Entrepreneurship: From Employee to Entrepreneur

Nearly everyone has had a moment where they are sitting at their desk, daydreaming about leaving their 9 to 5 hustle to start their own business and become their own boss. However, deciding to become an entrepreneur is a big decision that shouldn’t be taken lightly.

You may be a stay-at-home parent ready to re-enter the workforce as an entrepreneur or you may be in the corporate world and always dreaming of what you would rather be doing with your life. Whatever the reason, there are many things to consider and plan for when you feel called to move into entrepreneurship.

The road from employee to entrepreneur, and the motivations for traveling it, are different for everyone. We often hear the two extremes: the laptop entrepreneurs making six-figures working part-time and the statistics on how many small businesses fail within their first few years. The reality is somewhere in between the two.

Define what success looks like

Before you take the leap and become your own boss, you want to explore what that would look like and define what success looks like to you.

“If one year from now, you were living your entrepreneurial, self-employment dream, what would it look like?” asks career coach Sally Anne Giedrys. “Take the time to explore what types of work you’d be doing in that dream scenario, who you’d be working with and how many hours you’d be putting in for what level of income. What’s your work-life balance equation? Consider the life you want to be living one year from now and five years from now and be honest. This isn’t about someone else’s idea of success. If you’re the boss, you’re in charge.”

Understand the skills and knowledge you already have

You want to list all jobs you have ever had (volunteer or other) and what responsibilities you had, career coach Marla Williams explains. What are the skills or knowledge that you built up in these different jobs or positions that will be helpful as an entrepreneur? For example, a leadership position in PTSA  (Parent Teacher Student Association) requires tremendous leadership and organization skills. What else? You want to be able to capitalize on or leverage these skills.

After you’ve figured out the skills you already possess, you have to take into consideration all that goes into starting your own business (everything from pitching to investors to taking out the trash). Be realistic about what you can and can’t do, then look at ways you can gain more skills and knowledge, which brings us to the next step.

Create a financial plan

When you start your own company, if you are funding it through your own personal income, you need to have the expected funds saved, career coach Marla Williams explains. She recommends having a good savings account in place to support you until you can build up your sales.

“The truth is, with more start-up businesses, the revenue doesn’t come in right away so being prepared financially is a must. Ask yourself, ‘How are you going to fund your growth? How long will it last? In business, this is called your runway. Understanding how long your business can ‘run on red’ and dividing your current cash position by your monthly burn rate is an important part of cash-flow management.”

Sally agrees. “This is more than deciding what income will keep a roof over your head and food on the table, though that’s a great place to start. It’s important to have both a realistic budget for your lifestyle (what do you need and what would be even better?) and a realistic financial plan for your startup costs and first year in business. It’s important to know and work with your personal risk tolerance and your emotional needs as well.”

Refine your business and marketing plan

A business plan doesn’t need to be complicated, unless you’re seeking capital, partners or other resources, Sally explains. You do, however, need some level of plan that identifies how you will bring in income, what your operating expenses will be and how you will get the word out to the marketplace. If you want a plan you can easily create and stick to, tailor it to the skills and strengths that you’ve already identified instead of using someone else’s model.

Identify the right business for you

These are the gaps in the market that your new business will take care of. This will be achieved by carrying out thorough research in the area of interest. You should also learn about yourself first before embarking on the venture of being their own boss. This entails different personal facts and intuition as well. Hiring a career, business of entrepreneurship coach is a great way to do this.

A successful entrepreneur conducts enough research to know who their target audience is and knows whether or not people will be willing to buy their goods and services. You should study and have a clear understanding of who your target market is, the estimated size of the group, the relevance of what you are offering and who would find it beneficial/useful.

Study and know your target audience

A successful entrepreneur conducts enough research to know who their target audience is and knows whether or not people will be willing to buy their goods and services. You should study and have a clear understanding of who your target market is, the estimated size of the group, the relevance of what you are offering and who would find it beneficial/useful.

Test out your idea

Now that you’ve got a good idea of what you might like to do, Sally says you must refine it by going to the people or businesses you want to serve and testing the waters. If you have more than one idea, test one at a time, take on a couple of assignments or develop a quick-and-dirty version of your product of service. Do the market research on your field. Take it to the street and see what you learn.

Build a support network

You need to create a connection with advisors, partners and allies as well as vendors who you will need at one stage or another. Networking across relevant platforms is also very important, especially when it comes to marketing. As you deliver the services, make sure to serve the customers satisfactorily for consistent business.

What no one tells you about becoming an entrepreneur

1. Your personal life suffers

You will spend long hours during the first few months (and maybe longer) on building your business. And if you don’t have the funds to employ help in the beginning, you are it. Every facet of your business – marketing, sales, contracts, budget and finances – it’s all on your shoulders. Your days are spent with clients/customers and marketing efforts. All of the details – the website and social media maintenance, the invoicing, the bookkeeping – these are things you will do at night and on weekends.

