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Lessons Learned: Key Takeaways from My Entrepreneurial Journey

Last Updated:  

May 10, 2023

Embarking on the path of entrepreneurship can be an exhilarating, albeit challenging, adventure. Over the years, I've encountered numerous trials and triumphs, each contributing valuable lessons to my overall growth and development as a business owner. 

In this edition of The Fearless Business Blog , I'll be sharing some of the invaluable lessons I've learned throughout my entrepreneurial journey, delving into how they have shaped my mindset and contributed to my overall success. By understanding and applying these key takeaways, you too can navigate your own entrepreneurial endeavours with greater confidence and clarity.

Key Takeaways on My Entrepreneurial Journey

• Embrace failure as a learning opportunity : Understand that failures are an essential part of growth and can provide valuable lessons for future success.
• Build a strong support network : Surround yourself with like-minded individuals who can offer guidance, encouragement, and collaboration as you navigate your entrepreneurial journey.
• Prioritise personal well-being : To maintain peak performance and avoid burnout, it's crucial to find a healthy work-life balance and prioritise self-care.
• Deliver value to your customers : Focus on providing exceptional products and services that solve real problems for your clients and exceed their expectations.
• Stay adaptable and resilient: The entrepreneurial landscape is ever-changing, so it's essential to remain flexible and resilient in the face of challenges and evolving circumstances.
• Continuously learn and grow : Invest in your personal and professional development to stay at the forefront of your industry and maintain a competitive edge.

1. Embrace Failure as a Learning Opportunity

One of the most critical lessons I've learned is that failure is an essential part of the journey. When we experience setbacks or disappointments, it's vital to recognise them as opportunities to learn and grow. By embracing failure as a stepping stone towards improvement, you'll be better equipped to adapt, pivot, and ultimately achieve your desired outcomes. Furthermore, acknowledging that failure is inevitable allows you to approach it with curiosity and resilience, using each setback as a chance to refine your strategies and strengthen your resolve.

2. Build a Strong Support Network

No entrepreneur can succeed in isolation. Building a robust support network of mentors, peers, and like-minded individuals can be a game-changer in your entrepreneurial journey. These connections not only provide guidance and encouragement but also help you stay accountable and motivated. Make it a priority to join networking groups, attend industry events, and engage with fellow entrepreneurs through social media platforms. In addition, consider forming or joining a mastermind group, where you can regularly share ideas, resources, and support with like-minded individuals who are also on their entrepreneurial journey.

3. Prioritise Your Personal Wellbeing

It's easy to get caught up in the hustle and bustle of entrepreneurship, often neglecting our own mental and physical wellbeing . However, maintaining a healthy work-life balance is crucial for long-term success. Schedule time for self-care, exercise, and relaxation, ensuring that you are at your best when making important decisions and driving your business forward. Moreover, be mindful of burnout and the negative effects of chronic stress on your overall health. By prioritising your wellbeing, you'll not only foster greater personal satisfaction but also boost your productivity and effectiveness in your professional life.

4. Master Your Mindset

Developing a positive and resilient mindset is fundamental to overcoming obstacles and achieving success as an entrepreneur. Recognise your limiting beliefs and replace them with empowering thoughts that propel you towards your goals. By cultivating a mindset of abundance, confidence, and determination, you'll be better equipped to handle challenges and seize opportunities that come your way. Additionally, practice gratitude and focus on the positive aspects of your journey, as this will help you maintain an optimistic outlook and foster a greater sense of fulfilment.

5. Invest in Continuous Learning

In the fast-paced world of entrepreneurship, it's essential to stay ahead of the curve by continually updating your knowledge and skills. Dedicate time to learning about industry trends, mastering new tools, and refining your craft. By committing to lifelong learning, you'll ensure that you remain agile, innovative, and competitive in your chosen field. Furthermore, consider investing in professional development opportunities, such as workshops, courses, and certifications, to expand your expertise and enhance your credibility in the eyes of your clients and peers.

6. Focus on Providing Value

One of the most effective ways to stand out in a crowded market is by consistently delivering value to your customers. Focus on understanding your target audience's needs and pain points, and tailor your products or services to address these challenges. By establishing yourself as a trusted and reliable solution provider, you'll foster loyalty, drive repeat business, and ultimately grow your enterprise. Additionally, prioritise exceptional customer service and consistently exceed your clients' expectations. By nurturing strong relationships with your customers, you'll not only enhance your reputation but also generate valuable word-of-mouth referrals.

7. Cultivate Resilience and Adaptability

The entrepreneurial landscape is ever-evolving, requiring business owners to be adaptable and resilient in the face of change. Embrace change as an opportunity to grow and evolve, rather than a threat to your existing strategies. Stay informed about industry developments and market shifts, and be prepared to pivot when necessary. By demonstrating flexibility and resilience, you'll be better positioned to capitalise on new opportunities and weather any storm that comes your way.

8. Establish Clear Goals and Measure Progress

Setting clear, specific, and measurable goals is vital to tracking your progress and maintaining focus on your entrepreneurial journey. Break down your long-term objectives into smaller, actionable steps, and continually assess your progress to ensure you stay on track. Regularly reviewing and adjusting your goals will help you stay aligned with your vision and make informed decisions about the direction of your business. Moreover, celebrate your milestones and accomplishments along the way, as this will boost your motivation and remind you of the progress you've made.

9. Delegate and Outsource

As your business grows, it becomes increasingly challenging to manage all aspects of your operations single-handedly. Learn to delegate and outsource tasks, allowing you to focus on your core competencies and higher-value activities. By entrusting specific tasks to skilled team members or external professionals, you'll not only enhance efficiency but also free up time to strategise and drive your business forward.

10. Embrace the Power of Collaboration

Collaboration can be a powerful catalyst for growth and innovation in your entrepreneurial journey. Seek out partnerships and joint ventures that align with your values and objectives, enabling you to expand your reach, leverage complementary skills, and unlock new opportunities. By embracing collaboration and pooling resources with like-minded entrepreneurs, you'll be better positioned to scale your business and achieve long-term success.

FAQs on Lessons for Entrepreneurs

As you embark on your entrepreneurial journey, you'll likely encounter numerous challenges and opportunities for growth. To help you navigate this exciting and sometimes daunting path, we've compiled a list of frequently asked questions and their answers. In this FAQ section, we'll explore valuable insights and advice gleaned from years of experience, addressing topics such as learning from failure, building a support network, prioritising well-being, delivering customer value, and more. By understanding these key takeaways, you'll be better equipped to overcome obstacles and achieve success in your entrepreneurial endeavours.

How do I learn from failure and turn it into a valuable experience?

Embrace failure as an opportunity to gain valuable insights and grow both personally and professionally. Analyse what went wrong, identify areas for improvement, and apply these lessons to future endeavours. Developing a growth mindset will help you view failures as stepping stones towards success, rather than setbacks.

How can I build a strong support network?

Begin by connecting with like-minded entrepreneurs, mentors, and industry professionals through networking events, online forums, and social media platforms. Seek out individuals who share your values and can provide guidance, encouragement, and constructive feedback. Additionally, consider joining mastermind groups or enrolling in relevant courses to further expand your network and gain valuable insights.

How can I prioritise my well-being while running a business?

Develop a daily routine that incorporates self-care practices such as regular exercise, healthy eating, and sufficient sleep. Schedule downtime and set boundaries between your personal and professional life to prevent burnout. Remember that taking care of your physical and mental well-being is crucial for maintaining productivity and achieving long-term success.

Why is it essential to focus on delivering value to my customers?

By consistently providing value to your customers, you'll enhance customer satisfaction, loyalty, and trust in your brand. This focus on value can lead to repeat business, positive word-of-mouth referrals, and long-term success. Ensure that your products or services cater to your target audience's needs and continuously improve your offerings based on customer feedback.

How can I cultivate resilience and adaptability in my entrepreneurial journey?

Stay informed about industry developments, market shifts, and emerging trends to anticipate change and capitalise on new opportunities. Embrace change as a chance for growth, and be prepared to pivot your strategies or business model when necessary. By demonstrating flexibility and resilience, you'll be better positioned to navigate challenges and achieve long-term success.

What's the best way to delegate and outsource tasks in my business?

Begin by identifying tasks that can be delegated or outsourced, such as administrative duties, social media management, or content creation. Then, entrust these tasks to skilled team members or external professionals who specialise in the required areas. This approach allows you to focus on your core competencies and higher-value activities while ensuring your business runs efficiently.

How can I leverage the power of collaboration to grow my business?

Identify potential partners or collaborators who share your values and objectives, and explore opportunities for joint ventures, partnerships, or co-marketing initiatives. By pooling resources, skills, and knowledge with like-minded entrepreneurs, you can unlock new opportunities, expand your reach, and drive innovation in your business.

In conclusion, entrepreneurship is a journey filled with challenges, growth, and transformation. By learning from and applying these key takeaways, you can navigate your own path with greater confidence and resilience. Embrace failure as a learning opportunity, build a strong support network, prioritise your wellbeing, and continually invest in your personal and professional development. Stay focused on delivering value, embrace change, and leverage the power of collaboration to propel your business to new heights. Remember, your entrepreneurial journey is unique, and the lessons you learn along the way will ultimately shape your success and fulfilment.

