A comprehensive but simple guide on how to become an entrepreneur and get started on your first business. Learn the basics of entrepreneurship in 9 steps – with no money or experience necessary.
How to become an entrepreneur? Well, easy. Just open a travel blog, or start selling lemonade in your backyard.
The real question is of course, how can one become a successful entrepreneur?
Learning how to become an entrepreneur is a little bit like learning how to become good at a sport.
You can get a couch to give you some magic bullets and guidelines, but at the end, you're going to have to do the heavy lifting and hard work yourself.
In an attempt to summarize the most important aspects of succeeding as an entrepreneur, I've created this step by step guide on how to become an entrepreneur.
I don't have all the answers, but I've been an online entrepreneur for the last 12 years and did learn a few pitfalls that you can hopefully avoid.
This guide is in no means the full complete guide on entrepreneurship, but hopefully it will get you started and induce some action.
In this article
Things to know about becoming an entrepreneur
Who is an entrepreneur?
Before we jump into how to actually become an entrepreneur, lets just very quickly declare what an entrepreneur is – for the sake of this blog post.
The Oxford definition of what an entrepreneur is:
“A person who sets up a business, taking on financial risks in the hope of profit.”
The only thing to add here is that today we don't really need to take that much of a financial risk.
There's many businesses you can start that barely requires any up front investment (affiliate marketing is how I started). You can also raise money from an investor without personal risk.
So, the risk today isn't that high for most businesses.
If you want to be an entrepreneur today, the tricky part is more about finding an area where you can provide value and satisfy demand.
What's the average salaries for entrepreneurs?
In case you're wondering how much entrepreneurs actually make, here's a table listing the average salaries for entrepreneurs across the globe.
The average salary is pretty high, but most entrepreneurs aren't making much more than $50 000 per year, which is a surprise to many people.
|United Arab Emirates (UAE)||$2722|
*Data in this table is based on various sources and reflects the average salaries for entrepreneurs and founders.
Do you need a degree to become an entrepreneur?
The short answer is no. You don't need a diploma to become an entrepreneur.
In fact, I personally wouldn't recommend anyone to go to school to become an entrepreneur, unless it's a very specialized education program that is inline with what you want to focus on.
However, you do need to be learning. Being an entrepreneur, you need to know a broad spectrum of topics related to running a business.
You don't need to a jack of all trades, but you need the basics in accounting, marketing, technicals etc.
In my own experience, school isn't the best way to learn the practicality of these traits.
You usually learn them as you go about building your business.
The 9 steps to become an entrepreneur
I'm going to guide you through each step of becoming an entrepreneur.
Have in mind that every entrepreneurial journey looks a bit different, and there's no right and wrong place to start.
But one must start – and unfortunately most people dreaming about becoming an entrepreneur never do.
Here's 9 steps that will help you to get started and give you a general idea of the process of how to be an entrepreneur.
Step 1 – Figure out if you really want to be an entrepreneur
Are you sure you want to be an entrepreneur?
It may seem like this question has an obvious answer, but think again.
Being an entrepreneur is not better or worse than being an employee. It's just different.
There is certainly the potential to make a lot more money than being employed, but most entrepreneurs don't end up on the higher end of that spectrum – most entrepreneurs makes a pretty average salary.
One thing is for sure, not everyone in the world should be an entrepreneur.
That being said, if you are cut out to be an entrepreneur, you can and should not work as an employee for other than just financial reasons.
You have a certain kind of energy and creativity that just won't be utilized in most traditional corporations, and that will leave you frustrated.
1.1 – The misconception about “The Entrepreneur Lifestyle”
Too many people are dreaming about the entrepreneur lifestyle, imagining themselves working a few hours per day, then sipping coconuts on the beach the rest.
It just doesn't go down like that.
Sure, you might get there one day (but even then, you'd be bored out of your mind – if you're a true entrepreneur), but the road there is often very long.
And what dictates whether or not you should become an entrepreneur, is whether or not you're willing to take that long road.
If you love challenges, responsibility, and don't mind pain and hustle, chances are good that entrepreneurship is for you.
However, if you shake and fret only by the thought of working 14 hour days, without seeing results, for, yes.. potentially years.
Then you're going down the wrong path.
Entrepreneurship is for people who don't mind that struggle.
1.2 – Are you cut out to be an entrepreneur?
Before continuing this guide, make sure you check this list.
Thrives with performance based salary.Being an entrepreneur, you get paid by performance. If you can't produce value enough, you won't get paid. Income can be very unstable at times.
Love innovation and creative work.Being able to solve complex problems is why you essentially get paid. To do that, you need to use your creativity a lot, and always be innovative. Good news is that most people have this faculty – they just haven't discovered how to use it.
Have higher energy than most people.This is not a game for the weak who values comfortability over progress. Entrepreneurship can at times require tremendous energy. If your ship is sinking, you're gonna need to put out maximal effort to stay afloat.
Prefers more freedom over more money.Many entrepreneurs ends up making ridiculous amounts of money. But it wasn't their goal – at least not their primary one. Most people who started their own ventures did so because of freedom, and lacking it wasn't an option.
Have great resiliency and patience.It's very likely that you might be working hard for a long period of time without seeing any results. Succeeding as an entrepreneur requires a high level of resiliency and patience.
Enjoys building things.Entrepreneurs are artists and architects. They are all about finding better ways to do things and don't mind carrying stone after stone all day long just for the sake of building something.
Most importantly: being action oriented.The thing that really separates entrepreneurs from A-level students and top performing employees, is not their skillsets, but their ability to actually get stuff done. To succeed as an entrepreneur, you need to be a person that makes things happen, no matter what excuses you can find.
You're an entrepreneur if you're a person who
Step 2 – Choose a niche & market
Finding a market and picking your niche is usually where people get stuck, and the reason people who should be entrepreneurs, never becomes one.
Don't be one of those people.
Let me try to help you get a clearer perspective on this whole thing.
2.1 – How to find a business idea?
Forget everything people told you about how to find a good business idea.
You have with high certainty been given a false picture of how good business ideas comes about.
You might have a picture where you and your buddies are casually enjoying a beer where one gets this lightbulb moment where a magical idea just appears – then you go home and open the business and make millions a few months later.
Almost never does this happen.
It doesn't really happen by sitting at home brainstorming with pen and paper either.
For the most part, ideas develops gradually.
2.2 – Find your idea by action
Ideas comes from action and engagement.
Real ideas are born when you stop thinking and start doing. It doesn't mean you should open up a business without any plan whatsoever, but expecting that you'll be able to create a master-plan without taking the first steps is highly unrealistic and a common mistake caused by the waiting-bias.
Not many of the top 500 companies in the world today are still operating on the exact same business idea as when the company started.
One thing leads to something, then leads to something else, and the idea keeps developing with time. The longer the company exist, the better the idea becomes.
So to summarize, you don't need a crazy idea to get started.
You are way more likely to succeed if you learn to take action first, engage with your market, execute, adapt to customer feedback, and continuously work on perfecting your idea.
2.3 – Choosing a niche where you can make a difference
One of the major factors to whether or not you're going to become a successful entrepreneur is your ability to select the niche where you can make a difference.
Forget the billion dollar business ideas. This is not where you need to put your focus.
To become an entrepreneur, your focus should be figuring out where you can provide value to people.
That starts with asking yourself what you are really good at.
Alternatively, you can choose something that you have a very strong passion for and want to become really good at.
I started making money online from Adsense if you want to read the story, and that later got me into affiliate marketing.
2.4 – Things to have in mind when deciding
Finding your niche takes time and sometimes you'll end up changing your mind multiple times. That's okay and part of the process.
Here are some main keys to picking a good niche.
You will enjoy working in this fieldYou don't need to love every minute of it, but you need to have a general passion for the topic you're dealing with. This will come across in everything you do. The biggest failure is to become successful at something you don't like.
You have expertise or an edgeIt has to be a niche where you can utilize your strengths. Either natural talent or a field that you started learning very early about. It doesn't mean you have to be the best of the best, but you can't build on weaknesses.
You have an idea to provide valueProblems exists in every niche, and it's your job as an entrepreneur to pick one and figure out a way to solve it. We'll talk about this more in-depth shortly.
People need to be willing to spend moneyDo some research (usually you can just go with common sense) to get an understanding if people spend money here. The good news is that most niches can be monetized in one way or the other.
Keys to picking the right niche (for you)
Step 3 – Figure out how to solve problems & provide value
More importantly than picking the right niche, is to being able to bring value to your niche.
Elon Musk says:
“You get paid in direct proportion to the difficulty of problems that you solve.”
That's a great quote – but don't let it discourage you. You don't have to solve world hunger.
All you need is USP.
Unique selling proposition.
Basically, figuring out how you're gonna provide value to your customers.
3.1 – How to provide value
There's no such thing as something for nothing. If you want to become a successful entrepreneur, you're gonna have to figure out a way to assist the world.
How to be an entrepreneur simplified:
- You need to solve a problem.
- The harder the problem you solve, the more value you'll provide.
- The more value you provide, the more money you will make.
- The more money you'll make, the harder problems you can solve.
So for new entrepreneurs, it all begins by spotting out a relatively easy problem that you can afford and are capable to solve right now, and then work your way up.
The more advanced entrepreneur you become, the more difficult problems you solve.
But take one step at a time.
Many entrepreneurs think they need to start with something big or complex. That's not a good outlook when taking on the entrepreneurship challenge.
3.2 – What solving a problem means
Solving a problem means satisfying a demand.
This can actually be quite simple, and you don't always have to literally fix something.
Solving a problem can also mean:
- Save people time or money
- Give entertainment value
- Connect people
- Inspire people to grow
The hard part is to identify a problem that you can solve and where you can have a competitive edge.
That's why it's completely essential that you know your industry inside and out, so that you're able to simulate the demand of a real customers – and thus understanding what problems they are experiencing.
3.3 – Adding value to your customers
Here's a list of how you can help your customers.
Save timePeople love to save time. Make things easier and faster. If you build a taxi app where the average waiting times is 3 minutes instead of 7 minutes, people will love your business.
Save moneySave people money on their purchases either by offering competitive prices or by comparing products or service.
Entertainment valueOffer entertainment value and you'll attract a lot of eyeballs.
Fix a unique problemAll niches have undiscovered problems. Find and fix those.
Better qualityPeople are drawn to quality and things that seems more luxurious.
Increased convenienceMake your product more convenient to use. Simplify and package it better.
Ideas on how bring value
Step 4 – Picking a brand and domain
This step is about finding a brand and picking a domain name.
When it comes to choosing a name for your business or brand, there's no right and wrong names. You can most names work.
The most important thing is that you know what your brand will stand for and suit your business activity. This, requires some creativity on your part.
However, there are some more practical questions you should ask yourself and things to have in consideration before choosing a name.
4.1 – How to find a good name
Finding a good name requires a lot of patience, creativity and a bit of luck. These days, most good names are taken.
Let your mind wander long enough and sooner or later you will come up with a name that you love – you just have to brainstorm quite a bit to get there usually.
Here's some basic tips to coming up with a good name:
- Spend 30 minutes brainstorming on different names. Start writing up different words that you associate with your future brand, and see how you can play with the words to make that into a name.
- Use name generators. I personally like to play around with Namelix, not to get names, but to get ideas that I can expand on.
- Don't dwell too much, and don't pick a name too quick either. Make a list of different names that you find acceptable, check back on the list a few days later and see which you like the best.
4.2 – Buy existing or find available domains?
Regardless of what business you're opening, you most likely want to get your hands on the domain name.
First question you need to ask: how much do you want to pay for your name?
You have two choices:
- Buy a pre-existing domain.
- Find an available domain for $10 per year.
If this is your first business, I recommend that you find a name that is available.
When starting your next business, consider getting a premium brand.
4.3 – Check availability
You might need to spend some time to find a good name that's actually available.
Even though it's a bit tricky, eventually you'll find a good name.
You can do that here:
If you're not interested in the domain, but in the actual legal company name, you'd need to check your local register.
4.4 – Brand or keyword?
Do you want to build a name based on keywords, or do you want build something more brandable?
Using “MountainBikesForKids.com” can work well in many ways, but you'll have a hard time turning it into a recognized brand.
Upsides of keyword names:
- Everyone knows what your business is about.
- Google might rank you higher on keywords related to your name.
- Conversion rates might be higher.
Upsides of brand names:
- Easier to gain trust and get recognition.
- Easier to expand to more products.
- Looks more professional.
4.5 – Local or global?
Should you go with a local or a global name? It depends what your plans are, and what market you're in.
Upsides with local names:
- Good if your local market has potential enough
- People in your country will probably feel more familiar with the brand.
- Higher trust, which might affect conversion rate
Upsides with global names:
- Good if you're in a smaller niche that doesn't have too much potential locally
- Ability to expand to new markets with rebranding or creating new brands
- You can become recognized worldwide
4.6 – General guidelines when choosing a brand
Here's a few general guidelines that you can have in mind when finding a brand. You don't necessarily have to tick each one of these, because it really depends on your industry and goals.
Simple namesAvoid confusing or complicated names. Despite how intelligent a long and complex name sounds to you, most people are more attracted to simple names. There are exceptions, but in general, the simpler, the better.
A name people understand and can pronounceStay away from names that might sound clever to insiders, but none else really understands. People generally prefer names with words that feel familiar. Amazon for example, is easy to remember. Berkshire Hathaway, another of the world's largest companies, is not nearly as known despite having the same revenue.
A name that explains what you doIt might be an edge if you can find a name that explains what you do. “A Man With A Van” is a great example of a name where people instantly associate it with moving.
Names that trigger emotionsSome businesses can really benefit from having a name that awakes emotions. If your cat is sick and you see the website “catrescue.com” – that might appeal to you more than “cutekitties.com”.
Avoid long namesAvoid long names overall – no more than 20 characters. The shorter the better.
Don't use –A practical tips is to avoid the “-” symbol, both in your official company name and domain.
Overall guidelines (apply when possible)
Step 5 – Launch fast & execute on your idea
Being an entrepreneur means that you will fail occasionally.
There's nothing wrong with that and you can't completely avoid it.
So instead of trying to avoid failure, the game plan should be to fail as fast as possible.
That means you shouldn't be afraid to fail, but once you see that something isn't working, be fast to move on.
Let me stress: you really need to learn to enjoy the process, learn from your failures and move forward quickly – if you want to make it in this game.
5.1 – Experiment with minimum viable products
You can map out the best business plan, do in-depth market analysis, create an astonishing product, hire marketing experts, set up a sales funnel, only to find out that people didn't need your product, or you didn't succeed in making them understand that they did.
That's why it's better to launch fast and execute on your idea as soon as you got what is called minimum viable product.
Minimum viable product means to build the core functionality of your product and then test if people like it.
A rule of thumb is to get 80% of your product done, and then go out and test it, in various ways.
You should not necessarily expect massive success on a MVP launch, because you do need to perfect your product or service before it will “take off”, but the idea is to just check that it's not a complete failure, and that it generates some interest.
5.2 – Conducting micro experiments
Once you have your MVP ready, you need to conduct micro experiments to confirm that it works (at least confirm that it doesn't suck completely).
This is essential because you don't want to continue developing a product just to find out that it has no value for the real market.
Ideas on conducting the experiments:
- Generate leads pre-launch.
