What is an entrepreneur and what types are there?
Tips / 12.04.2022
There are people who walk among us with a unique vision for life. They are bold and brave. They want to make a change. And they have the grit to withstand all obstacles to make their vision come alive.
Two centuries ago, people bartered and apprenticed for their professions only to stay in them for the rest of their lives. Entrepreneurs, on the other hand, are innovators. Those that are not satisfied with the status quo. They’re on a mission to change the world and even the way we think about certain things.
But what is an entrepreneur? Let’s take a closer look.
Table of Contents
What is an entrepreneur?
Whether you’re doing a quick search or more detailed research, you’ll find some common entrepreneur definitions. These talk about developing ideas through a careful evaluation of the market, starting a business, making a profit, filling a gap in the market, and scaling or growing to meet more needs whilst making a profit.
The role of the entrepreneur is therefore to take an idea with commercial value and bring it to life for others to take advantage of it. Now that we’ve covered the entrepreneur’s meaning, let’s look at how the process of entrepreneurship, which is the practice of being an entrepreneur, works.
How does entrepreneurship work?
When you define entrepreneurship, you’ll quickly realise that there are several types of entrepreneurs. These are the startups and the small business entrepreneurs. Start-ups are disruptors in the market. They take a societal problem, a pain point if you will, and then resolve it with the ultimate aim of making a profit.
Small business entrepreneurs, on the other hand, are those who range from freelancers to retailers, shop owners, those who run coffee shops, restaurants, hotels, B&Bs, and more. The latter have taken an idea that works and have replicated it, giving it their own twist to again make a profit by offering customers a product or a service that’s in demand.
And speaking of entrepreneurship types, let’s delve deeper into this fascinating topic.
Cultural activities can be turned into business enterprises, and cultural entrepreneurship is one way to do so. The entrepreneurs involved in this type of activity are considered “cultural change agents”.
Then there’s ethnicity as a factor for entrepreneurship. It is essentially creating a business by ethnic minorities. Europe and the US are good examples of geographical locations where this takes place.
These are “for women, by women” enterprises with the goal of reaching equality through collaboration to improve the lives of women around the world.
The creation and transformation of new or existing organisations is the main goal of an institutional entrepreneur. This can be done by pooling resources together or inspecting their human resources as factors for change.
The Millennial generation was born between the years 1981 and 1996 and is one of the first to have grown up with technological advancements. The individuals in this group are curious and adaptive and can generate great ideas for others. One example of a Millennial entrepreneur is Facebook’s Mark Zuckerberg.
A word that means “just coming into existence and displaying signs of a future potential” can also refer to entrepreneurs who are in the beginning phases of developing their businesses. This may mean solidifying ideas, purchasing inventory, hiring staff, renting premises, choosing a legal structure, and more.
Nowhere is project-based entrepreneurship more clear than in the television/film or construction industries. This is because these types of endeavours usually have a set lifespan and once the project is complete, an entrepreneur continues to apply their efforts elsewhere to another project.
For example, in construction, once a house or a building is complete, there’s no more work to be done. Therefore, the entrepreneur needs to look at other opportunities to continue generating revenue and profits.
Although not necessarily profit-driven or oriented, social entrepreneurship refers to an entrepreneur’s interest in a social, cultural, or environmental cause. This can manifest itself in non-profit projects or projects with a more social cause. One example is a restaurant with a social cause that has a for-profit aim, which is then pumped into a community of homeless people who are employed at the restaurant to help them earn a living.
The biosphere model of entrepreneurship is such that the entrepreneur will consider aspects that are beneficial to the biosphere or environment and try to capitalise on these opportunities to make a profit while helping the environment in a chosen way.
History of entrepreneurship
While it is quite hard to pin down exactly when entrepreneurship started – after all, we have communities from ancient civilisations which bartered with each other – there are some emerging themes related to the history of entrepreneurship that are worth looking at.
These are the factors of trade, the advent of stable communities and specialisation, the formation of markets, and the developing needs for independent career paths. We look at each one in turn.
It is believed that merchants and traders were the first entrepreneurs and their success was the foundation of entrepreneurship as we know it today. Largely driven by advancements in communication between countries and improvements in transportation, trade developed and spread across communities and borders, while generating wealth and opportunities.
Stable communities and specialisation
From tribes to stable communities, leaders of such communities developed strong leadership skills, which is a characteristic that entrepreneurs of this day and age possess.
After stable communities, markets formed all over. There came an ever greater need for improved ideas, innovation, and leadership. Risk-taking, as a characteristic of entrepreneurship, also gained traction. One reason for this was the increased competition and the aim of gaining higher profit shares.
