How to Become an Entrepreneur with No Experience
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Entrepreneurship is an attractive prospect to many. A business owner is in charge of their own destiny, they don’t report to anyone, and they (hopefully) reap the rewards of a successful business instead of getting a minute cut of the annual turnover.
Some people start a company because they have an idea for a product or service that they think is a stroke of genius, whilst others just want the freedom of creating something to call their own.
An entrepreneur is a person who runs their own business or businesses.
Whether you’re fresh out of college and want to build your own empire, or a 40-year old in need of a change; to become an entrepreneur, you must be determined, dedicated, accept failure and embrace change.
Being your own boss and calling the shots is an attractive prospect to many, but can you do it without being a business expert?
The answer is, yes!
You don’t necessarily need experience to be a stand-out entrepreneur – everyone has to start somewhere and some of the world’s most famous entrepreneurs were inexperienced, starting with an idea and little else.
If you’re launching a business, it should be in something that:
- Interests you
- You are passionate about
- You have a good knowledge of
If you want to start a business but don’t know what your product or service will be, think about:
- What it is you are interested in and have knowledge of that others might not
- Skills you possess that a business could be built around
- Whether you have experience in a certain area that could be used as a starting point for a business
In the world of recruitment, the term ‘competencies’ is frequently used to describe the ingrained qualities and talents that cannot always be taught.
These, coupled with knowledge of a subject and skills that can be learned and developed, form the foundation for a successful entrepreneur.
You’ll notice that business experience doesn’t feature in this list.
Below are some of the skills and competencies needed to be a great entrepreneur. These are not associated with prior experience or qualifications, and most can be learned and developed:
Determination – The conditions of starting up and running a business are such that you will need to be extremely determined to make it work. There will be knock backs and disappointments but you need the determination to rise above them and push on.
Finance – Finance is a good example of an area where you can learn if you don’t already have qualifications or experience – for example, becoming more familiar with accounting or budgeting. An entrepreneur needs to understand the finances of their business in order to plan, liaise with financial professionals key to the business – like accountants and bank managers – and know enough to avoid getting stung by organizations who might take advantage of a lack of knowledge.
Communication – You’re going to need a lot of support from others and a coordinated approach to get to where you want to be. This requires a great deal of communication from the top down. The better you can communicate, the more chance you have of your team bringing your vision to life.
Accountability – When it’s your business it’s no good passing the buck and blaming someone else for your mistakes. If you’ve messed up, show your employees that it’s ok to make mistakes and learn from them – they will trust you far more than if you cover up your errors.
Resilience – Few entrepreneurs set up a business and enjoy a luxury lifestyle a year later, or even 10 years later. Setting up a business requires sleepless nights, stress and sheer hard work. You have to be resilient and ride the storm to reap the rewards.
Humility – Just because you own the company, doesn’t mean you need to be the best at everything and stop learning from others. By surrounding yourself with individuals who are the very best in their field, you can learn from them.
Strategic thinking – An entrepreneur should always come back to strategy when making decisions and planning for the future.
Decisiveness – A key quality of an entrepreneur is the ability to make decisions quickly. They might be the wrong ones, but you need to have the courage to move forward and take risks.
Confidence – It may be bravado, but you need to appear confident to the many stakeholders you will come across on your journey through entrepreneurship; banks, shareholders, employees, the media – all will expect you to be confident and welcome conversation rather than shy away from it.
Steps to Becoming an Entrepreneur with No Experience (Or Money)
The path to entrepreneurship doesn’t have to be daunting. The most successful entrepreneurs are the ones who start acting on a plan, rather than just thinking about it.
Below are the steps you can take to identify a business idea and work towards launching your own business:
A lack of experience means you are far more likely to embrace new challenges, take chances, go on gut feeling and react positively to new opportunities.
The business world is constantly evolving, but an experienced entrepreneur may think they know everything there is to know.
In contrast, a young fledgling entrepreneur will embrace all help they can get from mentors, courses and customers.
It’s unusual for a person to start a business in an area they have no affinity with; usually, the person knows the sector well and comes up with an idea for a business that will either:
- Make something better than it already is
- Fix a problem
A good starting point is to think about your target audience – the people you want to help.
What problems do they have?
For example, if you have worked as a mechanic for many years, you might think about what mechanics (your target audience) struggle with. All the while, you should be thinking about the less obvious needs.
By running a small survey, talking to friends and searching key terms online, you can start to build a better picture of the needs of your target audience and establish whether an idea of yours could create a solution to a need.
Think about how great the need is; if it is not that great then the incentive to buy won’t be as strong.
Try to identify an area of desperate need – this is where the biggest volume of sales will come.
For example, shoulder pain when the mechanic goes under the car might be something irritating they put up with, and they may or may not purchase a product to help. However, a tool to cut five hours of intricate work down to just 40 minutes has huge cost-saving benefits and provides an effective, immediate solution to a need.
