One of the most common misconceptions about Entrepreneurship is that it’s glamorous and easy. Sure, there are some Entrepreneurs who make millions and others who build empires before they graduate high school. However, not everyone can be an Entrepreneur and doing so isn’t as simple as having a great idea or making money after college. It takes significant time, effort and energy to become an entrepreneur. This article offers a beginners guide to Entrepreneurship.
The first step to becoming an Entrepreneur is understanding that Entrepreneurship is not a job. It’s a lifestyle, and it requires a lot of time and energy to do the day-to-day tasks that come with running your own business.
You don’t have to know everything about Entrepreneurship to be successful at it, but you do need to be willing to put in the work.
In this article, we'll give you advice on what it takes to get started as an Entrepreneur, how to find your idea, why having an idea isn't enough, and what resources are available for beginning Entrepreneurs. We'll also share some tips for how to run your business more effectively!
What is Entrepreneurship?
Three of the most basic definitions of an Entrepreneur you can find on the internet are those provided by Wikipedia, Investopedia and the Cambridge dictionary.
Investopedia defines an Entrepreneur as:
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. The Entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.
Wikipedia defines an Entrepreneur as someone who designs, launches, and runs a new business. Wikipedia also defines Entrepreneurship as the creation or extraction of value.
Cambridge dictionary defines an Entrepreneur as:
someone who makes money by starting their own business, especially when this involves seeing a new opportunity and taking risks.
The above definitions have one thing in common, they all refer to an Entrepreneur as someone who creates their own business. Well you know what we think about these definitions? They are too basic to fully conceptualise what an Entrepreneur means. To be clear all Entrepreneurs start their own businesses but so do Business leaders, so what is the difference between a Business leader and an Entrepreneur?
For a start, it isn’t the starting a new business that makes a person an Entrepreneur, it is the reason behind starting a business that differentiates a Business leader from an Entrepreneur. Although they are not mutually exclusive, as you can be both an Entrepreneur and a Business leader.
Every Entrepreneur is a Business leader but every Business leader isn’t an Entrepreneur.
To truly understand what an Entrepreneur is, let’s look at some research based definitions of an Entrepreneur and how these are different from the definition of a business leader.
OECD - Eurostat defines an Entrepreneur as:
a person who seeks to create value through creation or expansion of economic activities, by identifying and exploiting new products, processes, or markets.
Hisrich (1990) defined an Entrepreneur as:
someone who demonstrates initiative and creative thinking, is able to organize social and economic mechanisms to turn resources and situations to practical account, and accepts risk and failure.
Schumpeter (1965) defined an Entrepreneur as:
individuals who exploit market opportunity through technical and/or organizational innovation.
Bolton and Thompson (2000) defined an entrepreneur as:
a person who habitually creates and innovates to build something of recognized value around perceived opportunities.
In all four research definitions you find that an Entrepreneur is viewed as more than just a business creator. Rather an Entrepreneur is perceived as someone who intentionally seeks opportunities where they can create both economically and socially value, while influencing the wider marketplace. An Entrepreneur thinks about the wider impact of their solutions not just their business context.
Don’t get me wrong, creating a new business is one of many entrepreneurial activities but you don’t need to be an Entrepreneur to create a new business.
We can summarise this section by saying that being an Entrepreneur is a lifestyle. The mind of an Entrepreneur is constantly seeking opportunities to exploit, gaps to close, changes to make and value to deliver. An Entrepreneur is conversant with both the macro and micro context of any organisation they create. They are focused on delivering economic and/or social value to their consumers and the wider business economy.
What are the benefits of Entrepreneurship?
The benefits of Entrepreneurship to the people who start and run businesses are numerous. Entrepreneurs are self-employed, meaning they have control over when and where they work. They also have the freedom to decide how much time they want to commit to their business and what type of work best suits them.
Another benefit of Entrepreneurship is that it can be more flexible than working for someone else. Entrepreneurs don't have a set schedule with fixed hours, so they are able to balance their life better than those who work in an office setting. Some entrepreneurs also enjoy the fact that they can work when it's convenient for them rather than having to go into a 9-5 job every day.
