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Table of Contents

What Is an Entrepreneur?

Why Are Entrepreneurs Important?

What Are Different Types of Entrepreneurs?

4 Types of Entrepreneurship

Social entrepreneurship

How to Become an Entrepreneur

Entrepreneurship Financing

7 Characteristics of Entrepreneurs

Entrepreneurship in Economics

Questions for Entrepreneurs

FAQs

The Bottom Line

Business

Business Essentials

Entrepreneur: What It Means to Be One and How to Get Started

Learn about the challenges facing entrepreneurs as they start new businesses

Adam Hayes

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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated February 14, 2024

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What Is an Entrepreneur?

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship.

Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs and bring new ideas to market. Entrepreneurship that proves to be successful in taking on the risks of creating a startup is rewarded with profits and growth opportunities.

Key Takeaways

A person who undertakes the risk of starting a new business venture is called an entrepreneur.An entrepreneur creates a firm to realize their idea, known as entrepreneurship, which aggregates capital and labor in order to produce goods or services for profit.Entrepreneurship is highly risky but also can be highly rewarding, as it serves to generate economic wealth, growth, and innovation.Ensuring funding is key for entrepreneurs: Financing resources include Small Business Administration loans and crowdfunding.The way entrepreneurs file and pay taxes will depend on how the business is set up in terms of structure.

Investopedia / Yurle Villegas

Why Are Entrepreneurs Important?

Entrepreneurship is one of the resources economists categorize as integral to production, the other three being land/natural resources, labor, and capital. An entrepreneur combines the first three of these to manufacture goods or provide services. They typically create a business plan, hire labor, acquire resources and financing, and provide leadership and management for the business.

Economists have never had a consistent definition of "entrepreneur" or "entrepreneurship" (the word "entrepreneur" comes from the French verb entreprendre, meaning "to undertake"). Though the concept of an entrepreneur existed and was known for centuries, the classical and neoclassical economists left entrepreneurs out of their formal models. They assumed that perfect information would be known to fully rational actors, leaving no room for risk-taking or discovery. It wasn't until the middle of the 20th century that economists seriously attempted to incorporate entrepreneurship into their models.

Three thinkers were central to the inclusion of entrepreneurs: Joseph Schumpeter, Frank Knight, and Israel Kirzner. Schumpeter suggested that entrepreneurs—not just companies—were responsible for the creation of new things in the search for profit. Knight focused on entrepreneurs as the bearers of uncertainty and believed they were responsible for risk premiums in financial markets. Kirzner thought of entrepreneurship as a process that led to the discovery of opportunities.

Fast-forward to today, entrepreneurs commonly face many obstacles when building their companies. The three that many of them cite as the most challenging include overcoming bureaucracy, hiring talent, and obtaining financing.

What Are Different Types of Entrepreneurs?

Not every entrepreneur is the same and not all have the same goals. Here are a few types of entrepreneurs:

Builder

Builders seek to create scalable businesses within a short time frame. Builders typically pass $5 million in revenue in the first two to four years and continue to build up until $100 million or beyond. These individuals seek to build out a strong infrastructure by hiring the best talent and seeking the best investors. Sometimes, they have temperamental personalities that are suited to the fast growth they desire but may make personal and business relationships difficult.

Opportunist

Opportunistic entrepreneurs are optimistic individuals with the ability to pick out financial opportunities, get in at the right time, stay on board during the time of growth, and exit when a business hits its peak.

These types of entrepreneurs are concerned with profits and the wealth they will build, so they are attracted to ideas where they can create residual or renewal income. Because they are looking to find well-timed opportunities, opportunistic entrepreneurs can be impulsive.

Innovator

Innovators are those rare individuals that come up with a great idea or product that no one has thought of before. Think of Thomas Edison, Steve Jobs, and Mark Zuckerberg. These individuals worked on what they loved and found business opportunities through their vision and ideas.

Rather than focusing on money, innovators tend to care more about the impact that their products and services have on society. These individuals are not the best at running a business as they are idea-generating individuals, so they often leave the day-to-day operations to those more capable in that respect.

Specialist

These individuals are analytical and risk-averse. They have a strong skill set in a specific area obtained through education or apprenticeship. A specialist entrepreneur will build out their business through networking and referrals, sometimes resulting in slower growth than a builder entrepreneur.

4 Types of Entrepreneurship

As there are different types of entrepreneurs, there are also different types of businesses they create. Below are the main different types of entrepreneurship.

Small-business

Small business entrepreneurship refers to opening a business without turning it into a large conglomerate or opening many chains. A single-location restaurant, one grocery shop, or a retail shop to sell goods or services would all be examples of small business entrepreneurship.

These people usually invest their own money and succeed if their businesses turn a profit, which serves as their income. Sometimes, they don't have outside investors and will only take a loan if it helps continue the business.

Scalable startup

These are companies that start with a unique idea that can be built to a large scale—think Silicon Valley. The hopes are to innovate with a unique product or service and continue growing the company, continuously scaling up over time. These types of companies often require investors and large amounts of capital to grow their idea and expand into multiple markets.

Large-company

Large company entrepreneurship is a new business division created within an existing company. The existing company may be well placed to branch out into other sectors or it may be positioned well to become involved in new technology.

CEOs of these companies either foresee a new market for the company or individuals within the company generate ideas that they bring to senior management to start the process and development.

Social entrepreneurship

The goal of social entrepreneurship is to create a benefit to society and humankind. This form of business focuses on helping communities or the environment through their products and services. They are not driven by profits but rather by helping the world around them.

How to Become an Entrepreneur

After retiring her professional dancing shoes, Judi Sheppard Missett became an entrepreneur by teaching a dance class in order to earn some extra cash. But she soon learned that women who came to her studio were less interested in learning precise steps than they were in losing weight and toning up. Sheppard Missett then trained instructors to teach her routines to the masses, and Jazzercise was born. Soon, a franchise deal followed and today, the company has more than 8,300 locations worldwide.

Following an ice cream–making correspondence course, two entrepreneurs, Jerry Greenfield and Ben Cohen, paired $8,000 in savings with a $4,000 loan, leased a Burlington, Vt., gas station, and purchased equipment to create uniquely flavored ice cream for the local market. Today, Ben & Jerry’s hauls in millions in annual revenue.

In the 21st century, the example of Internet giants like Alphabet, the parent company to Google (GOOG), and Meta (META; formerly Facebook), both of which have made their founders wildly wealthy, have been clear examples of the lasting impact of entrepreneurs on society.

Unlike traditional professions, where there is often a defined path to follow, the road to entrepreneurship is mystifying to most. What works for one entrepreneur might not work for the next and vice versa. That said, there are seven general steps that many successful entrepreneurs have followed:

Ensure financial stability

This first step is not a strict requirement but is definitely recommended. While entrepreneurs have built successful businesses while being less than financially flush, starting out with an adequate cash supply and stable ongoing funding is a great foundation.

This increases an entrepreneur's personal financial runway and gives them more time to work on building a successful business, rather than worrying about having to keep raising money or paying back short-term loans.

Build a diverse skill set

Once a person has strong finances, it is important to build a diverse set of skills and then apply those skills in the real world. The beauty of step two is it can be done concurrently with step one.

Building a skill set can be achieved through learning and trying new tasks in real-world settings. For example, if an aspiring entrepreneur has a background in finance, they can move into a sales role at their existing company to learn the soft skills necessary to be successful. Once a diverse skill set is built, it gives an entrepreneur a toolkit that they can rely on when they are faced with the inevitability of tough situations.

Much has been discussed about whether going to college is necessary to become a successful entrepreneur. Many well-known entrepreneurs are famous for having dropped out of college: Steve Jobs, Mark Zuckerberg, and Larry Ellison, to name a few.

Though going to college isn't necessary to build a successful business, it can teach young individuals a lot about the world in many other ways. And these famous college dropouts are the exception rather than the norm. College may not be for everyone and the choice is personal, but it is something to think about, especially with the high price tag of a college education in the U.S.

Consume content across multiple channels

As important as developing a diverse skill set is, the need to consume a diverse array of information and knowledge-building materials is equally so. This content can be in the form of podcasts, books, articles, or lectures. The important thing is that the content, no matter the channel, should be varied in what it covers. Aspiring entrepreneurs should always familiarize themselves with the world around them so they can look at industries with a fresh perspective, giving them the ability to build a business around a specific sector.

Identify a problem to solve

Through the consumption of content across multiple channels, an aspiring entrepreneur is able to identify various problems in need of solutions. One business adage dictates that a company's product or service needs to solve a specific pain point, either for another business or for a consumer group. Through the identification of a problem, an aspiring entrepreneur is able to build a business around solving that problem.

It is important to combine steps three and four so it is possible to identify a problem to solve by looking at various industries as an outsider. This often provides an aspiring entrepreneur with the ability to see a problem others might not.

Solve That Problem

Successful startups solve a specific pain point for other companies or for the public. This is known as "adding value within the problem." Only through adding value to a specific problem or pain point does an entrepreneur become successful.

Say, for example, you identify that the process for making a dental appointment is complicated for patients, and dentists are losing customers as a result. The value could be to build an online appointment system that makes it easier to book appointments.

Network like crazy

Most entrepreneurs can't do it alone. The business world is a cutthroat one and getting any help you can will likely help and reduce the time it takes to achieve a successful business. Networking is critical for any new entrepreneur. Meeting the right people who can introduce you to contacts in your industry, such as the right suppliers, financiers, and even mentors, can mean the difference between success and failure.

Attending conferences, emailing and calling people in the industry, speaking to your cousin's friend's brother who is in a similar business, will help you get out into the world and discover people who can guide you. Once you have your foot in the door with the right people, conducting a business becomes easier.

Lead by example

Every entrepreneur needs to be a leader within their company. Simply doing the day-to-day requirements will not lead to success. A leader needs to work hard, motivate, and inspire their employees to reach their best potential, which will lead to the success of the company.

Look at some of the greatest and most successful companies; all of them have had great leaders. Apple and Steve Jobs, Bill Gates and Microsoft, Bob Iger and Disney, are just a few examples. Study these people and read their books to see how to be a great leader and become the leader that your employees can follow by the example you set.

Entrepreneurship Financing

Given the riskiness of a new venture, the acquisition of capital funding is particularly challenging, and many entrepreneurs deal with it via bootstrapping: financing a business using methods such as using their own money, providing sweat equity to reduce labor costs, minimizing inventory, and factoring receivables.

While some entrepreneurs are lone players struggling to get small businesses off the ground on a shoestring, others take on partners armed with greater access to capital and other resources. In these situations, new firms may acquire financing from venture capitalists, angel investors, hedge funds, crowdfunding, or through more traditional sources such as bank loans.

Resources for entrepreneurs

There are a variety of financing resources for entrepreneurs starting their own businesses. Obtaining a small business loan through the Small Business Administration (SBA) can help entrepreneurs get the business off the ground with affordable loans. Here, the SBA helps connect businesses to loan providers.

If entrepreneurs are willing to give up a piece of equity in their business, then they may find financing in the form of angel investors and venture capitalists. These types of investors also provide guidance, mentorship, and connections in addition to capital.

Crowdfunding has also become a popular way for entrepreneurs to raise capital, particularly through Kickstarter or Indiegogo. In this way, an entrepreneur creates a page for their product and a monetary goal to reach while promising certain givebacks to those who donate, such as products or experiences.

Bootstrapping for entrepreneurs

Bootstrapping refers to building a company solely from your savings as an entrepreneur as well as from the initial sales made from your business. This is a difficult process as all the financial risk is placed on the entrepreneur and there is little room for error. If the business fails, the entrepreneur also may lose all of their life savings.

The advantage of bootstrapping is that an entrepreneur can run the business with their own vision and no outside interference or investors demanding quick profits. That being said, sometimes having an outsider's assistance can help a business rather than hurt it. Many companies have succeeded with a bootstrapping strategy, but it is a difficult path.

Small business vs. entrepreneurship

A small business and entrepreneurship have a lot in common but they are different. A small business is a company—usually, a sole-proprietorship or partnership—that is not a medium-sized or large-sized business, operates locally, and does not have access to a vast amount of resources or capital.