Think about your strengths and how they can be used to your advantage.
What knowledge, experience or skills do you have in a certain area that few others do. Could those skills or that knowledge/experience be used to create something that either makes something better or fixes a problem?
The key to a successful business concept is delivering a product or service that others need but cannot manufacture or do themselves.
Once you have an idea for a business, you need to make sure it is viable.
Having extensive knowledge of how to manufacture a bouncy ball, for example, is great, but launching a business that manufactures bouncy balls without doing any research into the bouncy ball market means you will most likely create a product that blends into the background.
Market research is crucial to deciphering just how much competition is out there and whether there is any demand for the product or service you plan to launch.
Often, results of market research change the initial idea considerably – and that’s ok, it means you are responding to what the market needs and finding the area in which you are most likely to succeed.
As yourself these questions:
Consider whether there is a market in the first place. Unless your bouncy ball has a unique selling point (USP) making it different from all other bouncy balls, you will be entering into a saturated market.
Who would your competitors be? What are their strengths? What are their weaknesses? How much market share would you need to compete with them? If you can't compete, what can you do that's different?
Is there a demand for the product? If yes, how much?
What would the strengths and weaknesses of your product or service be?
The words ‘business plan’ might conjure up reams of paperwork and complex strategic thinking, but the process of putting together a plan for your business can be simple and will help you identify specific targets and goals.
The purpose of an initial business plan is to know where you are heading. By making decisions in advance, you can give everything more attention and greater consideration.
You can also build in some short-term career goals for yourself within the plan.
Plan the steps you need to take day-by-day to get the business up and running.
Taking this approach should expose some of the areas of weakness you may have and allow you to seek help and support in advance.
For example, by creating a plan, you may realize that you don’t know how to register your company. Instead of having to work this out with the pressure of suppliers calling, deliveries turning up and employees needing welcome interviews, you can take your time and make sure everything is done properly.
Commercial awareness is critical to the success of a business.
Getting feedback from customers after rolling out your products or services on a small scale can be hugely beneficial. Issues that arise can be ironed out at this early stage and the feedback you get might change your approach at a time when it can be changed.
- How the customer responds to your sales pitch
- Do they like the product or service initially?
- Is the price point right?
- Which areas of the sales pitch/product need improving?
As an entrepreneur with no experience, you should be like a sponge, soaking up every bit of expertise and knowledge you can to help you on your business journey.
There are many helpful resources available to businesses free of charge.
- Look out for business seminars at your local university, and use their library if you can
- Public libraries stock a large number of books on starting a business and business theory and practice
- Read business periodicals
- Read business journals
- Watch videos online
Funding comes in many guises – some you won’t be eligible for, others you will.
Investment can help give a business the additional capital it needs to open up more opportunities.
Small business grant. Small businesses can access grants, venture capital and low-interest loans via programs run by the government.
Micro loan. You can’t get a business loan in your first year of trading but you can get a micro loan from the US Small Business Administration (SBA). If eligible, you could access up to $50,000. The SBA uses intermediary lenders; you can look up your state and the lenders on the SBA website.
Angel investors. Angel investors look to work with early-stage businesses with great potential. You’ll need a watertight business plan to secure their investment, but a relationship with an angel is far more than just capital – you are getting their expertise and contacts as well.
Crowdfunding. Crowdfunding is a positive step for a new business to take. Aside from generating funds through the process, entrepreneurs can often access expert advice and get feedback on their products and services. A business can gain traction through brand awareness and press opportunities that come as part of their crowdfunding campaign.
Venture capital. Venture capital firms are similar to angel investors – they look for high risk and high return companies. The return they expect is slightly lower than an angel investor, and the return can go as low as three times their investment if the company is about to go public or be acquired.
A mentor effectively takes a person under their wing and guides them. Business mentors have a wealth of knowledge, experience and expertise to offer entrepreneurs with no experience.
Networking is a great way to find a mentor, meet other businesses and make valuable contacts.
Networking online via Linkedin or at physical events will allow you to ask for advice, get new leads, collaborate, and access a pool of knowledge and experience.
You’re not going to get it right 100% of the time and the sooner you get used to failure, the better.
Mistakes can teach you valuable lessons and build your experience. Learn from your mistakes and move on.
Starting a business can be nerve-wracking; you desperately want to create something to call your own, but at the same time feel like you’re entering the lion’s den where you don’t know what lies ahead.
Sometimes you just have to take the plunge and go for it – experience can’t be learned.
Business students studying business topics every day might have the knowledge, but nothing can prepare them for the real-life day-to-day running of a company.
You can’t be taught how to be an entrepreneur and the best experience you can gain is that which you get from getting stuck in, starting your business and going for it.