How To Become a Business Owner in 10 Easy Steps

ByJulija A.
June 30,2022

The post-pandemic world has brought dramatic changes to the business landscape. Many brick-and-mortar businesses have closed their doors for good, while others have shifted to an online presence. Starting a business is easier than ever before, and there are many opportunities for those with an entrepreneurial spirit.

If you’ve been thinking about starting your own business, now is the time to take the plunge. But where do you start? We've gathered tips and tricks on how to become a business owner to get you started on the right path.

1. Define Your Niche

The first step to starting any business is to identify your target market. Who are you selling to? What need does your product or service fill? Make sure to brainstorm your general goals for the business, as well as specific marketing strategies that will help you reach your target audience.

Once you’ve defined your niche, it’s time to research the competition. See what businesses are already out there serving your target market. What are they doing well? What could they improve upon? 

Finally, if you are interested in how to become an owner of a business, you should start by identifying the gaps in the market. In that way, you’ll create a unique selling proposition for your business. 

2. Decide on a Type of Proprietorship

Now that you've determined what business you'd like to start and done thorough market research, it's time to choose a career path. Do you want to be a solopreneur or build a team? Are you interested in starting a franchise or an independent business? The options are endless, and the decision should be based on your specific goals and skill set. The three main ways to kick-start your company are:

Purchasing an Existing Business

This is the quickest way to become a business owner, but it comes with some risks. Existing businesses come with a customer base, employees, and established systems. However, becoming a small business owner this way also means that you’ll inherit the company's debts and liabilities. If you're looking to take on an existing business, make sure to do your due diligence and understand all the financial risks involved.

Starting a Franchise

Franchises offer the opportunity to be your own boss while also benefiting from the support of a larger company. When you start a franchise, you're purchasing the right to use the company's name, logo, and marketing materials. You'll also receive training on how to run the business and access to the company's supplier network, in case you don’t know how to become a business franchise owner

The downside of franchises is that you'll have less control over your business, and you'll be required to pay royalties to the franchisor.

Launching a New Company From Scratch

This is the most challenging way to become a business owner, but it also offers the most growth potential. If you're starting a business from scratch, you'll need to generate your own funding, build a team of employees, and create a new brand. While this option is riskier, it also gives you complete control over your business.

3. Draft a Business Plan

Having a business idea isn’t enough. Before you venture into finding out how to become a successful business owner, you should first put together a business plan. This document will serve as a roadmap for your business, outlining your short- and long-term goals, strategies for marketing and growth, and details about your financial projections.

Your business plan should be as specific and detailed as possible. Include information on your target market, product or service, pricing strategy, and expected profits. Don’t forget to include a detailed marketing plan, which will outline how you plan to generate awareness for your business and attract customers.

4. Find Ways to Secure Funds

Unfortunately, we can’t provide you with ideas on how to become a business owner with no money. In fact, according to statistics, 20% of small businesses fail within the first year. One of the main reasons for this is a lack of capital. Before starting your business, you need to find ways to secure funding. There are a number of options available, including loans, grants, and investment capital.

It is ideal for a small business owner to secure enough funds to cover three to six months of expenses before getting started on their business ownership journey. Once you start, you’ll have to find a way to keep the business afloat with operating expenses. Some of the ways you can do this include:

  • Using your own funds
  • Obtaining venture capital from investors
  • Visiting crowdfunding sites
  • Taking out a small business loan

5. Choose a Name and Location 

If you’re researching how to become a legal business owner, you’ll have to choose a proper name for your business. Keep in mind that your business name should be reflective of your brand and what you do. Make sure to protect the name of your company and the domain name by trademarking it.

You'll also need to choose a business location. If you're starting an online business, you can work from anywhere in the world. However, if you're starting a brick-and-mortar business, you'll need to find a physical space to rent or purchase. Consider the local regulations and zoning laws in your area to find a location compliant with all the legal requirements.

6. Choose a Business Structure

Successful business owners understand the importance of choosing the right business structure. The type of business you're starting will dictate the legal structure you should choose. This will further determine the legal and financial liability of your business. The most common business structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.

Sole Proprietorship

A sole proprietorship is the simplest and most common type of business structure. It's owned and operated by one person, and there's no legal distinction between the owner and the business.

Partnership

A partnership is a business structure that involves two or more people. Before we delve deeper into how to become a part-owner of a business, we should explain that partnerships can be either general or limited. In a general partnership, all partners are equally liable for the debts and obligations of the business. In a limited partnership, there is at least one partner who has unlimited liability and one or more partners who have limited liability.

LLC

A limited liability company (LLC) is a business structure that offers personal liability protection to its owners. LLCs can be either single-member LLCs (owned by one person) or multi-member LLCs (owned by two or more people). Choose one of the top-rated LLC services and outsource LLC formation and ongoing compliance to experienced agents. 

Corporation

Finally, if you’ve been wondering how to become a business owner within a corporation, you should get familiar with what a corporation is. A corporation is a business structure that offers limited liability protection to its shareholders. Corporations can be either for-profit or nonprofit. Additionally, an S corporation is a special type of corporation that offers tax benefits to its shareholders.