- Try giving it away for free.
- Run a social media ad to see the traction.
5.3 – Building a real product
Build a good product, and it will market itself.
That's a phrase you have heard entrepreneurs say. And it's true.
If you can create something solid that offers high value, people will stand in line to do business with you, and you won't have to spend as much time and money on marketing.
So that should definitely be your long-term goal.
But you'll only get there when you learn what the actual demands are, and get the vibe of the industry.
After you have received some initial feedback and talked to your first customers, you'll have a better feel for what you do good and what you can improve.
Take this data and create a roadmap of how you're going to improve your product and make it into something amazing.
Make it your daily mission to steadily make your product into the most outstanding one in the market.
5.4 – Keys to building a good product
It's up to the entrepreneur to understand what makes a good product in their specific industry, and you need to create a strong vision for that.
If you came to this post wondering how to be an entrepreneur, here's the answer:
See the problems people are encountering, and have a vision to create a solution for that problem.
Here's some general guidelines that might help steer you in the right direction.
Don't forget UI & UXBeing able to package the product in a neat way is a very important step. How you build the user interface is going to determine how the user experience is.
Create a product roadmapA product roadmap is similar to a business plan, but for your product. Clarifying the vision and direction of your product will make it easier to map out the development process.
Focus on one productMore products is not always better. It's a common mistake to dilute your energy and focus on building multiple products at once, making them all mediocre at best. Focus on building one really strong product first.
Make it simplePeople love simplicity. Sometimes it's more powerful to think about what features you should remove rather than what to do. Focus on your core functionality at first and move on to more advanced functionality later.
Communicate with your customersYour customers have a better idea what they need than you have. Get customer based feedback continuously and make the product about them, not you. This does of course not mean to blindly listen to every complaint, but when you see an overall trend, don't ignore it.
Ask if you would use your own productA classic but powerful tip is to simply ask yourself if you would want to purchase your own products. If you're not enthusiastic about your problem, your customers won't be either.
Examine value propositionMost builds what already exists on the market, and that's why they are average. If you want to get to the top, you need to carefully examine how you're going to do things differently and provide real value.
Tips when building your product
Step 6 – Setup marketing channel(s)
Finding a good source of customers is one of the most important aspects of creating a profitable business and becoming a successful entrepreneur.
There's a ton of ways to get clients and customers, but it all depends on your business, and it's crucial to find the best channel for you.
Once you nailed down the fundamentals in your product, marketing is the step you should experiment the most with until you find something that gives you good results.
6.1 – Get the first customers
Before jumping in too deep in a specific channel, you should get some first customers.
Even though you already conducted some experiments to know that your product have some traction, you need to know that it will work on real customers.
This will also tell you a lot about what your customers really think about your product, and hopefully give you some feedback so that you're able to fix problems before spending too much of your funds on marketing that won't work because of fundamental flaws in your product or service.
Ideas to get your first customers:
- Peer group. Ask friends and family who might genuinely be interested in your product.
- Social media. Let your followers on social media know about your launch.
- Find relevant people. Go out and find specific people that you believe might be interested. Perhaps try a pitch on LinkedIn through DMs.
- Cold approach. Try sending out cold emails to businesses who should need your product and see how they respond.
- Network. Go to seminars and conferences related to your industry.
6.2 – Scaling up your marketing
Once you're confident that your product works and meets the expectation of your customer, it's time to to scale up the marketing and get your business going for real.
This is the fun part of becoming an entrepreneur and where you can start to make some real money.
However, this step won't work unless you know for sure that you have a product that works – so don't bother going here until you are sure of that.
The first step to scaling up your marketing is to find a channel that gives you profitability and ROI (return on investment).
Many times new businesses throws all their funds into one marketing channel, that “should” produce sales. But then it doesn't, and there's no money left – and this is where businesses end before it's even started.
One thing I learned as an entrepreneur is that there's a certain randomness factor to marketing and experimenting is the only way to really know what works for your specific product.
