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All Articles / Business and Management

How to Become an Entrepreneur

If you believe Instagram and TikTok, these days, everyone and their dog is an entrepreneur. Open social media, or your even your average news app, and you’ll find a dozen ‘gurus’ promising you the key to financial freedom working eight seconds a week. Or influencers selling their own carefully developed, definitely-not-drop-shipped merch. And that’s not even getting to the guy selling made-up currency.

For those who are attracted to the idea of being their own boss, escaping the rat race of traditional employment, passionately pursuing a new or improved idea or just doing something their own way, it can be a bit of a minefield. There is some good news though. The definition of entrepreneurship hasn’t changed. And there are thousands of Aussies like you pursuing it every year.

According to some of the latest stats from government and other sources:

For many professions, from tradies to personal service workers like beauty therapists and carers, it generally pays more to be a business owner than an employee.

  • There were 406,365 new businesses started in the last year!
  • 63% of sole traders are personally satisfied in running their business, vs just 35% who are satisfied in their jobs
  • 53% of sole traders feel financially secure (vs 34%)
  • And unlike 20 years ago, advances in technology, financing and business models make the process of pursuing a life as an entrepreneur these days so much easier, quicker and more profitable.

On the flip side, 386,392 businesses also shut down in the same time. It’s even harder to do it alone. The ‘survival rate’ for new sole traders is around 41.5% over four years. 24.7% of businesses that do survive have turnover of less than $50,000.

In this article, we’ll break down exactly what it means to be an entrepreneur. We’ll get in to what entrepreneur life is really like, the pros and cons, and the (surprising!) range of pathways to success. By the end, you’ll have a good idea of whether entrepreneur life is for you.

What is an entrepreneur?

The dictionary definition of ‘entrepreneur’ is someone who sets up a business or businesses, taking on risks with the aim of making a profit. Sounds like… a business owner, right? Well, they’re sometimes similar, but there’s a few key differences.

Being an entrepreneur means taking on more long-term risk (with the aim of a lot more reward!). It means taking on a project or starting a business from scratch. There’s a clue in the word itself – it comes from the French word ‘entreprendre’, which means ‘undertake’. There’s a sense of undertaking a big journey or project when you start out as an entrepreneur.

Entrepreneurs usually have either completely new ideas, are trying to disrupt a market, or are trying to do something critical in a new way. Business owners, on the other hand, play it a bit safer. They use more proven business models, strategies, and existing products/services. Entrepreneurs are also more likely to go it alone (although they may have employees or contractors), at least at the start. Business owners, on the other hand, may start a business as a partnership, or buy an existing business.

Pros and cons of entrepreneurship

Entrepreneurship can be an exciting and rewarding pursuit, but it also comes with its unique set of challenges. Here are some of the key pros and cons.

Pros

  • Autonomy and control: entrepreneurs have the freedom to make decisions and steer their business in the direction they choose. This autonomy allows for creativity and innovation in business strategies and products.
  • Financial rewards: successful entrepreneurship can lead to significant financial gains. The potential to earn more than in a typical salaried job is a strong incentive for many.
  • Personal fulfillment: starting and growing a business can be deeply satisfying. Entrepreneurs often feel a strong sense of achievement in creating something from scratch and seeing it succeed.
  • Flexibility: entrepreneurs often have the ability to set their own schedules, which can allow for a better work-life balance compared to traditional employment.
  • Impact: owning a business gives one the opportunity to impact their community and the industry they are in by introducing new products or services and creating jobs.
  • Speed: advances in digital technology and platforms, funding and finance pathways and lean business models allow a budding entrepreneur easier methods of setting up and starting their businesses relatively quickly.

Cons

  • Risk: entrepreneurship involves significant risk. Financial loss, business failure, and instability are real concerns that can affect not just the entrepreneur but also their employees and families.
  • Stress and workload: the responsibility of managing all aspects of a business can lead to high stress and long hours. Work-life balance can become skewed, especially in the early stages of the business.
  • Uncertainty and instability: entrepreneurs must deal with uncertainty regarding income, business growth, market stability, and more. This can lead to a lack of job security that many find uncomfortable.
  • Financial commitment: starting and maintaining a business often requires substantial capital investment. Accessing funds can be challenging, and personal assets are frequently used as collateral.
  • Isolation: running a business can be lonely, especially if you are doing it alone. Unlike in a company setting, you might not have colleagues to share challenges and successes with daily.

Entrepreneurship demands a mix of passion, resilience, and adaptability. It offers substantial rewards but also significant challenges, making it important for anyone considering this path to weigh these factors carefully.

