Entrepreneurship 101: What Every Founder Needs to Know

9 min read
Entrepreneurship 101: What Every Founder Needs to Know

Welcome to Entrepreneurship 101! Whether you're a first-time founder or you already have a bit of experience, you’ll be able to use these practical tips and advice for starting your own business and overcoming common obstacles along the way. This guide is for you if you’re looking for advice on:

Let's dive in!

What Is Entrepreneurship?

First, let’s make sure we’re on the same page about the definition of entrepreneurship. The term “entrepreneur” carries different connotations for different people. However, the definition is very simple: 

An entrepreneur is anyone who starts a new business venture — which means entrepreneurship encompasses all the work and responsibilities of building a business from the ground up. 

But the bounds of entrepreneurship often extend beyond the basic definition of business ownership. Entrepreneurs are risk-takers who are willing to try new things and take chances on their business ideas. They are innovators who push the envelope and seek to revolutionize their industries. 

Entrepreneurs also play a crucial role in the global economy. Startups and small businesses are some of the primary drivers of job creation and overall economic growth throughout many influential markets. 

Without further ado, let’s take a step-by-step look at what every entrepreneur needs to know in order to build a thriving business.

1. Identifying a Business Opportunity

When starting any kind of entrepreneurial venture, the very first step is identifying a promising business opportunity. To do this, you will need to begin with market research. Market research is the process of gathering information about your chosen market — primarily data on potential customers and competitors. The overarching goal of your market research should be to illuminate which group (or groups) of people are most likely to buy your product, and why, so that you can tailor your product offerings and marketing efforts toward those groups.

There are two types of market research you can use to collect this information: primary research and secondary research.

In the course of your market research, you will need to account for both demographic factors (such as age, race, gender, and education) and psychographic factors (such as personality traits, personal values and interests, and behavioral patterns) to get a complete picture of your ideal customer group(s).

Once you’ve identified a promising group to target with your business idea, you’ll need to become familiar with their biggest pain points. Identifying key pain points is a matter of pinpointing the most challenging or frustrating problems your customers regularly face that your product or service is equipped to solve.

Once you understand who your customers are and which pressing problems you are well-positioned to solve for them, you can look for market gaps — areas of demand where existing solutions fall short or are absent altogether. These gaps represent your best potential business opportunities.

How to Come Up With Great Business Ideas

One of the best sources of inspiration is your own personal experiences. Reflecting on where you’ve been and what you’ve done so far can lead you to “eureka” moments about problems you frequently encounter.

Likewise, examining your interests might reveal common problems you can solve. Passion-driven businesses are sometimes the most successful due to the element of personal enthusiasm. If, in the course of pursuing your hobbies, you find yourself wishing often for a product or service that doesn't exist, chances are high that others are, too. By using a personal desire as a starting point, you could end up tapping into a much broader latent market demand.

2. Creating a Business Plan

Your business plan is your roadmap for your venture. It should outline your business’s key goals and the steps you'll take to achieve them. Creating a business plan might sound daunting, but it will force] you to think through every aspect of your business and help you identify potential challenges— as well as opportunities you may have missed. A well-crafted business plan is also essential for winning over investors.

Your business plan should include at least a company description, a market analysis, a product or service line, a marketing and sales strategy, and financial projections.

Company Description

Your company description should concisely capture the essence of your business, including its core mission and brand ethos. It should also offer an easily digestible snapshot of your business strategy that enables any reader to quickly grasp what your business does.

Market Analysis 

Your market analysis is a deep dive into your target market. It should mainly address your market’s overall demographics and your ideal customer persona within that market. It should also include information about the competitive landscape your business will be entering.

Product or Service Line

Your product or service line should lay out the details of how your business offers value to customers. It should clearly define your product or service and communicate how it aligns with the demands of your target customer base. Moreover, this section of your business plan should define what sets your product or service apart from others like it.

Marketing and Sales Strategies 

Your marketing and sales strategy should outline how you will promote your offerings and acquire customers in a sustainable manner. It should establish a clear set of steps for getting your product to market, covering everything from branding, to pricing, to distribution channel selection, and beyond.

Financial Projections

Your financial projections should present your business’s anticipated financial figures, such as revenue, expenses, and profits. This section of your business plan should demonstrate the financial viability of your business and lay the groundwork for informed financial decision-making.

3. Funding Your Business

There are many funding options available to entrepreneurs. Some of the most popular methods include bootstrapping (relying on personal savings), angel investors, venture capital, and crowdfunding.

Bootstrapping

This method is one popular choice because it allows you to avoid taking on debt or giving up any ownership of your company. However, it can be very difficult to fund a business entirely on your own savings without limiting its growth potential.

Crowdfunding 

Entrepreneurs who choose to crowdfund their ventures use platforms like Kickstarter to raise funds in small increments from large groups of backers. The backers are usually the product or service’s intended end users — not professional investors. Crowdfunding effectively democratizes access to startup capital (not to mention inherently validates market interest), but attracting enough publicity to crowdfund an entire startup is much easier said than done.

Angel Investors and Venture Capitalists (VCs)

Angel investors (who are often experienced entrepreneurs themselves) generally offer early-stage funding, sometimes in addition to mentorship. Venture capitalists usually pool their capital into venture funds, which are then invested into startups with high growth potential. Both options can result in large amounts of funding for your business but usually come at the expense of a significant equity stake.

