How To Become an Entrepreneur: 7 Steps (2026)

Becoming an entrepreneur means starting a business, taking on the risk and decision-making that come with it, all in pursuit of profit or growth.

Entrepreneurship is more popular than ever: Business applications in the United States reached 531,423 in June 2026, an increase of 1.1% compared to May, according to the US Census Bureau. In the US, 86% of entrepreneurs say ecommerce platforms have made starting a business easier than it was a decade ago, according to a Shopify and Harris Poll survey of business owners.

This guide explains how to become an entrepreneur in seven steps, including how to validate a business idea, build a plan, and launch and manage a business. It also covers how to build an entrepreneurial mindset and the skills needed to run a business.

How to become an entrepreneur: your 7-step road map

The steps below show how to take an idea and turn it into a business with customers, funding, and daily operations in place:

1. Find a profitable business idea
2. Develop a product or service
3. Validate your product with an MVP
4. Write your business plan
5. Secure funding
6. Launch your business
7. Manage the business

1. Find a profitable business idea

Choose a product category before anything else, since it shapes every decision that follows, from pricing to marketing to fulfillment. According to Shopify’s own platform data, 41% of Shopify stores launch with a single product, which suggests a specific idea is enough to start.

No product is without risk, but a niche with strong, demonstrated market potential lowers that risk. 

Use the criteria below to weigh the pros and cons of an idea:

Does your product or service serve a passion or solve a problem?

Products that meet an existing need connect with customers who are already searching for a solution, rather than requiring outreach to an uninterested audience.

Is this a trend, fad, or growing product category?

Fads rise and fade quickly. Trends develop more gradually and can turn into sustained growth. Stable markets stay flat over time, while growing markets show a lasting shift in demand. 

Understanding which of these categories a product falls into shapes how a business plans for the months and years ahead. Here are a few real world examples:

• Fad: Fidget spinners surged in popularity in 2017 and faded within months. Fads can be profitable for those who time them well, but they are difficult to predict.
• Trend: The global beauty market, which includes skincare, grew 7% annually from 2022 to 2024 and is projected to keep growing at 5% a year through 2030, according to McKinsey. Sustained, moderate growth over multiple years like this is a hallmark of a genuine trend rather than a short-lived fad.
• Stable: The athleisure market shows how even a large, mature category keeps expanding rather than plateauing. It’s projected to reach $892.48 billion by 2033, a compound annual growth rate (CAGR) of 9.9% from 2026, according to Grand View Research.
• Growing market: Online retail is one example of a growing market. Global business-to-consumer (B2C) ecommerce revenue is projected to reach $5.5 trillion by 2027, a CAGR of 14.4%, according to the International Trade Administration.

What does the competitive landscape look like?

What’s the competitive landscape scope for your selected product and niche? Are you first to market? Are there already a few competitors, or is the market saturated with people selling the same product or targeting the same niche?

Here’s how the particular landscape affects both the opportunity and the difficulty of breaking in:

• No competitors. This can signal an untapped niche, or it can mean the market doesn’t yet exist. Thorough market research helps confirm which is the case before committing resources.
• A few competitors. Other businesses finding some success in a niche is an early signal of validation.
• Many competitors. A saturated market confirms demand exists, but it also means a business needs a clear differentiator to stand out.

Brainstorming techniques for business ideas

These exercises help aspiring entrepreneurs surface business ideas grounded in real demand:

• Mind mapping. Explore connections between interests, skills, and industries.
• Problem journal. Track daily frustrations and think through ways to solve them.
• Customer pain point analysis. Review product reviews, forums, or social media to identify unmet needs.

2. Develop a product or service

Once you’ve decided on a product, then choose one of several product development paths.

For instance, making products in-house gives full control over design and quality, such as the way the artisans at Heath Ceramics produce their own ceramics by hand. 

Working with a manufacturing partner, however, shifts production to a third party that builds the product to specification. West Path takes this approach for its Mexican blankets, sourcing from partner brands while still requiring 100% certified organic cotton.

Purchasing wholesale products directly from independent brands is another option. This allows a business to buy ready-to-sell merchandise in bulk and resell it at retail. Try using the Faire: Buy Wholesale app, which syncs with the Shopify admin, adding curated wholesale products from independent brands directly into a store’s catalog.

Another development path is dropshipping, an option that removes the need to hold inventory. In this case, a business buys a product from a third-party supplier only after a customer places an order, and the supplier ships the item directly to the customer. 

Shopify connects with dropshipping suppliers through app integrations, so orders can be automated without manual handling.

Print on demand works the same way for original designs like T-shirts, art prints, or mugs. A supplier prints the design on a white-label item only after a customer orders it, so nothing is made, stored, or shipped until it’s sold.

3. Validate your product with an MVP

Test a product idea before spending money on it. Validating early confirms whether customers actually want what’s being sold, and reduces the risk of building something nobody buys.

The fastest way to start: Launch a minimum viable product (MVP), a stripped-down version that can help test demand, gather feedback, and satisfy early customers before scaling further.

From there, research buyer personas to understand the target market, and use this information to shape decisions about product, messaging, and marketing strategy.

Build a Coming Soon page to build interest ahead of launch, or set up pre-orders to gauge demand directly. A few sales can confirm demand and provide the foundation to refine and scale the business from there.

4. Write your business plan

Once a product idea has been validated, put together a business plan that details:

• Who the target customers are
• What the business model is 
• How the business model will make money
• Product pricing
• Initial product lineup
• Marketing approach

This plan works as a road map, guiding early decisions and giving funding partners or team members a clear picture of the business. Shopify’s free business plan template offers a starting structure.

Choosing your business structure

Business structure sets tax treatment and personal liability, and the IRS uses it to determine which income tax return form applies. The most common options:

• Sole proprietorship. The simplest structure to set up, but the owner is personally responsible for business debts and legal issues.
• LLC (limited liability company). Offers personal liability protection with flexible tax options, suited to solo founders or small teams.
• Corporation (C corp or S \cCorp). Offers strong liability protection and works well for businesses raising investment, though it comes with more paperwork and separate taxation.

Choose based on growth plans: an LLC suits founders who want simplicity and liability protection without the complexity of incorporation, while a corporation suits founders planning to raise venture capital, offer employee stock options, or reinvest profits at scale. 

Structures can change later, but choosing the right one from the start avoids unnecessary cost and delay.

Finding the right co-founder

A co-founder brings shared workload, complementary skills, and a second perspective on decisions—though it also means splitting equity and decision-making, and a poor fit can slow the business down.

Look for a co-founder through an existing network of friends, former colleagues, or classmates, at startup events and industry meetups, or through matchmaking platforms like CoFoundersLab or Y Combinator’s Startup School forum.

Vetting a potential co-founder means asking direct questions: their long-term goals for the business, how they handle stress and conflict, how much time and money they’re willing to invest, their strengths and weaknesses, and how they make decisions under pressure. 

A founder agreement covering roles, equity split, decision-making, and exit plans protects both the business and the working relationship, even between co-founders who trust each other.

5. Secure funding

Reinvesting early profits covers some costs, but most entrepreneurs need outside funding to launch and sustain operations, whether starting from scratch or buying a franchise.

Traditional funding options

Traditional funding comes from banks, investors, or government-backed programs, and typically requires a formal application or vetting process.

Loans from banks, credit unions, or online lenders cover startup costs like inventory, manufacturing, and marketing. 

Shopify Capital offers funding to eligible merchants based on store performance. Other online lenders, like Fundbox and Bluevine, offer flexible lines of credit or short-term loans suited to newer businesses.

Venture capital fits high-growth businesses. Venture capital firms and angel investors provide funding in exchange for equity or convertible debt, a loan that may later convert into shares. 

Platforms like AngelList, Crunchbase, and SeedInvest connect founders with early-stage investors, who look for market opportunity, a strong team, and a path to scale or exit. Early-stage funds and accelerators offer another route for qualifying companies.

Alternative funding sources

Alternative funding suits entrepreneurs who don’t qualify for traditional financing or want to avoid giving up equity. This also works well for bootstrapping or validating an idea.

One option is self-funding, or covering business costs with personal assets or savings, which keeps full control over decisions and equity but puts all the risk on the founder. 

