Entrepreneurs are the lifeblood of nations, through their desire to make a profit they keep economies from collapsing. It is also their dynamism that fuels innovation, which drives the economy forward. While there are many definitions of entrepreneurship, it usually includes the following:
Creating and managing a business that is new or different. It is this uniqueness that separates entrepreneurs from other types of business owners, such as those who own and manage established businesses, or shareholders in a corporation who assume the financial risk but do not manage the business day to day.
Successful entrepreneurial endeavors often start as small businesses. These can be anything from a home-based craft business to a franchise restaurant. In order to survive, the business must be able to generate revenues that are higher than the costs associated with producing the product or service. This is a major challenge that entrepreneurs face as they work to get their businesses up and running, because if revenues do not increase and the expenses continue to rise, the business will eventually fail.
The road to entrepreneurial success is a treacherous one, with many sleepless nights and plans that never come to fruition. It is essential for entrepreneurs to have a strong passion and drive for the business they are trying to build, and the ability to persist through all obstacles. Many times, this will involve sacrificing personal income or even using personal assets to keep the business afloat. This can put a strain on relationships with significant loved ones who must adjust to lower living standards or even worry about the entrepreneur risking family assets in the pursuit of a dream.
In addition to being a passionate and driven individual, an entrepreneur must be able to anticipate changes that may affect the business. This can include technological advances that change consumer habits, changes in the market that alter the demand for a specific product or service, or any other factor that could impact the business. The ability to adapt and respond quickly is a key attribute that all successful entrepreneurs have.
Many entrepreneurs begin their businesses on a shoestring budget and rely on the flexibility of their lifestyles to help them navigate through these challenges. They often begin with a small amount of money and then seek out ways to reduce their operating costs through methods such as sweat equity, minimizing inventory, factoring receivables, or borrowing funds from friends and family. This is a strategy known as bootstrapping and is a common practice for most startup businesses. Entrepreneurs are also savvy in obtaining financing from outside sources, especially angel investors and venture capitalists. These financiers are interested in early-stage companies with innovative ideas that offer a high potential for growth. The entrepreneur’s ability to persuade the investor to believe in their vision and idea is critical in securing funding. These are the individuals that can turn dreams into reality and create jobs in the process. Entrepreneurs can be found in all sectors of the economy, including manufacturing, healthcare, technology, and retail.