We can define an entrepreneur as a person who sets up their own business or businesses.
They are involved from day 1, from coming up with the initial idea, to setting up and running the business, as well as dealing with any issues or problems along the way–this is known as entrepreneurship.
Typically, or at least in the beginning, they work alone, but not all entrepreneurs are alike, especially today.
Anyone can be an entrepreneur.
It doesn't matter where you come from, or what you look like. Young, old, food-lovers, nature-lovers, more people are doing their own thing than ever before–and the number of startups in the UK keeps growing at a record pace year on year.
You may have heard of the entrepreneurial mindset, sometimes referred to as the entrepreneurial spirit–the thing every entrepreneur ‘has to have’.
These two phrases carry a similar meaning, referring to what it takes to set up and run your own business, from being a hard worker to taking risks and having a desire to learn and grow.
With businesses so diverse today, even though all entrepreneurs have a certain mindset, it encompasses a wide variety of traits and behaviours.
Entrepreneurialism is simply having an idea, and acting on it. So whether creating goggles for dogs or serving coffee from a bike, there are all kinds of opportunities out there for you.
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Whilst the passion for something new embodies all forms of entrepreneurship, the difference in types of entrepreneurship lies in what type of industry they enter, and why they set up in the first place.
Small-business entrepreneurship includes examples from all kinds of industries, from handymen to hairdressers, to small e-commerce stores.
They have fewer than 250 employees and are typically set up by people who want to get one of the many benefits that come with starting your own company, like being your own boss or working on the thing you love full-time.
Different industries specify types of entrepreneurship even further, from fashion entrepreneurs, to food entrepreneurs, and tech entrepreneurs to name a few.
These can, of course, grow into larger companies and end up employing well over 250 people–but with this transition, they would step away from the small business status.
Social entrepreneurship refers to the people who start something with the aim to solve or reduce a social problem.
The popular shoe brand TOMS is a great example of the benefits that social entrepreneurship can bring.
The business model is simple. When you buy a pair of TOMS shoes, they donate a pair of shoes to someone who needs them.
Founder Blake Mycoskie came up with the idea after a trip to Argentina, where he saw many children getting sick or injured due to lack of footwear.
When we think of entrepreneurs and startups, we think of big and complex issues and ideas, but as shown here–it doesn't have to be complicated to have a big impact.
The term ‘young entrepreneur’ simply refers to people who set up their own business under a certain age. Whilst the definition of ‘young’ may vary, generally, we are looking at people under 25.
At the very young end of the scale, founders like Moziah Mo’ Bridges prove that age really doesn't matter when it comes to starting your own business.
He launched Mo’s Bows–a handmade bow tie and necktie company when he was just 15, and sells both online and in retail outlets.
As we get closer to the 25-year mark, we can take examples from entrepreneurs like Mark Zuckerberg–founder of Facebook at age 19, and Phoebe Gormely, who set up the first-ever women’s only tailor in Savile Row’s history, at age 22.
Entrepreneurship and innovation go hand in hand.
When people set up their new business, they don't just set out to copy how others currently do it, they aim to do things better.
Airbnb’s founders didn't sit around and think about how they could create a better hotel brand. They thought about how they could create a better travelling experience as a whole.
Anyone who starts their own company has the opportunity to drive industries forward by challenging the status quo and solving old problems in new ways.
Many new businesses tackle problems in an unseen, often exciting way, and are therefore by definition, innovative.
Entrepreneurs' innovation is one of the big reasons they have such an impact on the economy. A lot of small businesses see success by providing a product or service that people really desire and are willing to pay for.
In fact, 77% of all consumers prefer to shop locally compared to online retailers, and are even willing to spend more when doing so.
Another major reason for their effect on the economy, is the sheer number of them. In 2018, there were 5.7 million small and medium-sized businesses in the UK. That’s over 99% of all UK businesses.
It’s no wonder that we have to take them seriously. And there are many products and services created with them in mind. A card reader designed specifically for smaller businesses is just one example.
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So, now we know what an entrepreneur is, and their effect on the world…
But how do you go about becoming one?
Whilst some people seem to have found their ‘calling’ and know what they want to do from an early age, it can be a big struggle for others just finding where to start.
In general, there are a couple of unwritten rules to follow when deciding what kind of business you might want to set up:
Starting a company from scratch is complicated enough, you don't have to further complicate the process by diving into a new field.
By sticking to what you know best, you’re putting yourself and your business in a good position to succeed.
As with the example of TOMS, many organisations aim to solve a problem. The type of problem you want to solve varies a lot on who you are and where you are. You can go really big and try to tackle a global issue, or you can go smaller-scale, and still see success solving a problem just within your city or town.
After choosing a path, it’s time to dive into the chosen market.
This stage is about discovering everything you can about your chosen area. Use all available resources. Look at the potential competition, your target market and study the demographics.
If time and money are not a constraint, conducting your own research at this stage will also be highly valuable later on, giving you a greater insight on specific questions you might have.
Once you have all your research, combine it in a business plan. This can be used as a guide containing all of your research and your goals in one place.
A business plan is also a great document to have on hand when discussing financing with investors and banks.
There are many options out there for small businesses to fund their operations. The most common ways include:
Taking out a small business loan
Using personal savings
Borrowing money from family
Finding an investor
Getting a business credit card
Of course, you’ll find some options suit you better than others, so spend some time thinking about how to finance your business the right way for you.
You've discovered the right opportunity, conducted research, and found a way to finance it–all that’s left is to start.
This is where you’ll experience the traits of being an entrepreneur first-hand. You’re going to learn, you’re going to work a lot, and you might fail. But you will grow and gain invaluable experience whatever happens.
On average, 415,000 new businesses are introduced in the UK every year.
With so many entering the market every year, it’s no surprise there is a large number that doesn't survive.
Whilst the number of failures is lower than the number of new starters, around 328,000 businesses have to cease trading every year. Their failure can be for a whole number of different reasons, but the founder often plays a key part.
So what makes a successful entrepreneur?
Successful entrepreneurs have these things in common:
They are passionate about what they do.
They are hard-working and not afraid of long hours.
They have good people skills.
They are determined and competitive.
They are open-minded and accept criticism.
A successful founder is someone who takes time to plan but can act quickly.
They think a lot about all the different outcomes of their actions, without forgetting to ‘do’.
And they are caring, yet competitive… … all at the same time.
It seems like a daunting task, but for the many aspiring entrepreneurs who give it their best go, it’s all part of the fun.
So when someone asks you ‘what is an entrepreneur’, now you’re ready not only to tell them, but to show them too.