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Entrepreneurship Defined: What It Means to Be an Entrepreneur

Table of Contents

The road to entrepreneurship is often a treacherous one filled with unexpected detours, roadblocks and dead ends. There are lots of sleepless nights, plans that don’t work out, funding that doesn’t come through and customers that never materialize. It can be so challenging to launch a business that it may make you wonder why anyone willingly sets out on such a path.

Despite those hardships, every year thousands of people embark on an entrepreneurial journey, determined to bring their vision to fruition and fill a need they see in society. They open brick-and-mortar businesses, launch tech startups, or turn an idea into a new product or service. With the right motivation, inspiration and game plan, you can be a successful entrepreneur, too.

What entrepreneurs do

An entrepreneur identifies a need that no existing business addresses and determines a solution for that need. Entrepreneurial activity includes developing and starting a new business and implementing a business marketing plan , often with the end goal of selling the company to turn a profit.

An entrepreneur who regularly launches new businesses, sells them and then starts new companies is a serial entrepreneur. Whether a business owner should be considered an entrepreneur often depends on whether they created the business, and other legalities. That said, any founder of a successful household-name business began as an entrepreneur. 

If you want to become an entrepreneur yourself but you worry you don’t have the money for it, finances don’t have to stop you from achieving your career goals . Many entrepreneurs seek financing options that bypass traditional banks, like funding from angel investors that provide entrepreneurs with capital to cover startup costs (or, later, expansion costs). If you can demonstrate a high growth potential for your business, you can also turn to a venture capitalist, who offers capital in exchange for receiving equity in your company.

Examples of successful entrepreneurs

Many people whose names no one knew decades ago exemplify entrepreneurial success today. Here are just a few examples:

• Steve Jobs: The late tech leader started Apple in a garage and grew it into the dominant company it is today. Jobs even faltered partway through his career, leaving Apple for more than a decade before returning to the company and taking it to new heights
• Elon Musk: He founded SpaceX and has since become known for putting the billions of dollars his company has earned him toward some benevolent projects, including providing clean water to Flint, Michigan, and donating FDA-approved ventilators to hospitals fighting COVID-19.
• Bill Gates: The Microsoft co-founder has often been listed as the world’s wealthiest individual and has become an internationally renowned leader on pandemics and how to handle them. The Bill & Melinda Gates Foundation, shared with his former wife, focuses on combating poverty, inequity and disease globally.
• Jeff Bezos: The founder and creator of Amazon.com originally started the enterprise as an online book retailer. The internet marketplace has since become one of the most valued companies in the world, selling nearly every product imaginable.
• Mark Zuckerberg: As a college student, he helped shape the future of social media by co-founding the social networking platform Facebook. Initially launched for only select college campuses, the service quickly expanded to the broader public. Its success turned Zuckerberg into one of the youngest self-made billionaires in America.
• Sara Blakely: She took $5,000 and turned it into a $1 billion company with an invention known today as Spanx. The idea was born out of Blakely’s frustration with the pantyhose she had to wear for prior jobs. She had no fashion experience but researched everything from patents to fabrics. 

The motivations of successful entrepreneurs

What motivates entrepreneurs to venture forth when so many others would run in the opposite direction? Though each person’s inspiration is nuanced and unique, many entrepreneurs are spurred by one or more of the following motivators:

• Autonomy: Entrepreneurs are people who want to be their own bosses, set their own goals, control their own progress and run their businesses how they see fit. They recognize that their businesses’ success or failure rests with them, but they don’t view this responsibility as a burden. Instead, it’s a marker of their freedom.
• Purpose: Many entrepreneurs have a clear vision of what they want to accomplish and will work tirelessly to make that happen. They genuinely believe they have a product or service that fills a void and are compelled by a single-minded commitment to keep pushing ahead. They hate stagnation and would rather fail while moving forward than languish in inactivity. [Check out the major reasons entrepreneurs fail by their second year.]
• Flexibility: Not everyone fits into the rigidity of traditional corporate culture. Entrepreneurs are often looking to free themselves from these constraints, find a better work-life balance , or work at times and in ways that may be unconventional. This doesn’t mean they’re working fewer hours – often, especially in the early stages of growing a business , they work longer and harder – but, rather, they’re working in a way that is instinctual for them.
• Financial success: Most entrepreneurs realize they aren’t going to be overnight billionaires, but that doesn’t mean they aren’t interested in the potential to make a ton of money from a hugely successful business over which they have full control. Some want to establish a financial safety net for themselves and their families, while others are looking to make a huge profit by creating the next big thing.
• Legacy: Entrepreneurs are often guided by a desire to create something that outlasts them. Others want to develop a brand that has longevity and becomes an institution. Some want to pass on a source of income and security to their heirs. There are also entrepreneurs who hope to make a lasting impression on the world and leave behind an innovation that improves people’s lives in some tangible way.

See more reasons entrepreneurs start businesses and the traits that lead to entrepreneurial success .

Advice from successful entrepreneurs

If you’re contemplating whether to become an entrepreneur, first identify which of the above motivators serve as your guiding forces. Then, consider if you have the specific character traits and attributes that will enable you to thrive as an entrepreneur.

To help you determine if you’ve got what it takes, here’s what 25 company founders and business leaders told us about what they think makes a truly successful entrepreneur: 

• “Entrepreneurship is at the core of the American dream. It’s about blazing new trails , about believing in yourself, your mission and inspiring others to join you in the journey. What sets [entrepreneurs] apart is the will, courage and sometimes recklessness to actually do it.” – Derek Hutson, managing partner at Morgan Creek Strategies
• “Entrepreneurship is a pursuit of a solution , a single relentless focus on solving a problem or doing something drastically different from the way it is done today. [It’s] aiming to do something better than it’s ever been done before and constantly chasing improvement.” – Blake Hutchison, CEO of Flippa
• “Entrepreneurship is … the constant hunger for making things better and the idea that you are never satisfied with how things are.” – Debbie Roxarzade, founder and CEO of Rachel’s Kitchen
• “At its core, [entrepreneurship] is a mindset – a way of thinking and acting. It is about imagining new ways to solve problems and create value . Fundamentally, entrepreneurship is about … the ability to recognize [and] methodically analyze [an] opportunity and, ultimately, to capture [its] value.” – Bruce Bachenheimer, clinical professor of management and executive director of the Entrepreneurship Lab at Pace University
• “The most successful entrepreneurs are the ones who possess grit . Grit is made up of persistence, passion and resilience. It’s the passion to achieve long-term goals, the courage to try again in the face of rejection, and the will to do something better than it has been done before. The most successful entrepreneurs tend to be gritty ones … They do not give up until they exceed their goals. When the going gets tough and they get knocked down, gritty entrepreneurs bounce right back up and try again.” – Deborah Sweeney, vice president and general manager of Deluxe Corp.
• “ The ability to listen , whether it be to the opinions of customers or employees, is also integral to success. While … you must have the confidence to make your own choices, it is still incredibly important not to become detached from the people whose needs you are trying to meet.” – Tirath Kamdar, general manager of luxury at eBay
• “Being an entrepreneur is like heading into uncharted territory. It’s rarely obvious what to do next, and you have to rely on yourself a lot when you run into problems. There are many days when you feel like things will never work out and you’re operating at a loss for endless months. You have to be able to stomach the roller coaster of emotions that comes with striking out on your own .” – Amanda Austin, founder and president of Little Shop of Miniatures
• “To be a successful entrepreneur, you must have a passion for learning – from customers, employees and even competitors.” – James Bedal, president and CEO of Bare Metal Standard
• “Being a successful entrepreneur also means being a good leader . Leadership is the ability to bring people to a place where they want to follow you, not feel like they are forced to follow you. This takes investing in your team personally. They must know you’re not only going to hold them accountable and drive them to be better, but [you will] also look out for them when they are struggling. It’s not transactional; it’s a relationship.” – Steve Schwab, founder and CEO of Casago
• “Entrepreneurship is the ability to recognize the bigger picture, find where there’s an opportunity to make someone’s life better, design hypotheses around these opportunities and continually test your assumptions . It’s experimentation: Some experiments will work; many others will fail. It is not big exits, huge net worth or living a life of glamour. It’s hard work and persistence to leave the world a better place once your time here is done.” – Konrad Billetz, founding partner at Outliant
• “A key skill an entrepreneur must possess is self-awareness . An entrepreneur must know who they are and what they need. Self-awareness is the first step for an entrepreneur to build their team.” – Krystal Nelson, founder of I-Impakt Consulting
• “[Entrepreneurs] have to be people-oriented . Your business will die without a good team to back you up. Study management techniques, learn from great leaders, [and] review where you’re succeeding and failing so you can help others improve. An entrepreneur has to be able to build a team who cares about its work, and to do that, you have to care about how you create your team.” – Jonathan Barnett, president and CEO of Oxi Fresh Carpet Cleaning
• “To be a successful entrepreneur, you need perseverance . Most successful businesspeople or entrepreneurs have never given up on their idea. When challenges arise, they have found innovative ways of overcoming them. You must be able to adapt to changing economic conditions, and innovate and embrace technological advances to keep your customers engaged. These things take determination and a strong focus on the end goal.” – Stacey Kehoe, founder and director of communications at Brandlective Communications
• “Entrepreneurship is the mindset that allows you to see opportunity everywhere . It could be a business idea, but it could also be seeing the possibilities in the people who can help you grow that business. This ability to see many options in every situation is critically important; there will be unending challenges that will test your hustle.” – Preeti Sriratana, co-founder of Sweeten
• “Entrepreneurs and business owners definitely need to get used to taking risks . … You have to get comfortable being uncomfortable. Trying to grow a company or execute on an idea is difficult. It’s not always going to be roses and unicorns. At some point, you’re going to run into issues, lose customers and have financial constraints. It’s at this point you need to get back on the horse and take another risk, whether it’s in the form of a new product, new marketing campaign or a new customer recruitment strategy.” – Matthew Ross, co-founder and chief operating officer of Slumber Yard
• “Successful entrepreneurs look past [the] ‘quick buck’ and instead look at the bigger picture to ensure that each action made is going toward the overall goal of the business or concept, whether or not that means getting something in return at that moment.” – Allen Dikker, CEO of Galk Consulting
• “Being an entrepreneur is ingrained in one’s identity . [It] is the culmination of a certain set of characteristics: determination, creativity, the capacity to risk, leadership and enthusiasm.” – Eric Lupton, president of Life Saver Pool Fence Systems
• “Entrepreneurship is an unavoidable life calling pursued by those who are fortunate enough to take chances. [They are] optimistic enough to believe in themselves, aware enough to see problems around them, stubborn enough to keep going, and bold enough to act again and again. Entrepreneurship is not something you do because you have an idea. It’s about having the creativity to question, the strength to believe and the courage to move .” – Jordan Fliegel, managing director at Techstars
• “You may need to also be a bit of a contrarian. Sometimes it takes a person who thinks differently than the herd to start something new and defy the odds.” – Akshay Khanna, founder and CEO of CareClinic
• “Entrepreneurship is seeing an opportunity and gathering the resources to turn a possibility into a reality . It represents the freedom to envision something new and to make it happen. It includes risk, but it also includes the reward of creating a legacy.” – Maia Haag, co-founder and president of I See Me! Personalized Books and Gifts
• “An entrepreneur must be able to accept failure. Everyone thinks they can accept failure until they come face to face with failing at a major thing they have put their everything into. To be a successful entrepreneur, you have to be someone who is able to risk failure at the deepest personal levels .” – Steven Benson, founder and CEO of Badger Maps
• “[Entrepreneurs] must be able to pivot. If something isn’t working, keeping at it won’t make you successful. But changing your approach, changing your business model, changing your plans to make it work is the power of the pivot . You’re adaptable regardless of what’s thrown at you.” – Michael Maher, chief idea officer of Cartology
• “Entrepreneurship is about always moving forward : never stopping, never allowing self-doubt or fear to take over and believing wholeheartedly that even a wrong decision is better than no decision.” – Adam Sherwin, founder of Viakix
• “Entrepreneurs are the dreamers and the visionaries . Without them, the world stagnates and progress stops. Society needs entrepreneurs the same way the body needs air.” – Cynthia Kirkeby, founder of Seasonally Fresh