Entrepreneurship is when an individual who has an idea acts on that idea, usually to disrupt the current market with a new product or service. Entrepreneurship usually starts as a small business but the long-term vision is much greater, to seek high profits and capture market share with an innovative new idea.

How entrepreneurs make money

Entrepreneurs seek to generate revenues that are greater than costs. Increasing revenues is the goal and that can be achieved through marketing, word-of-mouth, and networking. Keeping costs low is also critical as it results in higher profit margins. This can be achieved through efficient operations and eventually economies of scale.

How do taxes work for entrepreneurs?

The taxes you will pay as an entrepreneur will depend on how you structure your business.

Sole proprietorship: A business set up this way is an extension of the individual. Business income and expenses are filed on Schedule C on your U.S. personal tax return and you are taxed at your individual tax rate.

Partnership: For tax purposes, a partnership functions the same way as a sole proprietorship in the U.S., with the only difference being that income and expenses are split amongst the partners.

Entrepreneurs operating as sole proprietors can deduct any legitimate business expenses from their income to lower their tax bill. This includes expenses such as their home office and utilities, mileage for business travel, advertising, and travel expenses.

C-corporation: A C-corporation is a separate legal entity and has separate taxes filed with the IRS from the entrepreneur. The business income will be taxed at the corporate tax rate rather than the personal income tax rate.

Limited liability company (LLC) or S-corporation: These two options are taxed in the same manner as a C-corporation but usually at lower amounts.

7 Characteristics of Entrepreneurs

What else do entrepreneurial success stories have in common? They invariably involve industrious people diving into things they’re naturally passionate about.

Giving credence to the adage, “find a way to get paid for the job you’d do for free,” passion is arguably the most important attribute entrepreneurs must have, and every edge helps.

While the prospect of becoming your own boss and raking in a fortune is alluring to entrepreneurial dreamers, the possible downside to hanging out one’s own shingle is vast. Income isn’t guaranteed, employer-sponsored benefits go by the wayside, and when your business loses money, your personal assets can take a hit; it's not a corporation’s bottom line. But adhering to a few tried and true principles can go a long way in diffusing risk. The following are a few characteristics required to be a successful entrepreneur.

1. Versatility

When starting out, it’s essential to personally handle sales and other customer interactions whenever possible. Direct client contact is the clearest path to obtaining honest feedback about what the target market likes and what you could be doing better. If it’s not always practical to be the sole customer interface, entrepreneurs should train employees to invite customer comments as a matter of course. Not only does this make customers feel empowered, but happier clients are more likely to recommend businesses to others.

Personally answering phones is one of the most significant competitive edges home-based entrepreneurs hold over their larger competitors. In a time of high-tech backlash, where customers are frustrated with automated responses and touch-tone menus, hearing a human voice is one surefire way to entice new customers and make existing ones feel appreciated—an important fact, given that a significant percentage of business is generated from repeat customers.

Paradoxically, while customers value high-touch telephone access, they also expect a highly polished website. Even if your business isn’t in a high-tech industry, entrepreneurs still must exploit internet technology to get their message across. A startup garage-based business can have a superior website to an established company valued at $100 million. Just make sure a live human being is on the other end of the phone number listed.

2. Flexibility

Few successful business owners find perfect formulas straight out of the gate. On the contrary: ideas must morph over time. Whether tweaking product design or altering food items on a menu, finding the perfect sweet spot takes trial and error.

Former Starbucks Chair and CEO Howard Schultz initially thought playing Italian opera music over store speakers would accentuate the Italian coffeehouse experience he was attempting to replicate. But customers saw things differently and didn’t seem to like arias with their espressos. As a result, Schultz jettisoned the opera and introduced comfortable chairs instead.

3. Money savviness

At the heart of any successful new business, is steady cash flow, which is essential for purchasing inventory, paying rent, maintaining equipment, and promoting the business. The key to staying in the black is rigorous, regular cash flow management. And since most new businesses don’t make a profit within the first year, by setting money aside for this contingency, entrepreneurs can help mitigate the risk of falling short of funds. Related to this, it’s essential to keep personal and business costs separate, and never dip into business funds to cover the costs of daily living.

Of course, it’s important to pay yourself a realistic salary that allows you to cover essentials, but not much more—especially where investors are involved. Of course, such sacrifices can strain relationships with loved ones who may need to adjust to lower standards of living and endure worry over risking family assets. For this reason, entrepreneurs should communicate these issues well ahead of time, and make sure significant loved ones are on board.

4. Resiliency

Running your own business is extremely difficult, especially getting one started from scratch. It requires a lot of time, dedication, and often failure. A successful entrepreneur must show resilience to all the difficulties on the road ahead. Whenever they meet with failure or rejection they must keep pushing forward.

Starting your business is a learning process and any learning process comes with a learning curve, which can be frustrating, especially when money is on the line. It's important never to give up through the difficult times if you want to succeed.

5. Focus

Similar to resilience, a successful entrepreneur must stay focused and eliminate the noise and doubts that come with running a business. Becoming sidetracked, not believing in your instincts and ideas, and losing sight of the end goal is a recipe for failure. A successful entrepreneur must always remember why they started the business and remain on course to see it through.

6. Business smarts

Knowing how to manage money and understanding financial statements are critical for anyone running their own business. Knowing your revenues, your costs, and how to increase or decrease them, respectively, is important. Making sure you don't burn through cash will allow you to keep the business alive.

Implementing a sound business strategy, knowing your target market, your competitors, and your strengths and weaknesses will allow you to maneuver the difficult landscape of running your business.

7. Communication skills

Successful communication is important in almost every facet of life, regardless of what you do. It is also of the utmost importance in running a business. From conveying your ideas and strategies to potential investors to sharing your business plan with your employees and negotiating contracts with suppliers—all require successful communication.

Entrepreneurship in Economics

In economist-speak, an entrepreneur acts as a coordinating agent in a capitalist economy. This coordination takes the form of resources being diverted toward new potential profit opportunities. The entrepreneur moves various resources, both tangible and intangible, promoting capital formation.

In a market full of uncertainty, it is the entrepreneur who can actually help clear up uncertainty, as they make judgments or assume risk. To the extent that capitalism is a dynamic profit-and-loss system, entrepreneurs drive efficient discovery and consistently reveal knowledge.

Established firms face increased competition and challenges from entrepreneurs, which often spurs them toward research and development efforts as well. In technical economic terms, the entrepreneur disrupts the course toward steady-state equilibrium.

In 2022, there were 33.2 million small businesses in the United States.

How entrepreneurship helps economies

Nurturing entrepreneurship can have a positive impact on an economy and society in several ways. For starters, entrepreneurs create new businesses. They invent goods and services, resulting in employment, and often create a ripple effect, resulting in more and more development. For example, after a few information technology companies began in India in the 1990s, businesses in associated industries, like call center operations and hardware providers, began to develop too, offering support services and products.

Entrepreneurs add to the gross national income. Existing businesses may remain confined to their markets and eventually hit an income ceiling. But new products or technologies create new markets and new wealth. Additionally, increased employment and higher earnings contribute to a nation’s tax base, enabling greater government spending on public projects.

Entrepreneurs create social change. They break tradition with unique inventions that reduce dependence on existing methods and systems, sometimes rendering them obsolete. Smartphones and their apps, for example, have revolutionized work and play across the globe.

Entrepreneurs invest in community projects and help charities and other non-profit organizations, supporting causes beyond their own. Bill Gates, for example, has used his considerable wealth for education and public health initiatives.

Entrepreneurial ecosystems

Research shows that high levels of self-employment can stall economic development: Entrepreneurship, if not properly regulated, can lead to unfair market practices and corruption, and too many entrepreneurs can create income inequalities in society. Overall, though, entrepreneurship is a critical driver of innovation and economic growth. Therefore, fostering entrepreneurship is an important part of the economic growth strategies of many local and national governments around the world.

To this end, governments commonly assist in the development of entrepreneurial ecosystems, which may include entrepreneurs themselves, government-sponsored assistance programs, and venture capitalists. They may also include non-government organizations, such as entrepreneurs' associations, business incubators, and education programs.

California's Silicon Valley is often cited as an example of a well-functioning entrepreneurial ecosystem. The region has a well-developed venture capital base, a large pool of well-educated talent, especially in technical fields, and a wide range of government and non-government programs fostering new ventures and providing information and support to entrepreneurs.

Questions for Entrepreneurs

Embarking on the entrepreneurial career path to “being your own boss” is exciting. But along with all your research, make sure to do your homework about yourself and your situation.

A few questions to ask yourself:

Do I have the personality, temperament, and mindset of taking on the world on my own terms?Do I have the required resources to devote all my time to my venture?Do I have an exit plan ready with a clearly defined timeline in case my venture does not work?Do I have a concrete plan for the next "x" number of months or will I face challenges midway due to family, financial, or other commitments? Do I have a mitigation plan for those challenges?Do I have the required network to seek help and advice as needed?Have I identified and built bridges with experienced mentors to learn from their expertise?Have I prepared the rough draft of a complete risk assessment, including dependencies on external factors?Have I realistically assessed the potential of my offering and how it will figure in the existing market?If my offering is going to replace an existing product in the market, how will my competitors react?To keep my offering secure, will it make sense to get a patent? Do I have the capacity to wait until I receive it?Have I identified my target customer base for the initial phase? Do I have scalability plans ready for larger markets?Have I identified sales and distribution channels?

Questions that delve into external factors:

Does my entrepreneurial venture meet local regulations and laws? If not feasible locally, can I and should I relocate to another region?How long does it take to get the necessary license or permissions from concerned authorities? Can I survive that long?Do I have a plan for getting the necessary resources and skilled employees, and have I made cost considerations for the same?What are the tentative timelines for bringing the first prototype to market or for services to be operational?Who are my primary customers?Who are the funding sources I may need to approach to make this big? Is my venture good enough to convince potential stakeholders?What technical infrastructure do I need?Once the business is established, will I have sufficient funds to get resources and take it to the next level? Will other big firms copy my model and kill my operation?

What Does It Mean to Be an Entrepreneur?

An entrepreneur is an individual who starts their own business based on an idea they have or a product they have created while assuming most of the risks and reaping most of the rewards of the business.

What Is the Best Definition of Entrepreneurship?

Entrepreneurship is the process of setting up a business, taking it from an idea to realization.

What Are the Four Types of Entrepreneurs?

Four types of entrepreneurs include builders, opportunists, innovators, and specialists.

What Are the Seven Characteristics of Entrepreneurs?

Seven primary characteristics among entrepreneurs include versatility, resilience, flexibility, money-savviness, business smarts, focus, and having strong communication skills.

The Bottom Line

An entrepreneur is an individual who takes an idea or product and creates a business, a process known as entrepreneurship. Creating a business requires a lot of work and dedication, which not everyone is cut out for. Entrepreneurs are often young, highly motivated risk-takers who have a vision and often sacrifice a lot to achieve that vision.

Entrepreneurs enter the market because they love what they do, believe their product will have a positive impact, and hope to make profits from their efforts. The steps entrepreneurs take fuel the economy; they create businesses that employ people and make products and services that consumers buy today.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our

editorial policy.

Van Praag, C. Mirjam. "Some Classic Views on Entrepreneurship." De Economist, Vol. 147, No. 3. 1999. Pp. 311-335.

Forbes. "The 4 Types of Entrepreneurs - - Which Are You?"

Jazzercise. "About Us."

Ben & Jerry's. "Our History."

Internal Revenue Service. "Instructions for Schedule C."

Internal Revenue Service. "Publication 535, Business Expenses."

Internal Revenue Service. "Forming a Corporation."

Internal Revenue Service. "S Corporations."

U.S. Small Business Administration, Office of Advocacy. "Advocacy Releases 2022 Small Business Profiles for States."

Related Terms

Social Entrepreneur: Definition and Examples

A social entrepreneur is a person who pursues an innovative idea with the potential to solve a community problem.