7. Register Your Business 

Once you have a business plan in place, it's time to register your business officially. If you're not sure how to become a licensed business owner, you can consult with an attorney or accountant for help. This process will vary depending on the type of business you're starting and your location. 

In most cases, you'll need to choose a legal structure for your business and obtain a business license or permit. You'll also need to open a business bank account and obtain any necessary insurance for your small business. These steps will help you get started on the right foot and ensure that your company is compliant with all local, state, and federal laws.

8. Open a Business Bank Account

One of the last steps to take to become a business owner is to open a business bank account with a reliable bank that deals with small businesses. This is a separate account from your personal one and is used to track the income and expenses of your company. The most common business accounts are savings accounts, credit card accounts, merchant services accounts, and checking accounts for small business owners.

Most banks will require you to have a federal employer identification number (EIN) before they open a business account for you. You should also provide them with your business's formation documents, ownership agreements, and a business license.

9. Hire Team Members 

Knowing how to become a small business owner isn't enough - you also need to know how to run your business effectively. If you're starting out, chances are you won't be able to do it all on your own. You'll need to build a team of employees, contractors, or freelancers to help you with the day-to-day operations. 

When hiring team members, it's essential to consider the skills and experience they bring to the table. You'll also want to ensure they're a good fit for your company culture.

Once you've built your team, it's important to manage them effectively. This includes setting clear expectations, providing feedback, and offering incentives for good performance. By taking the time to build a strong team, you'll set your business up for success.

10. Develop a Marketing Plan 

Being a business owner means wearing many hats. One of the most important hats you'll wear is that of a marketer. As the face of your business, it's your job to generate interest in your products or services and convert that interest into sales.

The best way to do this is to develop a marketing plan. This plan should include a mix of online and marketing tactics, such as search engine optimization, content marketing, social media marketing, and traditional advertising. You can hire one of the many email marketing services to create and execute your marketing plan for you.

What Do You Need to Become a Successful Business Owner?

Success doesn't come overnight. It takes time, dedication, and hard work. You'll need a clear vision, a strong team, and a comprehensive marketing plan. You'll also need to constantly learn and grow, monitor your progress, and make adjustments as needed.

You can acquire certain soft skills through formal education, such as leadership and communication. Also, many online resources, such as Coursera and Udemy, offer affordable business courses. For example, if you want to learn more about marketing, you can take some online courses in digital marketing.

However, in most cases, you won't need a business degree to start a business; knowing how to become a business owner is more important. You can pick the knowledge you need to run a business through the work experience you have gained.

Some people are born entrepreneurs, while others develop the skills over time. If you have the drive and determination to succeed, you can become a successful business owner regardless of your formal qualifications.

Final Thoughts

Becoming a business owner requires hard work and dedication. But with the right knowledge and tools, it can be an enriching experience.

By following our tips for business owners who are just starting their entrepreneurship journey, you'll be well on your way to success. Just remember that running a business is not a sprint - it's a marathon. So take your time, build a strong foundation, and continuously learn and grow. 

FAQ
Can anyone become a business owner?

In most cases, you don't need a business degree to become a successful business owner. However, having some formal training to gain soft skills can be helpful. If you don’t have it, you can go for one of the many online resources, such as Coursera and Udemy, that offer affordable business courses.

How long does it take to become a business owner?

There's no set timeframe for becoming a business owner. It depends on many factors, such as the type of business you're starting, your experience, and your dedication. In most cases, it takes a year to build the fundamentals, but most small businesses need at least two or three years to become profitable. 

Is it easy to become a business owner?

The answer is both yes and no. It all depends on the business you want to start, the amount of money you're willing to invest, and your experience level. If you were reading our article to get the idea of how to become a business owner with limited capital, then the answer is yes: it can be pretty straightforward. There are plenty of businesses you can start with very little money.

However, if you're looking to start a large business or one that requires a lot of capital, then it will not be easy. Instead, you’ll have to invest hard work, dedication, and a lot of money.

