What is Entrepreneurship and Entrepreneurialism?
Entrepreneurship is a French word meaning “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods.“ This may result an entirely new enterprise or may be part of revitalizing a mature organization in response to a perceived opportunity or possible gap in the market. The innovation piece of the process then means that there is always some level of creativity or new thinking, and not just a “me-too” approach or one that offers very little that is different.
Naturally, entrepreneurial activities can be substantially different depending on the type of organization being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Small entrepreneurial activities may involve establishing “trade” businesses (such as starting a plumbing, carpentry, personal coaching or hairdressing business, for example). Larger or more significant entrepreneurial activities could involve a new manufacturing process or a totally new technology offering, for example.
Smaller entrepreneurial businesses may need only limited financing to get them off the ground or need only relatively minor loans to get them up and running. However, many “high value” entrepreneurial ventures seek venture capital or “angel funding” (seed money) in order to raise capital to build the business or popularize the approach.
What traits do entrepreneurs have?
A definition of an “entrepreneur” (which also stresses the need for innovation) is as follows:
“An innovator who establishes a new business offering, new or existing products or services for the reward of profit.” Entrepreneurs generally have strong beliefs about market opportunities and willingly accept a high level of personal, professional and financial risk. An entrepreneur possesses a variety of different characteristics that provide a skill set for achieving success and a high level of reward.
According to many research studies of successful entrepreneurs, there are a number of traits that are common to these individuals. A few of the most common traits which emerge are:
- Independence—the desire to be his or her own boss.
- Self Discipline—the way these people trained or equipped themselves to meet certain goals.
- Persistence—never showing discouragement, always thinking of new ways to approach a problem and acting on ideas.
- Creativity —the ability to come up with clever or unusual but workable solutions.
- Hard Work—being capable of doing the work needed consistently and seeming to enjoy it.
- Motivation—the mental and physical drive to succeed, to accomplish chosen tasks on his or her own terms.
- Confidence—having a firm belief in his or her own capabilities and his or her chances of success.
- Willingness to Take Risks—the readiness to sacrifice his or her own financial security, if need be, in order to accomplish his or her goals (especially at the outset).
- Communication Skills—the ability to express him or herself well and to understand others so that ideas can be shared.
Who can be an entrepreneur?
Becoming an entrepreneur is theoretically an option for everyone but many are reluctant to make this choice. Let’s therefore explore the facts and the myths that exist about entrepreneurship.
Research (conducted by the Warwick Business School in the UK) suggests that the average entrepreneur or founder of a new enterprise is married (over 75% are), has children, and worked for many years at a larger company or for someone else before branching out and starting his or her own business.
Although it varies according to the type of entrepreneurial business, across all categories around 75% of entrepreneurs are men and 25% are women. However, those women who do set up and run new enterprises have equivalent levels of success when compared to men.
Here are a few other statistics to consider:
- 65% of existing entrepreneurs have at least one child when they launch their first business.
- Over 70% of entrepreneurs come from middle class backgrounds.
- 40% of entrepreneurs are first-born children.
- Over 60% of new entrepreneurs were the first ones in their family to launch a business.
- Less than half of the parents of entrepreneurs had a college or advanced degree.
- More than three-quarters of entrepreneurs worked for someone else for at least six years before launching their business.
- 20% of successful entrepreneurs had engaged in some kind of entrepreneurial activity in their youth or teenage years
- 70% of entrepreneurs use personal savings as a main source of funding for their first business. Even in subsequent start-ups, more than half of the entrepreneurs rely on their personal savings.
- Friends and family are a primary source of funding for around 10% of entrepreneurs.
- Bank loans are a primary source of funding for around 15% of entrepreneurs.
- Venture capital and private/angel investments clearly play a role in start-ups but only for a few entrepreneurs. Only 10% receive venture capital, and 10% receive angel financing.
An entrepreneurial life is not for everyone but if you do want to consider it (inside an existing business or when you are a starting a new one) you will need to have the temperament for the task and be prepared to perform many roles (or wear many hats). As the statistics above indicate, there are a number of common characteristics of entrepreneurs but none of these needs to be an inhibitor if an individual is truly committed to the cause and has a good idea that they want to personally take to market.