The word “entrepreneur” is often misused in today’s culture. We tend to call any small business owner an entrepreneur, but let’s look at why this is not necessarily true.
The Oxford Dictionary defines an entrepreneur as someone “who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.” The U.S. Small Business Administration (SBA) calls an entrepreneur “a person who organizes and manages a business undertaking, assuming the risk for the sake of profit.”
The key word in both definitions is “risk.” A true entrepreneur does not merely run a business. He or she has an idea, makes a plan, starts a business, runs the business and makes a profit. Each of these steps involves risk, and a true entrepreneur thrives on that sense of risk. The risk, in fact, is the reason that many people call entrepreneurship not just a way of working but a way of living.
Themes for the next decade: Cannabis, 5G, and EVs
A lot changes in 10 years, and many changes are expected by the time 2030 rolls around. Some key themes have already emerged, and we expect them to continue to impact investing decisions. At the recent Morningstar conference, several panelists joined a discussion about several major themes for the next decade, including cannabis, 5G and Read More
Five steps to become an entrepreneur
Do you have what it takes to be an entrepreneur? Here are five tell-tale signs you do:
- You are unfulfilled by a “regular” job. An entrepreneur will get excited about a job and look forward to going to work as long as he or she is still learning. After that job becomes a routine, entrepreneurs get bored and start itching to do something else.
Do you feel like you are going through the motions at work and instead are thinking about new ways to do what your company does? Has this happened before in a previous job? You may be an entrepreneur.
Entrepreneurs like to keep creating. They dislike regular office hours and like to work until the job is done and then take some time off. High-profile British billionaire Richard Branson says, “My biggest motivation? Just to keep challenging myself. I see life almost like one long university education that I never had — everyday I’m learning something new.”
- You see an opportunity. Entrepreneurs are more than just idea people. It takes more to being an entrepreneur than just having a great idea. There are plenty of people with great ideas, yet they are unsuccessful because they haven’t done anything with those ideas.
Successful entrepreneurs see a business need and a plan a way to fill that need. In other words, they don’t start a company because they want to start a company; they start a company because it is the way to turn a great idea into a reality. An entrepreneur has a plan for that great idea and how it will fit the marketplace.
In his classic book Innovation and Entrepreneurship: Practice and Principles, Peter F. Drucker writes “This defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”
- You have a plan. Whatever line of work they are in or want to be in, entrepreneurs are in the job of creating plans and marketing those plans. An entrepreneur begins a new venture slowly by having “what if” conversations with friends and family to make sure there is a need for the new idea. Then he or she checks for any competitors who may be already offering something similar to see how those goods or services could be made better or provided more efficiently.
Your goal as an entrepreneur should not merely be independence or being your own boss, but it should be that you will solve a problem. Your customers won’t get excited about your business; they will get excited about how your business will help them.
Nolan Key Bushnell , the founder of is Atari, Inc. and more than 20 other companies, writes
“The true entrepreneur is a doer, not a dreamer.”
- You are realistic about the risk. There’s that word “risk” again. An entrepreneur prepares for the chaos of starting a new company. He or she plans for the upheaval it will bring financially and personally.
He or she doesn’t quit the “day job” until money is secured for the new venture. In addition, a successful entrepreneur doesn’t launch a new business with a personal life that is a mess.
An entrepreneur cares enough about the idea and the plan to give it 100 percent, yet knows the plan might not succeed. Successful entrepreneurs are strong enough to realize that if the business fails, it need not be seen as a personal failure.
This sense of objectivity must go the other way too. If the business succeeds, it is because it was a sound idea executed well; it was not “all about you.”
“Entrepreneurship is like a computer game in which you have to master every level before achieving success,” says Vivek Wadhwa, who teaches about entrepreneurship at Stanford and Duke Universities. “Startups repeatedly stumble and have to go back to the drawing board. The best way to skip some levels and to increase the odds of survival is to learn from others who have already played the game.
- You are competitive. Sometimes people see competiveness as a negative attribute, but it is a positive and essential characteristic of an entrepreneur. A successful entrepreneur is someone who doesn’t like to take no for an answer, and will keep trying long after something seems unattainable.
You are always thinking what can I offer my customers that my competitor doesn’t offer? You go beyond the original concept to improving the nuts and bolts of your business, such as better customer service, longer business hours, more flexible payment options, lowest price or a better return and exchange policy.
Competition leads to innovation. Some of our best companies have had giant competitors at one time or another. Think Nike and Reebok, Coke and Pepsi, Ford and GM or Visa and MasterCard.
“The truth is that entrepreneurship is more like a roller coaster ride than a cruise,” Wadhwa contends. The issue of whether successful entrepreneurs are made or born is unclear. What is clear is that most entrepreneurs have had an idea or two kicking around their heads for a long time.
Think about these characteristics and how you fit into the definition of being an entrepreneur. Then think about what you are willing to risk. Your savings? Your lifestyle? Your already established career? If you are an entrepreneur, the risk will be worth it.