How to become an entrepreneur

There’s no single path to becoming a successful entrepreneur. A lot of it can come down to having the right skills, mindset and ideas at the right time to resonate with the public. However, there are a few things you can do to increase your chances of starting a thriving business.

• Find the right idea. Entrepreneurship isn’t just about finding a profitable idea; it’s about finding one you’re passionate about pursuing. Almost any industry has room for new entrepreneurs, and identifying the subject you care about most can motivate you to stay on course.
• Develop a plan for your business. It’s not enough to say you want to start a business; you also need a solid plan for how to do so. A business plan can help solidify the financial goals you’d like to reach. It can also tell you how to reach them while enticing potential investors to fund your venture.
• Determine your clientele. Not many businesses become successful without serving customers or clients. Most ventures won’t appeal to every member of the public equally, but you can gauge interest in your idea before opening your doors. The demographics of the people most interested in your business can help you make other decisions, like your store location and ad buys. 
• Sell your idea. Even if your product or service has garnered interest among friends, family or online forums, that’s a small sample size. You need to get a sense of what the public thinks. Marketing your idea in the right places and highlighting what sets it apart from competitors can help draw people to your business. [Related article: What Is a Unique Selling Proposition? ]
• Meet others in your field. There are most likely people in your industry whose expertise in certain areas can benefit your fledgling business. Proper networking can connect you to people from whom you can draw valuable knowledge or gain monetary support. It’s even worth following business Instagram accounts to learn from peers and experts.

The value of entrepreneurship

Being a successful entrepreneur isn’t an easy path. It can often take far more hard work, ingenuity and perseverance than the typical 9-to-5 job and yet still not pan out in the long run. However, succeeding as an entrepreneur can be one of the most rewarding experiences, because you’re doing so on your own terms and affecting society at the same time. For many, those rewards are invaluable. There’s never a guarantee that an idea will succeed, but you’ll still see many people starting their own businesses anyway. After all, failure is just as uncertain.

Isaiah Atkins and Paula Fernandes contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article. 

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The First 5 Steps That Begin Your Entrepreneurial Journey They're mostly mental but if enacted diligently, you too will discover that Fortune favors the prepared mind.

By Gerard Adams Jul 8, 2016

Opinions expressed by Entrepreneur contributors are their own.

Nobody is born an entrepreneur. Different people take different paths to achieve success, and there is no set-in-stone instruction for becoming one. Entrepreneurs take on a number of different roles and these roles can vary depending on what field you choose to enter.

While there is no perfect guide to entrepreneurship, there are a few steps that should be taken before beginning the endeavor, however. As with most forms of success, one way to achieve your goal is by avoiding mistakes. Following these pieces of advice could prevent you from starting off your life as an entrepreneur on the wrong foot.

1. Have the right mindset.

I often see people who want to be an entrepreneur and can't figure out why their goal isn't working. In the end, they simply aren't thinking like an entrepreneur. The first thing that new entrepreneurs need to know is that failure is likely and success is not given. Understand the risk you are taking, and also understand that you will most likely not succeed immediately.

Related: The 5 Components of the Mindset That Will Let You Live Your Dream Life

2. Be honest with yourself.

The life of an entrepreneur can be great -- you're your own boss, you make the rules, you run the business. However, all of these are easier said than done. Entrepreneurship isn't an easy path. Instead, it is often much more difficult than getting a regular job.

One reason entrepreneurship isn't easy is because, at the end of the day, you can only ever blame yourself. At a corporation you can blame your boss, or perhaps the economy as a whole. As an entrepreneur, you will be looking for a niche in the market that you can fill. Excuses won't cut it in this field. If your business failed, chances are that you researched poorly, you hired the wrong people or you just weren't prepared.

Related: The 7 Golden Rules of Leadership

3. Start thinking.

Just because some college drinking buddies want to open a bar doesn't mean they should. Likewise, just because you've come up with what you think is a good idea doesn't mean it's perfect. There's a lot of research, planning and general deep thought needed to succeed as an entrepreneur. Without proper preparation, your dream business could fail quite quickly.

At the same time, no amount of preparation is going to ensure that your business will succeed. You need to be the one who knows when you're ready. Decisiveness is important to have, but you should have ample preparation before the big decisions need to be made.

4. Find a mentor.

This is one of the most important steps you can take to lay a foundation for success. When you have expert guidance, support, and motivation -- you are 100 times more unstoppable than you are alone. Mentorship allows you to quantum leap straight to the head of the game more rapidly than if you tediously faced down every beginner's hurdle. Avoid pitfalls, mistakes that could cost you your future, and rash decisions by having someone in your corner.

Related: 8 Ways Entrepreneurs Can Find and Get Value From a Great Mentor

I credit having a mentor from the outset as the reason I was able to attain success. It's an invaluable resource for anyone who is serious about getting where they want to go. Get online, get out into the world, connect with the people who inspire you -- especially the one's whose paths you admire -- and develop a working relationship with someone who has done what you want to do. It can change everything.

Entrepreneur, angel investor, self-made millionaire at 24

Gerard Adams is The Millennial Mentor™, inspiring the generation to leverage their passions for success and create the lifestyle they dream of. A serial entrepreneur, angel investor, self-made millionaire by the age of 24 and millennial himself, he is most popularly known as the co-founder of Elite Daily. To date, he has built, backed or invested in nine businesses across multiple industries that have all delivered over seven-figure profits. Gerard has recently developed a video series,  Leaders Create Leaders , to offer a behind-the-scenes look at what it takes to be a successful entrepreneur. Learn more at  GerardAdams.com

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Stages of the Entrepreneurial Process: The Path to Success Unveiled

Embarking on an entrepreneurial journey is like setting sail on a vast, unpredictable sea. It’s thrilling, daunting, and utterly transformative. You’ve got a brilliant idea, a spark of genius, but what’s next? How do you turn that spark into a roaring fire?