4 Factors of Production Explained With Examples

Factors of production are the inputs needed for the creation of a good or service. These include labor, entrepreneurship, and capital.

Business Plan: What It Is, What's Included, and How to Write One

A business plan is a document that details a company's goals and how it plans to achieve them. Business plans are valuable to both startup and established companies.

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ENTREPRENEUR中文(简体)翻译：剑桥词典

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entrepreneur 在英语-中文（简体）词典中的翻译

entrepreneurnoun [ C ] uk

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/ˌɒn.trə.prəˈnɜːr/ us

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/ˌɑːn.trə.prəˈnɝː/

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someone who starts their own business, especially when this involves seeing a new opportunity

（尤指涉及风险的）企业家，创业者

He was one of the entrepreneurs of the 80s who made their money in property.

他是80年代靠做房地产生意赚钱起家的企业家之一。

(entrepreneur在剑桥英语-中文（简体）词典的翻译 © Cambridge University Press)

entrepreneur的例句

entrepreneur

Studies show that many small entrepreneurs have been employed in the formal sector before setting up their own enterprises.

来自 Cambridge English Corpus

Under what circumstances might we expect the presence of political entrepreneurs to operate in a normatively desirable manner?

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In many cases, leveraged buyouts, often structured by the entrepreneur and top managers, were the ultimate customers.

来自 Cambridge English Corpus

In so acting as norm entrepreneurs in international arenas, indigenous organisations are changing traditional statecentric international politics and its basic institutions to encompass different actors.

来自 Cambridge English Corpus

The remuneration of the wage worker converged with that of the entrepreneur.

来自 Cambridge English Corpus

Because of this friction, the amount that an entrepreneur can borrow is a function of his own wealth, which thus acts as collateral.

来自 Cambridge English Corpus

In the end, the ministry was intermittently criticized for enriching minority entrepreneurs and infringing on the privileges of minority vested interest.

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And agitating against bilingual education are monied entrepreneurs.

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（尤指涉及風險的）企業家，創業者…

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emprendedor, emprendedora, emprendedor/dora [masculine-feminine]…

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empresário, empresária, empreendedor…

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起業家, 起業家（きぎょうか）…

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What is entrepreneurship? | Stanford Online

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What is entrepreneurship?

What does “entrepreneurship” make you think of? Innovation? Business savvy? Perseverance?

Here, we’ll help you learn more about what entrepreneurship is, the different forms it can take, and the various challenges that many entrepreneurs face.To develop a more comprehensive understanding of what it takes to become an entrepreneur, consider enrolling in Stanford’s Entrepreneurial Leadership Program.What is entrepreneurship?At its most basic level, entrepreneurship refers to an individual or a small group of partners who strike out on an original path to create a new business. An aspiring entrepreneur actively seeks a particular business venture and it is the entrepreneur who assumes the greatest amount of risk associated with the project. As such, this person also stands to benefit most if the project is a success.Entrepreneurial pursuits often involve innovation. Large enterprises may seek to emulate this element by cultivating what’s known as “intrapreneurship.” Employees are encouraged to think like entrepreneurs, cultivating an original perspective that may result in a new idea for the company. These workers may be given extra latitude, but the enterprise still holds authority over the project and absorbs any risk associated with it. Entrepreneurs benefit every sector, from large corporations to small businesses.What industries do small business entrepreneurs work in?A recent small business owner survey from Guidant Financial found that the top three industries for small business startups are:Food and restaurant operationsRetailBusiness servicesOther leading industries included health and fitness, finance, insurance, and law. No matter what type of venture a small business entrepreneur is involved in, it’s vital that they prioritize innovation and perseverance.Characteristics of an entrepreneurThe entrepreneurial mindset combines several different skills that require careful development for the successful achievement of a business idea. For example, an entrepreneur must be able to balance an understanding of how business works — including from a financial and operational perspective — with a drive for innovation. Entrepreneurship means understanding when you have an opening in the marketplace that no other provider is meeting and having the business sense to know how to go after this new opportunity at the right time.A successful entrepreneur will possess many abilities and characteristics, including the ability to be:CuriousFlexible and adaptablePersistentPassionate Willing to learnA visionary MotivatedEntrepreneurial drive stems from qualities like these, just as an entrepreneur's ability to succeed will depend on developing these abilities.What types of entrepreneurs are there?From social entrepreneurship to scalable startup entrepreneurship to intrapreneurs, there is no limit to the kinds of entrepreneurs currently operating within businesses.An intrapreneur may be considered a type of entrepreneur, though this individual will likely have a bit less freedom and much lower financial risk than an entrepreneur who is truly embarking on a new, independent journey. While intrapreneurs may need to manage expectations and budgets provided by their sponsoring organization, they don’t have the same concerns as independent entrepreneurs when it comes to investor relations, venture capital, and overall business management.Entrepreneurs may also be motivated primarily by their desire to make a positive impact on the world by creating a new business. This type of leader is known as a social entrepreneur. They see a problem facing their communities, or the world at large, and they strive to create and implement new solutions that drive change.Another important distinction among the different entrepreneurial categories is the scale of the entrepreneur’s ambition: Are they trying to launch a small business or to create a growth-oriented startup?What is the difference between a startup and a small business?The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand and expect to grow the business. The vision for the business is usually different from a small business owner’s.For example, a food service worker who’s interested in entrepreneurship might choose to go into business for themselves, opening up a new restaurant. Eventually, this venture may succeed and grow to the point where opening up a second location or franchising the brand could be viable options. However, this does not necessarily mean that the restaurant is a startup, especially if the founder’s initial goal wasn’t to significantly expand the business.A better example of a startup entrepreneur might be a food service worker who has an original idea about how to transform restaurant operations on a larger scale. This person might be interested in creating a new technological solution, reimagining distribution and logistics, or something else. The key difference here is that the startup is small in the beginning, but its success relies on using an innovative idea to respond to a large-scale opportunity. Right away, many startups, companies that are just beginning operations, have big ambitions. From idea to startupTo visualize the journey of a startup entrepreneur, consider Kevin Plank’s story. As the founder of Under Armour his company, which is now known for its moisture-wicking clothing, a revolutionary idea at the time, took Plank into about $40,000 of credit card debt. His idea didn’t catch on until he made his first sale to Georgia Tech and the appeal of his product took off.Plank’s entrepreneurial spirit took an idea based on the dryness of his compression shorts and turned it into a highly visible and wildly popular company through persistence, vision, motivation, and a determined sales strategy.Obstacles to successful entrepreneurshipA smart venture and the right opportunity don’t guarantee success in the world of entrepreneurship. A rising entrepreneur may face many hurdles on the road to founding a business.Recent research from the Ewing Marion Kauffman Foundation reported that the leading concern among “aspiring entrepreneurs” was difficulty acquiring funds to launch or expand the organization. Finding the proper mentorship was another major obstacle.Speaking in a recent webinar, our faculty and guests explored similar topics as they described common mistakes and pitfalls that startups face, from assessing the competitive landscape to figuring out how to scale.If you’re looking for ways to turn your innovative idea into a successful business, our experts and educators can help. Consider enrolling in the Entrepreneurial Leadership Program today.

Entrepreneurship - Wikipedia

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(Top)

1Perspectives on entrepreneurship

2Elements

3Entrepreneurical opportunities

4History

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4.1Historical usage

4.220th century

4.321st century

4.4Relationship between small business and entrepreneurship

4.5Historians' ranking

5Types of entrepreneurship

Toggle Types of entrepreneurship subsection

5.1Cultural

5.2Ethnic

5.3Religious

5.4Feminist

5.5Institutional

5.6Millennial

5.7Nascent

5.8Project-based

5.9Social

5.10Biosphere

6Entrepreneurial behaviours

Toggle Entrepreneurial behaviours subsection

6.1Uncertainty perception and risk-taking

6.2"Coachability" and advice taking

6.3Strategies

6.4Designing individual/opportunity nexus

6.5Opportunity perception and biases

6.6Styles

6.7Communication

6.7.1Links to sea piracy

7Psychological makeup

Toggle Psychological makeup subsection

7.1Strategic entrepreneurship

7.2Leadership

7.3Global leadership

8Entrepreneurship training and education

9Recent trends that seek to merge neurosciences into entrepreneurship

10Resources and financing

Toggle Resources and financing subsection

10.1Entrepreneurial resources

10.2Bootstrapping

10.2.1Contextual background

10.2.2Common definition

10.2.3Related methodologies

10.3Additional financing

10.4Effect of taxes

11Predictors of success

12See also

13References

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13.1Works cited

14External links

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Entrepreneurship

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From Wikipedia, the free encyclopedia

Creation or extraction of economic value

"Entrepreneur" redirects here. For other uses, see Entrepreneur (disambiguation).

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Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk (assumed by a traditional business), and potentially involving values besides simply economic ones.

An entrepreneur is an individual who creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards.[1] The process of setting up a business is known as "entrepreneurship". The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

More narrow definitions have described entrepreneurship as the process of designing, launching and running a new business, often similar to a small business, or (per Business Dictionary) as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit".[2] The people who create these businesses are often referred to as "entrepreneurs".[3][4] While definitions of entrepreneurship typically focus on the launch and operation of businesses, due to the high risks involved in launching a startup company, a significant proportion of startups have to close (in Mikal Belicove's words) due to "lack of funding, bad business decisions, government policies, an economic crisis, a lack of market demand, or a combination of all of these."[5]

In the field of economics, the term entrepreneur is used for an entity which has the ability to translate inventions or technologies into products and services.[6] In this sense, entrepreneurship describes activities on the part of both established firms and new businesses.

Perspectives on entrepreneurship[edit]

In the 21st century the governments of nation states have tried to promote entrepreneurship, as well as enterprise culture, in the hope that it would improve or stimulate economic growth and competition. After the end of supply-side economics, entrepreneurship was supposed to boost the economy.[7]

As an academic field, entrepreneurship accommodates different schools of thought. It has been studied within disciplines such as management, economics, sociology, and economic history.[8][9] Some view entrepreneurship as allocated to the entrepreneur. These scholars tend to focus on what the entrepreneur does and what traits an entrepreneur has. This is sometimes referred to as the functionalistic approach to entrepreneurship.[10] Others deviate from the individualistic perspective to turn the spotlight on the entrepreneurial process and immerse in the interplay between agency and context. This approach is sometimes referred to as the processual approach,[10] or the contextual turn/approach to entrepreneurship.[11][12]

Elements[edit]

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this section. Unsourced material may be challenged and removed.Find sources: "Entrepreneurship" – news · newspapers · books · scholar · JSTOR (August 2021) (Learn how and when to remove this template message)

Entrepreneurship includes the creation or extraction of economic value.[13][12][14] It is the act of being an entrepreneur, or the owner or manager of a business enterprise who, by risk and initiative, attempts to make profits.[citation needed] Entrepreneurs act as managers and oversee the launch and growth of an enterprise. Entrepreneurship is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation.

In the early 19th century, the French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield". Entrepreneurs create something new and unique—they change or transmute value.

Regardless of the firm size, big or small, it can take part in entrepreneurship opportunities. There are four criteria for becoming an entrepreneur. First, there must be opportunities or situations to recombine resources to generate profit. Second, entrepreneurship requires differences between people, such as preferential access to certain individuals or the ability to recognize information about opportunities. Third, taking on a level of risk is a necessity. Fourth, the entrepreneurial process requires the organization of people and resources.[15]

An entrepreneur uses their time, energy, and resources to create value for others. They are rewarded for this effort monetarily and therefore both the consumer of the value created and the entrepreneur benefit.

The entrepreneur is a factor in and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics since the late 1970s.

In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. According to Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products, including new business models.

It has been argued, that creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is debated in academic economics. An alternative description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the making of drinking straws.

