what you need to become a business owner

My dad is 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 client base, hired other mechanics, sold services (automobile repair) equally well as products (auto parts), and was ultimately answerable for his own success.

Inquire him what he does for a living, all the same, and he won't tell you lot he's a business owner. He'll say he fixes cars. Ask him about being his own boss and he'll say, "When you accept your own business, you're non the boss. You're an employee."

But in my eyes he is most definitely a business organisation owner, at least according to the definition yous become from a quick search:

A business owner is a person who organizes and operates a business or businesses, taking on greater than normal financial risks in society to do then.

Like my dad, many people who run businesses don't embrace their identity as "business organization owners." On the other hand, you probably know someone who wears the title with pride.

Some people exclude those who own side businesses every bit "existent business organization owners." Others refer to the title broadly, including anyone who starts a new business organisation in whatever chapters. And let'due south not forget the "entrepreneurial tendencies" people can have without owning a business organisation that many companies today look for in the people they rent.

Only is an independent freelancer a business owner? What virtually a full-fourth dimension Uber driver? Someone who runs a stall at a fish market place? Where practise we describe the line, if there is one to draw?

This wide range of interpretations, coupled with all the new ways for people to make coin online on their own terms, begs the question: What exactly is a "business owner" today?

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What is a business possessor?

A business possessor is ane person who is in control of the operational and budgetary aspects of a business organisation. Any entity that produces and sells goods and services for profit, such as an ecommerce shop or freelance writer, is considered a business.

Businesses can exist 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 organisation operations.

According to data from Zippia, the average business owner salary is between $67,000 and $135,000 per year.

Despite the COVID-19 pandemic and a big economical turndown, new concern activity grew in the Usa in 2020. Q3 2022 saw quarterly new business applications hit an all-fourth dimension high, with more than one.46 million new applications filed, a 60.9% quarterly increment, and a 69.ix% year-over-yr spring.

New information shows that applications dipped slightly in Q4, with over ane.1 1000000 applications filed, earlier rising to 1.37 meg in Q1 of 2021, and and then to 1.44 million in the second quarter. In July 2021, more 454,000 business applications were filed alone.

In fact, the 2022 Global Entrepreneurship Monitor written report revealed that over 60% of adults surveyed in the US know someone who started a business during the pandemic. In Central and E Asia, those personally knowing an entrepreneur ranged from thirty% 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 concern during 2022 and 2021.

This is probable due to our evolving interpretation of what a business organisation owner is, one that's born from new variations and forms of "concern ownership," from the sidepreneur to the infopreneur—emphasizing, above all, the cocky-starter attitude toward creating value that, in plow, creates revenue.

Business owners also taken on many other titles, including:

Possessor
Proprietor
Founder
Principal Executive Officer (CEO)
Director
President
Director
Principal
Managing Partner

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 adventure, value creation, and rebellion, the answers I got varied from person to person, from business organisation to business. The definition of business ownership seems to have evolved, and information technology'southward likely the effect of 2 trends:

Thanks to technology, the barriers to entry have never been lower to showtime every bit a business organization owner.
At that place are more paths at present to starting a business concern than ever before.

There are still many reasons people don't become a business concern possessor. Mark Zweig, Entrepreneur in Residence at the University of Arkansas, identified the perceived barriers in his xvi years of teaching new venture development:

"I accept to invent something or practice something new that has never been done before."
"I take to create a engineering business because nix else has existent growth potential."
"I take to sell my idea to VCs or angel investors."
"Starting my own business organisation is riskier than taking a job somewhere."
"I don't know where to outset to create my own business."
"I am not good at (fill up in the blank), and that is a necessary skill to starting time and run a business."
"I am not sometime enough."/"I am as well old."

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 applied science and platforms that enable united states of america to beginning things and put plans into move in ways that weren't possible before.

Business organization owners versus entrepreneurs

Chances are you've heard the term "entrepreneur." It's associated with owning a business concern, and today, the 2 are oft used interchangeably. However, in that location are small differences in the mindset and approach to business organization which differentiates the 2. Ane role isn't meliorate than the other. They are just unlike.

Business organization owners often build companies effectually a business idea that already works, such as starting a eating place or jewelry brand. Entrepreneurs, on the other hand, tend to take on more risk and pursue innovative ideas that solve everyday problems, like Airbnb providing a way to book rooms with locals versus hotels.

The subtle differences between business owners and entrepreneurs are:

Motivation. Business organization owners often starting time a company because they want to work for themselves. Information technology's more a natural progression of turning something they dear into a business concern. Entrepreneurs may see a new vision for the hereafter or a new mode of doing things.
Innovation. Business owners aren't e'er concerned with groundbreaking concepts. They apply proven principles to success. They know their target marketplace intimately and are focused on growing their business and serving customers. Entrepreneurs tend to work on ideas that haven't been tested yet. They challenge the status quo and can modify industries or niches as the business gains traction.
Growth. Business organization owners are keen to grow their visitor, but often at a slower and more than controlled footstep. Entrepreneurs aim for explosive growth, going nationwide to international equally fast as possible. They don't use the aforementioned tactics as business owners and oftentimes cleave out a new market place to dominate competitors.

The mutual thread is that they both made the conclusion to start a concern. This decision is often influenced by many different personal factors:

Ability to spot opportunities
Attitude toward taking risks
Personal ambitions
Level of self-confidence
Resource
Social and family unit support

Whether you identify as an entrepreneur or as a concern possessor, you nevertheless work with the same stakeholders: suppliers, manufacturers, banks, customers, employees, contractors, etc. Both groups run across a business organization opportunity and deed on it. They adapt and presume skills to create more valuable businesses that turn a turn a profit.

Business ownership types

Starting a business is both challenging and rewarding. Creating a business name, building a website, finding products to sell, and finding customers are the fun parts of having your own business. But you can't forget almost business concern ownership types and incorporation.

Your business structure decides how y'all're taxed, your liabilities, and how yous can secure capital, if needed.

There are four main types of concern structures to choose from:

Sole proprietorship. A sole proprietorship is an unincorporated business without legal stardom between the business concern and the person who owns and runs it. It's piece of cake to set up and manage, and you'll probable pay less in taxes.
Partnership. A partnership is a business with two or more owners. General partnerships presume the business is evenly divided or split up into percentages that are agreed upon earlier filing.
Corporation. A corporation is a legal entity separate from a person, and so you are free from personal liability, unless information technology's a rare and extenuating circumstance. What yous pay in taxes differs by state, and then y'all may or may not pay more than a sole proprietorship. But your personal property is protected.
Limited Liability Company (LLC). An LLC is a newer, hybrid business type that combines partnerships with the liability protections constitute in corporations. See our state specific guides for California LLC, Texas LLC and Florida LLC.

The best type of ownership depends on your business model's needs. Read Types of Businesses: Which Legal Structure Is Right for Your New Venture? to cull the best one for you.

Business owner roles and responsibilities

Business owners practice whatever it takes to make their venture a success. This means doing the petty things you may not be a fan of, like authoritative work or driving orders to the post part or creating a marketing strategy.

Your 24-hour interval-to-mean solar day tasks depend on your business and how y'all choose to spend your time. Merely they typically boil down to the post-obit roles and responsibilities:

Planning and strategy

Minor business owners are responsible for the direction of their own company. They are in charge of creating and managing their business organization program, developing their marketing campaigns, and coming up with ways to keep the visitor competitive and assisting. Research and planning are essential skills for a concern possessor. Many business concern owners also use time management apps to come across deadlines, lower stress, and create meliorate work-life balance.

Finance and accounting

Business owners need to manage finances properly to give the business a fighting chance. You'll be responsible for getting commencement-up majuscule to establish the business, whether it's through a small business loan or crowdfunding, plus funding expenses for product evolution, marketing assets, and hiring employees. Don't forget near maintaining concern banking concern accounts, payments processing, taxes, and general accounting.

Compliance and legal

Business owners are likewise responsible for complying with federal and state licensing laws. As mentioned above, you must incorporate your business and empathise the legal requirements for operating one.

Y'all'll likewise demand to know the basics of labor laws and should take a lawyer available if you meet any problems with employees or customers. Everything from legal contracts and sales agreements are written, reviewed, and signed past y'all.

Marketing and sales

No affair how unique or amazing your products are, you need marketing and sales to make money as a business. Depending on your business type, you'll exist responsible for joining sales calls and closing deals in the early stages.

Yous'll also be the go-to person for creating campaigns, approving ads, running social media marketing and email marketings, and conducting other marketing activities for the business.

Customer service

Information technology'southward also common in the early stages for business owners to be the main customer back up agent. Tasks include answering phones and emails, jumping in a live conversation chat on the website, and managing the customer human relationship management (CRM) software. It's upward to you to build a positive reputation for your business and please customers then they go out positive reviews and brand repeat purchases. As the business grows, yous can hire an employee to help with customer service duties.

Hiring and homo resource

Business owners are likewise in charge of building a swell squad to operate the business. This includes finding and hiring new employees, and training and developing existing ones. You'll create the job descriptions, do performance reviews, and control employees' pay, benefits, and advancements in your company.

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How to go a business owner

Condign a business owner is all about uncovering assisting business opportunities.

Unless you've been hitting with a vivid thought correct from the beginning and that'south your motivation to outset your business organisation, finding great products to sell online profitably tin be a daunting task. There are thousands of possible choices, nevertheless everything seems like information technology's been done a thou times earlier.

And then with all these production choices, where do you even brainstorm digging to observe the golden? The first footstep to finding products to sell online is being able to recognize the various opportunities that exist for uncovering great products.

Agreement the following eight product opportunity types is key to helping you place great products to sell and niches to explore online. Each one involves a different mindset and arroyo. Let's explore them in more detail:

Build an interesting and captivating make
Uncover opportunities in keywords
Identify and solve a customer pain point
Identify and cater to consumer passions
Follow your own passion
Wait for an opportunity gap
Use your own experience and expertise

one. Build an interesting and captivating brand

Differing from the previous method, building a brand ways likewise building an audition. A make-building approach involves developing a superior agreement of your potential customers, crafting a unique brand, and carving out a unique place in your customers' minds.

This approach to building an online business can be especially constructive at differentiating yourself from competitors in the market if in that location is heavy contest.

Example: DODOcase, an Apple products case manufacturer has done a noteworthy chore at crafting a unique make. Despite operating in the extremely crowded and competitive space of iPad cases, DODOcase bankrupt through past telling a different and unique story, one where its cases are handcrafted using traditional artisan bookbinding techniques in the metropolis of San Francisco.

Information technology's this unique story and brand that has fabricated DODOcase 1 of the top iPad case manufacturers in the globe in a curt amount of time.

2. Uncover opportunities in keywords

Organic search traffic can be the holy grail of ecommerce. If done correctly, Google and other search engines volition reward you with consistent and targeted traffic. In a world of slim margins, where paid advertising channels are consistently getting more expensive, this is precisely what makes products with keyword opportunities so lucrative.

Looking for keyword opportunities involves strategically looking for a product or niche online based on the keywords people are searching for in search engines like Google and Bing, then identifying high volume but low competition search terms.

Keyword research can be a chip technical, so this opportunity involves a solid base understanding of keyword research and search engine optimization (SEO).

This opportunity tin be especially lucrative if you plan to dropship products, as margins on dropshipped appurtenances are sparse, often making it hard to use paid advertisement channels effectively.

Instance: Gymshark invested fourth dimension and energy into SEO and found an opportunity to rank for keywords in the fitness wear niche.

You can see in the image above that Gymshark has been able to rank in both the 2d and third organic position on Google for the organic search term "gym clothes," which 74,000 people search for each calendar month. It's been SEO opportunities like this that have helped Gymshark go so successful—that and having amazing products.

3. Place and solve a customer pain bespeak

One of the all-time ways to build a strong business is by solving a customer pain indicate. Products that solve pain points can be lucrative considering customers are actively seeking out solutions to these issues.

Keep in listen that pain points don't always hateful concrete pain. They can also include frustrating, fourth dimension consuming, or poor experiences.

Example: Jing, an ecommerce entrepreneur, knew that people that grind their teeth can suffer from excruciating pain. More than just the concrete pain, constant grinding can lead to expensive dental bills.

Knowing this was a pain betoken that many people would seek out a solution for and happily pay money to solve, Jing launched Pro Teeth Baby-sit, a custom moulded teeth guard at a corking toll.

4. Identify and cater to consumer passions

Consumers tend to spend significantly more money to support their passions and habits. Simply consider golfers. Golfers are notorious for spending thousands of dollars on gear and gadgets with the hopes and dreams of lowering their score, even by the slightest.

Catering to passions has boosted benefits, including deeper interaction with your brand, brand loyalty, and increased word-of-mouth marketing.

Example: BlackMilk Habiliment began in 2009 after the founder's blog, TooManyTights, exploded in popularity.

Recognizing the passion consumers had for tights with unique designs and understanding the opportunity, the founder created BlackMilk Wearable. Today, BlackMilk is a multimillion-dollar visitor that's grown to over 150 employees and distributes its products globally.

Furthermore, past piggybacking on pop culture trends with its designs, BlackMilk taps into passionate audiences and customers from a range of unlike niches beyond just tights.

5. Follow your own passion

Some people consider choosing a product or niche based on your own personal passion to be a recipe for disaster. However, that'south not ever the instance, and can actually prove to be extremely assisting.

I of the biggest benefits to edifice a business around your passion is having the tenacity to keep going when you run into difficult times. This one point shouldn't be underestimated, equally staying motivated is a major key to building a successful online business.

Example: Eric Bandholz began Beardbrand every bit a personal blog discussing business and sales strategy. Over time though, Eric's passion for the disguised lifestyle kept creeping into his web log. Eventually, he went all in on that passion and launched Beardbrand, a brand that sells beard preparation supplies to men that are equally passionate most their beards.

vi. Look for an opportunity gap

Capitalizing on an opportunity or feature gap can be lucrative. This opportunity type involves uncovering problems or deficiencies in a production or the marketing for a production that can be capitalized on. An opportunity gap may exist in the course of an improved or additional production feature, an unrealized market by the current competitors, or it may even come in the grade of your ain marketing capability.

Example: Chaim Pikarski continually seeks out and capitalizes on opportunity gaps. He and his squad scour production listings all over the web and thoroughly read the reviews section.

They are continually on the lookout for deficiencies and feature gaps that buyers post. With this data in mitt, Chaim sources a manufacturer and makes his own, better version of the original product.

Hipe shower radio is one such product (of hundreds) Chaim has manufactured by finding an opportunity gap in the original marketplace. Past looking at other shower radios and reading consumer reviews, he plant an opportunity gap for a shower radio that was rechargeable.

7. Lean on your own experience and expertise

Leaning into your own experience and expertise is a potent competitive advantage. Turning your expertise into an online business is a neat way to enter the marketplace with a leg up and a bulwark to entry for others.

Case: Rhiannon Taylor, an gorging urban gardner and Japanese gardening enthusiast, turned her passion for plants into the online boutique, RT1home. Rhiannon also shares her insights with people on the RT1home web log and YouTube channel, which teaches them how to use RT1 products and take better care of their business firm plants.

Creating a successful small business

Because that "part-time business organisation buying" is now more than common than it once was, it'south no longer necessary for y'all to quit your job to commencement a concern online.

Many Shopify shop owners run successful businesses office fourth dimension, during evenings or on the weekend, eventually going full fourth dimension if they choose to. Some have a concrete location for their shop and others operate entirely online.

Businesses can now exist in a variety of forms that just weren't possible before. So naturally, people are starting them for a diverseness of reasons. You tin too.

Illustration by Francesco Ciccolella

Business owner FAQ

Is an entrepreneur a business possessor?

Yes. Small-scale-business owners tend to run an established business concern with a proven product and customer base of operations. Entrepreneurs tend to take on more risk through high-growth, innovative, untested business organization ideas, such equally an app that hails cabs from your phone. Both are self-employed and referred to interchangeably.

What's another proper noun for a business organization owner?

Owner
Proprietor
Founder
Chief Executive Officer (CEO)
Managing Director
President
Director
Main
Managing Partner