Follow this procedure:
- Experiment with different marketing channels.
- Choose the best one, optimize ads and strategies until you have reached profitability (preferably 20% margin).
- Use sales revenue and re-invest into this channel.
- Continue fine-tuning and once you are ready, scale up.
6.3 – Finding your marketing channel
What marketing channel works best for you will depend on your product, so you need to test different methods to figure that out.
Here's some marketing channels you can try out.
Social media marketingAn easy and cheap way to start getting your product out there is to build a presence on social media. You can offer valuable content that creates engagement and traction, which in turn may result in paying customers.
Search engine optimizationUtilizing SEO principles to your website can potentially be one of the best best channels long term – depending on what you're selling. If you have a website, I strongly recommend to apply basic SEO and learn how you can create a nice stream of traffic from relevant keywords.
Banner adsBuying traditional banners and ad space still works on various media. Check if relevant companies in the industry are offering banner spaces on their website.
Affiliate marketingJoin an affiliate network and get publishers to promote your product for commission. Using affiliate marketing can be a highly lucrative model for many businesses, especially digital products.
Guest bloggingMany websites will let you guest post in their blog if you can provide value to their readers. If you're able to provide expert content on a specific topic, reach out to relevant media and blogs to ask if they are accepting guest posting.
CPC AdsCPC stands for cost per click and means that paying on a click-basis for the traffic coming to your website. CPC networks like Google Adwords is an easy way to your first customers.
BillboardsThe good old billboard is great for short-term results but can work for branding and getting your name out there. People trust companies advertising on billboards more.
Word of mouthThe best marketing channel in the world of marketing is where your customers are so happy with their product or service that they simply do the marketing for you, by telling their friends and family about you. You should ask yourself: how can I make people want to recommend my product to others?
Different type of marketing channels
Step 7 – Start building your network
No matter what business you're in, an essential ingredient in becoming a successful entrepreneur is knowing the right people.
The cliche that it's more about who you know rather than what you do holds true to a large extent.
A good networker will be more able to attract the right partners, employees and clients.
7.1 – Why networking is so powerful
Networking doesn't necessarily only mean that you're targeting rich people who could potentially fund your business one day.
Networking serves many purposes and when done right, will have a very big bang for the buck.
The benefits of networking:
- Collaborate. Finding ways to collaborate (resource-sharing) with your competitors and inducing win-win situations instead of competing with them.
- Get insights. Learning from people in your industry, staying up to date with the newest trends and getting new external input.
- Help others. Helping people in your industry can be really powerful, because most people return the favor tenfold one day.
- Find clients. Recruit clients by building relationships instead of cold-calling and contacting random people.
- Partnerships. Find partners who you can start new collaborations with.
- Get mentors. Find mentors and advisors who can help take your business to the next level.
- Look for investors. Finding investors when you're casually networking is often times more powerful than going the traditional routes of getting funded.
- Establish presence. If you're attending the main industry events, people will just assume you're one of the big players. Just being present is a form of marketing.
It's hard to understand the real benefits until you have launched several businesses and realized that much of your success could be attributed to your network and resource-sharing.
7.2 – How to network effectively
Networking doesn't come naturally for all of us and you do need some skills if you want to get the best benefits.
To become an effective networker, there are some principles you should consider applying.
- Help others first. The easiest way to get value from people, is to give them value first. People open up when they see you're providing value to them.
- Connect people. Be the connector who pairs up the relevant people who are looking for each other. They'll always remember you.
- Create a connection before asking. Focus on building the connection with people, rather than trying to get a tangible outcome. It's fine to have one in mind, but if that's your only objective, the relationship might seem artificial.
- Reconnect. Many times we meet people, share interesting ideas on how to collaborate, but it just fizzles out and comes to nothing. Ask them out for coffee or lunch if you see good potential.
- Be the one who approaches. Don't be afraid to put yourself out there. People will respect you for being the one approaching.