2. You will lose sleep

It’s not just the details that will keep you up at night. It’s the worry and the planning. Entrepreneurs who are committed to their startups have a difficult time shutting down their brains when they hit that pillow. You will need to develop and practice some techniques to get decent sleep, because if you don’t, you brain will not function properly during the day.

3. You will be on a roller coaster

In an ideal world, successful startups grow steadily and regularly, making their founders very happy. In the real world, this is not the case. You will have great months and wonderful “highs.” You will also have deep valleys of bad weeks or months and may begin to question whether or not you should carry on. Those low times are what will test your resolve, so be prepared for those times you want to give up and have a strategy for keeping your head up. Working with a career or business coach may be a good option, as they can help you keep your eyes on the prize when times are tougher.

4. You will meet unexpected challenges

One entrepreneur began his business with an amazing website featuring his products. He realized that he was losing out on an entire demographic because he had not accommodated potential Hispanic customers that his competition was netting. This was because he had never considered developing his site and his social media platforms in Spanish.

Don’t ignore the potential global reach of your products/services and the need to have all of your online content translated and/or localized for foreign markets. You should compare translation features and prices to make your buying decisions easier as you look for a service to do this for you.

5. You will spend more time than you think on customer service

It is costly to acquire new customers, so you want to do as much as you can to keep your current ones coming back. And your competition will always be nipping at your heels. Customers are very fickle and if they think they are not getting personalized and responsive service from you, they will leave. Keeping your customers happy means that you do whatever you can to establish personal relationships with them and you respond immediately to any question or concern they have. This becomes more difficult as that customer base grows. Fortunately, there is some great software out there to help you do this. Use it.

6. Tracking your reputation will be critical

If you don’t use any social media monitoring software, you’ll want to get some right away. Using these tools will allow you to monitor your social reach and alert you any time your brand is mentioned anywhere on the web. You will need to set aside time every day to check this out. One piece of negative content about you that sits out there without your response will “kill off” potential customers. This is a part of customer service, but deserves its own mention. Never neglect to review every comment or piece of feedback.

7. Your mental health is at risk

While all of those former co-workers look upon you with envy, but what they don’t understand (and, at first, you may not either) is that the stressors and pressures to perform and to make a “go” of your startup will take their toll. The worry, anxiety, lack of sleep and daily demands on your time are called stressors and too many of them without good coping skills on your part will drain your enthusiasm. In recent studies, 42% of entrepreneurs report being heavily stressedand 30% reported being depressed.

Only you know what relieves your stress. It may be going to the gym, walking, taking a day off to be with family or a weekend getaway with friends. The issue is that a lot of entrepreneurs don’t do these things and they suffer burn out. When that becomes extreme, they hang it up or worse. No business will survive founder burnout.

Pros and cons of becoming an entrepreneur

Like any other career, there are pros and cons of becoming an entrepreneur. Here are a couple major ones to take into consideration before venturing into the world of entrepreneurship:

Pros

• Control – As the entrepreneur, you have total control over what you do. You are able to work on what you are passionate about and that makes the most of your strengths and weaknesses. You have ultimate job satisfaction.
• Flexibility – Since you are your own boss, you are able to work in a flexible manner. You can schedule your time as you please including sparing time for other commitments as well as personal and family time. You can set your own style which is different from the conventional 9-to-5 schedule. “As your own boss, you get to set the rules, the work schedule, the level of commitment. That can carry a lot of benefits,” explains career coach Kathleen Murray.
• Freedom – You are the key decision maker in this case, and therefore you are able to make decisions with a huge impact on the business. In the case an emergency arises you are able to access resources with ease.
• First to market – Nothing beats being first to the market with an idea. You are always ahead in all phases, your competition lags and the revenue/profit gains are exceptional,” career coach Deb Goldstein

Cons

• Administration – Being an entrepreneur can be quite involving and hectic as well. You will be tasked with making major decisions, long working hours and working on a lot of paperwork which takes up time and energy, to ensure everything is in place.
• Sole risk-bearer - In the case where the business incurs any form of loss, you will bear all the expenses solely. You are not subjected to a regular paycheck like an employee therefore you should have high self-discipline and resilience.
• Long and endless work hours – Becoming an entrepreneur means you have to dedicate a ton of time and energy into your business. That means working long, sometimes endless hours, according to career coach Deb Goldstein.
• Industry backlash (the 10 ft. pole affect) – Like any new product, it takes a while for consumers to trust it and for it to gain traction in the marketplace. Most consumers (a whopping 90% in the US!) rely on reviews to choose products and services, so having a customer base and reviews to back up what you offer is essential.

Thinking of hiring a career coach to help you become your own boss? Browse our directory of career coaches and get a FREE consultation or request a personalized coach recommendation!