Entrepreneurical opportunities[edit]

The exploitation of entrepreneurial opportunities may include:[16]

Developing a business plan

Hiring human resources

Acquiring financial and material resources

Providing leadership

Being responsible for both the venture's success or failure

Risk aversion

The economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the economy as "creative destruction", Which he defined as launching innovations that simultaneously destroy old industries while ushering in new industries and approaches. For Schumpeter, the changes and "dynamic economic equilibrium brought on by the innovating entrepreneur [were] the norm of a healthy economy".[17] While entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary-sector groups, charitable organizations and government.[18]

Entrepreneurship may operate within an entrepreneurship ecosystem which often includes:

Government programs and services that promote entrepreneurship and support entrepreneurs and start-ups

Non-governmental organizations such as small-business associations and organizations that offer advice and mentoring to entrepreneurs (e.g. through entrepreneurship centers or websites)

Small-business advocacy organizations that lobby governments for increased support for entrepreneurship programs and more small business-friendly laws and regulations

Entrepreneurship resources and facilities (e.g. business incubators and seed accelerators)

Entrepreneurship education and training programs offered by schools, colleges and universities

Financing (e.g. bank loans, venture capital financing, angel investing and government and private foundation grants)[19][need quotation to verify]

In the 2000s, usage of the term "entrepreneurship" expanded to include how and why some individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them.[20] The term has also been used to discuss how people might use these opportunities to develop new products or services, launch new firms or industries, and create wealth.[21] The entrepreneurial process is uncertain because opportunities can only be identified after they have been exploited.[22]

Entrepreneurs exhibit positive biases towards finding new possibilities and seeing unmet market needs, and a tendency towards risk-taking that makes them more likely to exploit business opportunities.[23][24]

History[edit]

Historical usage[edit]

Emil Jellinek-Mercedes (1853–1918), here at the steering wheel of his Phoenix Double-Phaeton

"Entrepreneur" (/ˌɒ̃trəprəˈnɜːr, -ˈnjʊər/ ⓘ, UK also /-prɛ-/) is a loanword from French. The word first appeared in the French dictionary entitled Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in 1723.[25] Especially in Britain, the term "adventurer" was often used to denote the same meaning.[26] The study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Irish-French economist Richard Cantillon, which was foundational to classical economics. Cantillon defined the term first in his Essai sur la Nature du Commerce en Général, or Essay on the Nature of Trade in General, a book William Stanley Jevons considered the "cradle of political economy".[27][28] Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price, "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise". Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities to maximize the financial return.[29][30] Cantillon emphasized the willingness of the entrepreneur to assume the risk and to deal with uncertainty, thus he drew attention to the function of the entrepreneur and distinguished between the function of the entrepreneur and the owner who provided the money.[29][31]

Jean-Baptiste Say also identified entrepreneurs as a driver for economic development, emphasizing their role as one of the collecting factors of production allocating resources from less to fields that are more productive. Both Say and Cantillon belonged to French school of thought and known as the physiocrats.[32]

Dating back to the time of the medieval guilds in Germany, a craftsperson required special permission to operate as an entrepreneur, the small proof of competence (Kleiner Befähigungsnachweis), which restricted training of apprentices to craftspeople who held a Meister certificate. This institution was introduced in 1908 after a period of so-called freedom of trade (Gewerbefreiheit, introduced in 1871) in the German Reich. However, proof of competence was not required to start a business. In 1935 and in 1953, greater proof of competence was reintroduced (Großer Befähigungsnachweis Kuhlenbeck), which required craftspeople to obtain a Meister apprentice-training certificate before being permitted to set up a new business.[33]

In the Ashanti Empire, successful entrepreneurs who accumulated large wealth and men as well as distinguished themselves through heroic deeds were awarded social and political recognition by being called "Abirempon" which means big men. By the eighteenth and nineteenth centuries AD, the appellation "Abirempon" had formalized and politicized to embrace those who conducted trade from which the whole state benefited. The state rewarded entrepreneurs who attained such accomplishments with Mena(elephant tail) which was the "heraldic badge"[34]

20th century[edit]

In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and by other Austrian economists such as Carl Menger (1840-1921), Ludwig von Mises (1881-1973) and Friedrich von Hayek (1899–1992). While the loan from French of the English-language word "entrepreneur" dates to 1762,[35] the word "entrepreneurism" dates from 1902[36] and the term "entrepreneurship" also first appeared in 1902.[37] According to Schumpeter, an entrepreneur is willing and able to convert a new idea or invention into a successful innovation.[38] Entrepreneurship employs what Schumpeter called the "gale of creative destruction"[39]

to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models,[citation needed] thus creative destruction is largely[quantify] responsible for long-term economic growth. The idea that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory[clarification needed] and as such continues to be debated in academic economics. An alternative description by Israel Kirzner (1930– ) suggests that the majority of innovations may be incremental improvements – such as the replacement of paper with plastic in the construction of a drinking straw – that require no special qualities.

For Schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon-making technologies to produce the horseless carriage. In this case, the innovation (i.e. the car) was transformational but did not require the development of dramatic new technology. It did not immediately replace the horse-drawn carriage, but in time incremental improvements reduced the cost and improved the technology, leading to the modern auto industry. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through a price system). In this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of x-efficiency.

For Schumpeter, the entrepreneur did not bear risk: the capitalist did. Schumpeter believed that the equilibrium was imperfect. Schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability. Some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit. Schumpeter was of the opinion that entrepreneurs shift the production-possibility curve to a higher level using innovations.[40]

Initially, economists made the first attempt[when?] to study the entrepreneurship concept in depth.[41] Alfred Marshall viewed the entrepreneur as a multi-tasking capitalist and observed that in the equilibrium of a completely competitive market there was no spot for "entrepreneurs" as economic-activity creators.[42]

Changes in politics and society in Russia and China the late-20th century saw a flowering of entrepreneurial activity, producing Russian oligarchs[43]

and Chinese millionaires.[44]

21st century[edit]

In 2012, Ambassador-at-Large for Global Women's Issues Melanne Verveer greets participants in an African Women's Entrepreneurship Program at the State Department in Washington, D.C.

In the 2000s, entrepreneurship was extended from its origins in for-profit businesses to include social entrepreneurship, in which business goals are sought alongside social, environmental or humanitarian goals and even the concept of the political entrepreneur.[according to whom?] Entrepreneurship within an existing firm or large organization has been referred to as intrapreneurship and may include corporate ventures where large entities "spin-off" subsidiary organizations.[45]

Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing and deploying resources,[46] often by innovating to create new or improving existing products or services.[47] In the 2000s, the term "entrepreneurship" has been extended to include a specific mindset resulting in entrepreneurial initiatives, e.g. in the form of social entrepreneurship, political entrepreneurship or knowledge entrepreneurship.[citation needed]

According to Paul Reynolds, founder of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers".[48] In recent years, entrepreneurship has been claimed as a major driver of economic growth in both the United States and Western Europe.[citation needed]

Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to large-scale undertakings that involve a team and which may create many jobs. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) to raise capital for building and expanding the business.[49] Many organizations exist to support would-be entrepreneurs, including specialized government agencies, business incubators (which may be for-profit, non-profit, or operated by a college or university), science parks and non-governmental organizations, which include a range of organizations including not-for-profits, charities, foundations and business advocacy groups (e.g. Chambers of commerce). Beginning in 2008, an annual "Global Entrepreneurship Week" event aimed at "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities" was launched.[who?]

Relationship between small business and entrepreneurship[edit]

The term "entrepreneur" is often conflated with the term "small business" or used interchangeably with this term. While most entrepreneurial ventures start out as a small business, not all small businesses are entrepreneurial in the strict sense of the term. Many small businesses are sole proprietor operations consisting solely of the owner—or they have a small number of employees—and many of these small businesses offer an existing product, process or service and they do not aim at growth. In contrast, entrepreneurial ventures offer an innovative product, process or service and the entrepreneur typically aims to scale up the company by adding employees, seeking international sales and so on, a process which is financed by venture capital and angel investments. In this way, the term "entrepreneur" may be more closely associated with the term "startup". Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weaknesses.[50]

Historians' ranking[edit]

A 2002 survey of 58 business history professors gave the top spots in American business history to Henry Ford, followed by Bill Gates; John D. Rockefeller; Andrew Carnegie, and Thomas Edison. They were followed by Sam Walton; J. P. Morgan; Alfred P. Sloan; Walt Disney; Ray Kroc; Thomas J. Watson; Alexander Graham Bell; Eli Whitney; James J. Hill; Jack Welch; Cyrus McCormick; David Packard; Bill Hewlett; Cornelius Vanderbilt; and George Westinghouse.[51] A 1977 survey of management scholars reported the top five pioneers in management ideas were: Frederick Winslow Taylor; Chester Barnard; Frank Bunker Gilbreth Sr.; Elton Mayo; and Lillian Moller Gilbreth.[52]

Types of entrepreneurship[edit]

Cultural[edit]

According to Christopher Rea and Nicolai Volland, cultural entrepreneurship is "practices of individual and collective agency characterized by mobility between cultural professions and modes of cultural production", which refers to creative industry activities and sectors. In their book The Business of Culture (2015), Rea and Volland identify three types of cultural entrepreneur: "cultural personalities", defined as "individuals who buil[d] their own personal brand of creativity as a cultural authority and leverage it to create and sustain various cultural enterprises"; "tycoons", defined as "entrepreneurs who buil[d] substantial clout in the cultural sphere by forging synergies between their industrial, cultural, political, and philanthropic interests"; and "collective enterprises", organizations which may engage in cultural production for profit or not-for-profit purposes.[53]

In the 2000s, story-telling has emerged as a field of study in cultural entrepreneurship. Some have argued that entrepreneurs should be considered "skilled cultural operators"[54] that use stories to build legitimacy, and seize market opportunities and new capital.[55][56][57] Others have concluded that we need to speak of a 'narrative turn' in cultural entrepreneurship research.[58]

Ethnic[edit]

The term "ethnic entrepreneurship" refers to self-employed business owners who belong to racial or ethnic minority groups in the United States and Europe.[citation needed] A long tradition of academic research explores the experiences and strategies of ethnic entrepreneurs as they strive to integrate economically into mainstream U.S. or European society. Classic cases include Jewish merchants and tradespeople in large U.S. cities in the 19th and early 20th centuries as well as Chinese and Japanese small business owners (restaurants, farmers, shop owners) on the West Coast.[59] In the 2010s, ethnic entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian motel owners of the U.S. and Chinese business owners in Chinatowns across the United States. While entrepreneurship offers these groups many opportunities for economic advancement, self-employment and business ownership in the United States remain unevenly distributed along racial/ethnic lines.[60] Despite numerous success stories of Asian entrepreneurs, a recent statistical analysis of U.S. census data shows that whites are more likely than Asians, African-Americans and Latinos to be self-employed in high prestige, lucrative industries.[60]

Religious[edit]

Religious entrepreneurship refers to both the use of entrepreneurship to pursue religious ends as well as how religion impacts entrepreneurial pursuits. While religion is a central topic in society, it is largely overlooked in entrepreneurship research.[61] The inclusion of religion may transform entrepreneurship including a focus on opportunities other than profit as well as practices, processes and purpose of entrepreneurship.[62][63] Gümüsay suggests a three pillars model to explain religious entrepreneurship: The pillars are the entrepreneurial, socio-economic/ethical, and religio-spiritual in the pursuit of value, values, and the metaphysical.[64]

Feminist[edit]

A feminist entrepreneur is an individual who applies feminist values and approaches through entrepreneurship, with the goal of improving the quality of life and well-being of girls and women.[65] Many are doing so by creating "for women, by women" enterprises. Feminist entrepreneurs are motivated to enter commercial markets by desire to create wealth and social change, based on the ethics of cooperation, equality and mutual respect.[66][67] These endeavours can have the effect of both empowerment and emancipation.[68]

Institutional[edit]

The American-born British economist Edith Penrose has highlighted the collective nature of entrepreneurship. She mentions that in modern organizations, human resources need to be combined to better capture and create business opportunities.[69] The sociologist Paul DiMaggio (1988:14) has expanded this view to say that "new institutions arise when organized actors with sufficient resources [institutional entrepreneurs] see in them an opportunity to realize interests that they value highly".[70] The notion has been widely applied.[71][72][73][74]

Millennial[edit]

The term "millennial entrepreneur" refers to a business owner who is affiliated with millennials (also known as Generation Y), those people born from approximately 1981 to 1996.[75] The offspring of baby boomers and early Gen Xers,[76] this generation was brought up using digital technology and mass media. Millennial business owners are well-equipped with knowledge of new technology and new business models and have a strong grasp of its business applications. There have been many breakthrough businesses that have come from millennial entrepreneurs such as Mark Zuckerberg, who created Facebook.[77] Despite the expectation of millennial success, there have been recent studies that have proven this to not be the case. The comparison between millennials who are self-employed and those who are not self-employed shows that the latter is higher. The reason for this is because they have grown up in a different generation and attitude than their elders. Some of the barriers to entry for entrepreneurs are the economy, debt from schooling, and the challenges of regulatory compliance.[78]

Nascent[edit]

A nascent entrepreneur is someone in the process of establishing a business venture.[79] In this observation, the nascent entrepreneur can be seen as pursuing an opportunity, i.e. a possibility to introduce new services or products, serve new markets, or develop more efficient production methods in a profitable manner.[80][81] But before such a venture is actually established, the opportunity is just a venture idea.[82] In other words, the pursued opportunity is perceptual in nature, propped by the nascent entrepreneur's personal beliefs about the feasibility of the venturing outcomes the nascent entrepreneur seeks to achieve.[83][84][85] Its prescience and value cannot be confirmed ex ante but only gradually, in the context of the actions that the nascent entrepreneur undertakes towards establishing the venture as described in Saras Sarasvathy's theory of Effectuation,[86] Ultimately, these actions can lead to a path that the nascent entrepreneur deems no longer attractive or feasible, or result in the emergence of a (viable) business. In this sense, over time, the nascent venture can move towards being discontinued or towards emerging successfully as an operating entity.

