What Does it Take to Be a Successful Entrepreneur? 6 Requirements Explained
What does it take to be an entrepreneur?
A great business idea? An innate talent for leadership and finance? A well-rounded support network?
All of these things can be helpful when starting and growing your business. However, they don’t guarantee success. Sure, a very small percentage of entrepreneurs are born with seemingly the best traits to run a business. But, most great entrepreneurs make their own way.
They know why they’re starting a business, are willing to experiment, have honed their leadership style, and have taken the time to plan out their business.
The crazy thing is—any aspiring entrepreneur can learn and refine these exact skills. Let’s explore exactly how to become an entrepreneur.
What is an entrepreneur?
An entrepreneur is an individual who creates a business. Often considered to be innovators, they are responsible for transforming an idea from an ambitious thought into a fully functioning product or service. They bear most of the risks associated with their business, and if successful, see greater rewards.
New entrepreneurs often lead a one-person show—physically carrying out all the day-to-day operations and long-term strategy of their businesses. This requires them to specialize in, or at least understand, a wide variety of roles and responsibilities.
Recommended Reading: 12 Types of Entrepreneurs Explained
What are the key requirements to be an entrepreneur?
So, what does it really take to be an entrepreneur? Aside from a great business idea, here are the six critical factors for success:
1. A firm understanding of why you want to start a business
What is driving you to become a business owner? If you don’t have a solid answer, then you’re not ready to be an entrepreneur.
Your reason for starting a business is your purpose, possibly even your mission. If you don’t have a clear purpose, you’re far more likely to get distracted or quit altogether when things become difficult. Which is bound to happen in business.
It sets a vision for your idea. One that can be easily explained to angel investors, drive employees to get behind your plans, and get customers excited about your business.
Don’t worry, you don’t have to be absolutely certain of your purpose right away. It may take exploring your idea further to fully unlock why you’re interested in entrepreneurship in the first place. Just be sure that you identify the reason and integrate it into your business sooner rather than later.
2. A willingness to experiment and take on risk
Entrepreneurship always requires some level of risk. Whether it’s time, money, or leaving the security of a day job, every successful business requires taking chances. Being an entrepreneur demands accepting risk as a necessary part of starting and operating a business.
This doesn’t mean that you have to blindly take on risks without weighing the costs. Instead, you must learn to make calculated decisions that take into account how both success and failure will impact you. You can even test your approach on a smaller scale to get an idea of how things could play out.
Remember, you must be willing to try new approaches that alleviate pain points and take advantage of growth opportunities. Just be sure that you weigh the potential cost of failure beforehand so that you are prepared to respond.
Recommended Reading: Why entrepreneurs should take risks
3. Leadership and management skills
As an entrepreneur, you’re seen as the leader of your business. The one that your employees turn to for guidance, who sets the vision for your business, and who helps foster a healthy culture.
Now, good leadership is more than just the ability to inspire. It requires a well-rounded set of management skills, including:
- Communication: Clearly and concisely share information across multiple channels.
- Organization: Structure your tasks and business to work more efficiently.
- Time management: Prioritize time spent managing multiple responsibilities.
- Strategic thinking: The ability to identify opportunities and threats when reviewing results and adapt to them when planning.
- Resilience: The capacity to navigate issues and recover from them quickly.
- Problem-solving: Take on more immediate issues in a structured manner that leads to greater results.
- Sales/Marketing/Accounting: More specific channel expertise that ensures you understand the core functions of your business, even if you don’t manage them directly.
- Customer service: Understanding the needs of your customers and how to connect with them.
Working on all of these skills ensures that you are able to manage your own work while effectively leading others. It helps you keep tabs on all areas of your business and provide the right support when necessary.
It takes time to become an effective leader. So, even if you’re uncomfortable leading others now, treat it as an opportunity to grow. Review your skillset, request feedback, and actively set goals for how you will improve. There are plenty of books, courses, and training programs out there that can help you elevate your leadership and management skills.
4. A validated business idea
Having a business idea is the first step when starting a business. However, even if you think your idea is good, it doesn’t mean it will actually work as a business. There needs to be an opportunity and a problem that you are actually solving for consumers.
That requires you to:
- Conduct market research
- Identify the right customers
- Test your product or service with potential customers
- Prepare realistic sales forecasts
Doing all of this upfront will help you avoid investing in something that no one is looking for. You’ll also understand if there are areas you just need to rethink and adjust. Maybe a different business model or target market will make you more likely to succeed.
5. A strategy and growth plan
Assuming you have a reasonable understanding of where you want to go, you’ll then have to devise how to get there. You need a good business plan.
Proper planning is vital to your success as an entrepreneur. A data-driven, cohesive business plan will help to guide you and provide the information you need to make sound, strategic decisions.
It’s a roadmap for growth. One that you, your employees, and investors can review to better understand your business. If you’re someone who likes to “shoot from the hip” or “just let things unfold” without planning, forget it. In business, the stakes are too high.
6. The ability to identify opportunities
Entrepreneurs have a vision. They can see potential where others see nothing. It’s a trait that is honed over time. It requires many mistakes and experiences to shape your perspective and approach to business.
For new small business owners, the ability to identify an opportunity might not be fully developed. However, with time, during the course of actually running a business, their insight will be broadened. It can be improved by spending time analyzing financials, reviewing business performance, making forecasts, and analyzing the accuracy of your plan.
It’s also a skill that you can work on before ever starting a business. Working through the idea validation process actually helps you learn to identify when there’s an opportunity, gauge if it’s worth pursuing, and what it will take to find success.
How long does it take to be an entrepreneur?
How long before you can stake your claim as an entrepreneur? It really depends. For some, it might take only a few months, or even weeks for their ventures to prove profitable and sustainable. Others might take years of struggle and sacrifice before they finally start seeing a return on their investment.
Realistically, most new small business owners should anticipate a one to three-year period where a new venture proves itself to either be a sustainable business or a failed idea.
Sustainable businesses take time to grow. If you’re not fully prepared to persevere through the growing pains of entrepreneurship, then you need to reassess if you’re really ready to be an entrepreneur.
You can grow into an entrepreneur
It takes time to become a successful entrepreneur. While we often see the glamorous results of popular business personalities, their success didn’t happen overnight. They had to improve their skills, sort through failure, and take all of the other steps we explored in this article.
So don’t give up hope. If you’re lacking in leadership or a willingness to take risks, you can still become an entrepreneur. You just need to take the time to improve those abilities and intently develop your business.
Are you ready to start your journey as an entrepreneur? Get started by writing your business plan and outlining what your business will be.