A Useful Guide to Entrepreneurship

June 9, 2020
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Entrepreneurship has evolved. Unlike previously where you had to invent something or have adequate capital to buy an invention, today’s entrepreneurs have myriad options.

Do you know that today there are approximately 582m entrepreneurs across the globe? Statistics also show that middle-aged men, between 40 and 60 years, start the most successful businesses.

The barriers to enter entrepreneurship are even lower, thanks to technology. The entrepreneurship failure rate is also dropping because amazingly, over the recent past, only 22.5% of small businesses have been closing down after a year.

The start up environment for entrepreneurs is, therefore, so promising, that many people are choosing this path over traditional employment.

With such good news in place, let’s have a look at what entrepreneurship is, and what you can do to become the next successful entrepreneur.

Entrepreneurial talk
Entrepreneurial talk – Image Credit: Unsplash.com

The Concept of entrepreneurship

Entrepreneurship is the activity of creating a business and designing systems and strategies to develop and grow it until it becomes profitable.

Howard Stevenson, an expert in the field of entrepreneurship and a Harvard Business School professor, describes the phrase as the pursuit of opportunity beyond one’s controlled resources. Entrepreneurs lack adequate resources, yet face multiple risks, which they must manage effectively.

While this is one of the best definitions of entrepreneurship, I still find it inadequate in describing the concept. Modern times have redefined entrepreneurship into the ability to bring social change. I define it as the ability to identify problems and innovate ideas and products to solve them.

The joy of taking your ideas and converting them into tangible value is motivating enough to make you start a business. Entrepreneurs are their own bosses – they run their schedules and have nothing to hold them back from deriving change for themselves and the community.

Types of entrepreneurship

When you read through many articles, you will learn that there are many kinds of entrepreneurship.

However, if you are wondering how to be successful in business, you should study these 4 types:

What are the 4 types of entrepreneurship?

Types of entrepreneurship
Types of entrepreneurship – Image Credit: Unsplash.com
  • Small businesses

Despite the many definitions of what entrepreneurship is, small businesses have created a mark for themselves. They form the majority of all companies. They also are the leading private employers.

Sole proprietorships fit this category, with the owner running the everyday operations of the business.

Examples of small business entrepreneurship include consultants, eCommerce businesses with storefronts, electricians, hairdressers, and plumbers. Since most of the employees in these firms are locals and relatives, their goal is not always to make profits, but mainly, to provide for the family.

  • Scalable startups

Scalable startups aim to grow exponentially through the reinvestment of profits made. Their model is to take risks, to acquire external capital, and to create demand for the company’s products.

Therefore, these entrepreneurs draft convincing business plans to gain the trust of funders. They also raise money by charging client fees or selling quality products. However, to run a successful, scalable startup, you should be ready to compete and replace other established players in the market.

These entities hire the best, brightest minds to propel the company’s vision of changing the world. Despite the heavy capital investment required, successful scalable startups can secure venture capitalists who expect to reap hefty returns on investments.

  • Large companies

How does a large company differ from other types of entrepreneurship? The model of large companies is to use already existing ideas and opportunities to create and sell new products and services. They also thrive by acquiring innovative companies.

Many large businesses develop new designs or products to keep up with competition and new technologies. Their driving force is their environment – they adapt as the environment expands.

  • Social entrepreneurship businesses

Social entrepreneurs focus on developing new products and ideas to make the world a better place. Though their model can be profit-making, they aim to solve social dilemmas through sustainable change.

Also Read: How to Become a Social Entrepreneur

The kind of business to start

A mug labeled 'Hustle' depicting the entrepreneurial spirit
The entrepreneurial spirit – Image Credit: Unsplash.com

You don’t have to start a business from scratch. Instead, you can modify an existing one.

Whichever approach you choose, these ideas will come in handy if you’re looking to build a business:

  • ECommerce store owner
  • Teaching – you can write a book or create and sell online courses
  • Freelancer – you can write blogs or sell freelance accounting or designer services
  • App creator – developing apps for social media 
  • Consultancy services – such as wedding planning and coaching
  • Translator 
  • Apartment manager through Airbnb
  • Marketer for affiliate programs on Amazon, Clickbank, etc.

