An entrepreneur is someone who takes on both the adventure and the risk of starting a new business. These businesses can begin either as side gigs or full-time business ventures. Entrepreneurs not only start their own businesses but also build and scale them to become profitable.
In this article, you’ll learn what an entrepreneur is, the four different types of entrepreneurs, and how to become one.
When hearing the word entrepreneur, you may think of someone that has launched their own start-up. While this is true, an entrepreneur is someone who sees a need and works to create a business that solves that need. It’s someone willing to take a risk and turn their business idea into reality.
Entrepreneurs tend to be hardworking, innovative, and resourceful because, in the beginning, they’re often solely responsible for the success of their ventures. Building a business can be a 24/7 job. No matter how brilliant a start-up idea may be, entrepreneurs need the skills to build and run a successful business, including:
Adaptability: If an idea isn’t working, you may need to adapt quickly and find solutions.
Ability to network: Networking can be one of the most valuable skills you learn as an entrepreneur. Growing a successful business requires a lot of time and effort. Creating a network of like-minded individuals can help you market your new business and stay motivated and enthusiastic when challenges arise. Collaboration and networking can also create opportunities to learn from other entrepreneurs.
Comfortable with fundraising: Unless you have the resources to start your new business venture, you will likely have to spend a fair amount of time selling and seeking investment in your idea.
Leadership: As your company’s founder, you’ll need to make important decisions and build and manage a team.
While there can be flexibility regarding expectations around any formal training, certification, or education requirements when starting your own business, entrepreneurs are driven and lifelong learners. It’s about your ideas, experience, and your dedication to making your vision a reality.
Some famous examples of entrepreneurs include Walt Disney, Oprah Winfrey, and Steve Jobs. These self-made business owners had a vision and saw it through, pushing past hardships and staying on course.
These individuals also show that entrepreneurship can look different and that you don’t have to be an inventor or engineer to start a business. Looking at famous examples of entrepreneurs illustrates the diversity and possibility of entrepreneurship.
Being an entrepreneur is a career, and it can be a lifelong career choice that turns out to be a lucrative endeavor. As an entrepreneur, you are solving problems and innovating in a way that may bring value to the economy. Initially it can be challenging, but the reward of owning your own company is worth it for most entrepreneurs. Similar to other careers, you can work as an entrepreneur until retirement. You may also start multiple businesses or just one. This career path can be long-term and lead to job satisfaction and financial independence.
Whether scaling your company long-term, starting new businesses, or working as a consultant for other entrepreneurs, it is possible to turn entrepreneurship into a lifelong, full-time career.
Read more: What Is Entrepreneurship? A Guide
There are four types of entrepreneurs based on the various business models being pursued:
Large company entrepreneurs launch businesses within an already established business by acquiring or creating a new internal division. Examples include Facebook’s acquisition of Instagram and Google launching Google Maps.
Small business entrepreneurs open businesses with no plans for wide-scale expansion. Often, they open a single location and take on their own financial needs rather than reaching out to investors. Examples include local restaurants, gift shops, and independently owned retail shops.
Social entrepreneurs work to create societal change with their products or services. Their goal is to create a sustainable business that can solve a societal problem or address a social issue. Examples include Books to Prisoners and TOMS.
Scalable start-up entrepreneurs start businesses with the intention of widespread, long-term growth. They are innovators who may often have a novel idea that shakes up a new market or launches it altogether. Examples include companies like Meta and Uber.
To become an entrepreneur, consider the viability of your ideas and research whether anyone else is doing something similar. After you assess the viability of starting your own business, go in-depth by building out your business plan, from financing to product development.
Consider the following questions to help you learn about your new business venture:
Is your idea solving a problem that needs fixing?
How can you disrupt longstanding industries or niche markets with modern technology?
What does your competition look like? You’ll want to do a competitor analysis and determine whether your idea is a need others have and would be willing to pay for.
Once you’ve determined if your idea can turn into a successful business, focus on building your network with individuals who support you. Attend networking events in your area and connect with investors, lawyers, and anyone who may be able to help along the way. Consider finding a mentor who can guide you and give advice as you work out the details of your business’s operations.
Organizing your idea into actionable steps and a clear plan is an important step in starting a business. Create a business plan and consider having a business partner or professional review and offer feedback. You can also hire someone to write one for you or use free online resources to create one.
Next, incorporate your business and open a bank account. Pick a location and get settled in. Create a proof of concept as early as possible to attract investors to help fund your business. Interacting with and getting feedback from both investors and customers is valuable in shaping the direction of your business.
If you’re taking out a loan, determine what type of loan you’ll need and the payments you can afford. Gather all required documentation required by the lender. Make sure you apply for the right loan based on your business and financial situation. Entrepreneurs may apply for several different types of business loans, such as lines of credit, personal loans for business use, and US Small Business Administration (SBA) loans.
If you’re seeking out investors, be ready to present your business plan, including financial plans and why the investor would benefit from funding your idea.
Building and rolling out your minimum viable product (MVP) can help engage your first potential customers to help validate your idea. Take this as an opportunity to see what works and what doesn't. This trial and error phase is essential to the long-term success of your business.
You'll want input from a wide variety of people. Use the feedback to help you make decisions about your company’s progression. Your concept doesn’t have to be perfect. This step ensures people are interested in your product or service and offers an opportunity to fine-tune it based on feedback.
After gathering data and implementing changes from your test run, your product and business plan should be relatively polished and targeted to intended consumers. Having these details in order can make it easier to convince investors to fund your venture.
Take the money you’ve raised and allot what’s needed to build and scale your business. As a tip, many successful business owners suggest starting with the end in mind to properly align your goals as you scale your business. Manage your cash flow accordingly, and you may see the growth that matches your initial dreams for the company or beyond.
There are many resources available to entrepreneurs. Here are a few helpful ones for first-time and seasoned entrepreneurs alike:
The US Patent and Trademark Office provides the resources you need to file for a patent, trademark, or copyright.
PRLog offers free and discounted options for press release distribution to search engines, news websites, and journalists.
USSmall Business Administration provides resources to help you start your business, including information on SBA-guaranteed loans.
FindLaw Small Business Center gives entrepreneurs access to legal forms and helps find answers to common legal questions. You can also search for lawyers on its website.
SCORE connects you to a network of small business mentors for free.
Aboard of advisors can provide counsel, advice, and support for your business.
Learning more about entrepreneurship can be a great way to prepare for your venture.
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