Understanding the stages of the entrepreneurial process is crucial. It’s not just about having a groundbreaking idea; it’s about nurturing it through various phases until it blossoms into a successful venture. From ideation to scaling, each stage is a stepping stone towards achieving your dream. Let’s dive into what these stages entail and how you can navigate them with confidence and clarity.

Key Takeaways

When embarking on the entrepreneurial journey, Ideation stands out as the spark that ignites the fire. Imagine this stage as planting a seed that has the potential to grow into a towering tree. It’s where your passion for online business , startups, and side-hustles translates into an idea that could change your life.

At this phase, it’s crucial to let your creativity flow unrestricted. Jot down every idea, no matter how far-fetched it may seem. Remember, today’s silly thought could be tomorrow’s breakthrough. You’re not just looking for any idea; you’re on the hunt for a concept that resonates with your interests, strengths, and market needs.

To help whittle down your list, consider employing some proven strategies:

• Market Research: Understand what’s out there. Is there a gap your idea could fill? What’s the competition like?
• Feedback: Share your ideas with trusted peers or mentors. Fresh perspectives can shed light on aspects you might overlook.
• Prototype: If it’s feasible, develop a basic prototype or service outline. This can provide tangible insights into your idea’s potential.

Don’t rush this process. Ideation is much more than just coming up with ideas; it’s about refining them until you uncover something truly viable. Think of yourself as a gold miner sifting through dirt to find nuggets of gold. It’s not just about finding any gold; it’s about finding the piece that’s worth the most.

As you toggle between brainstorming and analysis, you’ll likely experience moments of doubt and exhilaration. Embrace these emotions—they’re part of the ride. Learn from failed concepts, and don’t get too attached to a single idea. The goal of ideation is to emerge with a concept that’s not just brilliant but also executable and potentially profitable.

Remember, the ideation stage is just the beginning. Your entrepreneurial spirit and willingness to experiment will be key components as you move forward. Every successful venture starts with an idea, but it’s your commitment and action that will ultimately bring it to life.

Market Research

After your idea is solidified, it’s time to dive deep into Market Research. This is where the rubber meets the road, and you’ll get a clear picture if your idea has the muscle to compete in the current marketplace. Market research is not just a suggestion; it’s a critical step in validating your idea and its potential success.

You might be thinking, “Where do I even start?” Don’t worry, it’s not as daunting as it sounds. Start with identifying your target audience . Who are they? What do they like? What problems do they face that your product or service can solve? These questions are the backbone of your research.

Next, let’s talk about competitor analysis . It’s essential to know who you’re up against. Look for direct and indirect competitors, and analyze their strengths and weaknesses. What are they doing right? More importantly, what gaps are they leaving unfilled? This is where your business can leap in and fill those gaps.

Don’t forget about trends in the industry. Staying updated with the latest trends can help you predict where the market is heading and adapt your product accordingly. It’s also crucial for understanding how to position your product in a way that’s appealing and relevant.

Here are some tools that can aid your market research:

• Surveys and Questionnaires : Great for getting direct feedback from your potential market.
• Google Trends : Helps you identify and analyze industry trends.
• Social Media : A goldmine for understanding consumer behavior and current interests.
• SEMrush or Ahrefs : Excellent for competitive analysis and seeing what keywords your competitors are ranking for.

Your market research will lay the groundwork for your entire business strategy. It’s about understanding the ecosystem you’re about to dive into. With thorough market research, you’ll be able to position your business in a way that not only meets the needs of your target market but also outshines your competitors. Remember, knowledge is power, especially in the world of entrepreneurship.

Business Planning

After diving deep into market research and armed with a refined idea, you’re now stepping into a critical phase—business planning. This stage is where your dreams start taking a tangible form. It’s not just about jotting down ideas on paper; it’s about laying a solid foundation for your business to grow upon.

Think of your business plan as a roadmap. It’s going to guide you through the treacherous terrain of entrepreneurship. Here’s the kicker: a well-crafted business plan can make the difference between just scraping by and achieving skyrocketing success. So, roll up your sleeves and let’s get into the nuts and bolts of it.

First up, you’ll need to outline your business model. How will your business make money? Whether it’s through direct sales, subscriptions, or a mix of revenue streams, clarity here is key. This is where your market research pays off. You already know your target audience and competitors. Now, it’s about positioning your product or service in a way that’s irresistible to your potential customers.

Next, consider your marketing and sales strategy. How will you reach your audience? What channels will you explore? Digital marketing, traditional advertising, or grassroots outreach? Remember, the goal is to not just reach your audience but to convert them into loyal customers.

Finances are up next. This section can be daunting but it’s vital. You’ll need to detail your startup costs, projected income, and expenses. Be realistic but optimistic —a tricky balance to strike. Tools like financial projection software can be a lifesaver here, helping you visualize your business’s financial future.

Human resources planning shouldn’t be overlooked. Even if you’re starting solo, planning for growth means considering future hiring. What roles will you need to fill and when? This forward-thinking ensures you’re not caught off guard as your business scales.

Remember, your business plan isn’t set in stone. It’s a living document that grows as you and your business do. Keep tweaking it, refining it, and above all, make it work for you. Your plan is the blueprint for your business’s success; make sure it’s detailed, clear, and ready to guide you all the way to the top.

Funding and Resources

After laboring over your business plan, you’re stepping into one of the most crucial stages: securing funding and gathering the necessary resources to bring your dream to life. This phase can seem daunting, but remember, every successful entrepreneur you look up to has navigated this path.

Funding your startup is about finding the right mix of sources to fuel your venture without overburdening it with debt. You’ve got several options:

• Bootstrapping : Using your savings or personal funds. It’s risky, but it keeps you in full control.
• Angel Investors : Wealthy individuals looking to invest in promising startups. They’re not just a source of money but also valuable mentors.
• Venture Capitalists (VCs) : Firms that invest in startups with high-growth potential. In exchange, they usually expect equity and a say in business decisions.
• Crowdfunding : Platforms like Kickstarter let you pitch directly to the public. This not only raises funds but also builds a community around your project.
• Small Business Loans : Banks or government-backed schemes offering loans tailored for startups.

Gathering Resources involves more than just financial capital. You’re also looking at:

• Human Resources : Hiring the right team is pivotal. Consider contractors or freelancers if you’re not ready for full-time employees.
• Physical Resources : Whether it’s office space or manufacturing equipment, get only what’s essential at the start.
• Digital Tools : From accounting software to project management tools, lean on technology to streamline operations and boost productivity.

Each step here requires thoughtful decision-making. You’re aiming to optimize your resources without stretching too thin. Remember, this is your venture’s foundation. Solidifying your funding and resources sets the stage for scaling and eventual success.

Execution and Launch

After meticulously crafting your business plan, securing your funding, and gathering all your resources, you’re now at the thrilling stage of Execution and Launch. This phase is where your ideas and plans spring to life. You’ve done the groundwork, and it’s time to open your doors, virtual or otherwise, to the world.

Launching your business is more than just turning on your website or opening your store’s doors. It involves a well-coordinated effort across all your business facets to ensure your product or service is received as successfully as possible. Remember, first impressions count, so you want to make sure yours is memorable.

Setting up Your Operations

Before your launch, double-check that every operational aspect of your business is in place and functioning. This includes:

• Your product or service is fully developed and ready for customers
• Your website, if applicable, is user-friendly and tested
• Your supply chain is secure and capable of handling your forecasted demand
• Your customer service channels are open and staffed

Marketing and Sales Strategy

You’ve already laid the groundwork for your marketing and sales strategy in your business planning stage. Now, it’s time to bring these plans into action. Run those ad campaigns you’ve designed, start posting on your business’s social media pages, and engage with your audience. You’re not just selling a product or service; you’re telling your brand’s story.

Consistency is key. Ensure your message across all platforms reflects your brand identity and values. This clear, cohesive brand voice will magnetize your target audience to you.

Monitoring and Adjusting

Once your business is up and running, your job is far from over. It’s crucial to monitor all aspects of your business closely and be prepared to make adjustments. Use data analytics tools to track your website’s performance, sale conversion rates, and customer engagement. Listening to feedback is also vital. Be agile and ready to tweak your approach based on real-time feedback and data.

Execution and launch mark the moment your dream transforms into reality. While it’s an exhilarating stage, it’s also laden with challenges and learning opportunities. Each day provides you with insights and experiences to fine-tune your journey towards success. Keep your eyes open and never stop striving for improvement.

After navigating the turbulent but rewarding waters of execution and launch, you’re likely to find your entrepreneurial journey at the doorstep of Scaling. Scaling is less about starting and more about expanding the reach of what you’ve already built. It’s a thrilling stage, signifying that your business isn’t just surviving; it’s ready to thrive.

