On “Shark Tank,” a popular American reality TV show, aspiring entrepreneurs pitch ideas to a panel of established moguls.
There’s real drama from wealthy business executives saying outrageous — and usually mean — things. Along with zingers, the small business owners get honest feedback and criticism from the more experienced members of the show.
The term “entrepreneur” refers to someone who starts a business and has its roots in the French word entreprendre, the verb “to undertake.” And the entrepreneurial spirit is about more than having a dream and landing a big pile of money. It’s an undertaking.
Many successful entrepreneurs spend years — and hours of hard work every day — bringing their ideas to life. (Many unsuccessful ones do, too.) But business owners play an important role in our society and the economy. They help keep the market stable and create jobs.
While not everyone can stand in front of a panel of business moguls to hear their opinions about their idea, understanding entrepreneurship and what an entrepreneur does will help on your journey to becoming one.
You don’t need to find the next Microsoft or Apple to be an entrepreneur. Let’s look at what you need to get started.
What is an entrepreneur, and what does an entrepreneur do?
If you subscribe to the most popular entrepreneurship definition, an entrepreneur is a person who starts a business. This means they do everything from hiring employees to creating a workspace. They also develop an innovative offering, cultivate customers, and seek financing to fund further innovation or acquire inventory.
Until the 20th century, many didn't recognize entrepreneurs as a fundamental aspect of the economy. Joseph Schumpeter, Frank Knight, and Israel Kirzner are the economists responsible for actively incorporating the idea into mainstream perceptions of the economy.
The three men believed individuals, not just organizations, play a significant role in helping the market advance. Their definition of an entrepreneur is someone who takes risks, makes discoveries, and generates profits — all fundamental components of a thriving economy.
The entrepreneurial process can be boiled down to two primary things: money and hard work. Money is used to hire staff, access others’ skills, purchase equipment (or rent it), and make investments. That's true of any business. It’s especially precious when it has high demand and low availability for small businesses.
Hard work covers all the rest. Persistence and creativity among constraints are what make entrepreneurship unique. But entrepreneurs must be dedicated and willing to put in the hours to keep their businesses running.
Business owners are remarkable people. All sorts of responsibilities fall on their shoulders, including:
Alongside land and money, the goods, services, and profit generated by entrepreneurship is made possible by their labor.
Types of entrepreneurs
You can find a business in many ways and with many aims. Here are some of the main types of entrepreneurs:
Social entrepreneurship
Social entrepreneurs use their business opportunities to solve social issues. One way to improve a community's socio-economic well-being is by partnering with a nonprofit agency.
Bill Clinton, Florence Nightingale, and Maria Montessori are three noteworthy examples.
Serial entrepreneur
Serial entrepreneurs continually generate new business ventures and start new ventures. They're risk-takers and prioritize work that influences the economy in the short term.
American venture capitalist Michael Rubin and German engineer and investor Andy Bechtolsheim are two heavy hitters within this niche of entrepreneurialism.
Lifestyle entrepreneur
Lifestyle entrepreneurs make money from their passions. They’re typically self-employed. This freedom means they dictate their own ventures instead of adhering to the restrictions and plans of a larger company.
Pat Flynn and Chris Guillebeau are two prominent lifestyle entrepreneurs.
Imitative entrepreneurship
An imitative entrepreneur takes an existing idea and builds on it. They take notes of others’ mistakes and find creative ways to improve a business. Often, these entrepreneurial endeavors have lower financial risks.
Henry Ford is a historical figure who is an entrepreneur that changed the automotive industry. He didn’t invent the automobile, but he did invent the manufacturing process that made cars accessible to the masses.
Innovative entrepreneurship
Innovative entrepreneurs have fresh ideas for new products or services that don’t exist yet. They fill a gap in the market by solving a problem or addressing a consumer’s need.
Thomas Edison stands out as an innovator. He saw a need for an electric lighting solution that was small enough for the home and used very little electricity. This kind of innovative product didn’t exist yet — so he made it a reality.
Buyer entrepreneurship
Buyer entrepreneurs spend money to make money. Instead of generating a business idea on their own, they’ll purchase a developing or well-established company and help it succeed.
Jeff Bezos, the executive chairman of e-commerce giant Amazon, used this strategy effectively. Through his company, he acquired a number of organizations ranging from Whole Foods to the online video streaming platform Twitch.
This gives Amazon influence in their acquisitions’ affairs to add to their profits.
12 qualities entrepreneurs have
Even though everyone’s journey is different, here are some commonalities between successful entrepreneurs share:
1. They’re effective communicators
It’ll be impossible to get anything done if you can't communicate. Conveying your ideas and opinions, negotiation deals, disciplining an employee, and giving presentations are essential in the business realm.
At BetterUp, we believe that everyone can evolve into the best version of themselves. We’re here to support individuals and companies alike as they strive to achieve their goals and positively influence others in return through customizable coaching and behavioral resources.
2. They’re versatile
Jumping in and taking over certain duties or labor when your business is new helps you learn the ropes. This applies to your employees, too. The more knowledgeable your workers are, the fewer issues will arise. Cross-training various skills makes the process smoother, and customers will thank you for it.
3. They’re adaptable
Starting a company involves a lot of trial and error. You need to bounce back from error and simultaneously let yourself go with the flow. You must adapt to new situations and respond to adversity quickly and effectively. Being open-minded helps with this; sometimes the best ideas are the ones we didn’t see initially.
