Definition and Characteristics of an Entrepreneur
Interestingly enough, there is debate over the definition of an entrepreneur. Some experts have a wide definition to include anyone who works for himself. Others have a narrower viewpoint, suggesting that an entrepreneur doesn’t just work independently but also, their business involves innovation and leadership.
What they do agree on is that an entrepreneur takes an idea and develops a new business around it. They manage the business and assume the risk for its success.
Types of Entrepreneurs
One of the reasons there is disagreement over the definition of an entrepreneur is that it includes so many different types of self-employed businesses. Some common types of entrepreneurship include:
Small business: This includes mom and pop shops and local business owners. Small businesses can include partnerships, sole proprietors, and LLCs. Generally, it’s any business that has less than 500 employees, according to the Small Business Administration.
Home-Based Business: A home-based business could fit under the category of small business, but the primary factor, in this case, is that it’s run from home, as opposed to an office or other location. But just because a business is run from home, doesn’t mean it can’t compete with larger businesses. In fact, many large corporations were started at home, including Apple and Disney.
Online Business: Internet-based business can be small, home-based, or even large corporations. The key difference here is that the business is operated primarily online. This includes companies like Amazon or other e-commerce businesses, bloggers, eBay and Etsy owners, and any other business that does the majority of its business online.
Inventors: For an inventor to be considered an entrepreneur, they need to go beyond the idea stage to build the product and get it to market. A good example of inventors that transition to entrepreneurs is the contestants that appear on the TV show, Shark Tank.
Serial Entrepreneur: Many entrepreneurs get the most joy out of starting and building a business, but not in its continued management, so they sell it to launch a new idea. They are still considered entrepreneurs because they operate and assume risk in the business for the time they own it. Other times, serial entrepreneurs juggle several businesses at once, earning multiple streams of income.
Lifestyle Entrepreneur: Although the idea of a lifestyle entrepreneur isn’t new, it’s gained in popularity with the rise of technology, the Internet, and a global economy. A lifestyle entrepreneur is one that builds a business that incorporates their interests and passions and sustains their life goals. Many in this category are referred to as digital nomads because they often have online businesses that allow them to travel. However, travel isn’t necessary to be a lifestyle entrepreneur. The key factor in a lifestyle entrepreneur is that they do what they love, and/or the business supports their chosen lifestyle.
Characteristics of a Successful Entrepreneur
Some business experts suggest that the entrepreneurial drive is innate, a trait acquired at birth, while others believe that anyone can become an entrepreneur. Whether a person is born to it or develops it, there are characteristics and traits required for successful entrepreneurship.
Passion – Talk to successful entrepreneurs and you’ll nearly always hear the word passion when they describe what they do. Following your passion is one of the best predictors of success.
Independent thinking – Entrepreneurs often think outside the box and aren’t swayed by others who might question their ideas.
Optimism – It’s difficult to succeed at anything if you don’t believe in a good outcome. Entrepreneurs are dreamers and believe their ideas are possible, even when they seem unattainable.
Self-confidence – This is not to say entrepreneurs never have self-doubt, but they’re able to overcome it, and believe they can achieve their goal.
Resourceful and problem-solvers – Lack of assets, knowledge, and resources are common, but entrepreneurs are able to get what they need or figure out how to use what they’ve got in order to reach their business goals. They never let problems and challenges get in the way, and instead, find ways to achieve success despite hardships.
Tenacity and ability to overcome hardship – Entrepreneurs don’t quit at the first, second or even hundredth obstacle. For them, failure is not an option, so they continue to work toward success, even when things go wrong.
Vision – Some of the more stringent definitions of entrepreneurship include vision as a necessary element. It helps to know your end goal when you start. Further, vision is the fuel that propels you forward toward your goal.
Focus – It’s easy in this fast-paced, constant info-in-your-face world to get distracted. This is especially true for business start-ups that often get side-tracked by the shiny object syndrome (i.e. products and services that promise fast results), or bogged down in unimportant busywork. Successful entrepreneurs are focused on what will bring results.
Action-oriented – Entrepreneurs don’t expect something from anything, and they don’t wait for things to happen. They are doers. They overcome challenges and avoid procrastination.
How to Become an Entrepreneur
One of the great things about becoming an entrepreneur is that anyone can do it. Steve Jobs, Bill Gates, and Mark Zuckerberg were in college when they started Apple, Microsoft, and Facebook respectively. Ree Drummond, The Pioneer Woman, started a blog for fun, which has since turned into a business, a TV show, and books.
But you don’t have to be huge or famous to be a successful entrepreneur. The world is littered with entrepreneurs you never heard of who had an idea and turned it into a thriving, profitable business. There are moms who invented a gadget or started a lifestyle blog. Teenagers who star in their own YouTube shows. Retired folks who have turned a lifetime of experience into coaching or consulting business. Becoming an entrepreneur isn’t hard, but it is work and requires many steps including:
- Development of the characteristics mentioned above
- A great idea that people will pay money for
- A plan of success
- Consistent execution of the plan
While it takes research, planning, and work, you can start a home business in a month, maybe even faster depending on the business.