Continuously work on becoming a better networker and with time you'll see that it leads to very good things.
7.2 – Places to network
You can network in most places in the world – there's no excuses. And if you really can't find people, consider moving to where they are.
(I realized this early on and moved to Malta when I was 19 where I found most of my network of entrepreneurs.)
Here's some ideas on places to go to both online and offline to start networking more.
Seminars and conferencesAttending seminars and conferences is a pareto-efficiency. It's the best place to casually mingle with relevant people, and at the same time, learn more about your industry from the speakers. If you don't have any seminars in your city, go travel.
Socialize with your existing networkWe often overlook our existing network and don't realize that there might be a mutual opportunity. Start with the people you know.
Facebook GroupsThere are a lot of groups on Facebook with people who are there because they also want to network and find win-wins. You can get your questions answered, help others and find other practical ways to collaborate.
Host an eventPlan a networking event yourself (preferably with food and drinks). As a host, people respect you and will thusbe more open to find collaborations with you.
Industry meetupsFind smaller local events. Join websites like Meetup and check Facebook Events for any meetups being hosted.
Step 8 – Learn the habits of successful entrepreneurs
Becoming an entrepreneur, you'll need to change how you see education and learning.
To grow a successful business, you need to grow yourself.
Learning the habits of successful entrepreneurs is a vital part of getting there.
This continuous process is what will take you from merely being an entrepreneur, to actually living the life you want. The entrepreneur lifestyle is much more than just making good money.
Also read my post on the key take-aways from the world's 20 richest people.
8.1 – Setting up your life for success
Many people ask me how to become an entrepreneur – what they need to change in their life and what they need to learn.
My response is: start with changing your lifestyle.
It's not a job or career.
Being an entrepreneur is a lifestyle, not just a profession. Your life will be more integrated with work, and what you do on your free time, will affect your ability to do important work.
It's highly important to make the decision that you are going to become successful in all areas of life, not just financially.
Some entrepreneurs completely neglect their health when starting out, in hopes to make money. They will then have to use their money to fix their health.
After my 10 + years of being an entrepreneur, I realized:
If you're healthy, you'll make more money – short and long term.
Same goes for your happiness and social life. Striving towards success these aspects of life will rub off on the wealth aspect of your life.
Having financial success means nothing if it can't be used.
- You spend time with friends and family.
- Your diet is optimized.
- You have a workout routine and daily physical activities.
- You take time for yourself and do exciting things outside of work.
8.2 Balancing input vs output
As an entrepreneur, you're always going to be in learning-mode.
The more you learn, the more you earn, as Buffet says.
However, the biggest dilemma in entrepreneurship is finding the fine line between over-learning and under-learning.
If input is too high, you just won't be able to do enough meaningful output. Having no input means you won't be able to do much meaningful output either.
Tips to keep input/output balance:
- Consume what's relevant for the moment. Learn about the things you're going are working on right now or planning to do the coming days. Stacking up a ton of information for a potential future use isn't very effective.
- Apply what you learn immediately. Keep a strict mindset about actually applying what you're learning.
- Read only from the best. There's a lot of knowledge out there, and many times you'll find so many conflicting theories in any given topic. Try to stick to the top authors and people who have accomplished something – as those have higher odds of being accurate.
- Read, contemplate, study. Don't be afraid to reread or take a course twice. First level of understanding isn't enough for you to make it instinctual. Study and contemplate the material you're consuming to create a deeper knowledge.
- Don't get too much input at once. If you spend 3 hours reading, you'll get too much information at once. Personally, I love reading 20 minutes in the morning and 20 minutes in the evening. That gives me enough time to get a nugget from the book, video or podcast.
- Consume what you enjoy. The best way to learn is to consume material that you enjoy – this is when your brain has the highest absorption.
- Learn from different sources. Try to get input from various sources of knowledge. Watch inspirational movies, read classic books, listen to funny podcasts, and take step-by-step courses.
