How To Be An Entrepreneur

How To Be An Entrepreneur

If you're not cut out for it, being an entrepreneur isn't for you.

But even those with the guts and the grit to go for the glory don't always know what to expect. That's why I'm going to go over a little bit of everything that I've experienced on my journey as an entrepreneur.

I think this is probably the best place to say this:

While I am an entrepreneur, I am not any sort of lawyer or business guru. I am just a person who has known many entrepreneurs, who has done a fair share of business, and who has some advice to offer.

But I will in no way take responsibility for your choices - this is advice I've learned along the way that I hope I can share with you.

How To Be An Entrepreneur

It's Always a Risk

Everyone has an idea of what life will be like after their success, but not everyone has the mind, emotional capacity, guts, or know-how to get from point a to point z.

It's easy to picture some sexy new future with badass suits and fat stacks of cash without knowing what goes into it. That's why it's so important to know this before you go any further:

It. Is. Always. A. Risk.

With entrepreneurship, it is always feast or famine.

No matter how much work you put in, you can't predict the future. For this, I will share a personal-ish story.

My uncle is smart as a whip. He's not a billionaire, but he and his family are comfortable with 2 estates. He's had tons of experience with a variety of businesses.

A story he told me has stuck in the back of my mind no matter what venture I've gone into.

When he was a younger man, he had the opportunity to buy some land and build an airport on it. He went in halfers with another well-respected businessman. Everything seemed legit.

The land was a good price, the builders were in place, everything was on track to go well. The partners signed the dotted line and got things underway. The future was looking bright!

As the story goes, just a couple of weeks before the "grand opening" of sorts, the ground swallowed up everything.

It wasn't an earthquake (and this area doesn't have earthquakes) - it was a sinkhole. A freak fluke. Nothing to be done.

He lost a substantial amount of money and was wrecked emotionally for a while. He had done everything right, but it had all gone wrong. To make matters worse, a competitor built an airport nearby that ended up taking off.

Even though my uncle did everything right, from his research to partnering with the right guys, from hiring the best builders and tracking popular trends in population booms and city building, he still lost it "all".

If you don't think you can handle the unexpected, if you can't be prepared, if you can't take pride in coming back from the edge, then you probably aren't cut out to be an entrepreneur.

How To Be An Entrepreneur

Getting to Business

But that doesn't mean that you shouldn't try. After all, look at all the successful businesses that are all around you. It's worth it, and there are things you can do to help you have better odds of success!

Research

Is going to be your almost-best friend, secondly only to your customer.

This includes researching who your customer is, what they want, what they need, their price point, your competitors, success and failures in your field - everything. You must know as much as possible before you start to spend money on services or products.

Sure, you'll want to beta test it all, which may mean commissioning or creating samples of your own products or services, but don't go all-in on a bet - test first, then launch.

You want to know how this is trending, how it was trending, and what any sort of projection is for that market. You also want to look into how under-served or saturated the market is. And, most importantly, you want to know if there is a market.

If you're creating a market, you better be damn good because this is where a lot of people fail. If you're trying to create a product people didn't know they need, you better be ready to prove to them emotionally and mentally why they need your product.

Testing

This is one of the most fun and messy parts of being an entrepreneur. You will be surprised, sometimes for the better, sometimes for the worse.

Utilize cheap labor like MTurk. You can pay people a few cents to take a survey about your business: what they would add to it, their location/age/gender, and any other relevant questions that might help you with improvements and product launch.

Once you have a more solid product or service, you can start testing out your advertising ideas. You may want to go with services that will do this for you, but it is cheaper to do it yourself.

There are plenty of guides out there on how to market and advertise successfully, which should get you far enough along to earn the money to hire a contractor or company to get it done for you.

Customers

Something a lot of successful entrepreneurs have is mock-up customers.

"35-year-old, mother-of-2, Sally Woman has a penchant for long walks on the beach, cold drinks at the bar, and romantic getaways with her husband of 10 years."

It sounds silly, but these profiles and mockups are based on customer data. If you know that most of your customers are x, y, and z and love a, b, and c, and prefer to spend up to $XXX, then you have an idea of what to sell, when, and for how much.

It can also help you customize coupons and sales pitches for your customers. (Think birthday and anniversary coupons, copy that involves family getaways, and so on.)

It's not impossible to make these mockups through data you collect and sift through yourself, though in recent years many reputable companies have put out automated services that will do all that for you.

The money and time you'll save using a service are well worth the initial cost.

How To Be An Entrepreneur

Work Hard, Play Hard Does Apply

Especially in the beginning, you are the business. And it's not just you, it's your family and your friends, too.

A lot of beginners get their families and friends involved to some degree, whether it be as partners, or just promoting cool freebies.

But striking it out on your own affects the ones you love whether they're directly involved or not.