At this point, you’ve got a product or service that your customers love, but you’re also aware that there’s a bigger audience out there. Scaling means preparing your business to handle more : more customers, more sales, and often, more products or services. It’s where your strategic efforts shift towards maximizing growth while maintaining or even improving efficiency.

• Infrastructure : Your technology and logistics systems need to be robust enough to handle increased loads. Whether it’s beefing up your website’s hosting or optimizing your supply chain, ensuring your infrastructure can support growth is non-negotiable.
• Team Expansion : As your business grows, so does the need for a larger team. Hiring the right people, not just in terms of skill but also fit with the company culture, becomes critical. Remember, your team is the backbone of your operations; their growth is synonymous with your business’s growth.
• Funding : Scaling often requires significant investment. Whether it’s through profits reinvested into the business or external funding sources like venture capital, ensuring you have the financial resources to support expansion is key.
• Market Expansion : Entering new markets can be a powerful accelerator for growth. This could mean geographical expansion or targeting new customer segments within your existing market. It’s about finding new territories where your product or service can solve problems.

Each of these considerations comes with its own set of challenges but remember, scaling is a testament to your success so far. It’s a stage where the potential for growth is immense, and with the right strategies, you can turn your startup into a significant player in your industry. Keep leveraging data analytics, customer feedback, and industry trends to guide your scaling efforts.

Embarking on the entrepreneurial journey is no small feat. You’ve learned that it’s not just about having a groundbreaking idea but nurturing it through various stages until it blossoms into a successful venture. From the initial spark of ideation to the rigorous demands of scaling, each phase is crucial and requires your unwavering dedication and creativity.

Remember, the journey doesn’t end with a successful launch. It’s about continuous improvement, learning from challenges, and seizing every opportunity to grow. Keep refining your strategies, stay attuned to your customers’ needs, and never lose sight of your entrepreneurial dream. Here’s to turning your vision into reality and beyond!

Frequently Asked Questions

What are the stages of the entrepreneurial process.

The entrepreneurial process includes several stages: ideation, market research, business planning, securing funding and gathering resources, execution and launch, and scaling. Each stage plays a critical role in transforming an idea into a successful venture.

Why is understanding the entrepreneurial stages important?

Understanding the entrepreneurial stages is crucial because it helps entrepreneurs navigate the process of starting and growing a business. It ensures they are well-prepared for each phase, making the journey towards achieving their dream more structured and less daunting.

How can entrepreneurs refine their ideas during the ideation stage?

Entrepreneurs can refine their ideas through market research, gathering feedback, and prototyping. These strategies help in whittling down ideas, uncovering viable concepts, and ensuring the idea meets market needs and consumer preferences.

What is the significance of market research?

Market research is vital as it validates the business idea and its potential success. It involves identifying the target audience, analyzing competitors, and staying updated with industry trends, which aids in making informed decisions and refining the business strategy.

What should a business plan include?

A business plan should outline the business model, marketing and sales strategies, finances, and planned human resources. It serves as a roadmap for the business and should be continuously updated as the business grows.

What are the options for funding a startup?

Options for funding a startup include bootstrapping, seeking investments from angel investors or venture capitalists, crowdfunding, and applying for small business loans. Each option has its advantages and conditions, making it crucial to choose the right fit for the business.

How can entrepreneurs successfully execute and launch their business?

Successful execution and launch require a well-coordinated effort across all business facets, such as product development, website functionality, supply chain, and customer service. It also involves implementing the marketing strategy and maintaining a consistent brand voice.

What does scaling involve?

Scaling involves expanding the reach, handling more customers and sales, and possibly offering more products or services. It requires a robust infrastructure, team expansion, additional funding, and market expansion strategies, guided by data analytics and customer feedback.

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• 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, 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.

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:

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.

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.

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, Vermont 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 Google ( GOOG) , and later its parent company Alphabet, as well as Facebook, and now its parent company Meta ( META ). Both companies 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 with Steve Jobs and Microsoft with Bill Gates, are just a couple 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.

S-corporation: An is corporation is a corporation that is not taxed like a typical corporation. All the income passes through to the individual owner or owners and is reported and taxed on their personal returns.

Limited liability company (LLC): An LLC can either be taxed as a corporation, a partnership, or on the individual's return. This will depend on the number of members and how they elect to be taxed.

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.

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 2023, there were about 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

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.

Hébert, Robert F, and Link, Albert N. " Historical Perspectives on the Entrepreneur ."

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

AARP. " Meet the Mother-Daughter Duo Behind Jazzercise ."

Jazzercise. " About Us ."

Ben & Jerry's. " Our History ."

Zippia. " Ben & Jerry's Revenue ."

Yahoo! Life. " From a College Dropout to a $54 Billion Fortune — the Incredible Rags-to-Riches Story of Oracle Founder Larry Ellison ."

Reed College. " Steve Jobs and Reed College ."

Technology Magazine. " Mark Zuckerberg: From College Dropout to Billionaire ."

Internal Revenue Service. " 2023 Instructions for Schedule C (2023) ."

Internal Revenue Service. " Tax Information for Partnerships ."

Internal Revenue Service. " Tax Guide for Small Business ."

Internal Revenue Service. " Forming a Corporation ."

Internal Revenue Service. " S Corporations ."

Internal Revenue Service. " Limited Liability Company (LLC) ."

The World. " What Happened to the Opera Music at Starbucks? "

U.S. Small Business Administration Office of Advocacy. " Frequently Asked Questions About Small Business 2023 ."

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Introduction

Chapter outline.

What do you plan to do with your life after graduating from school? This is one of the most common—and admittedly most terrifying—questions that students are asked on a regular basis. There are literally thousands of career choices and just as many pathways or options to reach them. How do you decide which career pathway is best for you? You might select a new career based on your major, a favorite high school subject, the advice of a family member or friend, or an inspirational summer or internship experience.

What if none of those options reflect the future that you see for yourself? It may mean that you are destined to create your own career path by becoming an entrepreneur. Regardless of the career pathway that you follow, your entrepreneurial journey begins with a single step.

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• Authors: Michael Laverty, Chris Littel
• Publisher/website: OpenStax
• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
• Location: Houston, Texas
• Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
• Section URL: https://openstax.org/books/entrepreneurship/pages/2-introduction

© Jan 4, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

What does it mean to be entrepreneurial?

What does it mean to be Entrepreneurial? It is not just about starting a business, or spinning out a company from research. It’s a mindset, or a way of thinking. Entrepreneurs just think and do things differently. You can be entrepreneurial even if you are working for someone else, with the buzzword “intrapreneurial” highlighting the desire of employers to have adaptable, flexible employees who can think for themselves. Being entrepreneurial can mean knowing your industry inside out, and being able to exploit that knowledge to create new opportunities.

Being entrepreneurial can mean sharing ideas freely, and celebrating so-called failures as learning and growing experiences. Being entrepreneurial can mean simply thinking outside of the box, and expecting the unexpected. 

Entrepreneurial thinking can manifest itself in many ways, whether it is the hard core serial entrepreneur who has developed a range of business ideas, or the social entrepreneur using technology to empower women in India, or artists using their work to raise awareness of social injustice or inequality. Entrepreneurial thinking enables people to be flexible, adaptable, and see opportunities.

1.   Think ahead  – Where do you want to be in 5/10/20 years?  Entrepreneurs are good at thinking in the present, but also try and have a vision of the future.

2.  Working across disciplines  – Think about the broader picture and the impact of your research. Entrepreneurs see opportunities in not-so-obvious places, and are often able to find a way to exploit them.

3.  Develop transferrable skills  – Think about the skills you have and how they can be applied to different situations. Entrepreneurs often must have a breadth of transferrable skills, being the developer, marketer, salesman and accountant for their idea.

4.  Meeting people  – Growing a network is important for both entrepreneurs and students or researchers. Meeting people from other walks of life allow you to have a broader perspective and allows you to connect with others who may be able to help you or be helped by you in the future.

5.  Mentors  – Mentors will help an entrepreneur or student to visualise a goal or pathway, giving advice and guiding the mentee on a path which is beneficial.

6.  Be in Charge of Your Own Destiny  – Entrepreneurs are generally agile and adaptable, working around issues and finding new ways where necessary. Researchers and students need to have the same flexibility, working towards a goal, but being able to adapt to changing circumstances.

So, being entrepreneurial doesn’t mean you have to start a business. . . it just means being innovative, creative, resourceful and adaptable. This will help in any aspect of a career path, whether you want to work for yourself or someone else, in industry or academia.

Ready to get started on your entrepreneurial journey? We can help!

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The nature of the entrepreneurial journey is explored to illustrate how ventures organically emerge. Each venture has a purpose and mission, develops a culture and values that guide its operations, and plans for the future, reacts to threats and opportunities, and attempts to ensure long-term viability. It takes risks and makes mistakes. It can be creative, developing new products and services, and looking for ways to improve its internal ways of doing things. It nurtures an image in the marketplace and within the communities where it operates. Accomplishing all of this is the work of the entrepreneur. Usually with insufficient resources, he or she must overcome obstacles, demonstrate tenacity, and constantly solve new problems. In the end, most ventures are created in the face of adversity, and it is the entrepreneur who has a vision, addresses the critical implementation risks, makes the necessary adjustments, and keeps a venture going through the inevitable ups and downs that occur.