8.3 – Habits of highly successful entrepreneurs
Here's some of the most important habits that a lot of successful entrepreneurs are incorporating in their daily lives.
They are careful who they spend their time withYou will become the average of the people you spend most time with – so be well aware of choosing carefully who you hang out with. This can have tremendous impact.
They know how to motivate themselvesYou're gonna go through more obstacles than you can count, and your ability to motivate yourself through those hard times will be directly correlated to your success.
They build on strengthsYou should focus on identifying your strengths and passions – and really build on those. Outsource (or plan to) what you're not good or and don't like.
They are good at dealing with peopleAs an entrepreneur, you're always going to be dealing with people. Employees, partners, clients, investors will all bring difficult situations to you, and being able to deal with those is vital.
They don't nitpickEntrepreneurs are highly action-oriented and knows how to control their perfectionism. While they don't get rid of it completely, they're not getting paralyzed by minor details.
They take calculated risksIt's definitely an absolute necessity to take risks in the entrepreneurship game – but they can't be foolish ones. Always calculate the risk and weigh it against the potential upside.
They don't multi-taskIn order to get important work done, you're gonna need deep focus. Avoiding multi-tasking is the best way to accomplish that.
Traits of successful entrepreneurs
Step 9 – Raise money and scale it
Raising money can scale your business faster.
That being said, if liquidity is not a bottle neck (but rather you need to develop better ideas, systems and processes), you shouldn't go out and raise money just because you can.
9.1 – Be aware of raising money too early
If your business is not ready for growth – for any reason, then throwing money at the problem could just cover up fundamental flaws in your model and later on cause problems.
You should raise money when:
- You have a proven business model that works.
- When you have set up processes and systems .
- Once cash becomes the bottle neck.
9.2 – How to pitch your idea
To get people (especially investors) to believe in your business enough to want to invest their money, you need to be able to pitch it just right.
When you want to raise money, not only do you need a lot of confidence in your idea, but more importantly, you need to make other people confident in your idea.
That requires some thought and getting enough clarity to make your vision clear for other people.
Tips on pitching your idea:
- Make your USP clear. Make it absolutely clear what problem you're solving, how you're doing it better than the competitors, and why that will mean profit for the investors.
- Dress well. Yes, it really matters. Neil Patel did an experiment and said his success rate for pitching ideas increased more than 35%.
- Use real data. Investors prefer to see a realistic expectation rather than an overly optimistic one. Present data points that makes sense.
- Research the investors. People are looking for different things when they're investing, so know who you're presenting for and what is the most important thing for them. Some really care about having a marketing plan, others care more about nailing the product. A little bit of research can go a long way.
9.3 – Ways to raise money
Here's a list of different methods you can use to get funds.
Go to venture capitalistsProfessional investors are always on the hunt for new startups and might fund you if they can see the profit potential.
Boostrap it – use your own moneyAlways consider paying for your venture with your own money first. You get to keep full shares and can probably get started faster.
Apply for a governmental grantCheck if you are eligible for a government grant – many governments is doing this to initiate new businesses and support entrepreneurship.
Use crowdfunding platformsCrowdfunding is a great way to get funds for your startup. It's basically many small loans from different people combined into one. There's several crowdfunding platforms that helps you raise money without too hefty fees.
Find an angel investorMany successful entrepreneurs and individuals out there are looking for better returns than traditional investments and could want to invest into your business. Ask colleagues and people in the industry if they know someone who is looking for an investment.
Get a credit card for short term expensesAlthough I don't personally recommend using credit cards to fund your business, it is an option. Rates can be fairly low if you have good credit score and always pay back on time.
Apply for a micro loanThere are several organizations (Kiva is my personal favourite) out there operating worldwide that provides micro loans for entrepreneurs. Not everyone is eligible.
Ask family or friends to investIt's not always the best idea to mix family and money, but if you have family or friends looking to invest and knows the risks, it shouldn't be excluded as an option.