Ever meet someone and you don’t know what they do for a living, but then they say they are an “entrepreneur” and you still don’t know what they do? Yeah, we have all been there.
But it’s not our fault nor their fault that no one understands what is an entrepreneur. In fact, the word seems to have changed its meaning constantly in the last few decades. So what is an entrepreneur actually? What do they do? Why are there so many of them these days?
Well, wonder no more. This article will provide you with all you need to know about what is an entrepreneur.
1. Entrepreneur definition
Alright, let’s start off with some good old definitions and dictionaries. What is an entrepreneur? Entrepreneur comes from a French word, entreprendre, meaning “to undertake”. However, economists have never had a consistent definition for “entrepreneur”, despite the fact that the term had been existing for centuries.
According to my all-time favorite Oxford Dictionary, the definition for what is an entrepreneur is “a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so”.
Long story short, an entrepreneur is an ambitious businessman, with risky and daring startup ideas. No wonder everyone wants to call themselves an “entrepreneur”.
The process of creating a startup/business to turn a profit is called “entrepreneurship”. Mouthful, I know. That was the original definition anyway. But nowadays, the definition is shifting and includes the “act of solving large-scale problems and transforming the world” (while also maybe making money from it). So I guess you can think of entrepreneurs as capitalistic heroes, probably.
2. What is an entrepreneur?
So as stated above, an entrepreneur definition is an individual who forms a business/startup despite facing great risks in order to gain greater profits. But nowadays, entrepreneur is a really vague and wide term - so it’s hard to understand what is an entrepreneur exactly. And that’s a good thing - because people’s definitions of risk and ambition might not be the same.
So as long as you have a mindset that is focused on creating a profitable business, you are an entrepreneur. But being an entrepreneur is not simply decided by having ideas. Entrepreneurs take the ideas and try to make them their reality - because entrepreneurship is about the execution, the undertaking. And yes, entrepreneur ideas can either be small and simple, or they can change the world. Elon Musk, Bill Gates, Mark Zuckerberg - they were all entrepreneurs. And they shaped the world in an unimaginable way.
3. How entrepreneurship works
So we have gone through all the definitions of what is an entrepreneur, but I bet most of you still understand nothing more about this word. So let me try to explain to you how entrepreneurship works to the best of my knowledge, shall we?
Entrepreneurship is classified by economists as one of the four most vital resources for production and the capitalist market, the other three being land/natural resources, labor, and capital. Entrepreneurs and entrepreneurship can be considered the backbone of capitalism and the economy in general.
They encourage the growth of the economy by taking risks and venture down ambitious paths. The chances of success for most entrepreneurs are not very promising, but if they succeed, an entrepreneur can push forward and even revolutionize any industry that they choose, and change the world in their own way. Entrepreneurship can create jobs, raise incomes, open up new markets and sometimes revive dying ones, stimulate the economy and make it healthy and balanced, and most importantly, it can push forth a lot of social changes.
Entrepreneur salary is also an interesting concept. Technically, being an entrepreneur means that you are your own boss, and you often only have income, not salary. But also, technically, there is no one that can stop you from giving yourself a fixed monthly/yearly entrepreneur salary. But hey, as long as you are making money, who cares if you call it your income or your “entrepreneur salary”, right? Typically in the US, an entrepreneur makes about $43.2k a year on average, ranging from $29.1k to $134k per year. I don’t know about you, but if I’m making more than $50k/year, I’d be calling it my pocket change, and no one can stop me.
4. Characteristics of an entrepreneur
Do you notice how people with certain characteristics often fit into similar roles? The same thing can be applied to entrepreneurs. While every entrepreneur is different and unique - because they have to be so in order to become an entrepreneur - there are certain characteristics that can be seen from almost all successful entrepreneurs. What is an entrepreneur's defining trait?
- Passionate: All entrepreneurs are passionate about their cause - you have to be passionate because the risks are high. You have to be passionate enough to be ready to fail, to try again. You have to have passions to delve deep into a problem and find a unique solution for it. Passion is what keeps you going, and if you start with passion, you will be more likely to succeed.
- Independent: When you are a trailblazer - which is the case for most successful entrepreneurs - you have to have your own way of thinking that is independent and separated from everyone else’s. Of course, this doesn’t mean straight up ignoring any criticism whether they are constructive or not, but rather that you yourself can realize what constructive criticism is and shouldn’t be swayed by other people’s doubt.
- Confidence: In order to be independent and separated from people’s opinions, you also have to be confident in yourself. You have to know what your strengths and weaknesses are, your ability, your limit. It’s not that entrepreneurs never have self-doubts, but they often know how to overcome it and how to utilize themselves.
- Resourceful: Of course you need to be resourceful. You cannot always have enough money or resources, but you need to know how to manage without having enough on your hand. Knowing your revenues and how to direct them is important, and knowing how to come up with a creative way to deal with challenges is the key to your success.
- Resilient: Never give up. One cannot simply succeed in a day or two. There have to be some failures here or there, some downfalls, some setbacks. An entrepreneur knows how to learn from past mistakes and failure, and how to stand up where you fall down. Starting your own business from scratch is difficult, and only the headstrong and assertive can survive.
- Focus: There are going to be a lot of noises and doubts when it comes to starting up a business. Sidetracks and distractions are everywhere and they can be very tempting. If you are not focused and keep your eyes on your goal at all times, it’s easy to lose track of where you are heading. Getting bogged down by unimportant works or “shiny object syndrome” (products that promise fast results) is the slippery slope straight to failure.
- Vision: The difference between an entrepreneur and a regular businessman is that an entrepreneur has a clear vision of where they are going - and how they will get to where they need to be. Vision is needed to plan ahead and be prepared for any bad situations that can come your way.
5. How to become an entrepreneur
The “self-made man” has been such a dream for decades, and everyone wants to learn what is an entrepreneur to make a fortune. But being an entrepreneur is not that easy. How to become an entrepreneur is an easy question. The hard question is, how to become a successful entrepreneur.
As much as I hate saying this, but we live in a capitalist world. This means you need money to do pretty much anything. To ensure a safe and stable start for your business, you need a decent amount of capital and a backup fund for everything that can go wrong. You need to ensure your budget is enough to last until you’ve gained a stable income.
Develop problem-solving skills
As the business develops and grows, new problems will arise. There will be problems you didn’t even know to exist. That’s why it’s important to develop your problem-solving skills, and it’s important to identify problems when they arise. You need to be creative and think outside of the box to find the solutions to some impossible challenges.
Relationships are important. I have been single long enough to know that. You cannot grow your business if you have no network, but I think we all know it’s common sense by now. Building a business is hard, and most of the time you can’t do it alone. Therefore networking is critical for any business - meeting people, gathering contacts, building relationships. Trust me, you’ll have to call in a favor sooner or later.
Know your resources
If you want to start out, you can always rely on help and resources. Research online. Reach out to famous entrepreneurs. Ask for help. Read entrepreneur magazines and documents and interviews (legit, there’s a magazine called Entrepreneur Magazine. You should check that out).
Actually, we do have something for you. If you are an entrepreneur starting with an online business, we at Magenest offer many Payment Gateways that incorporate many online transaction platforms such as Opayo or Stripe for you to check out. We also have ERP and Accounting Integration Extensions, which help you manage your business with ease.
A wise man once said, “If I have seen further than others, it is by standing upon the shoulders of giants”. Yes, it’s one of the entrepreneur quotes, and it is said by none other than Sir Isaac Newton, who is considered an entrepreneur because of his innovative and world-changing discoveries.
6. Types of entrepreneurs and entrepreneurship
Everyone is different and therefore, you cannot expect people to have similar traits. Not everyone is going to have the same goals, and not everyone has a similar way of achieving what they want. That is why if you want to know what is an entrepreneur, you should know there are different types of entrepreneurship and different types of entrepreneurs.
Types of entrepreneurs
These are the headstrong entrepreneurs that seek to create a scalable business that will get really big in a rather short amount of time. They often reach five million dollars in revenues in the first two years and hope to reach a hundred million in the next four. Extremely assertive, hardworking, and relentless, builders are like worker bees of entrepreneurs.
If you are an innovator, it means that you have an incredible mind and can come up with products/services that no one had ever thought of before. Though you are not great with building up businesses, your entrepreneur ideas are brilliant enough to be something of their own. Money is usually not the goal for innovators, but change and impacts are. Innovators are Mark Zuckerberg, Steve Jobs, Thomas Edison - the ones whose entrepreneurship changed our lives forever.
A specialist is someone who is not necessarily as brilliant as innovators or as determined as builders, but they are the ones that excel in their fields. They often have a specific set of skills that are limited to them, obtained by years of training and education and apprentice. Their business cannot grow as fast as that of the builders, nor will they be life-changing as innovators’ businesses, but their business will serve a very specific community.
Opportunists do not necessarily have certain skills or characteristics, but they are really good at observing and analyzing the market. And thus, they know exactly the right time to start their business, utilize the slim opportunities whenever they appear. Opportunists are in this for the money, and when the hype has worn off, they will be the first to go.
Serial entrepreneurs, quite like the name, are the ones with a series of businesses. They are full of ideas and always eager to jump on their newest inspirations. Serial entrepreneurs will come up with entrepreneur ideas, build up a business, and when the business is up and running, they will sell it and pivot off to their next idea.
Types of entrepreneurship
All entrepreneurship started up as small businesses, but the idea of small business entrepreneurship is that it will not be turned into a large company and/or open many chains. Like a local bakery or a family restaurant - those are all examples of small business entrepreneurship.
Unlike small business entrepreneurship, scalable startups aim to build and extend their business. These businesses will scale up and get larger with time and will require a large amount of capital with a lot of investors in order to reach different markets
Large companies entrepreneurship is not built by individuals from scratch, but rather a new division and/or business created within a company. Imagine Amazon. They started out as a book-selling company - and now their business is the largest online retailer in the world.
Social entrepreneurship is often created by social entrepreneurs, whose goal is less about the money and business, but more about the change and innovation they can bring to the world. Social entrepreneurs aim to change the world and bring more benefits to society.
“Entrepreneur” is a hard word to read and a hard thing to be. Creating a successful business requires a lot of dedication, hard work, and determination, which is not for everyone. But if you are passionate, believe in your cause, and are confident enough about yourself, entrepreneurship can be for you and you can succeed.