The distinction between the novice, serial and portfolio entrepreneurs is an example of behavior-based categorization.[87] Other examples are the (related) studies by,[88][89] on start-up event sequences. Nascent entrepreneurship that emphasizes the series of activities involved in new venture emergence,[90][91][92] rather than the solitary act of exploiting an opportunity. Such research will help separate entrepreneurial action into its basic sub-activities and elucidate the inter-relationships between activities, between an activity (or sequence of activities) and an individual's motivation to form an opportunity belief, and between an activity (or sequence of activities) and the knowledge needed to form an opportunity belief. With this research, scholars will be able to begin constructing a theory of the micro-foundations of entrepreneurial action.

Scholars interested in nascent entrepreneurship tend to focus less on the single act of opportunity exploitation and more on the series of actions in new venture emergence,[90][93][92] Indeed, nascent entrepreneurs undertake numerous entrepreneurial activities, including actions that make their businesses more concrete to themselves and others. For instance, nascent entrepreneurs often look for and purchase facilities and equipment; seek and obtain financial backing, form legal entities, organize teams; and dedicate all their time and energy to their business[94]

Project-based[edit]

Project entrepreneurs are individuals who are engaged in the repeated assembly or creation of temporary organizations.[95] These are organizations that have limited lifespans which are devoted to producing a singular objective or goal and get disbanded rapidly when the project ends. Industries where project-based enterprises are widespread include: sound recording, film production, software development, television production, new media and construction.[96] What makes project-entrepreneurs distinctive from a theoretical standpoint is that they have to "rewire" these temporary ventures and modify them to suit the needs of new project opportunities that emerge. A project entrepreneur who used a certain approach and team for one project may have to modify the business model or team for a subsequent project.

Project entrepreneurs are exposed repeatedly to problems and tasks typical of the entrepreneurial process.[97] Indeed, project-based entrepreneurs face two critical challenges that invariably characterize the creation of a new venture: locating the right opportunity to launch the project venture and assembling the most appropriate team to exploit that opportunity. Resolving the first challenge requires project-entrepreneurs to access an extensive range of information needed to seize new investment opportunities. Resolving the second challenge requires assembling a collaborative team that has to fit well with the particular challenges of the project and has to function almost immediately to reduce the risk that performance might be adversely affected. Another type of project entrepreneurship involves entrepreneurs working with business students to get analytical work done on their ideas.

Social[edit]

Student organizers from the Green Club at Newcomb College Institute formed a social entrepreneurship organization in 2010.

Main article: Social entrepreneurshipSocial entrepreneurship is the use of the by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues.[98] This concept may be applied to a variety of organizations with different sizes, aims, and beliefs.[99] For-profit entrepreneurs typically measure performance using business metrics like profit, revenues and increases in stock prices, but social entrepreneurs are either non-profits or blend for-profit goals with generating a positive "return to society" and therefore must use different metrics. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with the voluntary sector[100] in areas such as poverty alleviation, health care[101] and community development. At times, profit-making social enterprises may be established to support the social or cultural goals of the organization but not as an end in itself. For example, an organization that aims to provide housing and employment to the homeless may operate a restaurant, both to raise money and to provide employment for the homeless people.

Biosphere[edit]

Biosphere entrepreneurship is "entrepreneurial activity that generates value for the biosphere and ecosystem services."[102] It is part of a larger trend of business schools seeking to incorporate environmental topics more actively into their curricula.[103]

Entrepreneurial behaviours[edit]

The entrepreneur is commonly seen as an innovator—a designer of new ideas and business processes.[104] Management skills and strong team building abilities are often perceived as essential leadership attributes for successful entrepreneurs.[105][unreliable source] Political economist Robert Reich considers leadership, management ability and team-building to be essential qualities of an entrepreneur.[106][107]

Uncertainty perception and risk-taking[edit]

Theorists Frank Knight[108] and Peter Drucker defined entrepreneurship in terms of risk-taking. The entrepreneur is willing to put his or her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture. However, entrepreneurs often do not believe that they have taken an enormous amount of risks because they do not perceive the level of uncertainty to be as high as other people do. Knight classified three types of uncertainty:

Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing five red balls and five white balls)

Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing five red balls but an unknown number of white balls)

True uncertainty or Knightian uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose contents, in terms of numbers of coloured balls, are entirely unknown)

Entrepreneurship is often associated with true uncertainty, particularly when it involves the creation of a novel good or service, for a market that did not previously exist, rather than when a venture creates an incremental improvement to an existing product or service. A 2014 study at ETH Zürich found that compared with typical managers, entrepreneurs showed higher decision-making efficiency and a stronger activation in regions of frontopolar cortex (FPC) previously associated with explorative choice.[109]

"Coachability" and advice taking[edit]

The ability of entrepreneurs to work closely with and take advice from early investors and other partners (i.e. their coachability) has long been considered a critical factor in entrepreneurial success.[110] At the same time, economists have argued that entrepreneurs should not simply act on all advice given to them, even when that advice comes from well-informed sources, because entrepreneurs possess far deeper and richer local knowledge about their own firm than any outsider. Indeed, measures of coachability are not actually predictive of entrepreneurial success (e.g. measured as success in subsequent funding rounds, acquisitions, pivots and firm survival). This research also shows that older and larger founding teams, presumably those with more subject expertise, are less coachable than younger and smaller founding teams.[citation needed]

Strategies[edit]

Strategies that entrepreneurs may use include:

Innovation of new products, services or processes[111]

Continuous process improvement (CPI)[111]

Exploration of new business models

Finding solutions for problems

Use of technology[111]

Use of business intelligence

Use of economical strategies

Development of future products and services[111]

Optimized talent management[111]

Entrepreneurial marketing strategies for interactive and innovative networking[112]

Designing individual/opportunity nexus[edit]

According to Shane and Venkataraman, entrepreneurship comprises both "enterprising individuals" and "entrepreneurial opportunities", so researchers should study the nature of the individuals who identify opportunities when others do not, the opportunities themselves and the nexus between individuals and opportunities.[113] On the other hand, Reynolds et al.[114] argue that individuals are motivated to engage in entrepreneurial endeavours driven mainly by necessity or opportunity, that is individuals pursue entrepreneurship primarily owing to survival needs, or because they identify business opportunities that satisfy their need for achievement. For example, higher economic inequality tends to increase necessity-based entrepreneurship rates at the individual level.[115]

Opportunity perception and biases[edit]

One study has found that certain genes affecting personality may influence the income of self-employed people.[116] Some people may be able to use[weasel words] "an innate ability" or quasi-statistical sense to gauge public opinion[117] and market demand for new products or services. Entrepreneurs tend to have the ability to see unmet market needs and underserved markets. While some entrepreneurs assume they can sense and figure out what others are thinking, the mass media plays a crucial role in shaping views and demand.[118] Ramoglou argues that entrepreneurs are not that distinctive and that it is essentially poor conceptualizations of "non-entrepreneurs" that maintain laudatory portraits of "entrepreneurs" as exceptional innovators or leaders[119][120] Entrepreneurs are often overconfident, exhibit illusion of control, when they are opening/expanding business or new products/services.[23]

Styles[edit]

Differences in entrepreneurial organizations often partially reflect their founders' heterogenous identities. Fauchart and Gruber have classified entrepreneurs into three main types: Darwinians, communitarians and missionaries. These types of entrepreneurs diverge in fundamental ways in their self-views, social motivations and patterns of new firm creation.[121]

Communication[edit]

Entrepreneurs must practice effective communication both within their firm and with external partners and investors to launch and grow a venture and enable it to survive. An entrepreneur needs a communication system that links the staff of her firm and connects the firm to outside firms and clients. Entrepreneurs should be charismatic leaders, so they can communicate a vision effectively to their team and help to create a strong team. Communicating a vision to followers may be the most important act of the transformational leader.[122] Compelling visions provide employees with a sense of purpose and encourage commitment. According to Baum et al.[123] and Kouzes and Posner,[124] the vision must be communicated through written statements and through in-person communication. Entrepreneurial leaders must speak and listen to articulate their vision to others.[125]

Communication is pivotal in the role of entrepreneurship because it enables leaders to convince potential investors, partners and employees about the feasibility of a venture.[126] Entrepreneurs need to communicate effectively to shareholders.[127] Nonverbal elements in speech such as the tone of voice, the look in the sender's eyes, body language, hand gestures and state of emotions are also important communication tools. The Communication Accommodation Theory posits that throughout communication people will attempt to accommodate or adjust their method of speaking to others.[128] Face Negotiation Theory describes how people from different cultures manage conflict negotiation to maintain "face".[129] Hugh Rank's "intensify and downplay" communications model can be used by entrepreneurs who are developing a new product or service. Rank argues that entrepreneurs need to be able to intensify the advantages of their new product or service and downplay the disadvantages to persuade others to support their venture.[130]

Links to sea piracy[edit]

Research from 2014 found links between entrepreneurship and historical sea piracy. In this context, the claim is made for a non-moral approach to looking at the history of piracy as a source of inspiration for entrepreneurship education[131] as well as for research in entrepreneurship[132] and business model generation.[133]

Psychological makeup[edit]

Ross Levine, an economist at the University of California, Berkeley, and Yona Rubinstein, a professor at the London School of Economics released a study which suggests entrepreneurs are disproportionately white, male, from wealthy and highly educated backgrounds, and prone to "aggressive, illicit, risk-taking activities" as teenagers and young adults. Entrepreneurs also performed above average on aptitude tests.[134] This masculine image is also found when studying how male entrepreneurs are represented in media. A supporting but invisible family are one of the success factors when being portrayed as a male entrepreneur in media.[135] A study conducted by the Census Bureau and two MIT professors, after compiling a list of 2.7 million company founders who hired at least one employee between 2007 and 2014, found the average age of a successful start-up founder when he or she founded it is 45. They consistently found chances of entrepreneurial success rises with age.[136][137]

Apple co-founder and longtime leader Steve Jobs (pictured in 2010) led the introduction of many innovations in the computer, smartphone and digital music industries.

