6 Steps to Become an Entrepreneur in 2020- Complete Process

by Jasmeet Singh
1557 views

We live in times when Entrepreneurship is a career choice that most of us are not afraid of making.

Unlike our previous generations, where everyone was encouraged to find a job and settle in a life that worked in cycles of ‘Salary – expense’, we are in an era where ‘Take a Risk –Follow your dreams – Build a Business’ cycle replaces the earlier cycle.

Now, how exciting is that!

Having been a part of around ten businesses and startups, I can tell you – entrepreneurship is the most exciting and challenging thing you will ever do.

But is there a process that entrepreneurs need to follow to be an entrepreneur?

Or to put it in simple language – What are the steps to be an entrepreneur?

Yes – I know, you are as confused as I was 12 years back when I had just quit my job to kick start my entrepreneurial journey without knowing ‘How to be an Entrepreneur’.

Worry not – Regardless of whether you understand entrepreneurship or not, I promise to take you through the entrepreneurial process Step by Step.

When I started my first Business – I was as seriously lost.

One day I was doing market research and the next day I was running to my CA’s office trying to figure out the right business organization for my Business.

It was bloody, Chaotic!

Trust me – it took me a reasonable amount of time to figure out that there is an ‘order to the chaos’.

The order that comes in the form of ‘Steps’ / ‘Process’.

I use the Six Steps to become an Entrepreneur define the ‘Entrepreneurial Process’.

I have kept the steps as simple as possible to help you implement them quickly in your journey.

Let’s get started with the entrepreneurial process.​

Step 1: Assess your risk-taking ability as an Entrepreneur!

How ready are you to be an Entrepreneur?

Now whoever told you that entrepreneurship does not involve risks was joking.

Entrepreneurship – though driven by passion, involves risks.

Risks, where you might end up, broke in future or become a multi-millionaire after toiling hard for years.

So, before you start your entrepreneurial journey – I want you to sit down and assess your risk-taking abilities.

How do you do that?

The easiest method to do this is to:

  • Assess your current financial situation
  • Talk to your family members and check their comfort level around your decision

And last but not least, you can check your risk readiness by knowing your idea better.

How do you do that?

You do that by moving to the next steps of our entrepreneurial process – market research.

Before I move to the next Step, I will walk down the memory lane and share with you the story of a venture that started of ‘passion’ and not ‘readiness to be an entrepreneur’.

Around 11 years back, we started – Arrange My Party.

The venture failed because I was already running an existing venture and though we had partners in this venture, I was just not prepared to take the risk (emotional and financial) of starting a new venture.

Ultimately, the venture failed severely.

The failure of the venture ensured that the next time I put my hands into a new venture – I assess my situation and prepare a road map to ensure I am fully committed to the venture.

We understand - What it takes to be an ?

steps to be an entrepreneur

Join the List  – Get notified of latest Blogs, Free Courses & Resources directly in your Mailbox! 

Joining Bonus – Introduction to Digital Marketing

Step 2: How to do Market Research Before starting a Business

market research

Before I start explaining to you the importance of Market Research, let me ask you a question ‘Can you swim across a river from one side to the other side and finish the distance in 10 minutes?’

If I were you, I would be really uncomfortable in doing this

Why would I be uncomfortable?

Well – I would be uncomfortable because I don’t know anything about the river.

I don’t know:

  • The width of the river
  • The speed of river at the point

Most importantly, I do not know if the river has some scary Crocodiles.

Now I am scared and will sink out of fear of ‘the unknown’ than the real challenges the river might pose.

Let me give you some more information:

‘ The river has no crocodiles and In the last one year 1000+ novice level swimmers could swim across in five minutes’

And ask you the same question again.

Even a terrible swimmer like me would be jumping out of his pants (obviously, in swimming trunks) to cross this river.

If a novice level swimmer can cross the river in 5 minutes – I can definitely do it in 10.

Did you notice the change in attitude and emotions before and after the information was provided?

This is the power of ‘Knowledge’.

A famous quote that comes to my mind at this stage is ‘We fear the unknown’.

I can not agree any less with the above quote.

Similar to our real life, we fear the unknown in Business.

The solution to removing the darkness and knowing your idea better is to do market research.

Imagine starting a business with knowledge of your market size, competitors, customer behaviour, etc., etc.

One of my close relatives started a multi-million dollar hotel in a small city in India, assuming that the fancy hotel will lead to customers paying a premium to host their parties there.