Similar careers

Not sure if entrepreneurship is for you? If you like the sound of some of the above, but not all of it, there are some similar gigs out there that could get you a comparable income, work/life balance, and/or job satisfaction.
Several career paths share characteristics with entrepreneurship, such as autonomy, money, fulfillment, flexibility, and impact. Here are a few examples.

  • Freelancing: whether it’s in writing, graphic design, consulting, or coding, freelancing offers a high degree of autonomy and flexibility. Freelancers choose their projects and clients, set their own schedules, and work from locations they prefer. The financial rewards vary based on skill and market demand, but successful freelancers can earn significantly more than their employed counterparts.
  • Consulting: working as a consultant in areas like management, technology, or marketing can offer many of the benefits of entrepreneurship. Consultants often have control over which projects they take on and may run their own consulting businesses. This career offers high potential earnings and the flexibility to work with different clients on various issues, making a significant impact in their fields.
  • Real estate investing: real estate investors operate independently, make their own investment choices, and bear the risks and rewards of their decisions. This career requires a significant upfront financial investment but can lead to substantial returns. Real estate investing also offers flexibility in terms of when and where one works.
  • Creative professions (artist, writer, musician): creative professionals often enjoy autonomy in their work, choosing what to create and how to present it. Financial success can vary widely, but successful artists, writers, and musicians can achieve high earnings and significant personal fulfillment. They also have the potential to impact culture and society through their work.
  • Product improvement/invention: many people are presented by an idea that can improve on existing products and ideas, or even create a breakthrough. This might mean designing a product or service to be more efficient, or starting from scratch to design an idea that improves people’s lives across many different domains like cooking, fashion, nutrition. The potential for new or different ideas are endless!

Each of these careers offers a mix of independence, potential financial gain, and personal satisfaction, akin to what one might find in entrepreneurship, albeit often with different scales of investment and risk.

Of course, there’s also still small business ownership and management. Small business ownership and management serve as a practical alternative to entrepreneurship, offering similar benefits with potentially less risk. Owners usually enjoy a high degree of autonomy and control, except with some forms of business such as franchises. They’re always making crucial decisions that shape the business’s direction and operations. This role can lead to substantial financial rewards if the business is successful, paralleling the potential earnings of more traditional entrepreneurial ventures.

Furthermore, managing a small business provides personal fulfillment from directly influencing outcomes and seeing the tangible effects of one’s work. Small business owners often benefit from flexible schedules, allowing for a tailored work-life balance. Additionally, they can significantly impact their local communities and economies by providing goods, services, and employment, enhancing both personal and community growth.

Wondering what it’s like to be an entrepreneur on a day-to-day basis? While there’s plenty of Reels and YouTube tutorials out there that’ll show you the highlights, the reality is there’s a huge variety of tasks and responsibilities involved. Here’s an example.

In Melbourne, a vibrant city known for its culture and innovation, a young entrepreneur named Alex begins another bustling day. It’s just past 6:00 AM, and the morning starts with a brisk jog along the Yarra. The quiet time allows Alex to clear their mind before the day’s chaos kicks in.

By 8:00 AM, Alex is in a local café up in Fitzroy, laptop open, sipping a magic. The morning is dedicated to strategic planning. Alex reviews the product development roadmap for their new tech startup, which aims to revolutionise how local businesses manage waste. They jot down a few ideas to discuss with their product team later in the day and shoot off several emails to potential investors.

At 10:00 AM, Alex meets with their co-founder, Sam, at a shared office space back in the CBD. They go over feedback from their recent beta launch, identifying key areas for improvement and brainstorming solutions. The session is intense but productive, ending with a clear list of priorities that need to be addressed over the coming weeks.
Lunchtime offers a chance for networking. Alex heads to a startup incubator event where they connect with other entrepreneurs and share experiences. Here, Alex picks up valuable advice on navigating regulatory hurdles with the government and council, and even meets a potential mentor.

By 2:00 PM, Alex is on a call with their lead developer to discuss technical issues that have been affecting user experience. They work through the problems, set deadlines for fixes, and plan for the next sprint. After the call, Alex reviews their financial spreadsheets, preparing for an upcoming meeting with their accountant.

The late afternoon is spent in another local coffee shop, where Alex has a virtual meeting with a supplier. They negotiate terms that could help reduce costs and ensure a more sustainable supply chain for their products. As the sun sets, Alex drafts an update for their Kickstarter backers, reporting on progress and outlining the road ahead.

Dinner is a quick meal at the local pub. Alex reflects on the day’s achievements and challenges, using the time to unwind. Back home, before heading to bed, Alex reviews their schedule for the next day, knowing that each morning brings them one step closer to turning their vision into a successful reality.

