It takes more than sheer confidence and a business plan to be an entrepreneur.
According to the Global Entrepreneurship Monitor's 2020/2021 Report, more than 60% of Americans believe they have the skills, knowledge, and experience necessary to launch a business. But while self-efficacy is a great start, it's not enough.
Here are five things that will strengthen your chances at becoming a successful entrepreneur.
1. Good Emotional Footing
Matt Ballema, the president and owner of Pioneer Search Group, an executive search firm, urges aspiring entrepreneurs to make sure they are on solid ground before starting their own businesses.
“Above and beyond any idea or frustration at your current job or career, why do you want to be self-employed?" he says. “Are you ready for the all-out emotional war and anxiety that undoubtedly comes over every new entrepreneur? Will you be willing to sacrifice most everything for it—time, relationships, self-care?"
Decide if you're able to devote much of your time and energy to your fledgling business.
2. Ability to Tolerate Risk
Patrick Burke, the managing partner of tax and business consulting firm Burke & Schindler PLL, says potential entrepreneurs should ask themselves if they can live with the uncertainty associated with running your own business, and if they have a safety net should things go awry.
“Can you tolerate the risk of not knowing what your income will be in any given year?" he says. “And what is your relationship with money? If losing any part of it would be a personal disaster, you better rethink your idea to be an entrepreneur."
3. A Clear Mission
Your business must provide a clear value, according to Brett Larkin, the founder and CEO of Uplifted Yoga, an online yoga school.
“No matter how great your idea is, how much drive you have, how brilliant you are, or how much capital you have, ask yourself this question: Will people actually buy this product or service?" Larkin says.
“Start by figuring out your audience's pain points, which are their needs, then think about how your competitors are fulfilling those needs and how you could do these things better," he explains. “A USP is your most important characteristic that differentiates your business from others."
4. A Revenue Plan
Many early business owners focus on the wrong things, such as logos, office space, or equipment. While those are important, 90% of your energy during the first 90 days should be focused on sales and revenue, according to Ballema.
5. Good Time Management
Being an entrepreneur is like being a circus ringmaster, Carlos Castelán, the founder and managing director of The Navio Group, a management consulting firm, says.
“With dozens of things that need to be done daily and so many distractions, one of the most challenging things about being an entrepreneur is constantly juggling a set of competing priorities and figuring out where to invest your limited time," he says.
Create a list of priorities by weighing the short- and long-term impact of every task, because the choice isn't obvious in the moment.
“Urgent and important work is easy to identify and do. However, where the most value is created over the long-run is the work that's important but non-urgent," Castelán says.
“Those are the activities that create significant value over the long run but do not have an immediate deadline. Prioritizing that work while balancing what's needed right away is one of the hardest things to do as an entrepreneur."
Knowing When You're Ready
Ballema offered some parting advice for budding entrepreneurs: “Take the time to self-reflect and diagnose what you really want and what you can handle both financially and emotionally," he says. “The old cliché to 'follow your dreams' is good advice — just be ready for what is ahead. If you can make peace with that, it will be a great ride."