Stanford University economist Edward Lazear found in a 2005 study that variety in education and in work experience was the most important trait that distinguished entrepreneurs from non-entrepreneurs[138] A 2013 study by Uschi Backes-Gellner of the University of Zurich and Petra Moog of the University of Siegen in Germany found that a diverse social network was also an important characteristic of students that would go on to become entrepreneurs.[139][140]

Studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Empirical studies suggest that female entrepreneurs possess strong negotiating skills and consensus-forming abilities.[141] Åsa Hansson, who looked at empirical evidence from Sweden, found that the probability of becoming self-employed decreases with age for women, but increases with age for men.[142] She also found that marriage increased the probability of a person's becoming an entrepreneur.[142]

Jesper Sørensen wrote in 2010 that significant influences on the decision to become an entrepreneur include workplace peers and social composition. Sørensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs.[143] Social composition can influence entrepreneurialism in peers by demonstrating the possibility for success, stimulating a "He can do it, why can't I?" attitude. As Sørensen stated: "When you meet others who have gone out on their own, it doesn't seem that crazy."[144]

Entrepreneurs may also be driven to entrepreneurship by past experiences. If someone has faced multiple work stoppages or has been unemployed in the past, the probability of becoming an entrepreneur increases[142] Per Cattell's personality framework, both personality traits and attitudes are thoroughly investigated by psychologists. However, in case of entrepreneurship research these notions are employed by academics[which?] too, but vaguely. Cattell states that personality is a system that is related to the environment and further adds that the system seeks explanation to the complex transactions conducted by both—traits and attitudes. This is because both of them bring about change and growth in a person. Personality is that which informs what an individual will do when faced with a given situation. A person's response is triggered by his/her personality and the situation that is faced.[145]

Innovative entrepreneurs may be more likely to experience what psychologist Mihaly Csikszentmihalyi calls "flow". "Flow" occurs when an individual forgets about the outside world due to being thoroughly engaged in a process or activity. Csikszentmihalyi suggested that breakthrough innovations tend to occur at the hands of individuals in that state.[146] Other research has concluded that a strong internal motivation is a vital ingredient for breakthrough innovation.[147] Flow can be compared to Maria Montessori's concept of normalization, a state that includes a child's capacity for joyful and lengthy periods of intense concentration.[148] Csikszentmihalyi acknowledged that Montessori's prepared environment offers children opportunities to achieve flow.[149] Thus quality and type of early education may influence entrepreneurial capability.[citation needed]

Research on high-risk settings such as oil platforms, investment banking, medical surgery, aircraft piloting and nuclear-power plants has related distrust to failure avoidance.[150] When non-routine strategies are needed, distrusting persons perform better, while when routine strategies are needed trusting persons perform better. Gudmundsson and Lechner extended this research to entrepreneurial firms.[151] They argued that in entrepreneurial firms the threat of failure is ever-present, resembling non-routine situations in high-risk settings. They found that the firms of distrusting entrepreneurs were more likely to survive than the firms of optimistic or overconfident entrepreneurs. The reasons were that distrusting entrepreneurs would emphasize failure-avoidance through sensible task selection and more analysis. Kets de Vries has pointed out that distrusting entrepreneurs are more alert about their external environment.[152] He concluded that distrusting entrepreneurs are less likely to discount negative events and are more likely to engage control mechanisms. Similarly, Gudmundsson and Lechner found that distrust leads to higher precaution and therefore increases chances of entrepreneurial-firm survival.

Researchers Schoon and Duckworth completed a study in 2012 that could potentially help identify who may become an entrepreneur at an early age. They determined that the best measures to identify a young entrepreneur are family and social status, parental role-modelling, entrepreneurial competencies at age 10, academic attainment at age 10, generalized self-efficacy, social skills, entrepreneurial intention and experience of unemployment.[153]

Strategic entrepreneurship[edit]

Some scholars have constructed an operational definition of a more specific subcategory called "Strategic Entrepreneurship". Closely tied with principles of strategic management, this form of entrepreneurship is "concerned about growth, creating value for customers and subsequently creating wealth for owners".[154] A 2011 article for the Academy of Management provided a three-step, "Input-Process-Output" model of strategic entrepreneurship. The model's three steps entail the collection of different resources, the process of orchestrating them in the necessary manner and the subsequent creation of competitive advantage, value for customers, wealth and other benefits. Through the proper use of strategic management/leadership techniques and the implementation of risk-bearing entrepreneurial thinking, the strategic entrepreneur is, therefore, able to align resources to create value and wealth.[154]

Leadership[edit]

Leadership in entrepreneurship can be defined as "process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task"[155] in "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods".[156][page needed]

This refers to not only the act of entrepreneurship as managing or starting a business, but how one manages to do so by these social processes, or leadership skills. (Entrepreneurship in itself can be defined somewhat circularly as "the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control".[157]) An entrepreneur typically has a mindset that seeks out potential opportunities during uncertain times.[157] An entrepreneur must have leadership skills or qualities to see potential opportunities and act upon them.[citation needed] At the core, an entrepreneur is a decision-maker.[citation needed] Such decisions often affect an organization as a whole, which is representative of entrepreneurial leadership within the organization.[citation needed]

With the growing global market and increasing technology use throughout all industries, the core of entrepreneurship and the decision-making has become an ongoing process rather than isolated incidents.[citation needed] This becomes knowledge management,[citation needed] which is "identifying and harnessing intellectual assets" for organizations to "build on past experiences and create new mechanisms for exchanging and creating knowledge".[158] This belief[which?] draws upon a leader's past experiences that may prove useful. It is a common mantra for one to learn from their past mistakes, so leaders should take advantage of their failures for their benefit.[citation needed] This is how one may take their experiences as a leader for the use in the core of entrepreneurship decision-making.[citation needed]

Global leadership[edit]

The majority of scholarly research done on these topics has taken place in North America.[159] Words like "leadership" and "entrepreneurship" do not always translate well into other cultures and languages. For example, in North America a leader is often thought of as charismatic, but German culture frowns on such charisma due to the charisma of Nazi leader Adolf Hitler (1889–1945). Other cultures, as in some European countries, view the term "leader" negatively, like the French.[160][need quotation to verify]

The participative leadership style that is prevalent in the United States is considered disrespectful in many other parts of the world due to the differences in power distance.[161] Many Asian and Middle Eastern countries do not have "open door" policies for subordinates, who would never informally approach their managers/bosses. For countries like that, an authoritarian approach to management and leadership is more customary.[citation needed]

Despite cultural differences, the successes and failures of entrepreneurs can be traced to how leaders adapt to local conditions.[162] Within the increasingly global business environment a successful leader must be able to adapt and have insight into other cultures. To respond to the environment, corporate visions are becoming transnational in nature, to enable the organization to operate in or provide services/goods for other cultures.[163]

Entrepreneurship training and education[edit]

Michelacci and Schivardi are a pair of researchers who believe that identifying and comparing the relationships between an entrepreneur's earnings and education level would determine the rate and level of success. Their study focused on two education levels, college degree and post-graduate degree. While Michelacci and Schivardi do not specifically determine characteristics or traits for successful entrepreneurs, they do believe that there is a direct relationship between education and success, noting that having a college knowledge does contribute to advancement in the workforce.[164]

Michelacci and Schivardi state there has been a rise in the number of self-employed people with a baccalaureate degree. However, their findings also show that those who are self-employed and possess a graduate degree has remained consistent throughout time at about 33 percent. They briefly mention those famous entrepreneurs like Steve Jobs and Mark Zuckerberg who were college dropouts, but they call these cases all but exceptional as it is a pattern that many entrepreneurs view formal education as costly, mainly because of the time that needs to be spent on it. In the 21st century, a young Danish entrepreneur, Maniyar, had become famous while perusing his Bachelors of Pharmacy. There are few entrepreneurs that are also college dropouts, like Mark Zuckerberg however, Maniyar's ability and volition while studying would allow him to create a functioning business.[10] Michelacci and Schivardi believe that for an individual to reach the full success they need to have education beyond high school. Their research shows that the higher the education level the greater the success. The reason is that college gives people additional skills that can be used within their business and to operate on a higher level than someone who only "runs" it.[164]

Recent trends that seek to merge neurosciences into entrepreneurship[edit]

Currently it refers to the concept of "Entrepreneurial Enhancement", which refers to "the progressive improvement of cognitive, affective and conative skills in potential entrepreneurs or existing ones using appropriate neurotechnologies". The term has been coined by engineer Víctor Pérez Centeno, in relation to the need to fuse neurotechnologies in research, education and the empowerment of entrepreneurial performance".[165][166]

Resources and financing[edit]

Entrepreneurial resources[edit]

An entrepreneurial resource is any company-owned asset that has economic value creating capabilities. Economic value creating both tangible and intangible sources are considered as entrepreneurial resources. Their economic value is generating activities or services through mobilization by entrepreneurs.[167] Entrepreneurial resources can be divided into two fundamental categories: tangible and intangible resources.[168]

Tangible resources are material sources such as equipment, building, furniture, land, vehicle, machinery, stock, cash, bond and inventory that has a physical form and can be quantified. On the contrary, intangible resources are nonphysical or more challenging to identify and evaluate, and they possess more value creating capacity such as human resources including skills and experience in a particular field, organizational structure of the company, brand name, reputation, entrepreneurial networks that contribute to promotion and financial support, know-how, intellectual property including both copyrights, trademarks and patents.[169][170]

Bootstrapping[edit]

Contextual background[edit]

At least early on, entrepreneurs often "bootstrap-finance" their start-up rather than seeking external investors from the start. One of the reasons that some entrepreneurs prefer to "bootstrap" is that obtaining equity financing requires the entrepreneur to provide ownership shares to the investors. If the start-up becomes successful later on, these early equity financing deals could provide a windfall for the investors and a huge loss for the entrepreneur. If investors have a significant stake in the company, they may as well be able to exert influence on company strategy, chief executive officer (CEO) choice and other important decisions. This is often problematic since the investor and the founder might have different incentives regarding the long-term goal of the company. An investor will generally aim for a profitable exit and therefore promotes a high-valuation sale of the company or IPO to sell their shares. Whereas the entrepreneur might have philanthropic intentions as their main driving force. Soft values like this might not go well with the short-term pressure on yearly and quarterly profits that publicly traded companies often experience from their owners.[171]

Common definition[edit]

One consensus definition of bootstrapping sees it as "a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors".[172]

Related methodologies[edit]

Bootstrapping methods include:[173]

Owner financing, including savings, personal loans and credit card debt

Working capital management that minimizes accounts receivable

Joint use, such as reducing overhead by coworking or using independent contractors

Increasing accounts payable by delaying payment, or leasing rather than buying equipment

Lean manufacturing strategies such as minimizing inventory and lean startup to reduce product development costs

Subsidy finance

Additional financing[edit]

This section does not cite any sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (August 2021) (Learn how and when to remove this template message)

Many businesses need more capital than can be provided by the owners themselves. In this case, a range of options is available including a wide variety of private and public equity, debt and grants. Private equity options include:

Start-up accelerators

Angel investors

Venture capital investors

Equity crowdfunding

Hedge funds

Debt options open to entrepreneurs include:

Loans from banks, specialized financial companies (such as credit card companies) and economic development organizations

Line of credit also from banks and specialized financial companies

Microcredit also known as microloans

Merchant cash advance

Revenue-based financing

Grant options open to entrepreneurs include:

Equity-free accelerators

Business plan/business pitch competitions for college entrepreneurs and others

Small Business Innovation Research grants from the U.S. government

Effect of taxes[edit]

Entrepreneurs are faced with liquidity constraints and often lack the necessary credit needed to borrow large amounts of money to finance their venture.[174] Because of this, many studies have been done on the effects of taxes on entrepreneurs. The studies fall into two camps: the first camp finds that taxes help and the second argues that taxes hurt entrepreneurship.[citation needed]

Cesaire Assah Meh found that corporate taxes create an incentive to become an entrepreneur to avoid double taxation.[174] Donald Bruce and John Deskins found literature suggesting that a higher corporate tax rate may reduce a state's share of entrepreneurs.[175] They also found that states with an inheritance or estate tax tend to have lower entrepreneurship rates when using a tax-based measure.[175] However, another study found that states with a more progressive personal income tax have a higher percentage of sole proprietors in their workforce.[176] Ultimately, many studies find that the effect of taxes on the probability of becoming an entrepreneur is small. Donald Bruce and Mohammed Mohsin found that it would take a 50 percentage point drop in the top tax rate to produce a one percent change in entrepreneurial activity.[177]

Predictors of success[edit]

Dell Women's Entrepreneur Network event in New York City

Factors that may predict entrepreneurial success include the following:[178]

Methods

Establishing strategies for the firm, including growth and survival strategies

Maintaining the human resources (recruiting and retaining talented employees and executives)

Ensuring the availability of required materials (e.g. raw resources used in manufacturing, computer chips, etc.)