Entrepreneurs also take great pride in the companies they build and often feel like their hard work has finally been recognized by society. They often see themselves as contributors instead of just consumers and view themselves as leaders in society.
Entrepreneurs make up approximately 30% of America's workforce, according to data released by the U.S Bureau of Labor Statistics (BLS) on Wednesday, September 12th, 2016.
Do you have what it takes to be an Entrepreneur?
Before you decide to quit your job and start a company, ask yourself if you are truly ready. It's important that you are 100 percent committed to this decision because it's not easy.
If you want to be an Entrepreneur, here is some advice on how to prepare for that journey:
Develop a business plan.
Write down the core values of your startup.
Invest in yourself; take classes, go to conferences and read books about Entrepreneurship.
Find mentors who will help guide and support you throughout the process.
Be ready to fail and fail forward. An Entrepreneur who hasn't tasted failure can never truly know success.
Get enough sleep and eat good food.
Mindmapping your business idea
The first step to becoming an Entrepreneur is mind map your business idea. To start, find the type of business you want to start and then ask yourself what would make that business successful. For example, if you wanted to open a bakery, you would need to figure out how much baking supplies cost and how much money it would take to get those supplies. Then you might decide that the best way to become a successful bakery owner is by selling baked goods at farmers markets where the demand for fresh products is high.
After mindmapping your business idea, research the competition in order to figure out what makes your business different from others in its market. You can do this by reading reviews online or asking people who have had experiences with other businesses in your field for their thoughts. Once you’ve done all this research, you’re ready to write a plan for how you want your business to run and put it into action.
Creating a business plan
What is a business plan? A business plan is a document that outlines the business you want to start, what it will do, how much money you need, and other essential information. It also provides you with a framework for your business's success.
The first step in creating a business plan is creating general goals. This includes goals like how many customers you want to get, how much profit you want to make and how fast you want to grow your company. The next step is drafting a plan that outlines these general goals. It includes specific steps that must be taken by the entrepreneur to accomplish their goal. Then they write an outline of the future of their company, including potential challenges and opportunities.
The final step before developing a full-fledged plan is developing financials or forecasts. This includes estimating how much money may be needed to begin the venture and what it may cost in the long run (e.g., advertising budget).
Funding for your Business Plan
Finding funding is a major undertaking for any aspiring Entrepreneur. If you have an idea that you want to bring to market, you have to find the capital first. Luckily, there are a number of exciting avenues for Entrepreneurs looking to invest in early-stage start-ups.
Here are just a few of the ways Entrepreneurs can find investors and funding:
1. Bootstrap your own company: Though it may be challenging and require significant effort, Bootstrapping your own company is one of the best ways to fund your idea. There are certain risks involved when funding your own company, but if you're passionate about what you're creating, then it's a risk worth taking. Speak to family members and friends to see if they can invest or loan you money. Use your savings or take out a loan but only spend what you can afford to lose. Seek to utilise the resources you have at hand, which starts with you.
2. Seek out Venture Capitalists: Venture capitalists typically invest in start-up companies that have proven themselves by generating revenue or having already obtained some type of product or service. There is no guarantee that investors will invest in your company, but doing research into who might be interested will give you ideas on how to build a business model around their needs. If you do get VC funding you could also gain account to their business network and supply chain network.
3. Seek out Angel Investors: Angel investors typically invest smaller sums than venture capitalists do and are often friends or family members of the Entrepreneur or people who know them personally. Angel Investors can also be complete strangers but the key difference between them and a VC is the support network you will have access to. VC's usually have a better support network and supply chain links. Angel Investors are more likely to be people with spare cash to invest rather than career investors.
Conclusion
Write this down as it is the most important advice you will ever get. Entrepreneurship is a journey and the path to success is infinite. A 100 people could take a 100 different paths and end up with the same solution to an entrepreneurial problem.
What are we saying? Entrepreneurs know they have to adapt to succeed. You will come across business coaches, motivational speakers and even successful Entrepreneurs offering to sell you the secret to their success. Don't buy it!
Do the work, fail but fail forward, learn and make changes, adapt and become relevant. Most importantly, have an open mind to solutions and think outside the box with the resources you have at hand, not the resources you hope to have.