Starting Your First Venture? Here’s What You Need to Become a Business Owner
In 1990, he opened his own auto shop. He took a risk, went through the motions of uncertainty and stress, worked a second job to support his family and his business, grew his customer base, hired other mechanics, sold services (auto repair) as well as products (auto parts), and was ultimately accountable for his own success.
Ask him what he does for a living, however, and he won’t tell you he’s a business owner. He’ll say he fixes cars. Ask him about being his own boss and he’ll say, “When you have your own business, you’re not the boss. You’re an employee.”
Some people exclude those who own side businesses as “real business owners.” Others refer to the title broadly, including anyone who starts a new business in any capacity. And let’s not forget the “entrepreneurial tendencies” people can have without owning a business that many companies today look for in the people they hire.
But is an independent freelancer a business owner? What about a full-time Uber driver? Someone who runs a stall at a fish market? Where do we draw the line, if there is one to draw?
Free: The Big List of Business Ideas
Get the big list of business ideas delivered right to your inbox.
Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 14-day trial of Shopify.
What is a business owner?
A business owner is one person who is in control of the operational and monetary aspects of a business. Any entity that produces and sells goods and services for profit, such as an ecommerce store or freelance writer, is considered a business.
Businesses can be run alone or with a group of people. Regardless, its owners have complete control over the company and are responsible for defining a strategy, training staff, and managing day-to-day business operations.
Despite the COVID-19 pandemic and a big economic turndown, new business activity grew in the United States in 2020. Q3 2020 saw quarterly new business applications hit an all-time high, with more than 1.46 million new applications filed, a 60.9% quarterly increase, and a 69.9% year-over-year jump.
New data shows that applications dipped slightly in Q4, with over 1.1 million applications filed, before rising to 1.37 million in Q1 of 2021, and then to 1.44 million in the second quarter. In July 2021, more than 454,000 business applications were filed alone.
In fact, the 2021 Global Entrepreneurship Monitor report revealed that over 60% of adults surveyed in the US know someone who started a business during the pandemic. In Central and East Asia, those personally knowing an entrepreneur ranged from 30% to over 80%. The Latin American and Caribbean region showed less variation, ranging between 50% and 75% of people knowing someone who started a business during 2020 and 2021.
This is likely due to our evolving interpretation of what a business owner is, one that’s born from new variations and forms of “business ownership,” from the sidepreneur to the infopreneur—emphasizing, above all, the self-starter attitude toward creating value that, in turn, creates revenue.
I spoke to over 25 business owners from all walks of life—solopreneurs, tech founders, store owners, and creators—to get a range of perspectives on what exactly a business owner is.
Aside from the recurring themes of risk, value creation, and rebellion, the answers I got varied from person to person, from business to business. The definition of business ownership seems to have evolved, and it’s likely the result of two trends:
There are still many reasons people don’t become a business owner. Mark Zweig, Entrepreneur in Residence at the University of Arkansas, identified the perceived barriers in his 16 years of teaching new venture development:
But a lot of these are what I’d call legacy fears surrounding business ownership—outdated misgivings that have yet to catch up with the technology and platforms that enable us to start things and put plans into motion in ways that weren’t possible before.
2. BUY AN EXISTING BUSINESS
- Cash flow and goodwill: The business has money coming in and has developed a marketplace presence.
- Actual historical results: It has profit and loss statements as well as balance sheets that you can review. The tax returns are where you’ll typically find the most accurate information.
- Attractive to lenders: If the business is profitable (if it’s not, look elsewhere!) lenders may be interested in helping finance the purchase.
- Established location and customer base: Most businesses have a location where they operate. The business also has customers who are purchasing its products or services providing the cash flow mentioned above.
- Systems may be in place: Instead of having to create systems and experiment, there are already functioning systems in place. The more robust they are, the easier it is for the new owner to step in and keep the business operating efficiently.
- Owner financing: The owner generally carries a note on a portion of the purchase. Most banks will require this as part of their financing package. This way the owner/seller has a financial interest in a successful transition to the new owner.
- What is the real cash flow? Some businesses have more than one set of books. Some industries are notorious for doing a lot of cash business that is often under or unreported. Making a buying decision is tough when you are not sure of the numbers.
- What is the goodwill? If it is all tied up with the owner and their personal relationships with customers and vendors, then that goodwill leaves when the owner leaves.
- Hidden seller motive: Knowing if there is a hidden motive is difficult, if not impossible, to discover. Is there a major account that is leaving or going out of business? What about new pending regulations for the industry or the local business area?
- Poor training/support by the former owner: Even with seller financing, the seller may not be all that motivated to provide the kind of training and support you really need.
- Limited availability: There are good, profitable businesses for sale, but they are limited in number.
3. BUY A FRANCHISE
Investing in a franchise offers a fast path to business ownership with a proven system. But just with the other two ways to become a business owner, there are pros and cons to consider.
- Lots of choices: There are around 5,000 franchises in 80 or so industries, so you can usually find a franchise that will be a good fit.
- Projections are based on other franchisee’s results: You can talk to franchise owners who are already running the franchise. You can get a good idea of how you might do in the same business.
- Proven systems: This is what franchising is all about. A franchise’s proven systems and processes will help you be successful and mitigate risks.
- Not a first-time effort: Generally there are several — if not hundreds — of other franchisees that are in the business, so it is continually being refined.
- Home-based options: Service franchises that can be operated from home or a small office are much less of an investment than brick-and-mortar franchises.
Make Your Business and Work Your Worship
If you want to become a successful businessman, be passionate & strong about what you are doing. Either it’s 100% in or 100% out. There is no middle ground, there never is. U.S SBA reports over 47% of startups to fail when owners rest on their laurels. Mark Zuckerberg goes to work daily as does Bill Gates of Microsoft, among other successful entrepreneurs. Why should you leave others to run the show?
Being a young entrepreneur doesn’t exempt you from registering your business, keeping records and paying taxes. Following these simple rules now will save you from legal and administrative headaches later.
To become a successful entrepreneur, [/tag/entrepreneurs/] one needs to dedicatetime and energy to a business venture. Starting working on business gives a lotof time to know the in and out of business. But it takes willpower to start abusiness [/tag/start-your-own-business/] at any age as starti…
Don’t Settle
As it is said, there is always room for improvement. A businessman always sees where things are going wrong and how they can be improved. No matter how good your business is going currently, one must look for opportunities to improve more.
If you want to be a thriving as well as become a successful businessman, you will have to challenge yourself no matter what happens. No one else is going to push you, so it’s up to you to do it.
Believing in your abilities, powers, and judgments is what brings success inlife. Self-confidence is memory verse in our day to day life. Sometimes, Lifefeels meaningless without self-confidence. Self-confidence can be achieved byanalyzing and identifying what you are good at, what value you add …
How to become a businessman?
How to become a successful entrepreneur?
What skills should a businessman have?
How to improve business skills?
What does a businessman do?
Resource:
https://www.shopify.com/blog/business-owner
https://www.franchisewire.com/three-ways-to-become-a-business-owner/
https://startuptalky.com/tips-successful-entrepreneur-businessman/