Do you know what happened to the venture?

It failed miserably in the next four years and today, they are down by a few million dollars.

Now they could have easily avoided the situation by studying the market around them and doing proper market research.

That is the power of Market Research.

Not only does Market Research prepare you better to take risks, but it helps you get ready to move to the next stage of the Step to becoming an Entrepreneur – How to create a Business plan.

Step 3: How to create a business plan for a small business

Action List

I cannot emphasize the importance of a business plan for a small business or a startup.

It is pure common sense to have a map before embarking on a journey.

Without a map, you are a shit navigator who will get lost.

The same goes for the entrepreneurial journey.

You need a map to navigate through the entrepreneurial process.

In our case, the map is – business plan.

I know you are scared of the word ‘Business Plan’ which is quite understandable.

The examples of business plan they have on the internet are enough to scare guys like me who have spent 12 years running a business.

You are just new to the world of entrepreneurship and should not go through the torture of creating a 100-page document.

It’s annoying and scary.

In my opinion, until and unless you are applying for a government loan, you do not need a 100-page document.

Instead, you can just get started with a simple 5-page document that is supported by a spreadsheet of the financial plan.

Let me give you some pointers on putting together a simple business plan.

A simple business plan should have:

  • My analysis of my market including market size, customer behaviour, competitor (you get all the information from market research)
  • The money that you will need as operational expenses (OPEX) and capital expenses (CAPEX) cost
  • The break-even cost
  • How the Business will make a profit

Nothing of what I mentioned above is set in stone.

You are free to change the plan as you start your Business and move along.

Before I move to the next Step, I will reiterate the importance of a business plan.

The importance of a business plan lies in the fact that you can set up a road map which tells you about everything, including money.

Tomorrow, you know when is it that you will run out of money if you do not make enough sales or what worked and what did not work based on your initial assumption.

Do not forget the hotel business failure I mentioned in market research.

Had they done proper market research, they could have started their Business smartly or probably not started had they known:

  • The average room occupancy in hotels in their segment
  • The average running cost
  • The case study of some failed businesses
  • The number of competitors in the market

At the end of the day, the business plan is usually a road map that relied heavily on your market research.

Step 4: Finding the right Business Organization for your Business

Right business type

 

I am confused!

That’s what I told my Chartered Accountant when I was to decide my first Business’s registration.

He gave me so many options that by the end of our discussions, I was scratching my head thinking ‘which one is the right choice for me’.

Like a Good CA, he explained to me his charges, paperwork and the government fees required to register a business type.

Yet, I was confused.

I was confused because I did not know the relevance and impact of each business organization in business terms. (Proprietorship, Partnership, Private Limited, LLP Enterprise, Public listed company)

I went ahead with proprietorship as it seemed the cheapest (in terms of registration) and did not cost a bomb with government and CA fees.

Was I Right?

No– I wasn’t right because within a few months we had to shift to private limited as it was a requirement to be a private limited company for filling some government tenders and getting empanelled with big clients.

This is why you must understand the different organization structures and the one suites for you to start your venture.

Step 5: How to take your Business Online

Internet is an indispensable part of our lives.

Consider this – an average individual spends more than 5 hours on the internet daily.

Today, no one is out of reach of the internet.

It is a medium that has reached across different geographies, age groups, gender, interests.

From all that I know – my dad, granddad and everyone from their generation are as active on social media as a teenager who lives two blocks away from their home and lives – breaths internet.

I cannot imagine a life without the internet and the same holds true for businesses today.

As a Business owner, who sells directly or indirectly on the internet your Business needs an internet presence to help you with brand awareness.

Brand awareness that can help you get better employees, target customers and most importantly let your Business’s online brochure be readily available to anyone who wants to know about your Business.

As per my experience, the basics of taking a business online are:

  • Buying a domain name
  • Getting a platform on which your website should be developed
  • A hosting space where the website will be hosted
  • Professional email service to ensure your emails are sent from an email id that is linked to your domain name
  • A social media presence

And then, there are advanced concepts like digital marketing, etc.

We will not go into them now.

As of now, all you got to know is – You need to take your Business online and it is as important a step as anything else to help you become an entrepreneur.

Step 6: How to hire employees for a new Business?

How does a small business or a startup like yours get good employees?

You might think that the market is flooded with employees which is not a wrong assumption to have.

Every time you post a job on a job portal; you do get a strong response.

Don’t you?

However, there is a challenge that no small business or startup wants to address.

