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.
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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 Business
Common characteristics of entrepreneurs
Entrepreneurs 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:
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Adaptability: If an idea isn’t working, you may need to adapt quickly and find solutions.
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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.
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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.
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Leadership: As your company’s founder, you’ll need to make important decisions to build and manage a team.
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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.
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 Guide
Types of entrepreneurs
There are four types of entrepreneurs based on different business models:
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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.
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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.
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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 Guide
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Scalable start-up entrepreneurs start businesses with the intention of widespread, long-term growth. They are innovators who may often have a novel idea that shakes up a new market or launches it altogether. Examples include companies like Meta and Uber.
How to become an entrepreneur
To 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:
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Is your idea solving a problem that needs fixing?
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How can you disrupt longstanding industries or niche markets with fresh approaches?
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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 Networking
3. 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:
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Establishing your business as a legal entity by incorporating it.
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Open a business bank account.
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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 Accounting
Resources for entrepreneurs
There are many resources available to entrepreneurs. Here are a few helpful ones for first-time and seasoned entrepreneurs alike:
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The US Patent and Trademark Office provides the resources you need to file for a patent, trademark, or copyright.
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PRLog offers free and discounted options for press release distribution to search engines, news websites, and journalists.
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USSmall Business Administration provides resources to help you start your business, including information on SBA-guaranteed loans.
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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.
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SCORE connects you to a network of small business mentors for free.
Start your entrepreneurship journey with Coursera
Taking online courses can be a great way to prepare for entrepreneurial ventures. Consider Coursera’s offerings and build foundational business development skills.
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