Most get rich quick schemes won't get you rich and it won't be quick. It works because someone else already put all this time and money in upfront, and you're reaping the benefits.

True entrepreneurs will end up working long hours, late nights, be on-call 24/7 - you get the idea.

A new business venture is very similar to a new baby.

That first one is the hardest because you're learning as you nurture and care for it. Once you know the process, each one gets a little easier - but the time is almost always required, at least initially.

You have to make sure that you're taking some time off and that you're still able to have fun and be happy. You can burn yourself out, leading to you crashing and burning, if you don't.

Balance is super important for this reason. Balance time with your loved ones, time to wind down, time to sleep, and yes - time for work.

Make sure that you're taking care of yourself first and business second.

How To Be An Entrepreneur

Love & Entrepreneurs

I want to stress how much this can impact your relationship.

Just like every person isn't cut out to be an entrepreneur, not every spouse is cut out to be married to one. Starting your own business, launching your own product or service, building that much from the ground up, takes a lot of time.

Many marriages that break up over business ventures say that the business venture is like a mistress - it takes over the spouse's mind, body, and soul. They spend all their days obsessing over it and fixing it.

Many entrepreneurs who have been successful at love and business recommend keeping your partner in the loop and even letting them help make big decisions that could impact them. At minimum, it's recommended to keep them up-to-date on everything.

Don't make a promise you can't keep when it comes to your spouse and your business: If you say you'll have a date on your least busy day no matter what - do it. If you know you can't do something on one day, do something better on another.

And please, please, don't make the cardinal mistake of missing big, once-in-a-lifetime occasions for the business. If your grandmother is dying, your first kid is being born, or your little girl is graduating - go to it.

If your business can't function without you for a few hours, it probably needs an overhaul anyway.

How To Be An Entrepreneur

Products or Services

Almost every business can be broken down into two types: products or services. Some businesses have a bit of both, while others choose to focus on one or the other. Decide which is best for you and don't be afraid to tweak it as needed.

Products

Products are things - simple as that. Whether you're selling compression socks or e-books, they're all things.

You can have digital products or physical products. Both have their advantages and drawbacks, so it's up to you to decide which you'd rather dabble in. You may even combine the two, where your customer receives both a digital and physical copy of something or a digital preview to a physical copy.

Making a Product

If you're making your own product "from scratch", you're going to want to find the cheapest way to make the best quality. I know that sounds strange, but you can always improve the quality later as a response to customer feedback.

As I said earlier, if this is a new, never-before-seen product, you'll want to condition your market to it: Explain why they need it, why they should want it, and why it's a great price.

Remember that while you should always charge at least 3x the cost (one to replace the one you just sold, one to make an extra, and one for profit), the standard mark up is 8x or more.

Fabrications and Knockoffs

Most products now are basically just fabrications or knockoffs of existing products. There's a lot that goes into it in terms of making sure you aren't breaking any laws - and, of course, you have to ensure you're making it your own rather than just stealing - but it's the truth.

While these used to be seen as cheap and cheesy, they've been taken in a new direction. Finding a product that is well-reviewed but unresponsive to pleas for improvements is a great way to start a new product.

You aren't selling "The Original", you're selling "The Improved".

There's even a saying when it comes to selling: You're either the first, the best, or the fastest. You can pick up to 2, but you can't be all 3.

Dropshipping

Dropshipping is a popular way to sell products. You don't have to make your own products, you don't have to store your own products, and it's generally pretty cheap and easy to do.

Because of this, though, it can be hard to stand out. When hundreds of other shops are selling the exact same products with similar shipping times, you're showing up to the party a bit late.

However, dropshipping can be interesting when it comes to putting together packages or having niche shops.

Do your research on it and see if this is something you might want to do for some fairly quick and easy cash.

Wholesale

This will be quick because there's only one thing you really need to know:

If you're buying "wholesale" and they aren't requiring you to enter in or show your wholesale license - it's not wholesale.

Wholesaler licenses are pretty easy to obtain and are the only way to legally buy from wholesalers.

Get one ASAP if it applies to your business as it will save you a ton of money.

Services

Services can be just about anything: from a friendship service that hires out friends for corporate events to services for the elderly. Delivery, babysitting, house cleaning, personal shopping, medical supply distribution - anything. If you're not supplying a product but you have a business, you're running a service.

Middlemen

Middlemen businesses are pretty popular right now. Whether you're a payment processor, business liaison, customer service center, or escrow/broker, you're probably in the market for some money.

While these are all lucrative while they last (and right now, things look pretty feast), middlemen services are usually the first to get cut when a business starts to downsize or go under.

Like with literally any business, you don't want all your eggs in one basket. If your business relies solely on one or two customers, you need to diversify ASAP. This can help protect you if those clients decide to go with someone else or quit using services entirely.

B2B Services

B2B or "business to business" services can be fun and offer a little more stability. Typically, you would hook up with pre-established businesses that are in good standing and in little danger of going under.

