Over the course of my professional life—both in business and as a business teacher—I’ve learned a lot about entrepreneurship and what makes for a successful entrepreneur.
However, before I share my advice with you on how you can set your new business venture up for success, we need to start at the very beginning.
Every career comes with a certain lifestyle, and a set of responsibilities and tasks that make up your daily life. Before you make any big decisions about your future as an entrepreneur, it’s essential that you have a clear idea of what you’re signing up for.
What is an entrepreneur?
An entrepreneur essentially sees an opportunity and then creates a new business venture (a startup), bearing most of the risks and responsibilities, and enjoying the lion’s share of any rewards. They bet the farm and then reap the rewards.
Entrepreneurship is a broad term, because you can bring an innovation to market in virtually every industry or field imaginable. There are also big differences between being self-employed, running a small business and founding a fast-growth startup. Make sure you understand these differences.
Launching a startup is a high-risk, high-return undertaking. It requires long hours, patience, business savvy and a lot of hard work—but it also has the potential to be incredibly rewarding. If you have the drive, ambition, ‘killer instinct’ and want to be the creator, innovator, chief strategist and driver of your own business, then this career path could be perfect for you.
However, there are more ways to be an entrepreneur than creating a startup.
If you want to drive innovation, be your own boss and bring new solutions to market without risking everything, there could also be a role out there for you as an ‘intrapreneur.’ This is a person who uses the same skill set to drive innovation, lead new projects and develop new products within a large firm.
A few years ago I got to lead a large transformational change project within Target Australia, redefining how fashion items are bought and sold. That’s just one of many consulting projects I’ve worked on over the years, innovating and solving problems within large companies.
Through these experiences I’ve learned that this type of undertaking can be just as satisfying and challenging as creating your own business.
Before you choose one path, research all the options and think carefully about what kind of entrepreneurial career might be right for you. If you’re sitting on a burning idea and you’re confident in it’s business potential, then you may be on the right path to be the entrepreneur of a successful startup.
Skills you need to be a successful entrepreneur
Alejandro Cremades, serial entrepreneur and author of ‘The Art of Startup Fundraising,’ told Forbes magazine last year, “You can learn just about any of the leadership skills you’ll need [to be an entrepreneur].
What you’ve got to bring to the table is relentless grit, the determination to never quit, and the ability to keep going no matter how hard, stressful or desperate things become along the way.”
Here are some examples of the leadership skills essential to entrepreneurship that Cremades is referring to:
• Time Management
• Strategic Thinking
You will learn a lot of skills on the job through trial and error, and it is not essential for all entrepreneurs to have a university education.
However, studying important skills such as marketing and strategic management before you launch a business can help you achieve greater success, and allow you to avoid making costly mistakes along the way.
At TUA, for example, our Bachelor of Business (Entrepreneurship) provides students the chance to learn and practice many of the essential skills listed above, through a combination of classwork and an industry placement program.
Subjects cover topics such as:
• Business Communications
• Marketing for Entrepreneurs
• Venture Ideation
• Consumer Behaviour
• Customer Experience Management
• Entrepreneurial Financing
• Accounting for Decision Making
• Sales and Negotiation Strategies
• Lean Business Startup
If you already have competence across these skills and topics, then you probably don’t need to consider further study. If not, or if you want to learn any of the ‘secret handshakes’ when it comes time to pitch your idea to savvy investors, then I highly recommend filling any gaps in your skill set before you embark on such a high-risk undertaking.
How to become an entrepreneur
Creating a successful startup is a lot of hard work. You get to realise your own vision, build something out of nothing and make all the big decisions—but don’t expect to get any time off for the first few years.
Begin your journey with a realistic understanding of the work you’re about to take on, and commit to it. If you need further education, go and get it! If not, you may still need advice on key areas, so don’t be afraid to seek it out from seniors in business.
1. Choose your idea
Make sure you research your idea, before you commit to it. Look at the competition, and investigate commercial viability. Your business has to add value, if you want it to succeed. It has to offer a solution to a problem, fill a unique gap or create a new demand.
You also need to choose an idea you care deeply about. You’ll be pouring your heart and soul into your venture, so you want to be sure you’re choosing a project you’re still going to be passionate about in three years.
2. Develop a business plan
Your business plan crystallises your grand vision into a pragmatic, manageable set of strategies. It’s an essential document for all entrepreneurs to lay down the research, timelines and growth projections you’ll need to impress investors.
Typically, a business plan consists of the following sections:
1. Executive summary
2. Business description
3. Market strategies
4. Competitive analysis
5. Design and development plan
6. Operations and management plan
7. Financial factors
How lengthy and detailed it needs to be will depend on the level of risk and investment involved in your startup. The more finance you need or the higher the risk, the more detail investors will expect.
Developing a business plan requires some knowledge of the core business concepts and strategies that we typically teach in our business courses at TUA. If you don’t know how to conduct a competitive analysis, determine your target audience or develop a management plan, you may need to upskill.
Seek out guidance from someone in business, enrol in a course, or otherwise be proactive about filling gaps in your knowledge through your own reading. It’s important to get these critical elements right at the planning stage, because they will determine your success further down the track.
Although I’ve listed it here as step number three, networking is really something you should always be doing. Go to events, get active on LinkedIn, actively contribute to discussions and reach out to your peers and potential investors.
This is particularly important in the early stages of a startup, because you’ll be relying on these people to support and champion your venture.
4. Build your legal and financial skeleton
The less glamorous side of entrepreneurship is dealing with bureaucracy, but it’s unavoidable. In fact, the three things entrepreneurs cite as the most challenging when establishing a startup are:
1. Overcoming bureaucracy
2. Hiring talent
3. Obtaining finance
When you want to build a business out of nothing, you need to start with a legal and financial skeleton. Decide on a location, incorporate, consult a lawyer to learn about your rights and obligations, register for tax, set up your accounting systems and open a business account.
5. Test your idea on consumers
Once you’ve established the basics and developed a brand and a product, you can start testing your product with consumers. Use incentives to encourage early adoption (such as a free trial period), and engage in dialogue with customers as they use and trial your product. You will learn a lot of valuable information in these early stages, and you may end up with a very different business as a result.
6. Harness the power of early adopters
I cannot emphasise enough the potential power of early adopters to shape the success of your venture. Not only do they provide essential feedback at a critical stage, they also have the potential to become your biggest brand champions and your most effective marketing tools. There is a significant amount of research on this topic, but to put it as simply as possible: you need to impress these early adopters.
7. Raise money
There are a lot of different ways you can raise money for your startup; crowdfunding, family and friends, angel investment, venture capital, bank loans and business incubators, to name a few.
The most important factor in getting funding at this stage is whether or not you’ve already effectively followed the steps up until this point. If you can demonstrate from your testing that early adopters are buying and raving about your product, you can make an easy pitch to investors.
8. Scale it up carefully and market, market, market
Scaling-up is a make-or-break moment for any startup, and it should be carefully planned and researched. You have to be careful in choosing your timing. Scale-up too quickly and you may run into organisational problems - too slowly and you can miss invaluable opportunities.
You are going to have a lot to think about before you start scaling-up, such as: developing an ambitious marketing strategy to reach new audiences; duplicating your successes; streamlining your operations to cater to bigger demand; identifying your core products and customers; and ensuring you stay within budget.
Make sure you develop a detailed strategy, so you can scale up your operations as seamlessly as possible. With a lot of hard work and a bit of luck, you’ll soon be the proud parent of a successful startup.
Associate Professor Justin Pierce at Torrens University Australia (TUA).
Find out more here about the Bachelor of Business (Entrepreneurship) at TUA.