UNDERSTANDING ENTREPRENEURSHIP

The distinguishing characteristic of an entrepreneur is that he or she creates a venture (Gartner, 1988). The key is that an operating entity actually gets launched. It may subsequently fail or succeed, grow or not grow, and last months, years or many decades. It may be well planned or somewhat accidental, high-tech or relatively low-tech, privately or publicly owned, and formally registered or operating beneath the radar. In fact, one of the most remarkable aspects of entrepreneurial ventures is how diverse they are.

What exactly does it mean to create a venture? Many potential entrepreneurs fail to understand the distinction between an interesting product idea and a functioning business, or more basically, the difference between innovation and entrepreneurship. Innovation is coming up with an idea (and even developing a prototype or working model) for a new app that enables people to schedule hair appointments at thousands of different salons, a snow plow with a unique blade that removes twice as much snow, or a better designed knee replacement joint. It takes entrepreneurship to translate the innovation into a business, get the venture up and running, and make it sustainable.

 So, what does a business look like? A business has customers and an ability to address their needs and collect money from them. New customers are continually acquired and existing ones receive ongoing marketing communications. It typically has employees who need to be supervised, evaluated and compensated. It has suppliers with whom terms have to be negotiated, orders placed, the logistics of delivery and returns coordinated, and payments made. It has operations, where inputs are turned into products or services, quality is managed and inventory is maintained. It must keep accounting records, maintain legal protection and insure itself against unforeseen developments. And, of course, a business never stops running.

More importantly, a venture is organic – it is a living, breathing thing. It has a purpose and mission. It develops a culture and values that guide its operations. It plans for the future, reacting to threats and opportunities, and attempting to ensure long-term viability. It takes risks and makes mistakes. It can be creative, developing new products and services and looking for ways to improve its internal ways of doing things. It nurtures an image in the marketplace and within the communities where it operates.

Accomplishing all of this is the work of the entrepreneur. Usually with insufficient resources, he or she must overcome obstacles, demonstrate tenacity, and constantly solve new problems. As we shall see, most ventures are created in the face of adversity, and it is the entrepreneur who has a vision, addresses the critical implementation risks, makes the necessary adjustments, and keeps a venture going through the inevitable ups and downs that will occur.

VENTURE CREATION AS A JOURNEY

Anyone can start a venture. In one sense venture creation is relatively simple. Consider the farmer’s wife who makes attractive quilts. She has her nephew create a website, registers her business as a sole proprietorship, does some social media marketing, and begins making sales. In another sense, it can be quite complex. An entrepreneur who has developed a novel drug that treats kidney stones must try to get patent protection, which can be denied, has to go through expensive clinical trials to obtain regulatory approval, typically must raise millions of dollars from equity investors to cover ongoing research and development costs, has to establish large-scale production and distribution capabilities, and is subject to relatively strict product liability laws should the product have any adverse side effects.

Regardless of how basic or complicated the venture is, a variety of steps are involved and these are implemented over time. This reality has led entrepreneurship scholars to adopt what can be called the “process perspective” (McMullen and Dimov, 2013; Shane, 2003). In essence, entrepreneurship is conceptualized as a set of stages that unfold over a prolonged period. This is critical, as it allows for the fact that these steps can be managed and the process can be learned. Further, as a manageable process, it can be applied by anyone and in a wide variety of contexts.

Although there are different conceptualizations of the entrepreneurial process, Figure 1.1 provides an illustration of the principal stages involved. The process begins with the identification of a market opportunity. Opportunities derive from forces in the external environment creating a gap or opening for something new. This gap or opening represents an unmet need. Then a business idea is formulated and it typically centers around a new product or service offering. The business idea captures a unique value proposition for capitalizing on the opportunity. A business model is next developed where one translates the innovative product or service concept into the essence of a business. The business model provides a basic architecture or design of the business and how it will make money. With this business model in mind, the entrepreneur determines the necessary financial, physical, human, relational, intellectual and technological resources necessary to actually launch a venture. He or she does not usually have most of these resources, and so must develop creative approaches to acquiring them through bootstrapping, leveraging and financing activities. Then comes the actual launch of the business where operations are set up and the entrepreneur begins addressing the marketplace. Here, adjustments are being made as the individual figures out what works in practice and comes to better understand the market opportunity. At this point, the entrepreneur must learn how to be a manager, formalize various aspects of operations, and, if he or she wants to grow, develop the necessary infrastructure. Eventually, there is a need to pursue some kind of exit strategy, such as selling the business, passing it on to a family member or other party, or simply shutting it down and selling off the assets.

Figure 1.1    The process perspective on entrepreneurship

The process as presented in Figure 1.1 appears to be a fairly straightforward, linear set of steps or stages. Yet, in reality, venture creation tends to be anything but linear. It is messy, chaotic and ambiguous. The entrepreneur gets to a particular stage and encounters obstacles and new information that necessitate adjustments to decisions made in a previous stage. Aspects of different stages are pursued in tandem, and ongoing adjustments are made to decisions from earlier stages.

As a result, the venture creation process should be approached as a journey. This journey is one where the path is not well marked, there are lots of twists and turns, and the ultimate course taken depends on key decisions made by the entrepreneur along the way (Morris et al., 2012). The founder of a business is constructing reality as he or she goes. It is an experience filled with uncertainty and encounters with novelty, or things with which the entrepreneur has little previous experience, particularly early on. The days are long and tend to be filled with highs and lows surrounding extended periods of hard work and little result. In a sense, the entrepreneur is equivalent to an actor in a play where there is no script or director.

Three critical things happen when someone tries to launch a business: (a) the entrepreneur makes a number of mistakes; (b) there is resistance to the new venture; and (c) unexpected developments impact the business. As the venture unfolds, many of the entrepreneur’s initial assumptions and expectations (often captured in a business plan) prove to be wrong. Costs are higher, the market smaller, customers more demanding, logistics more complex. Based on faulty or incomplete information, wrong interpretations and errant judgments, multiple mistakes are made. Despite best efforts, the entrepreneur ends up pricing too high or low, emphasizing products or services that are not the ones desired by the market, targeting the wrong customers, selecting an inappropriate location, buying the wrong piece of equipment or technology, operating at the wrong hours, and not hiring the right kinds of employees – among many other errors.

At the same time, a person creating a new venture deals with various sources of resistance, and tends to underestimate what it will take to overcome these obstacles and establish a successful operation. There can also be resistance from competitors, customers, suppliers, regulators, distributors, financiers, and even family members and friends. For example, requests for funding might be rejected by over a dozen banks, competitors attempt to undercut the new business by running specials and spreading poor word of mouth, and the entrepreneur may be encouraged to get a stable job by family members who grow weary of the long hours and limited revenue.

On top of this, all sorts of unplanned events take place that impact the business. A roof leak during a rainstorm results in the spoilage of (uninsured) inventory worth thousands of dollars, the first employee hired suddenly quits and starts a competing business, a random connection made at a social event leads to a sizeable new customer account, a distributor that had agreed to carry the entrepreneur’s product decides instead to work with a competing firm. Changes can happen in the regulatory, economic and technological environments that positively or adversely affect the venture.

These developments indicate that the entrepreneurial journey is an unpredictable, often tumultuous one, where the entrepreneur controls much less than one might imagine. The key to what becomes of the venture lies in how the entrepreneur deals with mistakes, resistance and unexpected developments. Entrepreneurship is a learning journey. Entrepreneurs who learn quickly from mistakes and are able to adapt to ongoing developments on a timely basis are the ones who achieve the most success. Further, in attempting to chart a path and make corrections, it becomes important to experiment and engage in trial and error – reinforcing the importance of learning what works and what does not, making appropriate adjustments, and moving on. The nature of the journey also makes clear that entrepreneurs succeed because of tenacity and perseverance as they outlast the sources of resistance.

THE EMERGENT NATURE OF NEW VENTURES

The journey we have described has important implications. Perhaps the most important of these is the emergent nature of entrepreneurship (Morris and Webb, 2015). Emergence means that what one starts out to create is not what is actually created. Rather, as the entrepreneur undertakes the myriad tasks involved in pursuing an entrepreneurial idea, something that is distinctively different tends to emerge.

Venture creation involves an unceasing dynamic as the individual copes with unfolding events, many of which are unpredictable and uncontrollable. A multitude of novel events are encountered by the entrepreneur in the early years of a venture (often on a daily basis). They produce ongoing incongruities and changing realities, such that continual flux and encounters with novelty become essential characteristics of the entrepreneurial experience (Schindehutte and Morris, 2009). As such, entrepreneurship is a creative process, yet one in which the initially conceived idea for the venture can be reinforced or radically disrupted through subsequent sparks of creativity that are stimulated by internal and external developments.

