What is Entrepreneurship? How to Get Started as an Entrepreneur

An entrepreneur can identify and exploit a business opportunity to create employment while making profits. Entrepreneurship goes beyond starting or improving a business to chasing a passion for innovation and the desire to positively impact society.

Entrepreneurs are unique in their ability to spot gaps in the market and then develop creative ways to fix them, benefiting not only themselves but others. They take calculated risks and are willing to invest whatever it takes, time, resources, and money, to make their vision a reality.

So, what do you need to become an entrepreneur and how do you get started? How does entrepreneurship impact society, and why is it so important?

Since you’re reading this guide, you must be interested in understanding entrepreneurship and finding answers to all related questions. Our comprehensive guide will introduce you to entrepreneurship and provide information on how to get started as an entrepreneur.

Let’s explore more to find out what entrepreneurship is and how to get started as an entrepreneur.

What is Entrepreneurship?

Entrepreneurship is the act of starting or improving a business to make profits. It’s a dynamic field that drives economic growth, promotes innovation, and empowers individuals to transform ideas into successful companies.

However, in this modern age, the concept of entrepreneurship is extensive. It has expanded to include the world by transforming ideas and solving large-scale problems. With the advent of the internet, entrepreneurship is now powerful enough to create social change. The internet influences the creation of services or products that positively impact individuals while addressing social problems with innovative ideas.

Entrepreneurship also allows self-driven individuals to forge career paths and earn income. These individuals are self-employed and develop goods or services to address a specific societal need. Although making a living is risky, entrepreneurship can result in surprising rewards and long-term success.

Who is an Entrepreneur?

An entrepreneur is an individual who ventures into business to make profits. Entrepreneurs sprout an idea to provide a quality service or product, package it attractively, and sell it to consumers. They can also improve an existing idea or service, make it a better alternative in the market, and offer it to customers.

Some entrepreneurs accidentally find themselves in the trade, turning a side hustle into a full-time gig. For instance, an individual who takes photos on the side can transition the gig to a full-fledged photography business. Others dive into entrepreneurs as a primary source of income, selling goods online or owning a retail shop.

Regardless of how you got into entrepreneurship, you’re an important part of society and the economy. Without entrepreneurs, there wouldn’t be many innovations in society today.

Steps to Becoming an Entrepreneurship

Becoming an entrepreneur is a tall order that requires hard work, dedication, and the willingness to embrace successes and failures. Here are some steps to help aspiring entrepreneurs increase their chances of success:

1. Develop a Business Idea

Identify a problem in society that needs fixing. Some people are serial entrepreneurs with a reputation of being jacks-of-all-trades. They jump from industry to industry, trying to get everything done. However, focusing on a specific area of interest and specialising in it can lead to success.

You can venture into a brick-and-mortar business, business-to-business (B2B) or Business-to-customer (B2C). Pursue a degree or program majoring in entrepreneurial skills to build a knowledge base in the specific industry you want to enter. Your dreams will be close to reality.

2. Determine a Legal Structure for Your Business

As you begin your entrepreneurship journey, you must make your business legal by choosing a structure favouring your trade. Your business structure can change as you grow to comply with state laws and regulations. Here are the four most common types of business structures:

• Sole proprietorship—You own the business, and in the eyes of the law, you and the business are one entity. You’re liable for all debts. On the bright side, you manage the profits you make alone.
• Partnership—The business is co-owned by two or more people. The parties contribute to all business aspects and share losses and profits.
• Limited Liability Company (LLC)—An LLC is a legal entity, meaning it’s independent before the law. The owners of an LLC have no relation to the business’ assets, debts, or finances. The structure is complicated to set up, but it also comes with multiple advantages, including taxes and protection for the owners.
• Corporation - A corporation is a legal entity, meaning it’s separate from its owners and has rights and responsibilities akin to an individual's. It can hire employees, sue, be sued, and pay taxes.

3. Choose and Register Your Business Name

A business name is the identity your business will be known as. You may have fun choosing a fancy name, but that won’t cut it. Rules and regulations are chosen for a business name, and the legal process involves a lot of paperwork and stringent rules you must adhere to. You can use a name search tool to find what names are available and then register it.

4. Get Permits and Licences

Depending on the jurisdiction where your business will be located in the UK, there are rules on licensing and permits you must comply with. A registered business must operate within the law, so you must get valid documents to trade in a specific jurisdiction.

5. Mission and Vision

Your business's mission and vision must clearly state your business activities, how you plan to better the world, and what you stand for. Your mission and vision guide you in creating a culture of operation and making the right decisions for your business. A company with a strong identity has it easy when creating content that resonates with its audience.

• Mission - The purpose of an organisation
• Vision - Long-term goal that will impact the community or world

6. Write a Business Plan

A business plan is an important document for any business that outlines the problem they intend to solve, how to make profits, and how the business will function. It’s a blueprint for success every business needs before seeking funding. Ensure the business plan lays out the business idea, marketing strategies, target market, operational plan, and financial projections.

7. Secure Funding

Your needs will determine your financing options. You can start a business with savings or obtain funding from lending institutions like banks.

For instance, personal savings can suffice if you’re opening a retail business. However, you must get investors or a loan for a big company like a restaurant. A new business may take time to get off the ground and realise profits, so you need funds to keep it afloat until then.

8. Launch and Market Your Business

After completing the above steps, it’s time to launch your business. Network with individuals in the same field you’re operating, hire employees (where necessary) and build an online presence to market your business.

A new business might not make profits from the onset, so you need to be patient and focused to satisfy customers and build your business. Be willing to learn from mistakes by accepting them and improving how you run things. If you keep the business functioning until you realise gradual growth and success, congratulations, you’re now an entrepreneur.