Alternative Funding Methods

While bootstrapping, crowdfunding, and raising capital from professional investors are some of the most common ways for entrepreneurs to fund their businesses, they aren’t the only ways — for example, you could also apply to a startup accelerator.

4. Building a Team

Building a strong team should be a high priority for every entrepreneur. Your co-founders — as well as your first few hires — will be some of the most significant deciding factors in the fate of your business. First and foremost, you need people with the right skill sets to complement your own abilities.

You also need partners and team members who share your vision for the company. When sourcing early members of your team, look for people with great attitudes who are eager to learn and grow. 

New business ventures evolve quickly and demand flexibility from everyone, so having team members who are adaptable and open to trying new things will be a huge plus. By selecting team members who bring the right skills and attitude to the table, you can set the stage for a successful core team aligned toward shared goals.

5. Marketing Your Business

To get your great idea into the hands of customers, you need a clear plan for attracting them to your business. Your marketing plan begins with your target audience. You can use all the market research you’ve conducted so far to tailor your marketing messages to have the greatest possible impact on your ideal customer groups. 

It’s also essential to develop a strong brand identity and communicate it to your target audience using a varied mix of marketing channels and tactics.

No matter which marketing tactics you choose, it’s crucial to back up your choice with research. Rather than waste resources blindly targeting every marketing channel at once, figure out which channels your target audience is most likely to engage with and prioritize that group of channels.

6. Scaling Your Business

Growing your business is not just about making it bigger — it's about expanding in smart, sustainable ways. Scaling successfully will require you to identify the opportunities with the greatest potential and approach them with a strategic mindset. These opportunities may lie in different areas depending on your business’s circumstances. Common examples of ways to expand a startup include:

After you've figured out what kind of growth you're aiming for, it's time to map out your journey in a clear and practical way. That's where a growth strategy comes into the picture. This strategy should be like a step-by-step guide, showing you the actions you need to take to make your desired growth a reality. It should cover everything from the timeline for each step, to the resources you'll need along the way, to how you'll track your progress using key performance indicators (KPIs). Throughout the process, it’s important to remain flexible; if circumstances change or your growth plan doesn’t play out the way you expected, you’ll need to be able to adapt quickly.

Remember that your growth strategy is only as good as the team that carries it out. You're going to need a group of skilled and motivated people who have what it takes to handle the challenges of scaling a startup. When you've got the right team in your corner, overcoming obstacles becomes a whole lot easier.

7. Seeking Mentorship

Starting a business is an exciting journey filled with rewarding experiences, but startup success is not without its fair share of hurdles. Having a mentor to guide you through the ups and downs of entrepreneurship can truly be a game changer. With a mentor’s practical insights and experience-backed advice at your disposal, you can cut down your learning time and speed your way toward success.

Mentorcam makes it easy to find the perfect mentor for you. With just a few clicks, you can get direct access to world-class startup founders and professionals in marketing, fundraising, product development, and more.

Get 1:1 advice about entrepreneurship.

Tristram Hewitt

Tristram Hewitt

Ex-VP of Operations - Turo
Startup Growth Expert

Turo
Outschool

Tristram Hewitt is an experienced ops executive with a track record of scaling companies like Turo (Series B to E) and Outschool (Series A to D). His expertise covers customer ops, risk, insurance, go-to-market, and company operations in marketplaces, mobility, and edtech. Tristram excels at data-driven problem-solving and has prior experience at Bain. He got his degree from Harvard and holds his MBA from the University of Chicago.

Turo
Bain & Company
Outschool
Intrax
Harvard University
See pricing & availability
Dan Bauer

Dan Bauer

President - Bauer & Associates Inc.
Marketing and Strategy Expert

Harvard Business School
MBA Exchange

A recognized expert in marketing and entrepreneurship, Dan Bauer founded The MBA Exchange, an education and career advisory firm ranked among the Inc. 5000. Since then, as head of Bauer & Associates, he has delivered high-impact, marketing guidance to clients ranging from Fortune 100 to startups in 30+ industries. Previously, he served as SVP of Global Marketing & Sales for MasterCard International’s global debit business and as Vice President of National Marketing for Citibank NA. His career includes account management roles with DDB Needham and Ketchum Advertising. Bauer earned an MBA from Harvard Business School focusing on general management and marketing. He ranked in the top 15% of his class in industry and competivie analysis.

SVP MasterCard
VP Citibank
Inc. 5000
Harvard MBA
Board Member MonogramGroup
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Chris Yeh

Chris Yeh

Partner - Blitzscaling Ventures
Co-author of Blitzscaling

Blitzscaling Ventures
Harvard Business School

Chris Yeh is a writer, investor, and entrepreneur who has been in the world of startups and scale-ups since 1995. Co-author of the bestselling book Blitzscaling together with LinkedIn founder Reid Hoffman, Chris offers advice and mentorship on on how to build and scale your business. Hundreds of companies, from garage-dwelling startups to Fortune 50 titans have tapped his knowledge and insights to accelerate and transform their businesses. As the Founding Partner of Blitzscaling Ventures, he helps founders rapidly scale their companies, fundraise and figure out how to crack new markets. Prior to his investing journey, he was the CMO of Target, and started his career as a PM at D.E. Shaw in the 90s.

NYT bestseller
CMO Target
Venture Capitalist
Harvard MBA
Blitzscaling Academy
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