How To Become an Entrepreneur in 2024 – Forbes Advisor UK

Feeling stuck in a nine-to-five rut, and dreaming of creating a business of your own? You’re in good company. With the number of private sector businesses having grown between 2022 and 2023 by almost 1% according to HMRC data, it’s clear that the entrepreneurial spirit in the UK is alive and kicking.

So what’s the essential first step to breaking free from the conventional career path? Understanding how to become an entrepreneur. In this guide, we’ll take you on a deep dive into the practical strategies and insights you’ll need to transition from being an employee to owning your own business.

What is an entrepreneur?

You’re ready to leave the nine-to-five grind behind, but entrepreneurship means so much more than simply starting a business: it’s about bringing a business vision to life by filling a gap in the market in a way that’s unique to you. By becoming an entrepreneur, you’ll be building a business from scratch, driven by your ideas, passion and ambitions.

And as an entrepreneur, you’ll do more than just manage a business. You’ll become a strategist, an innovator, a creator – the face of your brand. It’s a role that demands not only business acumen but also commitment and a deep connection to both your vision and your goals. You’ll be making decisions that shape not just your business, but also your personal life and the lives of those your business touches.

Why entrepreneurship is important

Entrepreneurship extends beyond your own personal success and destiny: It’s also a key driver in shaping society and the economy. As an entrepreneur, you’ll bring fresh ideas to life, challenge the status quo and create value in unique ways. Your impact can be far-reaching, influencing not just the market but the development of your community and individual lifestyles, too.

Here are just some of the reasons why entrepreneurship is so vital in our modern world:

• Innovation. Entrepreneurs drive innovation through the introduction of new products and services, offering creative solutions to fill gaps within the marketplace
• Job creation. New jobs go hand in hand with the start of new businesses, which means entrepreneurs play a crucial role in boosting employment and supporting local economies
• Market competition. By introducing new competition into the market, entrepreneurs encourage improvements in quality and pricing, which benefits both consumers and the economy as a whole
• Technological advances. The surge in tech startups is no coincidence: Entrepreneurs are at the forefront of tech innovation, harnessing cutting-edge technologies to develop industry-revolutionising solutions
• Social change. Many entrepreneurs are driven by a desire to make a difference in the world. The result? New businesses that address social issues – which can lead to positive changes within both local and global communities
• Economic growth. Entrepreneurs stimulate economic growth by generating revenue, paying taxes and engaging in trade within local and global markets. Many also build networks that span borders, resulting in enhanced international trade.

8 Steps to becoming an entrepreneur

But how do you get started on your entrepreneurial journey? From cultivating the right mindset to effectively navigating business challenges, your path to entrepreneurship starts with understanding the key steps involved.

1. Cultivate an entrepreneurial mindset

It might come as a surprise that the first step in becoming an entrepreneur doesn’t focus on a practical business skill or task, but rather developing three key traits: resilience, adaptability and a growth mindset. These traits are the crucial pillars that support and drive entrepreneurial success. Here’s how each plays a critical role:

• Resilience. For entrepreneurs, resilience means the ability to handle business challenges and setbacks without losing your drive, so you can smoothly navigate the inevitable ups and downs of starting and growing a business. It’s a quality that helps you see obstacles not as dead ends, but as opportunities for revising and strengthening your business strategy
• Adaptability. When it comes to running a business, being able to pivot and adapt to ever-changing market factors is core to your success. By being adaptable, you’re ready to alter your business strategies as needed, whether it’s in response to market feedback, technological advances or new opportunities. It’s a crucial quality that lets you embrace the inevitability of change as a constant
• Growth mindset. Developing a growth mindset helps you see every experience as a chance to learn and improve. With a growth mindset, you understand that abilities and intelligence can be expanded over time. The obstacles you face become lessons, and any feedback you receive generates fuel for further development, ensuring you’re always open to new strategies and ideas to drive your business forward.

2. Identify your niche

This step combines an introspective look at what drives you (your interests and strengths) with thorough market research to provide insights into consumer demands, emerging trends and underserved areas that are key to uncovering ideal opportunities. By using this dual approach to find an angle that’s uniquely yours, you can set yourself apart in the marketplace – and craft a business concept that marries what you love to do with what the market needs.

Knowing your niche and aligning it with the right business idea simplifies your decision making by giving you the clarity you need to guide your product development, branding, marketing and operational strategies. This enables you to create tailored solutions that help build a stronger connection with your target audience.

3. Develop a business plan

Creating a business plan is more than a strategic exercise. Your business plan is an ever-evolving blueprint laying out the foundations of your venture’s success – and while it’s commonly associated with piquing the interest of lenders and investors, it’s a vital document even if you aren’t in need of funding.