The blend of strategic decision-making, problem-solving, and networking that filled their day is typical for entrepreneurs who are passionate about making a difference and building something new.

How to become an entrepreneur

Unlike some traditional careers, when it comes to entrepreneurship, there’s no one single pathway. But read the stories of enough successful entrepreneurs, and you’ll notice a few key themes.
One is that there are a few common starting points from which people break off and start to take an entrepreneurial approach.

1. School leaver

Some dive into entrepreneurship directly after completing their secondary education. This pathway often appeals to those who have a business idea or a passion they want to pursue immediately without formal higher education. School leavers typically rely on self-education, hands-on experience, and mentorship. They may start small, learning the ropes through trial and error, and gradually build their business acumen by actively engaging in all facets of running a business.
The up side of starting early is that you’ve got a lot of energy, passion, and (hopefully) not too many commitments. The down side is that, as mentioned, you might fail a few times before you’re successful.

2. Vocational

Vocational education and training involves specialised training at a TAFE or RTO (like Monarch!). This pathway equips aspiring entrepreneurs with practical skills and technical knowledge for entrepreneurship, from the legal side of business, to how to validate ideas, to getting funding from a variety of different sources.

It’s the ideal pathway for you if you want to learn some important skills and knowledge you can’t easily get through experience alone. It’s also great if you’re raring to go and don’t want to spend years at uni learning things you might not use, that’ll be outdated by the time you’re done. In other words, it’s a bit of a shortcut to the essentials.

Short courses for entrepreneurs

Speaking of vocational training, Monarch Institute offers a variety of courses purpose-built for budding innovators and self-starters.

The Certificate IV in Entrepreneurship and New Business is made up of ten units (topics), from basics like organising the finances, to how to market your brand new venture and get the money rolling in. It’s ideal if you’re ready to get started in on your own business, as you’ll start off learning the basics of planning. It’s also great if you’re still considering your options; potential career outcomes also include small business owner, product design business partner, and more.

The Diploma of Entrepreneurship and Innovation is an exclusive, nationally-recognised qualification. It’s made specifically for those with unique and innovative ideas who are ready to enter the start-up world, and just need those foundational skills to work with. The Diploma includes eleven units, covering topics from the practical idea validation methods used by real entrepreneurs, to planning projects to be as efficient as possible. Whilst most Diploma students already have the start of a business idea in mind, it’s also a great course if you’re considering options like product management, or moving on to uni.

Both courses are 100% online, and designed to fit around your work hours. The learning and assessments (no exams!) are created in consultation with industry experts, meaning they’re as practical and relevant as it gets. While you’re studying independently, there’s plenty of help and support available whenever you need it. You’ve got up to two years in total to complete your qualification, so you can take your time, although most learners finish a lot faster than that.

Meet your future trainers or get in touch with one of our friendly course consultants now for a no-obligation chat about the right study option for you.

3. Uni

University study provides a broader educational background and can include specific entrepreneurship or business-related degrees. This pathway helps potential entrepreneurs develop a solid foundation in business theory, economics, and management strategies. University programs often offer valuable resources like incubators, networking events, and access to mentors and investors. Students can take advantage of internships and collaborative projects that provide real-world business exposure and experience.

Many of the world’s most successful entrepreneurs – especially in tech – were either uni dropouts, or graduated from something pretty far removed from the business they ended up in. Their stories go to show that while this pathway has its benefits, going to uni isn’t mandatory for entrepreneurs.

4. Business experience as an employee

Gaining experience as an employee in a business setting can be an invaluable pathway to entrepreneurship. Working in a company allows individuals to understand inner workings of business operations, management, and strategic planning. Employees can observe and learn about the industry’s challenges and opportunities firsthand, which is crucial for identifying business opportunities. This route also helps in building a professional network and understanding market dynamics before venturing out on their own.

5. Product/service/marketing experience as an employee

This pathway involves working specifically in roles that deal with products, services, or marketing within a company. It is particularly beneficial for those interested in launching a business that involves innovative product development, service delivery optimisations, or targeted marketing strategies. Such experience allows future entrepreneurs to gain insights into customer needs, industry trends, and effective marketing tactics. Employees in these areas develop critical skills in product design, customer engagement, and strategic marketing. These are all essential for a successful entrepreneurial venture.

Ever read semi-scandalous stories of former employees breaking away to start their own company, building or creating something that would never fly with the old bosses? It’s a more common story than you’d think, especially for product developers or marketing professionals in large organisations, where their technically good idea doesn’t fit in with the big corporate strategy.

Sources: 

– Reviewed by Glenn Buesnel – May

 

Any questions? Ask away!