As disruptions interrupt the everyday operations in a venture, they clash with any sense of order that has been achieved by the entrepreneur. In trying to bring order to their circumstances, entrepreneurs are forced to continually reweave their webs of beliefs and habits of action to accommodate new experiences (Tsoukas and Chia, 2002). Although they seek to establish routines and stability, entrepreneurs are forced to improvise and adapt as new developments create changing demands and opportunities. Unfolding events introduce variety which feeds individual learning and exploratory behavior. Learning, in turn, is instrumental in the individual’s ability to adapt. Improvisational and adaptive behaviors serve to generate new events or realities. In this way, the entrepreneurial experience becomes a crucible involving the confluence of change, improvisation, learning, adaptation and ongoing challenges to one’s assumptions, perceptions and beliefs.

Emergence differs from growth, evolution, or the pursuit of a new direction by the venture. It instead represents the establishment of a new type of order (Lichtenstein, 2014). Order is being created out of instability and change, where novel and coherent structures and patterns are derived during the process of self-organization (Goldstein, 1999). The venture is in the process of becoming something it was not before. Emergence might involve changes that lead to growth or decline or simply the reshaping of the new venture without any real effect on size. Similarly, emergence does not necessarily unfold through a pre-determined set of stages (e.g., birth, growth, maturity and decline) but is more random (Aldrich and Ruef, 2006). More specifically, the emergence perspective asserts that the properties of emergence (Box 1.1) are fundamental to the understanding of subsequent order creation within new ventures.

BOX 1.1   PROPERTIES OF EMERGENCE IN NEW VENTURE CREATION

Irreversibility: Emergence occurs based on experiences as they unfold and accumulate. New experiences are continually added, creating an increasingly nuanced and interconnected process of emergence. The unique combination of events defining a particular entrepreneur’s experience leaves an indelible stamp, where it is impossible to return to a pre-emergent state.

Adaptive tension: A large variety of unexpected and uncontrollable events combine with ongoing intrinsically based disruptions that create instability in entrepreneurs’ lives and lead them to seek change as a means of adjusting back to a more stable state.

Presence of nonlinear change and feedback, where small inputs can produce large outcomes: The occurrence of small, random events has the potential to be amplified and, based on feedback received, fundamentally shift the entrepreneur’s path of emergence.

Surprise, where non-obvious or unexpected behaviors come from the object in question: Ventures produce and interact with a stream of unpredictable, surprise events, both positive and negative. Also, moments of sudden insight, or instinctual or improvisational acts, can be instrumental in affecting outcomes.

Reciprocal interactions between micro-level events and behaviors and emergent macro-structures: A wide mix of internal and external variables constantly interact at micro-, meso and macro-levels to produce a venture that often differs markedly from what was originally intended. Emergence and the subsequent behaviors of those involved can radically shape the structures in which they are embedded and create new structures.

Co-evolution among components of the system and increasing complexity: Co-evolution occurs (a) among the components that form the opportunity, the venture or the entrepreneur, and (b) as a result of the interplay among the emergent opportunity, venture and entrepreneur.

Supervenience of resultant structure over components: The novel structure that surfaces through emergence can establish order for the various components (i.e., individuals, routines/activities, interactions, etc.) that initially came together to form the resultant structure.

Source : Adapted from Morris and Webb (2015).

When launching a new venture, three core elements are emerging: the business model, the opportunity and the entrepreneur. Consider a venture that is five years old and doing quite well on various performance indicators. Then draw a simple comparison between the business model of this successful venture and the business as described in the original business plan written for the venture. The result will almost always be more difference than similarity. The principal product being sold, target audiences generating the most revenue, positioning and pricing approach, financial structure of the firm, kinds of employees needed, locational requirements, marketing and distribution approaches, and much more are likely to change. Again, the entrepreneur is correcting mistakes, overcoming obstacles, and dealing with unanticipated developments. He or she is experimenting and seeing what works and what does not.

In addition, the underlying opportunity that supports the venture tends to emerge, and this is tied to the so-called “corridor principle” (Ronstadt, 1988). In the process of pursuing a perceived opportunity, the entrepreneur is likely to become aware of additional opportunities that would never have been apparent had he or she not begun the journey in the first place. In a sense, the pursuit of opportunity begets recognition of other opportunities. By starting the venture, interacting with market forces, learning from what does not work, and experimenting with alternative approaches, the entrepreneur is able to discover where the real opportunity lies. This discovery process suggests that opportunities tend to emerge. Consider an example. An entrepreneur starts a cleaning business and initially perceives that the opportunity lies with the residential market. While some inroads are made with this market, it proves to be too crowded or insufficiently profitable. Yet, based on new information that becomes available because the entrepreneur is interacting with stakeholders in the marketplace, he or she is able to determine that the real opportunity may lie with cleaning offices, warehouses or government buildings. As a result, the entrepreneur starts to provide cleaning services to office buildings. Eventually, he or she discovers that medical offices represent an especially attractive niche. Then, additional insights suggest that, with some training and certification, the company can charge a lot more by specializing in dealing with clean up and disposal of bio-waste and hazardous materials (hazmat). Ultimately, the entrepreneur realizes that it might be more lucrative to actually provide the bio-waste and hazardous materials training to hospital employees and others. With time, experience, continued experimentation, learning and adaptation, a more attractive and viable opportunity has emerged.

As the opportunity and the business model emerge, so too does the entrepreneur. The evidence suggests that entrepreneurs are not born – people do not have some sort of genetic predisposition to start ventures (Bird, 1989; Morris, 1998). Much of what is required is learned. It certainly helps to have passion, a strong work ethic, and to be organized. One must also be open to change, and have the ability to learn and adapt. The entrepreneur is learning how to make sense of developments as they occur, to tolerate ambiguity, and to manage when surrounded by uncertainty. He or she is learning the many different roles that have to be played as a venture unfolds (e.g., salesperson, money manager, service provider, supervisor, record keeper, delegator, planner, organizer, innovator and so on). In the end, just as the entrepreneur creates a venture, over time the venture is creating the entrepreneur (Morris et al., 2012). By being immersed in the experience, one is being formed into an entrepreneur.

Figure 1.2 illustrates the concept of emergence. Here, the entrepreneur starts with an idea for a new venture. Building on his or her past experiences, knowledge base, assumptions and beliefs, the research they engage in, and interactions with others, they develop intentions and expectations. In short, they have some concept of what they are trying to create, what will be required, and what sort of outcomes might be realized. Once the venture is launched, the entrepreneur is exposed, in varying degrees, to the many characteristics of the entrepreneurial journey that we have described (e.g., ambiguity, novelty, unexpected events, new opportunities). The question becomes how these developments are interpreted and responded to. The combination of these ongoing responses together with the dynamic interactions between external developments and internal resources/conditions influence what is emerging in terms of opportunities, the business model and the entrepreneur.

Figure 1.2    The emergent nature of venture creation

EVERY ENTREPRENEURIAL JOURNEY IS UNIQUE

Two people who start the same type of venture at the same time and with the same resources are likely to create very different types of businesses. Even if they have similar skills and capabilities, the outcomes will still diverge. It is not just about differences in performance, but in the very nature of the venture being created. And no two people will experience the entrepreneurial journey in the same way.

There is a path dependency in the manner in which a venture unfolds. Hundreds of critical decisions and actions are taken as a venture takes form, with little consistency among entrepreneurs in the order in which things are done. Decisions and actions (or inactions) at certain points in time impact future developments, often in unexpected ways. Hence, when one starts a venture, a decision to sign a two-year lease on a building or pursue a particular market segment will affect a range of subsequent developments both within and outside the venture (e.g., obstacles created, resources available, opportunities uncovered), and delimit certain future choices. Even if subsequently modified, every decision has a permanent imprint on the emerging venture. The same dependency can apply to actions taken or not taken. The entrepreneur who finds the willpower to call on one more bank after rejections from ten others, or attend one more networking function despite being exhausted, can find these simple acts profoundly redirect the pathway of the venture.

Further, every entrepreneur is unique based on how he or she processes and responds to the pressures, resource constraints, misdirection and mistakes, unanticipated problems, threats, lack of clarity and emergent opportunities that occur during the journey. One will not interpret the gaining of a new customer account or the failure to attract an angel investor in the same way as the other. Each will draw alternative implications from novel or unexpected developments, such as a change in regulations or an increase in interest rates. One will acknowledge a poor decision while another associates a bad outcome with some factor unrelated to their own decision-making. Both may look at the same informational inputs and recognize divergent opportunities, or no opportunity at all.

In addition, entrepreneurs vary in terms of how much they are able to learn in a given venture context (Cope, 2011; Politis, 2008) and they do not all learn in the same ways (Minniti and Bygrave, 2001). Moreover, some are more willing to experiment and are better able to draw lessons from trials and failures (Sarasvathy, 2009). The same is true for the individual’s relative rigidity or flexibility when it comes to adapting aspects of the venture over time. Schindehutte and Morris (2001) demonstrate how entrepreneurs vary in their capacity to adapt, how much they actually adapt, and the strategies relied upon to adapt. 

