According to the 2018 National Report on Early-Stage Entrepreneurship published just a couple of months ago, 0.32% of the U.S. adult population starts a new business every month. That translates to about 6 million people over the course of a year.
Most people look at that data and probably feel some kind of affirmation for the fact that entrepreneurship is alive and well. When I look at that data, I’m reminded of how many people should be entrepreneurs but aren’t. The truth is, millions are what Mark Cuban once dubbed “wantrepreneurs”: people who want to start a business but don’t take the initiative.
Modern-day conventions will tell you a successful entrepreneur is someone who’s made billions of dollars because of a world-changing idea, or perhaps someone who hops from venture to the next with brash confidence and an air of invincibility. But you don’t have to be Mark Zuckerberg or Elon Musk to be a ‘successful’ entrepreneur. If that’s your barometer for success, it’s far less likely you’ll ever get started.
I think it’s problematic that as a society, we celebrate those who have already blossomed in their entrepreneurial journeys, rather than those in the most challenging moment: the beginning.
Here are the five steps that ‘wantrepreneurs’ can take to turn their dreams into reality, right now:
1. Understand Your Purpose
Purpose is what will keep you focused and moving forward when you’re met with obstacles. It will attract others to support you and make your business more attractive to investors and customers. But first and foremost, it will drive you to get started.
When Randy Goldberg and David Heath learned that socks were the most in-demand item at homeless shelters, they saw an opportunity to make a difference. They launched the apparel brand Bombas with the goal of donating a pair of socks for every pair the company sells. Six years on, Bombas has donated 25M+ pairs of socks and has scaled to 2500+ giving partners around the U.S. The company has more than just socks now, but it continues to donate an item of clothing for every item it sells.
While socially responsibility has been at the heart of Bombas’ growth, the company has been pragmatic about its purpose. When entrepreneurs have too lofty of goals from the jump, they are often blinded from the actionable steps to reach them. After all, it is much more practical to make a connection with a local homelessness organization than to try to completely eliminate extreme poverty all at once.
Bear in mind, most successful entrepreneurs are simply those who have created something to support themselves and their families. They are inspired to make an impact, whether this be in creating a solution that will make people’s lives easier, or in providing jobs for their communities. It’s no wonder the Kauffman Foundation estimates almost 2/3 of all new jobs created come from early stage startups.
2. Define Your Business
It’s imperative to define your business in both simple and practical terms. Let’s say you have a talent for baking cakes. It brings you joy and inspiration, and anyone who has one of your cakes always wants a second one. You have the makings of a business already — but you need to define it.
Something like “I’m going to bake cakes for everyone” is simple, but not practical. Imagine you’ve worked at major companies that had catered events for employees and customers. The cakes were never any good. Several friends and acquaintances have shared with you similar complaints about their companies’ catered events. In this case, something like “I’m going to bake cakes for companies that have large catered events” sounds incredibly practical.
Imagine your corporate cake-baking business used profits to give lunches to students at a local elementary school every day. After all, it’s best to define a company in a way that’s not only simple and practical but also purposeful.
When it comes to validating your business idea, my company offers a free resource that helps you think through the critical elements for starting up smart, providing a personalized action plan and access to curated resources to plan, fund and launch a new venture.
3. Make Time for Learning
Anyone who wants to build a successful business needs to always be ready to expand their knowledge. Far too often I hear people say "I'm so busy, I just don't know where I'm going to find the time." Newsflash: setting up a business is tough, you need to MAKE time to learn how to do it the right way.
I'm convinced that everyone can reclaim back time if we ask ourselves questions such as: do I need to binge-watch that TV show on Sunday? Do I need to go to the gym every day? Is the world going to end is I skip those after-work drinks? Have young kids? Why not put them to bed and commit to a session from 10 pm to midnight?
I recommend creating regular “learning sessions" for yourself. Carve out at least three blocks of time every week, ideally in three-hour increments. Use this time to research your passion, get familiar with trends and opportunities in this space, and attend startup and industry meetups.
The more you can make learning sessions a habit, the more confidence you will have to keep pushing your business forward. Once you have some direction, you are ready to start creating some kind of action plan, whether it's a business plan, a roadmap or a launch plan.
4. Think About Funding
A recent survey found 43% of Americans cite access to capital as the most important factor to starting up. While you may not be ready to reach out to investors, it is important to understand your startup costs and identify potential sources of funding from the earliest possible stage. Here are some options:
-Crowdfunding: Platforms like Kickstarter offer donation based funding. These are funds that people donate to help you get your business going. I once leveraged Kickstarter to generate pre-sales for my product and found it to be a great way to generate a customer base. Offering incentives always helps drive interest from potential donors. Consider also equity crowdfunding portals like Wefunder, which allows folks to invest as little as $100 in early-stage startups.
-Friends & Family (F&F): Reaching out to friends and family can be a great way to secure initial funding. They are more likely than anyone to take a risk and invest in you. There are multiple ways that you can structure a deal with F&F. I typically recommend a simple loan agreed with favorable terms. Legal Zoom offers low-cost loan agreements for a few dollars, much cheaper than consulting an attorney.
-Loans: If you can take on the risk, securing a bank loan or line of credit can be a quick way to get funding and you won’t have to give up any equity in your business. However, note that you’ll be personally liable for paying this back regardless of how your business performs. Startup friendly peer-to-peer (P2P) lending services like Fundable, are also an option.
5. Find Mentors
While starting a business is often portrayed as a shark tank, there is a prevailing culture of paying it forward in the startup community. I highly recommend that would-be founders reach out to potential mentors, who have founded similar businesses. After all, who is better to look to for guidance, than someone who has already been through the same struggles and come out the other side?
When it comes to mentorship, I recommend idea stage founders live by the mantra of “If you don’t ask you don’t get.” Those with backgrounds in other industries are often amazed at the willingness of other busy people to offer up their time to help for no personal gain. But you have to make the first move.
Start using LinkedIn to identify people who have launched similar businesses, and shoot them a friendly message asking if you can treat them to coffee or lunch. Be sure to look for ways you can help them too. ALWAYS offer to help. I promise you that this gesture will go a long way to creating a reciprocal (and not transactional) relationship.
Check out local startup accelerator programs (like the Founder Institute), or coworking spaces, and see if there are any public events which could put you in the room with the right people. Alternatively, check out online platforms like Find a Mentor, or for female entrepreneurs Female Factor.
What Are You Waiting For?
There’s good news for would-be entrepreneurs stuck on the starting line: You don’t have to be a world-beater in order to chase the dream of becoming a successful entrepreneur. You can start building with little more than inspiration and a plan.
So, for your new year’s resolution this year, aim to achieve at least one of these steps each month, and you will be well on track to creating your own destiny. Who knows, maybe you will even make the world a better place in the process.
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This original guest article was written by Bryan Janeczko, Founder of Grō Academy, the online startup academy behind Gro X, a free tool to design and validate business ideas. Janeczko is a former Director of the New York Founder Institute.
Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $975M in funding, and building products people love across over 200 cities worldwide.
See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey.