How to Become a Small Business Owner: Career Path Guide
If you want to become a small business owner, you first need to determine if this career path is a good fit for your skills and interests. If the following description sounds like you, then you’re probably well suited for a career as a small business owner:
• You are able to recognize potentially lucrative opportunities and predict market trends
• You have a strong desire to work for yourself
• You are able to raise enough capital to start or buy a business
• You have a thorough understanding of your market
• You are able to effectively prepare cost estimates, budgets, and work timetables
• You have a high risk tolerance; you can handle the possibility of heavy financial losses
Below we've outlined what you'll need to begin a career as a small business owner. We've also included helpful information for this career, such as job description, job duties, salary expectations, a list of possible employers and much more!
Education Needed to Become a Small Business Owner
There is no set educational path for becoming a small business owner, as there are no industry regulations to dictate such requirements, and since you are your own boss, there is no one to tell you otherwise.
There are however, some classes that could be of great benefit to you as a prospective business owner. These classes may be pursued as part of a business or commerce degree program, or they may be pursued on a per-course basis at the community college, college or university level.
Introduction to Small Business and Entrepreneurship: An introductory course in small business or entrepreneurship typically includes a broad overview of the responsibilities and duties that come with owning a small business. These classes will teach you about the various facets of operation, including legal considerations, human resources standards, finances and other aspects of running a company.
Human Resources Management: As a small business owner, you will likely have at least one employee other than yourself. A course in human resources management will teach you about the strategic and legal implications of employing workers, such as compensation and benefits, hiring practices, policy manuals, work schedules, as well as proper payroll and supervisory practices.
Small Business Financial Management: Taking a course in small business financial management gives you knowledge in several important areas of small business finance, such as how to effectively budget and maintain proper accounting record-keeping. You will also learn the basics of making purchasing decisions as well as how thorough accounting analysis leads to effective financial decisions.
Small Business Marketing: In a small business marketing class, you will typically learn the basics of what purposes marketing serves, as well as various techniques and goals pertaining to market research and promotion. A small business marketing course will also help you gain knowledge and skills related to the four core elements of a marketing strategy: product, distribution, pricing and promotion.
Small Business Owner Job Description
Business owners are individuals who start a business, or purchase an existing business as a sole proprietor, with a partner or as a corporation. The business owner's job description will vary greatly depending on the type of business structure and the industry in which they involved.
Small Business Owner Job Duties
• May perform bookkeeping and light accounting duties
• Liaise with professional accountants to ensure financial statements and other financial information is reported properly
• Ensure excellent customer service is provided at all times
• Keep track of expenses and revenue
• Coordinate payment of local, regional, federal and sales taxes
• Develop business plan
• Oversee the preparation of marketing and promotional materials
• Liaise with radio, television, internet, magazine and other advertising account managers
• Recruit, hire, train, supervise, discipline and support employees
• Create company policies and procedures manual
• Liaise with legal representative in order to ensure business activities are not in violation of any laws or regulations
Types of Small Business Ownership
There are many different types of small business ownership; below we’ve listed a few forms of small business ownership, as well as the primary advantages for each type of ownership.
Start a Store: Determine what product or service you would like to sell and lease a buy a space to sell it from. This is a great option for those who want complete creative control over a small business and are able to generate enough capital to buy their initial inventory, lease and improve a space, and invest some initial capital into marketing the business.
Independent Sales Representative: Become an independent representative for someone else's company, selling or distributing their products. This is a great option for those who want to own a small business that they can initially operate from home, and with minimal capital investment.
Buy a Business: Purchase an existing business is a great option for those who currently work at a business that the owners are looking to sell, or that simply want to own a ‘turn-key’ small business, as these businesses typically do not require as much initial legwork as starting a brand new business.
Become a Franchisee: Becoming a franchisee is a great small business ownership option for those who are able to raise large amounts of capital and are looking for a business opportunity that is statistically more stable than starting a brand new business, due to the brand recognition and established operations procedures of franchises.
Becoming a Small Business Owner: Create a Business Plan
Becoming a small business owner involves starting or buying a business, and to do either of these things, you will need to prepare a business plan. The process of writing down your plans for the business will help you refine your thinking and will focus your efforts by outlining the following elements of starting a business.
Identifying Your Business Opportunity: Look for unmet market needs you could address by introducing a new product or service.
Market Research: Use market research to determine if the business opportunity is feasible, what the current competition level is like, what their pricing is, etc.
Financing: One of the biggest challenges for a starting a business or purchasing a business is obtaining the necessary capital. Among the possible sources of funding are your savings, friends and family, banks, credit unions, vendor take-back loans (for buying an existing business) working a second job and venture capitalists.
Business Objectives: Defining realistic goals for the business on paper will help you determine what it will take to get there. It will also give potential financiers an idea of what the business’s potential could be if they invest in it.
Operational Decisions: There are many small decisions you must make that will help shape your business, such as what equipment to buy, who your suppliers will be, how many staff members you will need, where to locate your business, what business stationery to use, what policies and procedures to implement, et cetera.
Skills Needed to Become a Small Business Owner
Becoming a successful small business owner requires a well-rounded set of analytical, financial, human resources, organizational and marketing skills. These skills enable small business owners to make the right choices when sourcing suppliers, determining price points, hiring staff and performing other functions of their job.
• A thorough understanding of how to manage money
• May require basic bookkeeping or accounting skills
• A thorough understanding of the market the business operate within
• Knowledge of how to effectively raise capital for starting or purchasing a business
• Able to effectively prepare cost estimates, budgets, and work timetables
• Able to effectively hire, train and retain staff
• Able to select, schedule, and coordinate subcontractor activities (when applicable)
• Able to effectively respond to work delays, emergencies, and other problems
• Knowledge of how to effectively market the product or service
• Awareness of what will make your business stand out from the competition
Personal Traits Needed to Become a Small Business Owner
In order to enjoy your career as a small business owner, and maintain a positive attitude towards your work, you need a certain set of personality traits. Such traits include:
• A keen interest in the market you serve
• A strong desire to be self-employed
• A strong desire to control your own level of earnings
• Leadership, self-motivation and initiative
• Willingness to take responsibility
• Able to make important decisions
• Willingness to work long hours
• A high tolerance for financial risk
• Enjoy supervising and managing other people
Careers Similar to Small Business Owner
Listed below are occupations that are similar in nature to Small Business Owner, as they may involve many of the same skills, competencies and responsibilities.
References
Please use the references below to find more information on the various aspects of a career as a small business owner:
Look for Work: “Self-Employment.” (n.d.). ALIS website - Alberta Learning Information Service. Retrieved January 14, 2020.
Part-Time Studies: “Entrepreneurship & Small Business Management.” (n.d.). Niagara College Canada website. Retrieved January 14, 2020.
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Scholarships for Becoming a Small Business Owner
Scholarships listed for majors that apply to becoming a Small Business Owner can be found on our All Scholarships by Major page.
Success Tip: Be sure to apply for any scholarships that you even barely qualify for, as there are millions of dollars of scholarships that go unused every year due to a lack of applicants!
Becoming a Small Business Owner: Applicable Majors
Studying one of the university majors listed below is an excellent starting point to becoming a small business owner. Click on the links to find out what else you can do with these majors!