Independent career paths
Job security became an ever more important element in terms of survival and well-being and living a settled life. However, some individuals (think entrepreneurs) either faced difficulties in finding jobs or sought to leave jobs and careers to give life to their own ideas through business creation and entrepreneurship.
Perks and challenges
Being a curious, creative, ambitious, and innovative entrepreneur comes with a variety of advantages, but that’s not to say there aren’t challenges, too.
As a starting point, entrepreneurs create jobs, innovate, create change, and give back to society (they are the biggest donors to charity and social causes). As their own bosses, they can work flexible hours from anywhere. They also add to the national income, which adds to the budget, which is then spent on social causes, amongst other things.
However, this also means that by being their own boss, all the responsibilities of their business fall on their shoulders. Their willingness to change the world can face resistance and sometimes it’s hard to break through in a certain industry. Other times, their drive for entrepreneurship results from them not fitting the corporate environment and preferring to create their own.
Setting up a business involves a lot of costs and, to avoid additional unnecessary expenses caused by unexpected events, many entrepreneurs rely on adequate insurance. From public liability insurance to business income insurance and data breach policies, your new entrepreneurial dream requires proper protection.
What are some examples of good entrepreneurs?
A “good” entrepreneur is hard to define, but it is possible to measure their business’ success in order to determine their levels of success. Some examples of good entrepreneurs include the well-known Walt Disney from The Walt Disney Company.
Some challenges he faced included theft of his work and many commercial failures. Despite this, Disney continued to persevere and remained committed to his vision, ultimately resulting in his success.
Mark Zuckerberg, well-known as the founder of Facebook, also faced significant challenges before starting one of the world’s biggest social media platforms. Remaining true to his vision, he is now worth over $80 billion.
What characteristics does an entrepreneur have?
Few entrepreneurs thrive in the marketplace without the personal attributes of versatility, flexibility, being money savvy, resilient, focused, business smart, and effective communicators. These, apart from other characteristics, are what sets them apart from the average Joe.
Entrepreneurs usually have a very clear vision of where they’re going, and a determination to get there bolsters this. They find opportunities where others would find challenges, and they’re happy and committed to solving problems. This makes them inspiring leaders to look up to as they drive processes forward for both commercial success and societal change.
How to become an entrepreneur
There are many routes to becoming an entrepreneur and there’s no one set way of going about it. However, some common themes emerge when it comes to the starting of the process of entrepreneurship, and one of these is starting out by ensuring there’s financial stability. This does not mean going after quick money, but ensuring that value is provided to end customers whilst growing a steady stream of revenue to help expand and scale the business further.
Another theme that emerges is the one of building a diverse skill set. When starting out, an entrepreneur will be the boss, the secretary, customer support, a delivery person, and more, taking on all the roles possible in their business as they set out to hire more staff. This means they need to be familiar with and have a deep knowledge of all the tasks required to run their business as well as how to run it, too.
This is done by developing a diverse skill set. From bookkeeping, accounting, and finance, to production, deliveries, and customer service, an entrepreneur needs to know it all. Or at the very least, hire staff that can do this for them at a later stage.
Next up is staying inspired, driven, and motivated. This can come through the consumption of content across multiple channels. Whether it’s reading books or listening to podcasts, enriching one’s knowledge and skills is a crucial part of staying competitive and ahead of the curve by discovering trends, building on one’s knowledge base, and gaining a fresh perspective on things.
When an entrepreneur consumes content, they’re also able to identify new ideas for entrepreneurial development or problems that they can solve. Bringing such ideas to society, implementing them, and resolving pain points is a powerful way of entering the business world. But once they’ve entered the world of business, they need to ensure they stay there. This means a commitment to strong customer service – be it through the provision of a product or a service – and adding value along the value chain.
Networking is another key component of starting up as an entrepreneur. It’s crucial for them to get together with like-minded individuals who can help support them through mentorship and advice. Meeting the right people can help an entrepreneur make new contacts, discover a new client base, find the right suppliers or financiers, and more.
Finally, entrepreneurs need to lead by example. They’re the leaders of their businesses and carrying out daily tasks will not lead to success. They need to ensure they’re always thinking ahead, working hard, and motivating employees to achieve their full potential.
Entering the world of entrepreneurship can seem like a daunting task for some, while for others, it’s interesting and exciting. Entrepreneurship comes with many advantages, the least of which is flexibility and more freedom to make choices that are best for the business. While there are some downsides, too, it’s crucial for entrepreneurs to focus on solving customer pain points or addressing societal issues to help them get ahead.
The world of entrepreneurship is harsh these days. There are over 500 million entrepreneurs around the world. The competition is fierce. Therefore, constant innovation is needed to ensure that they continue to stay ahead of the curve and remain competitive. Failure to do so could lead to business failure and disappointment.
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