Entrepreneurs are those who create a business around a new idea. They are responsible for managing the business, and they assume all the risks involved in its success.
Entrepreneurship is not a fixed definition. Learn more about what entrepreneurs do and what characteristics you can recognize.
What is an entrepreneur?
Entrepreneurship is defined by taking personal risks in order to pursue a new venture, an innovation or another form of enterprise. They often gain the most from the success of their business in exchange for taking that risk.
Some people disagree on the definition of an entrepreneur. Some people define an entrepreneur as anyone who works independently. Some have a more narrow definition, stating that an entrepreneur is not just someone who works independently, but also has to be innovative and show leadership. There is a difference between a business that was started by an entrepreneur, and one that was run by a typical small business owner.
The two main differences are innovation and scaleability. A startup can scale exponentially and is based on a new idea, unlike a small company that copies what already exists.
How Entrepreneurs Work
Entrepreneurs play a vital role in the economy. Entrepreneurs are important to the economy because they take risks with innovative ideas. Although the odds of success are not very high, if they succeed, many entrepreneurial endeavors can propel industries forward.
Note:
As entrepreneurs pursue their goals, they must overcome many obstacles including those related to funding, employees, and organizational challenges.
Characteristics Of A Successful Entrepreneur
It may be helpful to examine the characteristics that entrepreneurs share. There are many similarities between successful entrepreneurs, whether they were born with these traits or developed them along the way.
PassionSpeak to entrepreneurs who are successful and you will hear them use the word passion almost always when describing what they do. One of the best ways to predict success is by following your passion.
Independent Thinking: Entrepreneurs often think outside of the box, and don’t let others influence their thinking.
Optimism It’s hard to achieve success if you do not believe in the outcome. Entrepreneurs dream and are optimistic, believing that their ideas can be achieved even when it seems impossible.
Confidence Entrepreneurs may have doubts, but they are able to overcome them and still believe that they can reach their goals.
Resourceful problem-solvers. Entrepreneurs are often faced with a lack of knowledge, assets and resources. However, they can find a way to get them or use what they have to achieve their goals. They don’t let obstacles and problems get in their way and instead find ways to succeed despite difficulties.
The ability to overcome obstacles: Entrepreneurs don’t give up at the first obstacle, second obstacle, or even 100th obstacle. They do not consider failure an option and continue to strive for success even when things are going wrong.
VisionSome more stringent definitions include vision as an essential element. Knowing your goal is important when you begin. Vision is also the fuel for your progress.
Focus It’s easy to be distracted in today’s fast-paced environment. Start-ups are often distracted by “shiny objects syndrome” (products or services that promise quick results) or get sucked into unimportant busywork. Successful entrepreneurs stay focused and avoid distractions.
Entrepreneurs are action-oriented. They don’t just wait around for things to happen. They are action-oriented. They are able to overcome obstacles and avoid procrastination.
Types of Entrepreneurs
There is disagreement about the definition of an “entrepreneur” because it encompasses so many types of businesses. Here are some examples of common forms of entrepreneurship.
Small Business
Many small businesses start as big ones, but many of them remain that way. This includes mom-and-pop stores and local business owners. Small businesses include sole proprietorships, partnerships, and LLCs. In the U.S., a small company is defined by its industry. It can be based on employee count, revenue limit, or both.
Note:
In the United States, a bookstore with a revenue below $30 million is regarded as a small enterprise. 1
Home Business
Home-based businesses can be classified as small businesses, but their primary characteristic is that they are run at home rather than in an office. A business that is run at home can still compete with large businesses. Many large companies start out at home, before moving to an office.
Online Business
Internet-based businesses can be small or large. This is a business that is primarily operated online. This includes businesses like Amazon, other ecommerce businesses, bloggers and eBay and Etsy users, as well as any other company that conducts its majority of business online.
Inventors
To be considered as an entrepreneur, an inventor must go beyond the stage of ideation and build the product. They also need to get it on the market. The contestants on “Shark Tank” are good examples of inventors that transition into entrepreneurs.
Serial Entrepreneur
Most entrepreneurs find the joy in starting and growing a business. They do not enjoy its ongoing management. These entrepreneurs will start a company, sell it, and then pivot to launch a new business. The fact that they run and take on the risk of the business during the time they own the company is what makes them entrepreneurs. Serial entrepreneurs can also run multiple businesses simultaneously, generating multiple streams of revenue.
Lifestyle Entrepreneur
The idea of lifestyle entrepreneurs is not new. However, the concept has gained popularity due to the advent of technologies like YouTube which allows everyone to reach a global audience. A lifestyle entrepreneur builds a business around their passions, interests and life goals. Digital nomads are often referred to by those in this category who have online businesses which allow them to travel. Travel is not a characteristic of lifestyle entrepreneurs. Lifestyle entrepreneurs are defined by their ability to monetize hobbies, lifestyles, and habits.
How to become an Entrepreneur
It is not necessary to be famous or rich to be an entrepreneur. Many examples exist of little-known, small-time entrepreneurs who took an idea and made it a profitable, thriving business. Moms invent gadgets or start lifestyle blogs, teens star in their YouTube shows and retired people turn their lifetime experience into coaching or consultancy businesses.
Entrepreneurship is not difficult, but requires a lot of work.
- Focused development entrepreneurial characteristics
- People will pay for a great idea
- Plan your success in detail
- Execution and commitment to the plan
You can start your home-based business quickly, perhaps even in a month, with some research, planning and hard work.
The Key Takeaways
- Entrepreneurs build a company around an innovative idea and take personal risks to achieve their goals.
- Entrepreneurs are defined differently.
- Entrepreneurs’ willingness to take risks is a key factor in fostering economic growth and innovation.