Characteristics of entrepreneurs

The most successful entrepreneurs don’t see the risks, but rather, the rewards. Despite their struggles, they maintain a positive attitude and personality. They hold these 6 essential characteristics:

  1. Creative –  what’s entrepreneurship without the desire to change the status quo? Entrepreneurs go out of their way to look for ideas, opportunities, and gaps for which they can create solutions.
  2. Passionate – they have a drive and dedication towards their goal. They love what they do; they are proactive and confident in themselves.
  3. Motivated – successful entrepreneurs are persistent, hard-working, and self-motivated. They manage their time and expenditures efficiently.
  4. Optimistic – they are constant dreamers who understand what entrepreneurship is. They see the bright side of life; they look for ways to make life better and are always focusing on moving forward. 
  5. Persuasive – they know how to sell their ideas to clients. They know how to get people to listen to them and convince them to be followers, supporters, and customers.
  6. Resourceful – entrepreneurship comes with challenges, but successful players face obstacles head-on, and develop solutions effectively. They make the most out of their time, money, and effort.

What entrepreneurship skill sets are needed to improve productivity in a startup?

Entrepreneurship skill sets
Image Credit: Unsplash.com

Productivity entails making processes cheaper, but better. Productive teams do more with the same level of resources. They adopt productivity-boosting techniques to ensure product and service quality.

As a CEO or founder of a business, these skill sets are what you need to improve the productivity of your startup.

  • Prioritize teamwork over individual efforts – nurture creative, motivated, and well-functioning teams.
  • Make the best use of the most valuable players (MVPs) – leverage on the outstanding talent of internally-motivated employees who support your agenda.
  • Slash unnecessary complexity – keep your organization lean and reduce bureaucracies as the organization grows. Encourage teams to be clear when communicating and to do away with unnecessary meetings. Eliminate outdated hierarchies and cumbersome approval systems.
  • Discard the “more is better” way of thinking – adopt a productivity culture by rewarding employees with more free time or vacations. 

Research shows that an average person cannot think critically for more than four hours at a time. Experiment with new ideas to understand the best ways to make your employees more productive and creative. Eventually, they will deliver results and innovations strong enough to propel your startup to the next level.

The importance of entrepreneurship

A lady entrepreneur holding a mug labeled' 'Like a boss'
A lady entrepreneur – Image Credit: Unsplash.com

A Cox Business report suggests that one of the key reasons people choose entrepreneurship over employment are:

  • Control – they want to be their own boss
  • Ambition – they want to develop their ideas into reality
  • Financial – entrepreneurship is an opportunity to earn more money

It is also important to understand what entrepreneurship is, from the perspective of both the entrepreneur and society. Why are entrepreneurs important?

  • Job creation – they employ themselves and others by creating profitable businesses
  • Innovation – they develop innovative products and services to solve societal problems, create efficiencies, and improve people’s living standards. 
  • Social change – they fund social services through corporate taxes, charities, and nonprofits.
  • Income generation – their new ideas and improved products create room for new markets, hence, wealth creation.
  • Poverty reduction – globalization has increased market reach and connections, enabling people to work and earn a living remotely.

What are the top 5 websites on learning entrepreneurship?

We understand that learning new entrepreneurial skills can be expensive, yet, you may be saving cash to fund your startup. Don’t worry because there are still free, high-quality e-learning resources.

If you have the desire to learn what entrepreneurship is, then check out these free online sites:

  • CodeAcademy – here you will learn programming languages.
  • HubSpot Academy – for courses on inbound marketing, lead nurturing, and website optimization.
  • LearnVest – learn how to budget and develop better money habits.
  • Moz – learn link building, search engine optimization (SEO), and social media marketing.
  • edX – enrol for courses on entrepreneurship, financial analysis and decision-making, etc.

What entrepreneurship articles should a startup CEO or founder read?

A man reading an article on entrepreneurship
An article on entrepreneurship – Image Credit: Unsplash.com

As an entrepreneur, you will cross paths with many sources of information and success stories, which can be overwhelming.

This list compiles the top 5 articles for you whether you want to learn how to run a small business, a startup, a large company, or a social entrepreneur organization.

  1. Inc. Magazine Guides – contains a list of short, educational pieces on business, finance, leadership, and growth.
  2. Mashable – a go-to, independent resource on digital culture, technology, and social media.
  3. A Smart Bear – for insights from Jason Cohen, a mentor for entrepreneurs, including those running startups.
  4. Social Media Examiner – for digital newcomers to learn current and comprehensive social media tools to use to derive the best results out of the online space. 
  5. Under30 CEO – for tools, apps, and strategic advice targeting early-stage businesses and young entrepreneurs.

Takeaways

To create sustainable solutions to existing problems requires that you understand what entrepreneurship is.

Entrepreneurs are risk-takers who thrive through creativity, passion, optimism, and resourcefulness. As opposed to efficiency, as a founder of today’s startup, you should focus on boosting employee productivity.

There are a variety of free online sites where you can enrol and build this and other entrepreneurial skills.

Intellini Business Consultants offers ideas on how to cultivate and develop your entrepreneurial skills. We are more than willing to work with you to see you create, nurture, and grow your business. Feel free to contact us.

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