Unless you’ve been living under a rock for the past 50 years, you have probably heard of the following people: Bill Gates, Emily Weiss, Reshma Saujani, and Arianna Huffington.
What do all of these people have in common: they all hold the title of entrepreneur.
What’s interesting about the people listed above is that they all work in different industries: news, technology, cosmetics, and more. All of these different types of businesses, and their founders all hold the same title. So, what is an entrepreneur?
A lot of businesspeople consider themselves to be entrepreneurs when they really aren’t, and true entrepreneurs might not even know that they fit the description. To avoid any further confusion, let’s go ahead and define what an entrepreneur is.
To be an entrepreneur, an individual must establish, organize, and operate a business, while taking on the financial risk of it failing, to make a profit.
Only people that have a deep enough understanding of an industry and the economy to create worthwhile opportunities can be a successful entrepreneur. Entrepreneurs play a big part in the health of the economy and the various markets within it.
They combine their knowledge of the economy and a particular industry with new technologies and innovations to introduce an entirely new product or service. Their end goal is to not only see a profit, but to also help the economy thrive.
Even though successful entrepreneurs are in tune with the economy, that doesn’t mean they always introduce something worthwhile. There are some entrepreneurs that see success from the risk of starting a business, but there are also plenty that fail.
There are plenty of reasons why new businesses don’t make it, and the most common ones for entrepreneurs are lack of funding, bad decision making, economic crisis, and lack of demand. Not to mention that a business can suffer from all of the above.
From that, you can tell that attempting to become a successful and self-made entrepreneur is not for the faint of heart. It is a high-risk high-reward situation.
Entrepreneurs need to be masters at analyzing the risk of a certain business venture, and can benefit from simulating investment scenarios with financial risk management software.
Since an entrepreneur is someone that designs a new business, entrepreneurship is the act of launching, establishing, and running it.
There are four categories of resources that economists see as crucial to production: natural resources, labor, capital, and, you guessed it, entrepreneurship. What makes entrepreneurs unique is that they use the other three resources to start a business. To become an entrepreneur, four things need to happen:
|1. There is an opportunity to combine resources, labor, and capital to make a profit|
|2. The person that recognizes that opportunity is able to understand that there is an opportunity and access those things|
|3. That person takes on a financial risk|
|4. Those people and resources are organized into a business|
And of course, that entrepreneur must follow the typical steps of starting a business to eventually launch that game-changing product or service.
Anyone can attempt to be a successful entrepreneur, but that doesn’t mean that everyone has what it takes to pull it off. There are five key traits that every entrepreneur must have to make it in today’s economy.
Entrepreneurs cannot be successful without in-depth knowledge of the industry they wish to start a business in, usually gained the hard way: experience. More often than not, entrepreneurs have left the security of their jobs to struggle. What keeps them going, you ask? Passion.
Entrepreneurs must be passionate about their business idea. If they aren’t, they can’t expect investors, employees, or customers to be. Getting a business off the ground is a lot of work, and most of the time, entrepreneurs are working long hard hours without much pay off. At the end of the day, their passion is what pushes them to success.
If I were to guess, I would say there has never been an entrepreneur immune to failure. And there probably never will be.
Image courtesy of Due
Every business idea is prone to fail in one way or another, and every entrepreneur knows that failure is not an option. To be successful in their field, entrepreneurs must be resilient. They are going to get a lot of pushback and run into a lot of obstacles. It’s simply a part of the job.
Aspiring entrepreneurs can’t expect to succeed if their business plan is nearly identical to other like businesses in the market. They need to apply creative, out of the box thinking to not only bring something new and innovative to the market, but to also find ways to improve collaboration, production, and communication in the workplace.
The flip-side of creativity is practicality. An idea without a potential customer is a failure waiting to happen. That’s why even the most creative minds need to approach their new ventures with a business mindset.
Entrepreneurs need to not only have access to the resources to start a business, but they also need to have the strategic mind to make their business model come alive. A true entrepreneur will strategically recognize opportunities, identify challenges, ask questions, find creative solutions, and overall, be a forward thinker.
Entrepreneurs need to think big picture. If they focused too heavily on the day to day, where they will constantly have to leap over hurdles, solve problems and accept certain defeats, they would never succeed. This not only includes keeping their eye on the prize, but also understanding where the industry is going, potential challenges for their business, and overall long term goals and initiatives.
Entrepreneurs feed capitalist economies. When every industry is controlled by private companies looking to make a profit, a small amount of people hold a majority of the money in the economy. The people with that money are the ones that fund entrepreneurs who will further contribute to capitalism, creating an endless cycle of investing money and seeing a return.
Enter entrepreneurial capitalism.
New innovations, and businesses as a result of them, are constantly being introduced by entrepreneurs, increasing competition, uncertainty, and profit opportunities in almost every industry. Basically, every entrepreneur that successfully enters a market, the more gas is thrown on the capitalism fire.
A lot of people think they have what it takes to be an entrepreneur: the idea of the century and the know-how to make it succeed. Most people would find themselves mistaken, especially after that five year mark.
However, that fairy tale happy ending (from a business standpoint) is not unattainable. If you have extensive knowledge of the economy and a product or service consumers won’t be able to resist, you might have what it takes.
Think you have what it takes? Check out some small business finance success stories from entrepreneurs that managed to make it happen.
Mary Clare Novak is a Content Marketing Specialist at G2 in Chicago, where she is currently exploring topics related to sales and customer relationship management. In her free time, you can find her doing a crossword puzzle, listening to cover bands, or eating fish tacos. (she/her/hers)
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