What goes into a business plan? Here are some of the key components:

• Vision and mission. This section of your plan outlines the core purpose of your business, your long-term vision and values, and your overall goals
• Market strategy. Here’s where the market research you completed earlier comes in handy: Use this section to provide an in-depth analysis of your target market and outline your strategies for entry and growth
• Financial plan. Provide detailed financial forecasts, including start-up costs and profit projections, and establish clear financial objectives, such as revenue targets and funding needs
• Operational framework. Outline how your business will operate, including your management structure and staffing and technology needs.

4. Obtain funding

It’s possible to start a business without a lot of money, but most entrepreneurial ventures will require some start-up funding. Securing the funds you need begins with an in-depth analysis of your financial needs, such as initial start-up costs, ongoing expenses and a buffer for unexpected costs. Your funding strategy should reflect the scale of your business, your risk tolerance and your projected growth trajectory.

From bank loans and angel investors to newer funding options such as peer-to-peer funding, each option will have its own unique requirements, conditions and benefits. For many funding sources, for example, your business plan will be key, along with a clear explanation of how you’ll be using the funds and a realistic projection of the return on investment.

5. Formalise your business legally

There are three types of small business set up: sole trader, partnership or limited company. The set up you go for will depend on what type of business you have and how you want to run it.

Then formalising your business legally is an essential step on your entrepreneurial journey. The following is a good checklist of items to consider when establishing your business:

• Choose your business name
• Register with Companies House (for limited companies)
• Register your business with HMRC
• Apply for the required permits or licences necessary for your business.

You may need a licence or permit if you want to be a street trader, if you plan to sell food or alcohol, or if you want to play music, for example. Contact your local authority or council to see what the legal requirements are for your business.

6. Set up your business operations

Once you’ve taken care of the legalities, it’s time to turn your plans into action by setting up your business operations. This step incorporates a number of different elements to ensure your business runs smoothly and efficiently, such as:

• Location and facilities. Whether you’re going with a physical or a virtual location (or both), consider factors including accessibility, costs and overall suitability for your operations
• Suppliers and inventory. Establish reliable supply chains and vendor relationships, and if you’ll be holding inventory, set up an efficient inventory management system that’s tailored to your business needs
• Technology and equipment. Invest in any necessary technology and equipment, including software and platforms for communication, financial management and data management
• Staffing. Plan your staffing needs, including recruitment and training. Define roles and responsibilities, and establish HR policies and procedures
• Customer service. Implement systems for customer support and service to ensure a positive customer experience.

7. Build your brand and online presence

Crafting a strong brand for your business is about more than just a great logo and catchy tagline (although you definitely want both as part of your brand identity kit).

When it comes to your brand, you’re looking to create a narrative and visual identity that is both authentic and resonates with your target market: Your brand story and tone of voice should work together with your visual elements to convey a message that connects emotionally with your audience.

How you show up online is a powerful complement to your branding. A well-designed, SEO-optimised website serves as the digital gateway to your business, while an active and engaging social media presence on relevant platforms helps you maintain your connection with your target market, using content, promotions and conversations that reinforce your brand values.

8. Embrace growth and continuous improvement

You’ve established your business, but your work has only just begun. A commitment to ongoing growth and improvement is key to the long-term sustainability of your venture. Here’s where we loop back to the first step on your entrepreneurial journey: cultivating the right mindset. Going forward, this mindset will be your greatest asset, as you stay curious, never settle and constantly strive to enhance your offerings.

It’s not just about scaling up and maximising efficiency, you will want to keep evolving your business so it continues to be relevant and competitive. The following are just some of the ways to stay committed to your business’s growth and improvement:

• Schedule regular reviews. Regularly assess your business strategies against market trends and external environmental and economic factors
• Seek out new opportunities. Whether it’s expanding your product lines, entering new markets or exploring the latest tech advancements, be proactive in your search for new opportunities
• Ask for (and act on) feedback. Gather input from customers and employees, and use this valuable information to refine your products, services and customer experience
• Monitor financial health. Keep a close eye on your business’s financial metrics so you can consistently make informed investment and cost management decisions
• Expand your network. Build and maintain relationships with other businesses, industry experts and mentors for new insights and opportunities.

Bottom line

Becoming an entrepreneur is a journey of self-discovery and determination that extends far beyond leaving a nine-to-five job. Entrepreneurship is more than a profession: It’s a way of life that can offer a multitude of rewards. With the right approach and mindset, your entrepreneurial dream isn’t just a possibility – it’s a goal that’s well within your reach.