Types of Entrepreneurs

Entrepreneurship encompasses many business activities, from startups to creating innovative products and services. These are the common types of entrepreneurs:

1. Small Business Entrepreneurs start and run small businesses like local retail shops or service providers.
2. Social Entrepreneurs—In this category, they use business strategies to solve social problems and create businesses that socially impact society. All their business activities are geared towards making the world better. Social entrepreneurs can be nonprofit organisations, profit enterprises, or both.
3. Serial Entrepreneurs - These individuals launch multiple businesses relying on their careers, experience, and skills to succeed.
4. Large-company entrepreneurs are individuals who work within large companies but drive innovation and growth by introducing new products or business ventures.

The Pros and Cons of Entrepreneurship

Entrepreneurship is highly beneficial; one can pursue one's passions, gain financial independence, and positively impact society. However, before becoming an entrepreneur, you should know that starting and running a business also comes with challenges and risks. Let’s discuss the pros and cons of entrepreneurship:

Pros:

1. Entrepreneurs have control over every decision they make, the freedom to set their schedules, and the choice of projects they work on.
2. Entrepreneurship brings fulfilment and offers an opportunity to pursue one's passions, positively impact society, and make a profit.
3. Successful entrepreneurs achieve financial independence through the businesses they run.
4. Entrepreneurship allows one to pursue one's passions, giving one an opportunity for personal growth and development. Individuals also get the chance to learn new skills and take on new responsibilities while operating their business.

Cons:

1. Any business you begin involves financial risks, market risks and legal issues.
2. Entrepreneurship is filled with unpredictable uncertainties. There is no guarantee of success or stability, making it a considerable challenge.
3. Starting and running a business requires commitment in time and finances. As your business kicks off, you might have to work long hours and sacrifice your life until it is up and running.
4. Entrepreneurship can cause financial instability before the business starts making profits. Hence, you need some buffer cash to help you keep running the business until it realises profits.

Reasons for Becoming an Entrepreneur

If you’re ready to venture into business and leave behind your 9 - 5 job, entrepreneurship may be the right path. Even better, if you have an amazing idea, you can turn it into a viable business and gain financial independence. There are many reasons why entrepreneurship is worth a shot.

1. Become your boss
2. Create a new product or service that society needs.
3. Set your schedule and work from anywhere.

Qualities of a Good Entrepreneur

Apart from specific skills, certain qualities set successful entrepreneurs apart:

1. Self-motivation and Discipline to face situations and embrace external challenges while remaining focused on productivity.
2. Risk-Taker - Successful entrepreneurs take calculated risks once they spot a business opportunity without a second thought. They know new opportunities come with uncertainties but are determined to make it work.
3. Resourcefulness - Entrepreneurs are highly resourceful in solving societal problems by leveraging available resources to achieve their goals.
4. Flexibility - An entrepreneur must be flexible, willing, and adaptable to pivot whenever necessary in response to market changes or the business environment.
5. Perseverance - An entrepreneur must be patient and invest time, effort, and commitment to a successful business. Entrepreneurs must be firm in pursuing their goals, even when obstacles or setbacks hit them.

Skills and Entrepreneur Needs

Besides the personal traits of an entrepreneur, they must develop a wide range of skills to thrive in business. In addition, entrepreneurs need to cultivate these skills:

1. Creativity and innovation to think outside the box
2. Problem-solving skills to help them identify and provide practical solutions
3. Effective marketing of products or services and identifying market trends to attract more customers
4. Effective communication and negotiation are vital for entrepreneurs. With these skills, they can effectively convey business ideas with clarity, make successful pitches to investors, negotiate deals, and forge strong relationships with stakeholders
5. Financial management to make healthy financial decisions to ensure the business is steering towards success. They must understand financial concepts like:
6. Budgeting
7. Cash flow management
8. Investment opportunities

Attributes of a Successful Entrepreneur

The business arena is highly competitive, and entrepreneurs must develop the necessary skills to thrive. These skills include:

1. Visionary thinking
2. Passion and persistence
3. Adaptability and resilience
4. Strong leadership
5. Networking and relationship-building

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Frequently Asked Questions

What are the five Ps of entrepreneurship?

The five Ps of entrepreneurship are purpose, patience, persistence, people, and profits.

What are the key elements of entrepreneurship?

The four key elements of entrepreneurship are organisation, innovation, risk and vision.

What is the common myth about entrepreneurs?

The biggest myth in entrepreneurship is that entrepreneurs are born, not made. The reality is that entrepreneurs are committed individuals who are ready to take calculated risks against all odds. As an entrepreneur, you’ll make mistakes while pursuing your goals, but learning from them and persevering will help you succeed.

In Summary

Entrepreneurship is all about identifying a need in society or a gap in the market and moving to provide a unique solution to the need. A successful entrepreneur must possess different skills, traits, and rich experience to thrive in business. Some important characteristics include taking risks, creativity, flexibility, and perseverance.

While entrepreneurship is highly beneficial, it comes with some challenges and risks, including financial instability, uncertainty, and a time commitment. However, resilient entrepreneurs can overcome challenges as they mainly focus on achieving success.

As an aspiring entrepreneur, you must first develop a solid business idea that, when turned into a business, addresses a certain need. There’s no promise that the path of entrepreneurship will be smooth, but resilience when challenges arise will make a successful entrepreneur. Commitment, hard work, and willingness to learn are key pillars to positively impacting society. If you have any questions about how you can get started as an entrepreneur, kindly contact one of our experts here.