Lastly, a critical factor explaining how people respond to the many events occurring as a venture emerges is the development of an entrepreneurial mindset. McGrath and MacMillan (2000) describe this mindset as an ongoing focus on recognizing opportunities and pursuing the most attractive ones with passion and discipline The mindset represents a way of both thinking and acting (Haynie et al., 2010; Ireland et al., 2009). From an attitudinal perspective, the person believes they are able to effect change in their environment. They tend to be optimistic, and recognize that, even in dire circumstances, the world is filled with opportunities. They believe that most anything can be improved, done better or enhanced in some way. Individuals embrace change and new approaches, and are tolerant of failure. With regard to behavior, the mindset includes an action orientation, where the individual is willing to pursue new, innovative approaches. They persevere in the face of obstacles, and continually adapt to these obstacles and emerging opportunities. They are not big risk-takers, but instead are adept at mitigating and managing risks. They understand the importance of leveraging resources, creatively finding ways to bootstrap, using other people’s resources, and recognizing things as resources that others do not.

Individuals vary in how much they demonstrate an entrepreneurial mindset, and this affects how their ventures emerge. Importantly, the mindset is something that can be developed and nurtured. It is enhanced with practice – by doing entrepreneurial things all the time. Arguably, it declines with lack of practice. The adverse circumstances encountered as a venture unfolds represent a key incentive for thinking and acting in entrepreneurial ways. The extent to which this mindset is manifested can dramatically alter the pathways open to the venture.

MAKING SENSE OF THE DIVERSITY

Entrepreneurs start businesses for many reasons. They can be motivated by a drive for independence, a need for achievement, a quest for income or wealth, or a desire to contribute to one’s community, among other factors. Some are pushed into entrepreneurship by necessity and others are pulled by the attractiveness of an opportunity (Block et al., 2015). There are those who deliberately seek to be entrepreneurs, and those who find themselves starting what become successful ventures almost by accident (Shah and Tripsas, 2007). We can also distinguish one-time entrepreneurs from those with experience in starting multiple ventures (Sarasvathy, 2009). And there are those who wish to see a new business through to its maturity, while others are speculative entrepreneurs who find they are better at getting the venture established and then exiting early on (Bruce, 2016).

However, regardless of their motives or intentions at the outset, things change as the venture emerges. The business takes on shapes and forms that depart from what the entrepreneur originally had in mind. Sometimes expectations are exceeded, and other times outcomes fall short of what was hoped for. What started as a high-end pastry bar becomes a supplier of desserts to two- and three-star restaurants. A venture launched with a technology to detect potentially unsafe chemicals in research laboratories subsequently emerges as a company that sells kits to police departments for use in bomb detection. In addition, a venture is always a work in progress. Unlike a painting created by an artist or a bridge built by an engineer, a business is never completed. It continues to emerge, resulting in ongoing changes in resource requirements and performance outcomes.

The picture we are describing is one of diversity, with every venture emerging in its own idiosyncratic way. Consider the differences between someone who launches a unique type of retail toy store that eventually grows to three locations in different cities in Great Britain and Elon Musk’s launch of Tesla, the US-based automobile company seeking to create a more sustainable energy future. Both are entrepreneurial ventures, but they have relatively little in common. Not only are the risks and returns surrounding these two ventures dramatically different, but so too are their structures, resource requirements, sources of investment, relative reliance on technology, management styles, growth potential, market impact, and much more.

The reality of this diversity and these differences makes entrepreneurship a more difficult subject to research and understand. If every entrepreneurial journey is unique, how are we able to draw any general conclusions about such fundamental questions as:

•    How can the venture start-up rate be increased?

•    What skills, capabilities and resources does it take to create a sustainable venture?

•    Why do most ventures start small and stay small?

•    What drives the level of innovation that occurs in a new business?

•    Why do new ventures fail?

•    What is the role of entrepreneurship in economic development?

Definitive answers to these and other basic questions have eluded scholars for many decades. What is true for some ventures may not hold for many others. One result of this state of affairs is the relatively widespread dissemination of a number of myths and misconceptions regarding entrepreneurship (e.g., regarding venture success rates, who can be an entrepreneur, the nature of entrepreneurial risk-taking, the social and economic impacts of entrepreneurship) despite the lack of evidence to support the underlying beliefs.

We believe the key to sorting out the tremendous diversity among entrepreneurial ventures and making progress in addressing many of the basic questions about venture creation lies in distinguishing general categories or types of ventures. Specifically, we argue that ventures will emerge as one of four general types. We will label these types as survival , lifestyle , managed growth and aggressive growth ventures. As we shall see in the chapters to come, each has a number of defining characteristics that make it possible to draw general conclusions about the ventures that fall into the category in spite of the uniqueness that characterizes every venture.

In exploring these four types of ventures, we seek to demonstrate how core commonalities among ventures within a given category outweigh the significant differences between those in different categories. Further, the four types do not represent a continuum, suggesting the differences are less ones of degree and instead go to the essence of the business itself. It thus becomes necessary to treat each category as a separate kind of entrepreneurship. In a sense, then, attempts at producing a general theory of entrepreneurship must give way to theories of different types of ventures.

CONCLUSIONS

When historians look back on the twenty-first century, they may well label it the “age of entrepreneurship,” a time when more ventures were started than at any other time in history.

On any given day, thousands of new ventures are created across the globe, each with its own unique development path and identity. This chapter has examined the emergent nature of new venture creation, and identified factors contributing to the fact that no two ventures, and no two entrepreneurs, are alike. This diversity has important implications for our ability to explain and predict many aspects of the venture creation process.

An interesting question then becomes how much will we have learned about entrepreneurship, its true nature, and how to facilitate it in a range of contexts by the end of the century. A beginning point in ensuring real progress is made is the question “what do entrepreneurs create?” The fact that they create everything from the corner hotdog stand to SpaceX and Instagram leaves us in a difficult position, particularly when it comes to developing the kinds of insights that advance theory, help entrepreneurs to be successful, and support development of public policies that encourage entrepreneurial behavior. Much of what we know about entrepreneurship depends entirely on the type of venture under question. Thus, a research finding regarding the cognitive processes employed by entrepreneurs, the role of networks in successful new business formation, how firms overcome the liability of newness, what makes a business model sustainable, the effectiveness of different resource leveraging approaches, and hundreds of other questions will not likely apply equally to every venture, and may only be relevant for a relatively small percentage of entrepreneurial firms.

To address this challenge and make sense of the significant diversity among ventures, this book introduces a typology that distinguishes four types of entrepreneurial firms. Venture type thus becomes a key contextual variable that drives how entrepreneurship theory and practice should be approached. In the chapters to come, we provide the underpinnings for development of the typology, and dedicate attention to an in-depth examination of each type. The tendency of ventures of a given type to develop a kind of shared identity is explored, and efforts are devoted to establishing reasons why a business of one type tends to not evolve into a different type over time. Issues of fit between types of entrepreneurs and types of ventures are probed. The diversity among firms of a given type is also acknowledged, with sub-groups of ventures identified for each category. Interdependencies among the four types of ventures are then reviewed, and the concept of a “new venture portfolio” is introduced as a guide in fostering economic development. Finally, we draw implications from the venture portfolio for ongoing theory development, management practice and the formulation of public policy.

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2. The Entrepreneurial Journey and Pathways

Chapter Outline

2.1 Overview of the Entrepreneurial Journey 2.2 The Process of Becoming an Entrepreneur 2.3 Entrepreneurial Pathways 2.4 Frameworks to Inform Your Entrepreneurial Path

What do you plan to do with your life after graduating from school? This is one of the most common—and admittedly most terrifying—questions that students are asked on a regular basis. There are literally thousands of career choices and just as many pathways or options to reach them. How do you decide which career pathway is best for you? You might select a new career based on your major, a favorite high school subject, the advice of a family member or friend, or an inspirational summer or internship experience.

What if none of those options reflect the future that you see for yourself? It may mean that you are destined to create your own career path by becoming an entrepreneur. Regardless of the career pathway that you follow, your entrepreneurial journey begins with a single step.

Real world problem solving: An entrepreneurial perspective Copyright © 2022 by OpenStax is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Why is interest in entrepreneurship growing among those entering or re-entering the workforce?

What is an entrepreneurial mindset?

What does the phrase “entrepreneurial venture” refer to?

What does the process of “cash management” entail for a business?

Why is the entrepreneurial process considered a fluid process rather than a rigid step-by-step guide?

What does the term “creative destruction” mean?

What is the difference between a corporate entrepreneur and an intrapreneur?

What are situational opportunities?

What does an entrepreneurial journey entail?

Under which circumstances might a person choose to bootstrap a venture?

What is an independent contractor?

What does the term “framework” mean in terms entrepreneurship?

What is an action plan? How is it different from a framework?

Why are action plans useful in the development or improvement of a venture?

What are the characteristics associated with traditional entrepreneurship?

What are some biases that minorities and women face in acquiring funding?