According to Shopify’s Survey of Store Owners (Q4 2025), 79% of merchants use profits to self-fund growth.* Some founders keep a day job while building the business in the evenings, using that income to cover early costs like inventory, tools, and marketing before the business supports itself. 

Founders who borrow from friends or family—another alternative funding source—document expectations and repayment terms clearly to protect the relationship. Some businesses become profitable quickly; others take a year or more to generate a return.

Another option is crowdfunding, which also has the added benefit of validating a minimum viable product, building an audience, and raising funds without giving up equity. The global crowdfunding market was valued at $2.1 billion in 2024 and is projected to reach $5.5 billion by 2030, a CAGR of 17.6%, according to Grand View Research. 

Platforms like Kickstarter, Indiegogo, and GoFundMe let founders raise money directly from future customers. Successful campaigns typically include a compelling story, strong visuals, and a clear rewards or perks structure.

6. Launch your new business

Get the store live and the essentials in place first; refinement can happen after launch.

Run a Shopify Launch Check before going live. The tool scans store data, admin settings, storefront elements, and payment setup, and flags anything that needs attention before customers arrive.

Confirm the legal basics are handled alongside the storefront. If your business structure is a corporation, multimember LLC, or any business with employees, then you’ll need an employer identification number (EIN) from the IRS. Sole proprietors without employees can typically use a Social Security number instead, though an EIN is often useful for opening a business bank account. 

Ensure you have all the necessary licenses and permits, which vary by state, city, and industry. A general business license is common, and specific categories like food service, alcohol, or professional services usually carry additional requirements. Local government or state licensing office websites list what applies to a given business and location.

Prepare launch day marketing, such as scheduling social posts in advance, and set up a direct way for customers to reach the business if they need help.

Keep in mind a launch doesn’t need to be flawless to succeed; it simply needs enough in place to start selling and learn what works from there.

7. Manage the business

Treat the business as a constant work in progress, and view ongoing learning as part of the job rather than a phase that ends after launch. Sales data, customer feedback, and return or complaint patterns all point to what to adjust—whether that’s a product detail, a pricing decision, or a marketing message. Revisit these signals regularly rather than only after something goes wrong.

Expand entrepreneurial knowledge alongside running the business:

• Work with a mentor
• Read business books
• Take courses
• Listen to business podcasts
• Subscribe to entrepreneur newsletters

As you finetune the business, build a marketing approach that reaches customers where they already are. According to Shopify’s Survey of Store Owners (Q4 2025), 53% of merchants cite word of mouth as their most common Year 1 growth strategy, alongside paid channels, social media, and email marketing.* Track what’s working, then shift budget and effort to the channels driving results.

Challenges of becoming an entrepreneur

Starting a business is rewarding, but it comes with real risk. Close to a quarter of new private-sector businesses in the US fail within their first year, and nearly half close within five years, according to long-term data from the US Bureau of Labor Statistics.

There are a number of reasons businesses fail, including cash flow issues, lack of market demand, and poor planning.

Marketing is the top Year 1 challenge for merchants, cited by 37%, followed closely by finding customers (36%), according to Shopify’s Survey of Store Owners (Q4 2025).* 

Cash flow timing matters, too. Twenty percent of merchants say their top regret is not waiting for consistent cash flow before scaling, according to the same Shopify survey.*

Not to mention, running a new business often means covering multiple roles at once including CEO, accountant, customer support, and marketing, sometimes all in the same day. 

Here are a few more common challenges and how to navigate them:

• Overspending too early strains cash flow. Instead, start lean, using low-overhead models like dropshipping or print-on-demand when funds are limited.
• Fear of failure can delay getting started. Set small, achievable goals and treat early setbacks as information rather than a verdict.
• A saturated market without a clear differentiator makes it harder to stand out. Focus on a niche and differentiate through a strong value proposition or stronger customer service.
• Covering every role can lead to burnout. Set clear work hours and boundaries early, even when working from home, and make time for rest. Take care of your mental health and make time for self-care.

That said, according to a Shopify and Harris Poll survey, 61% and 69% of founders across five surveyed markets said starting a business felt like moving toward something they wanted rather than away from something unstable.

Key features of an entrepreneurial mindset

Entrepreneurs succeed thanks to more than just good ideas; a few standout traits can help them adapt, persist, and grow:

• Resilience. Setbacks are inevitable. Entrepreneurs treat every failure as feedback and use it to improve the next decision, rather than viewing it as a dead end.
• Resourcefulness. Entrepreneurs work with what they have—whether that’s limited time, money, or support—and find solutions others might overlook.
• Curiosity. Founders test ideas, ask questions, and explore what customers actually want.
• Confidence. Small, low-risk moves—like launching a simple version of a product and iterating based on feedback—build confidence over time.
• Adaptability. Markets shift and customer needs change. Entrepreneurs pivot when needed instead of giving up.

Trina Spear, co-founder and CEO at FIGS, told the Shopify Masters podcast that resilience is a top trait for entrepreneurs—and while some people are born with this trait, it is possible to build that muscle over time. “I wasn’t this resilient day one,” she says. “I think enough bad stuff happens every single day that you start viewing it as … part of the journey.” 

These traits connect to practical skills like decision-making, problem-solving, and strategic thinking. The entrepreneur mindset develops gradually, through practice, rather than all at once.

Where to find entrepreneurial support

Entrepreneurship comes with real challenges, but a range of resources, groups, and support programs exist to help. A few worth knowing:

Resources

• Shopify.Free entrepreneur resources, including courses and video content, to build skills and knowledge to reach your goals.
• Small Business Administration (SBA). Information and resources for starting a small business, including SBA-guaranteed loans.
• SCORE. Free mentor matching through a network of experienced entrepreneurs.
• Small Business Development Centers (SBDCs). Free consulting and training at local centers.
• Small Business and Self-Employed Tax Center (IRS). Current tax news and forms for business owners.
• FindLaw Small Business Center. Legal forms, answers to legal questions, and access to small business lawyers.
• International Franchise Association (IFA). A resource for finding franchises for sale, for entrepreneurs considering a franchise rather than starting from scratch.
• StartEngine. An equity crowdfunding platform connecting founders with angel investors.

Business incubators and accelerators offer another path, pairing founders with mentorship, resources, and sometimes funding in exchange for equity, typically over a fixed program length.

Groups

Several organizations connect entrepreneurs with peers and mentors:

• Entrepreneurs’ Organization (EO). A global peer network of nearly 20,000 members across 80-plus countries, offering mentorship and networking opportunities.
• Vistage. Founded in 1957, Vistage is a mentoring membership program for CEOs and business owners, with more than 45,000 members across 35 countries offering coaching and peer advisory services.
• Startup Grind. A global community connecting more than 5 million entrepreneurs across 100-plus countries through events, talks, and networking opportunities.
• Young Entrepreneur Council (YEC). Support from vetted entrepreneurs under 45 years of age, focused on growth and peer support. Membership has tight restrictions, but it’s a strong place to network and find potential business partners.
• International Council for Small Business (ICSB). Brings together entrepreneurs, educators, researchers, and practitioners worldwide to share insights through programs, workshops, and advocacy.

Networking and mentorship strategies

The right people accelerate growth, which is why having a strong network can be key to entrepreneurial success. Just remember: Networking and mentorship is less about who you know and more about what you can learn from those connections.

Use these strategies to get started:

• Attend local startup communities and meetups. Look for small business expos, chamber of commerce events, masterminds, or startup networking nights. In-person connections can lead to long-term support.
• Join online communities. Participate in LinkedIn groups, Reddit forums like r/startups, or Facebook groups (such as Shopify Entrepreneurs) to ask questions, share progress, and get feedback.
• Find a mentor: Platforms like SCORE (free), GrowthMentor, or LinkedIn connect founders with experienced entrepreneurs who offer advice and perspective.
• Offer value first: Effective networking centers on building relationships rather than pitching. Share expertise, ask thoughtful questions, support others, and be generous with time.

Learning from the wins and mistakes of others shortens the path to running a business well, and often opens doors to opportunities or partnerships that wouldn’t otherwise appear.

* Disclaimer: Based on a 2025 survey of 500 Shopify merchants conducted in English across Australia, Canada, the United Kingdom, Ireland, New Zealand, and the United States. Respondents were established merchants with two or more years on the platform. Results reflect the experiences of this specific sample and may not be representative of all merchants.