Entrepreneurship: carving out original paths in businessPosted on: May 12, 2023
Global entrepreneurship has rocketed in recent years. In 2021, a record 540 companies achieved unicorn status – up from 150 in 2020.
While many start-up businesses will never reach such dizzying heights, there is still huge money and success there for the taking for those who get it right.
What is entrepreneurship?
According to Shopify, the definition of entrepreneurship is the process of developing, organising and running a new business to generate profit while taking on financial risk.
In the wider business ecosystem, entrepreneurialism differs from traditional business ventures in that it is not simply about making profit. Innovation lies at the heart of all entrepreneurship, whether it’s in the development of new products or services, a fresh take on addressing consumer pain points, or a desire to change the world for the better. Entrepreneurs – the founders and co-founders who start these businesses – seek to carve out original paths, cultivating new perspectives, tapping into new markets, and bringing new solutions and approaches.
What are the different types of entrepreneurship?
The type of business, together with wider goals and ambitions and the sector and context in which it operates, will dictate the nature of the entrepreneurship.
Understanding the differences between entrepreneurial ventures helps to identify particular approaches, resources and considerations that may be required along the way, as well as specific business challenges that are likely to be encountered.
There are various types of entrepreneurship, including:
- Small business entrepreneurship – Launching a start-up without the ambition of opening numerous chains or growing it into a large enterprise.
- Large company entrepreneurship – Pursuing or advancing new ventures or opportunities within an established, large business.
- Scalable start-up entrepreneurship – Launching on a small scale with the ambition to expand rapidly and make profit.
- Social entrepreneurship – Developing and implementing innovative ventures or solutions that address social, environmental or cultural issues.
- Innovative entrepreneurship – Creating new product or business ideas to achieve company goals and increase competitiveness
- Imitator entrepreneurship – Taking the products, services or concepts of existing businesses and working to improve them
- Buyer entrepreneurship – Purchasing or absorbing smaller businesses or companies to supplement existing products or services.
What are the characteristics of an entrepreneur?
What do successful entrepreneurs have in common?
Someone who wants to thrive as their own boss, and can handle the challenges and responsibilities associated with developing and scaling a business model, requires a number of key attributes.
According to economist Joseph A. Schumpeter’s theory, an entrepreneur requires:
- an institutional capacity to see the things in a way which afterwards proves to be true
- energy of will and mind to overcome static habits, desires and emotions
- the capacity to withstand social opposition.
They’ll need resilience, passion, perseverance and drive, alongside the creativity, vision and innovative mindset that led them to identify a potential business opportunity in the first instance.
While entrepreneurs come from all walks of life, with no specific demographic or background to connect them, they do tend to possess a number of critical business skills and personal characteristics:
- A propensity for risk-taking. Are all business owners entrepreneurs? Not necessarily. The key difference is that entrepreneurs take risks – including greater-than-normal financial risks. An estimated 74% of British entrepreneurs using personal finances to fund their ventures, a practice known as ‘bootstrapping’. Bootstrapping requires belief, self-confidence and a healthy relationship with having “skin in the game”. As the saying goes: the greater the risk, the greater the reward.
- Financial know-how. Entrepreneurs must possess basic financial abilities. There are many practical, financial aspects inherent in running a business, including monitoring cashflow, calculating budgets, and preparing statements. As well as supporting daily operations, entrepreneurs will be involved in speaking to investors, crowdfunding, raising venture capital, and other fundraising efforts – all made near-impossible without an understanding of business figures. Plus, ensuring a business is both viable and attractive to investors, lenders and financial backers relies on the ability to manage expenses and make confident future financial projections.
- Well-developed communication skills. Watch any footage of Steve Jobs presenting at an Apple keynote speech, and it’s hard to miss the evident passion, in-depth product expertise, and sheer single-minded belief in what he’s pitching. Entrepreneurs who can engage and inspire others, convey ideas and build solid rapport will fare far better than those without these skills. A founder is a start-up’s greatest advocate. Communication underpins every aspect of running a start-up: investment pitches, managing stakeholders, selling to customers, motivating employees and forging partnerships. After all, no one will hear about your innovative product if you don’t know how to tell them.
- The right attitude. Starting and scaling a new venture is no mean feat. There will be challenges, obstacles, long hours, difficult conversations and disappointments. However, possessing a growth mindset enables entrepreneurs to develop in tandem with their business, problem-solving along the way, growing in resilience and picking up new skills. As a journey, entrepreneurism demands drive, flexibility and dedication. Most of all, it requires a positive, proactive leader who learns from setbacks and innovates accordingly, never losing sight of the overall vision and goal.
- A capacity for collaboration and networking. Who an entrepreneur knows, and which networks they have at their disposal, can mean the difference between success and failure. Networks serve a variety of purposes, supporting team-building efforts, establishing incubator resources, mentoring opportunities, sharing expertise, attaining fundraising bids, and plenty more besides. As well as industry events and previous work contacts, networking opportunities can spring up in all manner of places: Bill Gates and Warren Buffett, two of the world’s most successful business people, became friends playing bridge before pooling their resources to tackle global philanthropic issues.
LinkedIn lists a number of further entrepreneurial skills and characteristics that can spell the difference between a successful venture and one that fails to get off the starting blocks.
Bring entrepreneurial spirit, vision and drive to your business venture
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