. The first thing most people need to do is build or improve upon their business skill sets, sometimes through training and often through education (including management and entrepreneurship certificate programs).
All businesses begin with an idea. So, in addition to boosting your skillset, you’ll need to figure out what your business will do. You also need to determine whom your business will serve and what service it will provide. This is the fun part for many entrepreneurs, as the possibilities are almost endless. Do you want to combine two ideas (a dating app for lawyers?) or stick with a single great idea?
After you finalize your idea, you should run any potential brand names by the U.S. Patent and Trademark Office.
As an entrepreneur you may want to think about how to develop a healthy mentality. These include ways to cope with the inevitable stress and curveballs you’re likely to encounter along the way.
This is important because, as an entrepreneur, there are no guaranteed outcomes. This is why, according to GetEducated, entrepreneurs, "must also be able to handle risk. If the thought of not getting paid on a regular basis, failing to sell your product or simply falling flat on your face frightens you to paralysis, you may have difficulty dealing with the up-and-down nature of entrepreneurship."
On the flip side, if you plan for a period of unprofitability or for a busy couple of months or years, you may be better equipped to weather the storm of entrepreneurship.
Even starting out with no money might be OK if you have a hustler mentality and know how to tap your network. For example, if you can do a lot of the early work (like designing a website or establishing a social media presence), you may be able to bootstrap the early stages of your business.
Having some business law training (especially training geared toward small businesses and entrepreneurs) offers yet another advantage to entrepreneurs. It better prepares you for legal issues, contract disputes and navigating the pros and cons of potential investor offers, which can help you reach profitability quicker.
Students may be wondering what kind of characteristics make a person a good candidate for entrepreneurship. Not surprisingly, there are many.
A successful entrepreneur is:
- Eager to tackle new projects and take on additional responsibilities
- Able to see the big picture and integrate best practices from a variety of areas
- Adaptable to changing conditions and prepared for contingencies
- Someone who enjoys working across multiple areas, such as management, finance and marketing
- Good with people and eager to grow business networks and professional relationships
- Always looking for ways to improve — new ideas and opportunities, better products, etc.
- Persistent — always looking for ways to reinvent one’s business (and oneself)
There are a lot of benefits to starting a business and being your own boss. However, it’s also a ton of work. The more knowledge and skills you can develop before starting a business venture, the greater the likelihood of success. Where many entrepreneurs go wrong is by failing to plan for contingencies. These include build-out costs, regulatory requirements, changing market needs, unexpected competition, and supply chain and inventory issues.
A broad, business-related education provides an overview of core business functions necessary to own and operate a business. It also provides case studies and research from various entrepreneurial ventures. It’s important to know how these areas are dependent on each other: products are dependent on supply chains, marketing is dependent on one’s budget and financing options, services are dependent on personnel and IT infrastructure, and operations are dependent on legal requirements.
The more a budding entrepreneur is aware of these interrelationships and their impact on business decisions, the greater the likelihood they will develop a strategic business plan that effectively meets each need.
Many courses, schools, books and programs out there promise to teach entrepreneurs the skills they need to succeed. To make the most of your time and investment, look for a business or management program. Even better if the program is taught by an instructor who has started a business. They will be teaching from experience.
These types of programs may include a Bachelor of Science in Business, Bachelor of Science in Management, Master of Business Administration or Master of Management. These programs may also offer business specializations, such as analytics, marketing, human resources, financial planning or small business management. While these degree programs cannot guarantee entrepreneurial success, they let you experiment, fail and refine your ideas. They will also teach you to learn from your real-world mistakes and to keep working until you’re successful.
Planning and budgeting can greatly improve your chances for entrepreneurial success. Entrepreneur magazine suggests asking yourself strategic questions like: "What are the company’s objectives, resources and goals?" "What are the steps I need to take to hit all of these marks?" "How much time do I have based on my monthly budget to bring a product to market before I run out of cash?" The more questions like these that you can answer, the better prepared you’ll be to begin.
To grow an already operational business, you’ll need a growth strategy. When do you hire your second employee? Your 10th? What roles will those 10 workers be filling? If you think it could be years before you have the profits to hire an accountant, you should budget for a bookkeeper to occasionally look over your books. They can make sure you’re processing revenues and expenses properly.
Accountants, by the way, can be vital to handling routine tax filings for your company; these are too important and tricky for many entrepreneurs to try to do themselves. Having an outside accountant will also save you time, which can be the most precious resource of all.
Also, if you are not 100% comfortable working with computers, troubleshooting software when it goes haywire or even installing and using the many types of software you’ll need to run your business, you may want to consider learning skills in informational technology, many of which are geared toward entrepreneurs and leaders.
Whatever your plan is, study well, plan extensively and remain patient. Good luck out there!
Are you interested in becoming an entrepreneur? Check out University of Phoenix’s business degree offerings, including our Bachelor of Science in Business with a Small Business Management and Entrepreneurship Certificate.