About the author

Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

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To stay competitive, eBay has introduced features such as “Buy It Now,” which lets buyers purchase items immediately at a set price, as well as “Best Offer,” which allows consumers to negotiate with sellers. Yet another benefit eBay users can count on is its “Best Price Guarantee.” If shoppers find a product they purchased on eBay for a lower price at another online retailer within 48 hours, eBay will offer a coupon worth 110 percent difference in price. Along with the guaranteed delivery scheme, which guarantees a refund if delivery takes more than three days, these initiatives make for a very customer-centric approach. 3. Alibaba - The Chinese eCommerce Dragon Market cap: $278 billion Revenue: $129.44 billion Monthly visits: 138.4 million The next entry on our handpicked list of eCommerce companies is a Chinese brand that has taken the world by storm - Alibaba. It was founded in 1999 as a business-to-business portal meant to connect Chinese manufacturers with overseas buyers.  Starting as a rags-to-riches story, the company has since transformed into a massive eCommerce empire with a market cap of over $278 billion. Currently, Alibaba is the largest eCommerce company in China and the world’s third-largest Infrastructure-as-a-Service provider by revenue.  The company operates a range of websites, including Taobao, DingTalk, AliExpress, and Tmall, which have a combined active user base of 1.31 billion, including 305 million overseas consumers. It operates in over 190 countries, offering online shopping, cloud services, logistics networks, digital media, entertainment, and more. Alibaba is one of the eCommerce retail companies that has been incredibly successful in China thanks to its focus on the country’s vast and growing middle class. The company has also been very innovative, introducing features such as Tmall, which provides a platform for businesses to sell to consumers, and AliExpress, which lets small businesses sell to buyers outside of China. In recent years, Alibaba has been expanding aggressively outside of China. The company has made a number of high-profile acquisitions, such as the purchase of the South China Morning Post in 2015. Alibaba has also invested heavily in overseas eCommerce companies, such as Lazada in Southeast Asia, further cementing itself as one of the top 5 eCommerce companies worldwide. In 2021, the company reported $129.44 billion in revenue, representing a considerable increase compared to the previous year’s $94.46 billion. We expect the upward trend to continue as Alibaba continues to capitalize on the growing global middle class and new international ventures. 4. Rakuten - The Amazon of Japan Market cap: $7.36 billion Revenue: $15 billion Monthly visits: 542.7 million Founded in 1997, Rakuten is a Japanese eCommerce company that is often referred to as the “Amazon of Japan.” The firm operates over 70 services, including an online marketplace, Japan’s largest online bank, the Viber messaging app, an e-book store, and Rakuten Mobile, a mobile carrier.  Today, Rakuten is the largest eCommerce company in Japan and one of the top 10 eCommerce companies in the world, with a market cap of $7.36 billion. The company’s website got a total of 542.7 million visits in April 2022, many of which were searching for Rakuten Travel services, which is Japan's largest online hotel reservation website. The ground-breaking acquisition of Viber in 2014 for $900 million was a strong statement of Rakuten’s ambitions to become a global player in the tech industry. The messaging app has since been integrated into Rakuten’s ecosystem and is used by over one billion people worldwide. Rakuten’s online marketplace is the company’s largest business and accounts for the lion’s share of its revenue. Being one of the best eCommerce brands, it sells everything from books and clothes to electronics and furniture. Rakuten is also known for its cashback program, which gives shoppers a percentage of their purchase back in the form of Rakuten Points. In 2021, Rakuten’s annual revenue amounted to $15 billion, having increased over the previous decade. With that in mind, and given that the name “Rakuten” means “optimism” in Japanese, we expect this upward trend to continue. 5. Walmart - The eCommerce Pioneer Market cap: $361.80 billion Revenue: $571.96 billion Monthly visits: 407.8 million Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded in 1962 and currently has around 10,500 locations in 24 countries. Being one of the top eCommerce companies in the USA, the total number of visits to its website was 407.8 million, according to the May 2022 data. Walmart’s online sales in the US amounted to around 47.8 billion dollars, which is an increase of about 11% compared to the previous year’s figures. Moreover, the company has a market cap of $361.80 billion and has been ranked 1st on the Fortune 500 list for 10 consecutive years.  The continued, steady growth encouraged the company to invest in its eCommerce resources by focusing on expanding and improving its delivery services and grocery pickup. This, combined with Walmart’s wide range of available products and its competitive prices, makes it one of the dominant entries on the eCommerce companies list.  Overall, Walmart offers a great customer experience, provides convenient delivery options, and has an impressive supply chain of 210 distribution centers and a fleet of almost 90,000 vehicles that deliver products to stores and customers. 6. The Home Depot - Everyone’s Favorite Home Improvement Store Market cap: $306.45 billion Revenue: $147.69 billion Monthly visits: 203.6 million Founded in 1978, The Home Depot is the world’s largest home improvement retailer, with more than 2,000 stores in the United States, Canada, and Mexico. The company offers a wide range of products, including tools, building materials, furniture, lawn and garden products, and appliances. When it comes to eCommerce services, Home Depot is currently one of the top eCommerce furniture companies, along with IKEA, with a website that received around 203.6 million visits in June 2022. In recent years, Home Depot has put a lot of focus on its eCommerce business, investing in initiatives such as same-day delivery and in-store pick-up. One of the newest additions to its online services, the “Rent Online, Pick-up In Store” feature, has become quite popular among customers.  ROPIS allows customers to reserve items online and then pick them up at their nearest store. This service is highly convenient for customers who don’t have time to wait for delivery or wait in queues, as well as those who live in rural areas. Combined with its mixed cart selling scheme, whereby customers can purchase both physical and digital items in one transaction, Home Depot’s online presence among other top eCommerce retailers is becoming quite strong. Final Thoughts Many factors have been contributing to the growing popularity of eCommerce in the world. The COVID-19 pandemic has played a significant role in this, as people started turning to online shopping out of necessity. In addition, the availability and popularity of contactless payment options, such as Apple Pay and Amazon Pay, have made it easier and more convenient for people to shop online. In times of drastic changes in the business world, it is hard to imagine the eCommerce industry without the six online sales companies we listed above, as they have all played a significant role in shaping the eCommerce landscape as we know it today.
By Danica Djokic · July 28,2022

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