4. They’re financially savvy
Cash flow is one of the most critical aspects of any business. Bookkeeping may be less than thrilling, but handling your accounts and staying within budget will help you now and in the future.
5. They’re resilient
You will try and you will fail, but don’t let that stop you. Get back up and try again. Our mistakes teach us valuable life lessons. If you want to succeed, you can’t give up.
6. They’re focused
To thrive as an entrepreneur, you have to drown out the noise. Set goals, believe in yourself, and always remember why you started your business in the first place. This will help you power through the hard times.
7. They’re business smart
Building a business plan, finding new markets, understanding your competitors, and acknowledging your strengths and weaknesses are vital skills in the cut-throat world of entrepreneurship.
8. They have a strong work ethic
The best leaders are the first to arrive and the last to leave the office. As an entrepreneur, it’s your job to work hard until everything is done.
9. They’re creative
The business world is rife with competition, so you’ll need a creative mind to stay ahead. This can mean thinking of new business ideas or innovative solutions to complex problems.
10. They’re confident
If you don’t believe in yourself, no one else will. It’s important to be aware of your weaknesses. But you should also celebrate your strengths and believe you can beat the odds.
11. They’re eager to learn
As confident as you may be, no one knows everything. You’ll need a team to support you and compensate for your weaknesses. But to manage them effectively, you’ll need a passing understanding of your team’s jobs — so don’t be afraid to let your curiosity run wild.
12. They’re passionate
If you love what you do, you’ll never work a day in your life. A deep passion for your company and its mission will help you work hard, inspire others, and become a successful entrepreneur.
Why is entrepreneurship important?
Entrepreneurs ignite the flame of progress, discovery, and opportunity, which leads to economic growth. They create competition that drives the market and creates stability and jobs and raises a society’s standard of living.
New inventions and technologies also aid in social change. A well-known example of this is the shift from single-use devices (think: MP3 players) to sleek smartphones that play music, have a camera, and allow you access to high-speed internet.
Entrepreneurialism is a positive force within any economy and anyone can participate in such a movement.
How to be an entrepreneur
All businesses have modest beginnings. The potential for success is always there — you just have to start.
Many people have become enamored with the idea of starting their own business due to the explosive accomplishments of companies like Google, Amazon, and Facebook.
Remember, there’s no set path for entrepreneurs to follow; the road twists and turns constantly, and the direction you’re traveling in won’t be identical to another’s path. Here are some steps you might need to take on your journey to becoming an entrepreneur:
1. Find financial support
Financial stability certainly makes the process of starting a business much smoother. Money will buy you time to work, fail, take risks, and grow.
Being a business owner means you’ll be dealing with money, people, and physical labor. Obstacles will arise, so you must have the capabilities to address these issues. These days, a business degree in some form is highly coveted, although post-secondary education is not a must-have.
3. Consume an array of content
Stay up-to-date on the latest trends and research your competition. You can also broaden your knowledge by taking classes or attending seminars.
4. Identify a problem to solve
New business ventures intend to fill a gap in the market. Entrepreneurs can identify a problem or a product that consumers may be lacking and use this as a pillar to construct their business.
5. Solve that problem
Once entrepreneurs solve the issue they’ve identified, known as “adding value,” they’ve succeeded. Kind of. Actually, it's rarely one-and-done. You have to keep solving that problem better and better. Often the problem you first identified wasn't the right problem or you didn't fully understand it. And problems change so solutions need to, as well.
6. Network
There’s a reason they say, “it’s not what you know, it’s who you know.” The right person can introduce you to new opportunities, suppliers, workers, and partnerships. They can also connect with mentors.
Spreading the word about your business will increase sales and earn you more money, networking is so important because it gives you support when you need it. Even Mark Zuckerberg needs advice now and then.
Resources for entrepreneurs
There’s no better time than now to start a business. The internet has made it easier than ever to connect with like-minded individuals, conduct market research, and reach previously inaccessible customers.
Here are some resources that can help you along the way.
1. Affordable business loans
The Small Business Administration (SBA) is a U.S. government agency designed to encourage the development of small businesses. They can help you get off the ground with affordable loans.
2. Crowdfunding
Crowdfunding websites like GoFundMe and Kickstarter are increasingly popular ways for entrepreneurs to fund their ideas. This strategy can generate seed funding and create buzz around your company and encourage sales once your launch your product.
3. Incubators and accelerators
Incubators and accelerators are programs and organizations that help startups grow. They provide services and advice to entrepreneurs and can connect you to mentors, investors, and venture capital.
4. Website creation tools
Gone are the days when you need to learn HTML to make a website. Now, there’s no shortage of web services that offer slick templates to help you create your digital storefront. This is a great way to ensure your prospective clients can find you online.
Final thoughts
What is an entrepreneur if not a person who wants to change the world?
It’s not for everyone. But if you have the passion and work ethic, it can be exactly what you need to put your talents on display and be your own boss. You’ll also play a fundamental role in our society and economy by generating jobs and connecting your clients with services that improve their lives.
You don’t need to be Bill Gates or Steve Jobs to have an innovative idea and bring it to market. The internet makes starting a business easier than ever, and many resources are available to help you get started.
You can make it happen with the right amount of planning and risk-taking. We believe in you.
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