Let’s address the elephant in the room.

The market is full of candidates but the market is not full of suitable candidates.

And suitable candidates want excellent packages!

Bottom line is – You, my friend do not have the fortune to splurge on good candidates (until you have a rich dad or have robbed a bank 😊).

Let me engage you with my recruitment challenges as a first-time entrepreneur.

As expected due to lack of funds, we could not attract the right talent.

So to make for the lack of suitable talent, we hired average talent and trained them to become good from average – only to see them move to better jobs.

We felt cheated and disappointed!

Months of hands-on training had gone down to drain.

We again went back to square one and started training a new bunch of candidates to cover their journey from average to good.

For a good few years, we would train candidates and see them leave us for good companies.

We went in cycles until I sat down and got my head around the problem.

The problem wasn’t with the candidates.

Our Business was the problem.

The employees upskilled themselves from average to good, but we as a company did not grow as a company that could pay them the market rates.

They were now much more worth than what we hired them at—thereby commanding a better salary.

We could not keep up with the job market’s pace.

I know it’s an undeniable problem that is frequently faced by all growing companies and not all companies go on to become the multi-million dollar enterprise.

Having said that – I encourage you to put together a short plan or some notes in your business plan to compare the growth of company v/s growth of old employees.

No one likes to be stuck to a company that hasn’t grown for years and bring their career to a standstill.

And that brings us to the end of the entrepreneurial process – the six steps to become an entrepreneur.

Before I bid adieu, I would like to make one more addition to the six steps. Something I refer to as a ‘bonus step’.

The bonus step is: Business Automation Tools

As I previously mentioned – it is a pain in the a** to find suitable candidates for small Business and startups.

One of the possible solutions for the challenge is to hire fewer people.

How do you do that?

You do that by shifting your focus on automating your Business as much as possible.

Your aim should be to build an ecosystem where you have the maximum efficiency with minimum investment.

How do you do that?

Let me give you an example.

If I were to do digital marketing for my Business, I would either hire an employee or I could just use a SAAS based tool to handle 50% of the work my employee could be doing.

I personally would buy an online Digital Marketing tool like SEMRush to manage your Digital Marketing Campaigns.

They cost roughly USD 50/month. Now compare it with hiring a good employee to do the job and you are looking at a lot more than what I wrote above.

The same goes for buying a social media management tool or a project management tool or an email marketing tool.

Precisely speaking, anything that can be done by machines 😊 using the internet is the right choice for you to select than hire a bunch of employees to do the same job.

Most importantly, the real-time reporting from these tools keep you on top of things and gives you exposure across all parts of your business operation.

And – that’s it!

We are done with the entrepreneurial process of starting a business.

Feel free to drop a comment at the end of the blog.

We understand - What it takes to be an ?

steps to be an entrepreneur

Join the List  – Get notified of latest Blogs, Free Courses & Resources directly in your Mailbox! 

Joining Bonus – Introduction to Digital Marketing

You may also like

5 comments

Chahak Jain September 11, 2019 - 8:34 pm

Hi Jasmeet,

Guides to be an enterpreneur wow!!! i love this article. I appreciate that you explained everything about a startup step by step making it easy to understand. This piece of information will help students who wants to be an enterpreneur in a great way , one can find everything about a starting a startup here.And mentioning some of the enterpreneur names at the end will create trust in the readers mind.

But as i read this blog one question comes in my mind what if after doing everything like extensive market research, good financial etc, a startup becomes a failure?

What do you think about this, failure of a startup?

Reply
Jasmeet Singh September 19, 2019 - 11:37 am

Hi Chahak,

By researching better you decrease your probability of failure. However, startups fail even after market-research because of multiple reasons. This blog should be of help to you:https://www.lessonsatstartup.com/2016/05/09/why-startups-fail/ in getting an answer to your question.

Reply
sumit thakur April 4, 2020 - 4:05 am

Being afraid of failure is the key for success for any Entrepreneur. Yes we fail, we fail again but the thing that make us different from every another guy is that we never give us and that why we are called Entrepreneurs 🙂
Thanks for such a classic article 🙂

Reply
Jasmeet Singh April 5, 2020 - 12:19 pm

Rightly said, Sumit.

Reply
What is holding you from becoming an Entrepreneur – Startup – Small Business Resources, Advice & Growth hacks April 5, 2020 - 10:00 pm

[…] So what holds people from becoming an entrepreneur: […]

Reply

Leave a Comment