Something in Between

Not all businesses aim to sell a product or service - sometimes they aim to sell themselves.

Building a Sellable Business

When you're making a business to sell it off, it's all about making it big and profitable as quickly as possible.

This will mean you have to do lots of research and hire a great lawyer to look over all contracts and paperwork once you line up a buyer.

A lot of people shy away from this because if the business is built on you, your name, your face, you might have to agree to stay on for a year or two after the sale - which can make things uncomfortable and stressful.

How To Be An Entrepreneur

The Boring Parts

With a flood of new would-be entrepreneurs coming to the market, a lot of the boring stuff gets overlooked out of excitement or desperation. But if you're serious about wanting to build something up, these are really important.

Banking & Your SSN

A lot of banks will want to get your SSN for business loans, but this is shady and NOT necessary. Banks like to get you on the hook for it because even if your business folds, you'll be responsible for it.

Rather than using your SSN, you should use your business's EIN or tax number. That way you aren't responsible for thousands of dollars of debt if you have to close your business down.

This can be tricky because banks will really give you a runaround. But with an EIN, you can get lines of credit from office supply places and big box stores, meaning you can build bigger and better credit for your business relatively easily.

With good lines of credit, banks may be easier to work with when getting a business loan.

Do not be fooled - it will save your behind down the road.

LLCs and More

You 100% want to get some kind of liability insurance and LLC attached to your business. This will help protect you from lawsuits and allegations.

Look into what will work best for your business, but don't skimp on it.

Forming an LLC or something more serious will mean that your business - and not you and your family - will pay for any damages or 'wrongdoings'.

Automation

While automation is a hot topic for customer service, most other positions are transitioning to automation. Some are even AI-based, meaning they're even cheaper and faster.

Indulge in automation as you can afford it. It'll help to cut costs in the long run and can help you with everything from buying projections to mass emails.

Outsourcing

Just like with automation, you have to know when to outsource. This can be something simple like hiring a personal assistant to deal with phone calls and take notes, to something more involved like hiring a team of temporary workers and contractors to get through a major project.

Don't be so proud or so stubborn that you overwhelm yourself when you can literally hop on apps like Task Rabbit and hire someone to come sweep the place up for you.

When to Hire

Now, if you're having to shell out week after week for temp services, it's probably time to start hiring on some permanent staff.

You may also want to hire someone to help out with smaller tasks if you're starting to feel overwhelmed.

If you have the money and you're wanting more time - either for yourself or for other aspects of your business - it's time to hire on some help.

How To Be An Entrepreneur

Should You Give Up or Change Directions?

There's going to be a point when everything seems like it's going wrong.

You'll have 2 choices: Change the way you run your business, possibly overhauling the whole thing, or throw in the towel and admit defeat.

Overhauling Everything

Sometimes people have a great idea, product, or service. But the delivery is all wrong.

A good example is Caviar Delivery.

The idea was simple: Make a delivery service that specialized in delivering food from upscale restaurants to wealthy clients who preferred having their delivery go the extra mile (ha)! It was a great idea and the company was actually very successful.

But with popular, more accessible services like PostMates (now owned by UberEats), UberEats, GrubHub, and DoorDash able to make more deals with more restaurants and reach a wider audience through advertising, Caviar was bought by DoorDash.

While the Caviar name may still be used occasionally, DoorDash was more interested in the unique app technology (which prevents things like multi-apping) than the brand name. DoorDash almost immediately implemented the technology it gained from Caviar to ensure their drivers were providing 100% of their attention to their customers.

Square sold Caviar to DoorDash on August 1, 2019 - just a few months shy of the initial Covid outbreaks. The outbreak, obviously, saw a huge boost in the utilization of delivery services. In some states and counties, delivery workers were some of the few people permitted to leave their homes.

If Caviar had overhauled the way they did business rather than selling to a competitor, there would have been plenty of work and money to be had.

It just would have taken more advertising, a different spin on delivery, and a little bit of out-of-pocket pampering.

Sometimes all you need to do to pull your business out of a nosedive is change everything. It's daunting, exhausting, but oh-so-worth it!

Cutting Your Losses

While the second choice sounds terrible, sometimes it really is the best option. You don't want to be stuck holding the bag when and if your business goes belly up - or worse, way into the negative.

Typically, a successful business will begin to have real profits within or by 2 years. Past that point, if you're still struggling to pay bills and maintain customers, it's likely time to call things. You can always come back to this particular line of business once you have a bit more capital and experience.

The important thing here is to remember that this isn't the end-all, be-all. You may have fallen in love with this business, but it is work. You wouldn't pay to work for Wally World, so why pay to work for yourself? Cut your losses and move on.

In Short

To be an entrepreneur, you have to be smart, healthy, quick on your feet, and good with communication. You'll need to be creative and very familiar with state and local laws.

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