Mention the word “entrepreneurship” and one normally thinks of the activities associated with starting a new business venture. Indeed, entrepreneurship does encompass the creation of new businesses, but today it is viewed as much more than that.
Entrepreneurship is a “mindset”—a way of thinking that is focused on opportunity recognition, innovation and growth. This mindset can be found in inventors wishing to commercialize a technology, socially responsible nonprofit organizations, municipal leaders undertaking economic development, and CEOs of large corporations looking to remain competitive in a global economy.
Entrepreneurship can be found in some form in every country, gender, race, age group and economic sector. What separates entrepreneurs from others is their willingness to gather the resources needed, accept risk and tirelessly apply their passion to succeed. No single discipline can claim a monopoly on entrepreneurial passion. It can be found in engineers, scientists, artists, teachers and business professionals. Many successful entrepreneurs have no college education, but every one has an unshakable belief in themselves.
So, how do you know if you have what it takes to be an entrepreneur? While entrepreneurs can come from any walk of life, they tend to share these common characteristics:
A common misconception is that entrepreneurs are the high-stakes gamblers of the business world—willing to take on wild risks not likely to succeed. In actuality, most entrepreneurs are moderate, calculated risk-takers. They are certainly optimists, but seek to reduce risks as much as possible while pursuing the opportunity. What distinguishes entrepreneurs from others is their willingness to proceed despite the presence of risk.
Acceptance of Ambiguity
Pursuing new opportunities is by its very nature uncertain, ambiguous and undefined. While entrepreneurs thrive in such an environment, many do not. The challenge and excitement of the unknown drives their creativity far more than a structured environment could.
Desire for Achievement
Entrepreneurs tend to have a far greater need than others to be personally responsible for setting and achieving goals. They are driven to make things happen and will keep trying until they succeed.
Strong Sense of Independence
Entrepreneurs want to “call their own shots”—to be responsible for decisions and their consequences, even bad consequences. This drive for independence gives them a high level of confidence in their abilities. The downside is their tendency to be slow to delegate authority to others.
Entrepreneurs come in many flavors and sizes—as varied as the kinds of business ideas they pursue. A few of the more common paths to entrepreneurship include home-based businesses, internet-only ventures, serial entrepreneurs, bricks-and-mortar businesses, social entrepreneurs and corporate entrepreneurship.
More than 24 million people have home-based businesses. Many have turned a hobby into a business, while others pursue consulting or freelance-type businesses. Some even compete head to head with brand-name businesses with large operations. A home-based business is a great low-risk, low-cost way to test a business concept before acquiring facilities and employees.
If flexibility and mobility are motivating factors for an individual, an internet-based business is an attractive option. Business can be conducted anywhere, at any time—from wifi-connected coffee shops to a beach in Maui to your own living room. Internet-only ventures give the entrepreneur the opportunity to look like a bigger company than it actually is, often attracting larger corporate clients. Services, digital products and lightweight consumer goods are excellent choices for an internet business.
A rare variety of entrepreneur, the serial entrepreneur, is one who enjoys the process of launching businesses so much that they prefer to leave managing and growing the company to someone else, enabling them to move on to the next start-up concept. They are often impatient and bored with the day-to-day operations of managing, preferring instead to launch their next business idea. Serial entrepreneurs tend to be very creative individuals, with a higher than normal tolerance for risk.
Often referred to as “traditional entrepreneurs,” this variety of entrepreneurship is for individuals who prefer to own a business with a physical location. These types of businesses can remain small, with a single location, or grow to become large multiple-location behemoths. Food services, retail stores and manufacturing operations are good examples. Smaller bricks-and-mortar businesses, often referred to as “lifestyle businesses,” provide a comfortable lifestyle for the owner while the business is growing. It is quite common for owners of single-location businesses to view the eventual sale of their store as the prime method of funding their retirement.
Individuals with business ideas of an educational, religious or charitable nature will often form a nonprofit organization to scratch their entrepreneurial itch. Social entrepreneurship is a very rapidly growing style of entrepreneurship. Most ventures of this type will seek tax-exempt status from the Internal Revenue Service so they can attract tax-deductible donations and grant funding. Most people think of social entrepreneurs as big-hearted individuals willing to sacrifice a decent salary for the opportunity to make a difference in the lives of others. While an altruistic motive is essential, nonprofit ventures can often provide their managers with a comfortable standard of living.
A trend that has become more prevalent in recent years is large companies changing their company culture to allow creative employees to search for and pursue new opportunities on behalf of the company. Entrepreneurial activity within large organizations is becoming increasingly more necessary to remain competitive, as smaller companies continue to innovate at alarming speed. So committed are some companies that they are allowing workers to develop new products and markets completely outside their core competencies. The difficulties encountered by those attempting to innovate within larger companies have included the bureaucratic structure and rules, their intolerance of risk and failure, and strict budgets.
To succeed in a corporate entrepreneurship endeavor requires: a) commitment by upper management to move the project forward fast enough to succeed; b) collaboration with and access to company resources in multiple departments; c) a team staffed by only the best, due to the risk and difficulty involved; d) clearly designed stages and timelines to gauge progress; e) elimination of career-threatening penalties for failure.
Today, very few industries enjoy freedom from domestic or even global competition. The successful will be those who find ways to adapt to rapidly changing environments. Opportunity recognition, thorough planning, management of risk and determination to succeed despite obstacles are the skills needed to navigate change. Entrepreneurs, in all of their many flavors and sizes, are the ones who possess these skills and will be the ones who drive our country’s economic future. Will you be one of them? iBi