How to become an entrepreneur: 5 questions to ask yourself
Figuring out how to become an entrepreneur? These 5 questions will tell you if you're ready.
If all of your free time (and then some) is consumed by your freelance gig, you might be wondering how to become an entrepreneur — not just someone who works on projects outside of their 9-5, but a full-fledged business leader. We're talking cover-of-Fortune success.
The leap from employee to entrepreneur can be terrifying but highly fulfilling. To make sure nothing crushes your entrepreneurial spirit as you go along, it's best to plan ahead. Ask yourself these five questions before you quit your day job.
Are you emotionally ready?
Even on the best of days, the life of an entrepreneur is a stressful one. You'll celebrate your wins, sure, but every failure will hit close to home when you start your own business. It takes a lot of hard work, discipline, and grit. On days when you just don't want to do anything, you'll still have to sit down and get the job done.
One of the first steps to starting a business on your own is taking the time to ask yourself why you want to be an entrepreneur. Is it because you're really excited about your idea, or are you just unhappy at your job? Will changing a few things at work do the trick, or are you truly ready to leave it all behind and leap into the unknown? Can you deal with long hours and working weekends, even when you may not know when you'll get your next paycheque?
Do you have enough savings?
It's fun to hear about stories of entrepreneurs who found overnight success and have been rolling in the cash ever since. It's the years of unpaid work that we don't often hear about.
Before you decide to take your side hustle full time, give yourself some breathing room by saving at least six months of household expenses in a high-interest savings account such as Manulife Bank’s Advantage Account, and paying off any credit card debt or lines of credit. That way, you can focus on growing your business without having to worry about paying your rent or mortgage.
Is there growth potential for your business?
Not all side hustles work as full-time businesses. While you may love what you're doing, it's always a good idea to research the industry to see if there's a market and growth potential. After all, you can't sell what people don't want. Look for consistent growth and an anticipated income that can sustain you over time. At a minimum, you'll need:
- Regular clients and the potential to obtain more.
- Other areas in your chosen industry that you could expand into to develop more revenue streams.
"There's nothing wrong with spending your hard-earned cash. Just don't let it get out of control. Keep your spending in check by monitoring it with the aid of an app, a spreadsheet, or old-fashioned pen and paper."
Do you have a business plan?
Businesses don't arrive fully formed. Instead, they're carefully planned. Having a business plan gives you goals for how your business is going to grow and what it's going to look like in one, three, and five years. This includes tracking your list of products and services, leadership (that's you!), your operations model, how you plan on financing it and how all of this is going to earn money.
Do you have a network?
Behind every successful entrepreneur is a network. This network may consist of friends and family to cheer you on, mentors to guide you, financial advisors to help fund your ideas, and a legal team to ensure you're maximizing all your options as you grow your business. Being an entrepreneur can be lonely, so build your network to become a space where you can ask for support, get advice, and — importantly — vent.
Knowing how to become an entrepreneur is all about prepping yourself for an adventure. There'll be good and bad days, and many things you may not be able to control, but by planning what you want to do, you can move confidently into the next phase of your career. Then you can work on the fun stuff, like crafting the perfect witty response when journalists email you asking to do a profile piece.