Ensuring that the firm has one or more unique competitive advantages

Ensuring good organizational design, sound governance and organizational coordination

Congruency with the culture of the society[179]

Market

Business-to-business (B2B) or business-to-consumer (B2C) models can be used

High growth market

Target customers or markets that are untapped or missed by others

Industry

Growing industry

High technology impact on the industry

High capital intensity

Small average incumbent firm size

Team

Large, gender-diverse and racially diverse team with a range of talents, rather than an individual entrepreneur

Graduate degrees

Management experience prior to start-up

Work experience in the start-up industry

Employed full-time prior to new venture as opposed to unemployed

Prior entrepreneurial experience

Full-time involvement in the new venture

Motivated by a range of goals, not just profit

Number and diversity of team members' social ties and breadth of their business networks

Company

Written business plan

Focus on a unified, connected product line or service line

Competition based on a dimension other than price (e.g. quality or service)

Early, frequent intense and well-targeted marketing

Tight financial controls

Sufficient start-up and growth capital

Corporation model, not sole proprietorship

Status

Wealth can enable an entrepreneur to cover start-up costs and deal with cash flow challenges

Dominant race, ethnicity or gender in a socially stratified culture[180]

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10 Characteristics of Successful Entrepreneurs

07 Jul 2020

Kelsey Miller

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Entrepreneurship Essentials

Multiple factors go into starting a successful business venture, including a strong concept and initial funding. But, perhaps the most important ingredient is the entrepreneur. These are individuals who must transform their ideas into a fully operational business.

If you’re thinking about launching your own venture, you might be wondering if you have what it takes to be an entrepreneur. But first, what’s an entrepreneur, and what do they do?

Free E-Book:So You Want to Be an Entrepreneur: How to Get Started

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What Is Entrepreneurship?

While entrepreneurship is commonly thought of as the process of starting a business, there are several nuances to consider.

In the HBS Online course Entrepreneurship Essentials, entrepreneurship is defined as “the pursuit of opportunity beyond the resources currently controlled.” An opportunity can be a myriad of things, but the course describes it as "a proposed venture to sell a product or service for which customers are willing to pay more than the required investments and operating costs.”

Entrepreneurs—either as individuals or in teams—discover opportunities throughout their personal and professional lives. They form hypotheses on ways to deliver value to customers and perform structured tests to validate their ideas. This often involves recruiting teammates through networking and investing funds to determine how they’ll deliver a product or service at an acceptable cost.

Great entrepreneurs come from all walks of life. In Entrepreneurship Essentials, it’s noted that “there’s no single personality profile, and it’s important to pay attention to the entrepreneurial team, rather than focus on the individual.” And while that's true, there are certain characteristics and skills that are particularly important for entrepreneurs to have when starting and leading a venture.

Here are 10 characteristics shared by successful entrepreneurs.

10 Characteristics of Successful Entrepreneurs

1. Curiosity

Successful entrepreneurs have a distinct personality trait that sets them apart from other organizational leaders: a sense of curiosity. An entrepreneur's ability to remain curious allows them to continuously seek new opportunities. Rather than settling for what they think they know, entrepreneurs ask challenging questions and explore different avenues.

This is validated in the online course Entrepreneurship Essentials, where entrepreneurship is described as a “process of discovery." Without curiosity, entrepreneurs can’t achieve their main objective: discovering new opportunities.

The drive they have to continuously ask questions and challenge the status quo can lead them to valuable discoveries easily overlooked by other business professionals.

2. Willingness to Experiment

Along with curiosity, entrepreneurs require an understanding of structured experimentation, such as design thinking. With each new opportunity, an entrepreneur must run tests to determine if it’s worthwhile to pursue.

For example, if you have an idea for a new product or service that fulfills an underserved demand, you’ll have to ensure customers are willing to pay for it and it meets their needs. To do so, you’ll need to conduct thorough market research and run meaningful tests to validate your idea and determine its potential.

3. Adaptability

Entrepreneurship is an iterative process, and new challenges and opportunities present themselves at every turn. It’s nearly impossible to be prepared for every scenario, but successful business leaders must be adaptable.

This is especially true for entrepreneurs who need to evaluate situations and remain flexible to ensure their business keeps moving forward, no matter what unexpected changes occur.

4. Decisiveness

To be successful, an entrepreneur has to make difficult decisions and stand by them. As a leader, they’re responsible for guiding the trajectory of their business, including every aspect from funding and strategy to resource allocation.

Being decisive doesn’t always mean being correct. Entrepreneurs need the confidence to make challenging decisions and see them through to the end. If the outcome turns out to be less than favorable, the decision to take corrective action is just as important.

Check out our video on the characteristics of successful entrepreneurs below, and subscribe to our YouTube channel for more explainer content!

View Video

5. Self-Awareness

A great entrepreneur is aware of their strengths and weaknesses. Rather than letting shortcomings hold them back, they build well-rounded teams that complement their abilities.

In many cases, it’s the entrepreneurial team, rather than an individual, that drives a business venture toward success. When starting your own business, it’s critical to surround yourself with teammates who have complementary talents and contribute to a common goal.

Related: 10 Tips to Help You Boost Team Performance

6. Risk Tolerance

Entrepreneurship is often associated with risk. While it’s true that launching a venture requires an entrepreneur to take risks, they also need to take steps to minimize it.

While many things can go wrong when launching a new venture, many things can go right. According to Entrepreneurship Essentials, entrepreneurs who actively manage the relationship between risk and reward position their companies to “benefit from the upside.”

Successful entrepreneurs are comfortable with encountering some level of risk to reap the rewards of their efforts; however, their risk tolerance is tightly related to their efforts to mitigate it.

7. Comfort with Failure

In addition to risk-management and calculated decision-making, entrepreneurship requires a certain level of comfort with failure.

“Of startups that have more than one employee, 70 percent survive at least two years, half last at least five years, and a quarter last 15 years,” says Harvard Business School Professor William Sahlman in Entrepreneurship Essentials. “Even then, only a small fraction of the survivors get to be significant employers.”

The reasons for failure are vast and encompass everything from a lack of business scalability to low product-market fit. While many of these risks can be avoided, some are inevitable.

Despite this, entrepreneurs must prepare themselves for, and be comfortable with, failure. Rather than let fear hold them back, they maintain a positive attitude to allow the possibility of success to propel them forward.

8. Persistence

While many successful entrepreneurs are comfortable with the possibility of failing, it doesn’t mean they give up easily. Rather, they see failure as an opportunity to learn and grow.

Throughout the entrepreneurial process, many hypotheses turn out to be wrong, and some ventures fail altogether. Part of what makes an entrepreneur successful is their willingness to learn from mistakes, ask questions, and persist until they reach their goal.

Related: How to Become a More Resilient Leader

9. Innovative Thinking

Innovation often goes hand-in-hand with entrepreneurship. While innovation in business can be defined as an idea that’s both novel and useful, it doesn’t always involve creating an entirely new product or service. Some of the most successful startups have taken existing products or services and drastically improved them to meet the changing needs of the market.

Although innovation doesn’t come naturally to every entrepreneur, it’s a type of strategic mindset that can be cultivated. By developing your problem-solving skills, you’ll be well-equipped to spot innovative opportunities and position your venture for success.

10. Long-Term Focus

Most people associate entrepreneurship with starting a business. While the early stages of launching a venture, such as securing funding, are critical to its success, the process doesn’t end once the business is operational.

According to Entrepreneurship Essentials, “it’s easy to start a business, but hard to grow a sustainable and substantial one. Some of the greatest opportunities in history were discovered well after a venture launched.”

Entrepreneurship is a long-term endeavor, and entrepreneurs must focus on the process from beginning to end to ensure long-term success.

How to Develop the Qualities of an Entrepreneur

There’s no right or wrong way to be an entrepreneur. Characteristics and behaviors like experimentation, persistence, and innovation can be developed with time, experience, and training. As long as you possess the entrepreneurial spirit, you'll be able to seize opportunities and overcome challenges throughout your journey.

Are you interested in learning the ins and outs of entrepreneurship? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

This post was updated on August 14, 2023. It was originally published on July 7, 2020.

About the AuthorKelsey Miller is a marketing specialist and contributing writer for Harvard Business School Online.

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What Does It Take to Be a Successful Entrepreneur?

09 Jul 2020

Tim Stobierski

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Entrepreneurship Essentials

The world is filled with aspiring entrepreneurs—people who believe they have what it takes to launch a company and build it into a profitable business. While anyone can start a business, not everyone will succeed.

Research by Harvard Business School Professor Shikhar Ghosh shows that up to 75 percent of startups fail. According to Zippia, 22 percent of small businesses fail within one year of being launched, half fail within five years, and approximately two-thirds fail within 10 years.

In light of these statistics, the question becomes: What does it take to be a successful entrepreneur? What steps can aspiring entrepreneurs take to lay the groundwork for success?

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What Is an Entrepreneur?

An entrepreneur is someone who launches a business venture, typically in the form of a company that manufactures and sells a product or provides a service. Entrepreneurs are often viewed as innovators who identify a problem or opportunity, then develop a solution no one else has recognized.

In the online course Entrepreneurship Essentials, it’s noted that “entrepreneurs—either individuals or teams—actively scan the environment for opportunities, or discover them as they live and work. They form hypotheses about what customers want or need and how they can deliver value to the customer.”

Successful entrepreneurs don’t just charge ahead with their ideas. First, they seek to validate there’s demand.

One way they do so is through testing. According to Entrepreneurship Essentials, entrepreneurs “recruit people and invest money to determine if customers will indeed value the product and they can produce and deliver it at an acceptable cost. They often find different, even better ideas once in the marketplace.”

Check out the video below to learn more about what it takes to succeed as an entrepreneur, and subscribe to our YouTube channel for more explainer content!

View Video

Entrepreneurship Requirements

Do you have dreams of one day becoming an entrepreneur and launching your own company? In addition to a business idea, doing so will require you to possess certain skills and characteristics.

1. Key Entrepreneurship Qualities and Behaviors

Several researchers have tried to pinpoint a specific entrepreneurial personality or profile in an attempt to quantify what makes some more successful than others.

In Entrepreneurship Essentials, it’s explained that there’s no single personality profile that leads someone to success as an entrepreneur. However, there are a number of characteristics shared by some of the world’s most successful entrepreneurs.

Some behaviors that are distinct from personality traits and associated with entrepreneurship include curiosity, pattern recognition, team building, structured experimentation, adaptation, decisiveness, and persistence.

While it can be argued that some people are more inclined to exhibit these behaviors than others, each of these qualities can be acquired through proper training and development.

2. Essential Entrepreneurial Skills

Especially in the earliest stages of launching a business, entrepreneurs are responsible for performing a variety of duties—it comes with the territory. Before you have an accounting department, marketing staff, and product development team, you'll likely need to perform some of these critical responsibilities.

Taking the time to develop certain skills before launching your business can drastically improve your chances of success. Here’s a list of some of the most critical skills all entrepreneurs should have:

Communication skills, which you’ll leverage daily as you work with vendors, investors, customers, and various members of your growing team

Organizational skills, which will empower you to work toward your goals efficiently

Time management skills, which will be essential throughout your career, but especially early on, when you have multiple responsibilities

Data-driven decision-making, which will enable you to make objective, measurable decisions about your products, services, business, and customers

Strategic thinking, which will allow you to discover opportunities and threats that guide business decisions more easily

Accounting basics, which will be especially important before you have a person or team dedicated to managing your business’s finances

Resilience, because every entrepreneur faces challenges and struggles, and it takes resilience to bounce back

3. An Opportunity or Business Idea

For a new venture to succeed, the business plan must be centered around a solid opportunity. In Entrepreneurship Essentials, an opportunity is defined as a proposed venture to sell a product or service for which customers are willing to pay more than the required investments and operating costs.

An opportunity is more than a product idea, and it extends well beyond the initial act of getting into business. According to Entrepreneurship Essentials, “it’s a plan that shows how a venture will attract, retain, and reward all stakeholders, including customers, founders, employees, investors, distributors, and suppliers.”

That plan doesn’t end once you’ve identified an innovative business idea. Ideally, your concept should be validated before you commit resources, time, and effort to bring it to life. Once validated and pursued, you must constantly reevaluate your business to determine whether you need to adapt to new opportunities or threats.

4. Resources and Funding

Finally, to launch your business, you’ll need a source of funding to purchase equipment and materials, develop your product or service, iterate upon your offerings, and refine your processes. Exactly what funding looks like will vary depending on the type of business you’re launching and your industry.

For some entrepreneurs, self-funding is possible. In such cases, an entrepreneur might set aside enough money to pay for their living expenses while they get their business off the ground, in addition to the costs associated with the launch.

Self-funding isn’t the only option available. There are many other paths you might take, such as:

Securing an SBA loan from the Small Business Administration

Raising capital from investors

Applying for grants (this may be especially suitable for nonprofit organizations)

Crowdfunding from the public

Relying on a line of credit

Every form of funding comes with benefits and risks. Self-funding, for example, allows you to retain complete control over your business and potential profits, but also requires you to carry the risk of failure. Raising capital from investors, on the other hand, allows you to spread your risk and, potentially, launch your business quicker—but it forces you to give up a portion of your control. Ultimately, you must decide what makes the most sense for your business.

Your Path to Becoming an Entrepreneur

Countless aspiring entrepreneurs have an interesting, innovative, and compelling business idea, but don’t have the skills or qualities to carry it through to fruition. Similarly, many others have the skills and qualities, but lack an idea to pursue. Even those with a brilliant idea and the necessary skills can fail to get their project off the ground if they don’t have access to funding. Successful entrepreneurship requires a blend of all these components.

The good news is: Successful entrepreneurs aren’t born—they’re made. With the right training, instruction, and development, everyone has the potential to become an entrepreneur.

About the AuthorTim Stobierski is a marketing specialist and contributing writer for Harvard Business School Online.

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Entrepreneurship | Definition, Historical Theorists, & Facts | Britannica Money

epreneurship | Definition, Historical Theorists, & Facts | Britannica MoneyHistory & SocietyScience & TechBiographiesAnimals & NatureGeography & TravelArts & CultureGames & QuizzesVideosOn This DayOne Good FactDictionaryLifestyles & Social IssuesPhilosophy & ReligionPolitics, Law & GovernmentWorld HistoryHealth & MedicineScienceTechnologyBrowse BiographiesBirds, Reptiles & Other VertebratesBugs, Mollusks & Other InvertebratesEnvironmentFossils & Geologic TimeMammalsPlantsGeography & TravelEntertainment & Pop CultureLiteratureSports & RecreationVisual ArtsCompanionsDemystifiedImage GalleriesInfographicsListsPodcastsSpotlightSummariesThe ForumTop Questions#WTFact100 WomenBritannica KidsSaving EarthSpace Next 50Student CenterSubscribe NowMoney HomeHousehold FinanceInvestingRetirementHistory & TheoryTable of ContentsExternal WebsitesTable Of ContentsHistory & TheoryentrepreneurshipbusinessWritten byDaniel CostaDaniel CostaDaniel Costa is a writer for Encyclopedia Britannica. He has studied applied linguistics, philosophy, and history.Fact-checked byThe Editors of Encyclopaedia BritannicaThe Editors of Encyclopaedia BritannicaEncyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.Updated: Feb. 02, 2024Table of ContentsExternal WebsitesTable Of ContentsOpen full sized imageAdam Smith, paste medallion by James Tassie, 1787; in the Scottish National Portrait Gallery, Edinburgh.Courtesy of the Scottish National Portrait Gallery, Edinburghentrepreneurship, the state of being an entrepreneur, or a person who organizes, manages, and assumes the risk of a business with the goal of generating economic value. The term is derived from the Old French verb entreprendre, “to undertake.” Entrepreneurship is one of the four factors of production (the economic resources, both human and other, that are used to bring about a flow or output of goods and services), the other three being land, capital, and labour. It nowadays plays a significant role in capitalist economies, often involving high-risk ventures that forge innovative commercial strategies to sell existing products and services or that introduce new products and services altogether.The remainder of this article briefly discusses historical contributions to the theory of entrepreneurship. For treatments of the role of entrepreneurship in economic growth, see economic growth: Entrepreneurship and economic growth: Role of the entrepreneur.The roots of the concept of entrepreneurship appear in a seminal work by the Irish economist Richard Cantillon, Essay on the Nature of Trade in General (originally in French, 1755), in which he distinguishes between wage earners with fixed incomes and wage earners without fixed incomes. He places entrepreneurs in the latter category, thereby conveying the adventurous volatile nature inherent in their activities. In The Wealth of Nations (1776) the Scottish economist Adam Smith asserts that the role of entrepreneurs is to serve as intermediaries between other factors of production; entrepreneurs are thus proprietary capitalists whose activities can fuel the division of labour. The French economist Jean-Baptiste Say later underlined entrepreneurs’ innovative nature by contending that they are uniquely capable of coordinating economic resources to meet market demands.The American economist Joseph Schumpeter’s 20th-century contributions shed light on the distinction between an entrepreneur and a capitalist. He introduced the term Unternehmergeist, or “entrepreneur-spirit,” to designate a driving force of innovation, one that revolutionizes economic structures and thereby fosters constant economic change. In his view, a healthy economy depends on the dynamic disequilibrium initiated by entrepreneurs.Daniel CostaThe Editors of Encyclopaedia BritannicaBritannica MoneyHousehold FinanceInvestingRetirementHistory & TheoryAbout UsPrivacy PolicyTerms & Conditions© 2024 Encyclopædia Britannica, Inc.

What Is an Entrepreneur? + How to Become One | Coursera

Is an Entrepreneur? + How to Become One | Coursera

For IndividualsFor BusinessesFor UniversitiesFor GovernmentsExploreOnline DegreesDegreesOnline DegreeExplore Bachelor’s & Master’s degreesMasterTrack™Earn credit towards a Master’s degreeUniversity CertificatesAdvance your career with graduate-level learningFind your New CareerBrowseTop CoursesLog InJoin for FreeListBusinessEntrepreneurshipWhat Is an Entrepreneur? + How to Become OneWhat Is an Entrepreneur? + How to Become OneWritten by Coursera Staff • Updated on Nov 30, 2023Learn what an entrepreneur is, discover real-life examples of entrepreneurs, and begin your entrepreneurship journey. An entrepreneur is someone who takes on the adventure and 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 about the different types of entrepreneurs, how to become an entrepreneur, and resources you can use to succeed.What does an entrepreneur do?When hearing the word entrepreneur, you may think of someone who has launched their own start-up. While this is true, what really defines an entrepreneur is the entrepreneurial spirit: seeing a need and creating a business that solves that need. An entrepreneur is someone willing to take a financial and professional risk in order to bring a business idea to life.Read more: 10 Steps to Starting a BusinessCommon characteristics of entrepreneursEntrepreneurs start all kinds of businesses across industries, including tech, healthcare, education, and design. There are characteristics that many entrepreneurs share, no matter their field. They tend to be hardworking, innovative, and resourceful, as they are often solely responsible for the success of their ventures. They also have a forward-thinking mindset, always looking for business opportunities and ways to take advantage of future trends. 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.Comfort with fundraising: Some entrepreneurs may have the resources to start a new business venture, while others may need to seek investments in the idea. Leadership: As your company’s founder, you’ll need to make important decisions to build and manage a team.Passion for learning: 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. Who is an example of an entrepreneur?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.

Is entrepreneurship a good career?If you're a self-starter with a passion for what you do, entrepreneurship may be a great career path. Initially, the entrepreneurial process can be challenging, but with the right strategies, you may find that it becomes a lucrative endeavor. As an entrepreneur, you can solve problems and innovate in a way that brings value to the economy, as well as experience personal satisfaction in owning your own company. After starting one business, you may decide to start multiple businesses that reflect your interests, abilities, and understanding of consumers' needs. 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. This career path can lead to financial freedom.Read more: What Is Entrepreneurship? A GuideTypes of entrepreneursThere are four types of entrepreneurs based on different business models:

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's launching of Google Maps.Small business entrepreneurs open stand-alone businesses with a few employees. Often, they open a single location, such as a restaurant or boutique, or offer professional services to a small list of clients. 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.

Read more: What Is Social Entrepreneurship? A GuideScalable 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.

How to become an entrepreneurTo become an entrepreneur and experience business success, you'll need to follow several key steps, as outlined below: 1. Conduct research. 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 fresh approaches? What does your competition look like? Analyze competitors to discover gaps in the market that your business and its products could fill. Read more: Competitive Product: Definition + How to Analyze One

2. Build a network.Once you’ve determined if your idea can turn into a successful business, focus on filling 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 advise you as you work out the details of your business’s operations. Read more: How to Use LinkedIn: A Guide to Online Networking3. Get organized.Organizing your idea into actionable steps and a clear plan is an important step in starting a business. Create a business plan and consider getting it professionally reviewed by a experienced entrepreneur, potential investor, early potential customer, or someone in your field of expertise. You can also hire someone to write a business plan for you or use free online resources to create one. Additional organizational tasks include:Establishing your business as a legal entity by incorporating it. Open a business bank account. Create a proof of concept as early as possible to attract investors to help fund your business. 4. Get funding.Taking out a loan can often help in the early phases of building a business by supplementing any existing entrepreneurial resources you may already have. Determine what type of loan you’ll need and the payments you can afford. Gather all required documentation required by the lender. 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.

5. Build and test.Building and rolling out your minimum viable product (MVP) can help engage your first potential customers to help validate your idea. The initial version of your concept doesn’t have to be perfect in order to gauge interest. Getting input from a variety of people is 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. After gathering data and implementing changes from your test run, fine-tune your products and business plan. 6. Scale your business.Take the money you’ve raised and allot what’s needed to build and scale your business. Many successful business owners suggest scaling your business based on your overall goals. Manage your cash flow accordingly, and you may see the growth that matches your initial dreams for the company or beyond.Read more: Your Guide to Small Business AccountingResources for entrepreneursThere 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.As you grow your business, consider recruiting a board of advisors who can provide counsel, advice, and support for your business.Start your entrepreneurship journey with CourseraTaking online courses can be a great way to prepare for entrepreneurial ventures. Consider Coursera's offerings and build foundational business development skills. Keep readingUpdated on Nov 30, 2023Written by:CCoursera StaffEditorial TeamCoursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

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Entrepreneurs and Entrepreneurship: Definitions and Examples

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What Is an Entrepreneur?

How to Be a Successful Entrepreneur

Myths About Entrepreneurs

Types of Entrepreneurship

Examples of Entrepreneurship

What Is an Entrepreneur?

What Are Some Types of Entrepreneurship?

Who Are Some of the Most Influential Entrepreneurs?

The Bottom Line

Business Leaders

Entrepreneurs

Entrepreneurs and Entrepreneurship: Definitions and Examples

Shobhit Seth

Updated October 10, 2023

Reviewed by

Akhilesh Ganti

Fact checked by

Vikki Velasquez

Fact checked by

Vikki Velasquez

Full Bio

Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area.

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What is entrepreneurship? | Stanford Online

Entrepreneurship - Wikipedia

10 Characteristics of Successful Entrepreneurs | HBS Online

What Does It Take to Be a Successful Entrepreneur? | HBS Online

Entrepreneurship | Definition, Historical Theorists, & Facts | Britannica Money

What Is an Entrepreneur? + How to Become One | Coursera

Entrepreneurs and Entrepreneurship: Definitions and Examples

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