What is an entrepreneur?

What is the definition of an entrepreneur?

An entrepreneur can be defined as a person who devises, sets up and runs a new business or businesses. Successful, well-known entrepreneurs include:

• Arianna Huffington
• Bill Gates
• Huda Kattan
• Justine Roberts
• Karren Brady
• Mark Zuckerberg
• Lord Alan Sugar
• Sara Blakely
• Sir Richard Branson.

Entrepreneurs can work in many fields including technology, retail, services and social enterprises. At the core, entrepreneurs are builders, risk-takers, and problem solvers.

What do entrepreneurs do?

Entrepreneurs are people who create, develop, and manage businesses - often from the ground up - with the goal of making a profit, solving a problem, or delivering value in a new way. Typically, an entrepreneur:

• identifies opportunities
• develops a business idea
• builds the business
• markets and sells
• manages operations
• grows and scales up.

They need to be able to take on financial and professional risk, navigate uncertainty and failure, learn from mistakes and pivot when necessary.

How do I become an entrepreneur?

This isn't about waiting for the 'perfect' time or idea - it's about starting with what you know and care about, and taking steps forward.

Here's a step-by-step guide to becoming an entrepreneur, whether you're starting from scratch or already have an idea.

• Shift your mindset - Start thinking like a problem solver. Be ready to take risks, learn constantly, and deal with uncertainty. Accept that failure is part of the journey and that it teaches you what works.
• Identify a problem or opportunity - Look for everyday frustrations or unmet needs. Ask yourself, 'What do people need or want that they're not getting?' Think about your skills, passions, or unique insights. Don't go too broad; remember that successful businesses often solve a specific problem for a specific group of people.
• Validate your idea - Talk to potential customers. Ask questions to help understand their pain points, but don’t sell yet. Build a simple Minimum Viable Product (MVP), which is a basic version of your idea, to test demand.
• Make a business plan - Outline your value proposition, target market, revenue model, marketing strategy, startup costs and budget. Keep it simple at first.
• Set up the basics - Choose a structure, register, set up a bank account and apply for any licences or permits.
• Build your product or service - Whether you're creating a prototype, an app or speaking directly to clients, make sure you start small.
• Launch and market it - Collect feedback as you go.
• Learn, adjust and grow - Track what's working (and what's not) and refine your product, pricing, and message based on real-world results.

What qualifications do I need?

If you have an original idea and the business mind to get your venture off the ground, formal qualifications aren't necessary. However, if you'd like to learn more about entrepreneurship, several courses are on offer.

For example, the University of Southampton offers a BSc Business Entrepreneurship course, while De Montfort University runs a BA in Business Entrepreneurship and Innovation.

A number of Masters courses are also available, covering a range of specialisms. For instance, you could study the MSc International Business with Entrepreneurship at the University of Huddersfield or the Communication Technology and Entrepreneurship at Cardiff University. Search postgraduate entrepreneurship courses.

Short courses are also available through providers such as FutureLearn, The Open University, London School of Economics and University of the Arts London.

What are the characteristics of an entrepreneur?

While five skills to succeed in business (creativity, knowledge, leadership, organisation and self-belief) are discussed in is self-employment right for you?, you'll need a specific set of skills to make it as a successful entrepreneur.

You'll need to be:

• Decisive - Entrepreneurs are confident self-starters with the resilience to overcome any problems and the belief that they'll learn from any mistakes they make.
• Innovative - Always looking to create better products or services, entrepreneurs continually strive to reinvent their business.
• Flexible - Most entrepreneurs initially assume multiple functions within their business, including sales, recruitment and product development.
• Passionate - A genuine love for their product or service, not to mention their customers, is essential.
• Resourceful - A successful entrepreneur knows how to work with what they have and utilise their resources. They also know how to create opportunities.
• Results-oriented - Continually seeking to raise the bar, entrepreneurs don't simply achieve their targets.
• Risk-taking - Prepared to take calculated risks, but never reckless ones, entrepreneurs characteristically sacrifice short-term income to maximise long-term gain.
• Persistent - Not every idea or business venture will be a success, but the best entrepreneurs have the resilience to pick themselves up after a failure and the perseverance and tenacity to keep going.
• Visionary - Entrepreneurs don't simply dream big. Their actions turn ideas into reality, and they're savvy enough to identify future business opportunities.

As well as possessing these entrepreneurial skills, you'll also need to be wise enough to ensure that any shortcomings you have are compensated for. This usually requires recruiting other individuals and the ability to attract external support.

What makes a successful entrepreneur?

While entrepreneurship courses expand your knowledge as well as your networks, they can only take you so far. To become a successful entrepreneur, you'll also need to:

• Solve a problem - Try not to be over ambitious. You don't need to solve multiple problems. If you identify a lucrative gap in the market, solving one problem will be enough to get your business off the ground.
• Get the basics right - While a brilliant idea is a great start, it's not enough on its own. Make sure that you've done your research and have a solid business plan.
• Hire the right team - While an entrepreneur comes up with a unique idea, they rarely pull it off alone. To grow your business, you'll need to hire talented, experienced individuals who know your sector and the market it caters for inside out. Make sure their drive and passion match your own.
• Deal with rejection - You'll need to be resilient and tenacious when it comes to dealing with rejection. Securing investors takes time and effort so don't be discouraged if you hear the word 'no'. If you believe your idea is a good one, determination is key. If your pitch to secure funding is unsuccessful at first, gather feedback and improve it.
• Find a mentor - Venturing into the world of entrepreneurship and self-employment can be a daunting prospect, especially if you've never done it before. Do some research and reach out to an experienced entrepreneur (ideally one who works in your sector) to ask if they'd be happy to show you the ropes. Having someone you can call or email for advice will prove invaluable.

How do entrepreneurs think of new ideas?

Entrepreneurs' ideas often grow from their qualifications, skills, interests, or personal circumstances, and are usually formed in response to an unmissable market opportunity.

However, while all entrepreneurs require an inventive mind to identify trends and possibilities, not all entrepreneurs create completely new products. Similarly, a product's inventor may work alongside an entrepreneurial individual who can help to market their product and create a successful business.

If entrepreneurship appeals to you but inspiration has yet to strike, start by conducting some market research in your area of interest. Try to identify any gaps - is there space for a new product or a need for a new service? Networking can also provide inspiration. Join relevant industry organisations and attend events to meet like-minded people and engage with industry leaders.

What are the pros and cons of being an entrepreneur?

Being an entrepreneur comes with great potential rewards, but also significant challenges. Here's a breakdown of the pros and cons to help you decide whether it's the right path for you:

Pros of being an entrepreneur

• Freedom and independence - You're your own boss and you make the decisions. This means you have control over your time, business direction, and work environment.
• Creative expression - You can turn your ideas into reality as you have the freedom to innovate, solve problems your way, and shape something unique.
• Unlimited income potential - Unlike a salary job, there's no cap and success can scale. Plus, you keep the profits your business generates (after expenses).
• Personal growth - You'll develop resilience, confidence, and a range of skills as you’re constantly learning through challenges and real-world experience.
• Flexibility - You often have more control over when and where you work. This can be especially appealing if you value lifestyle balance or want to travel or work remotely.
• Impact - You have the ability to make a difference, whether this be socially, economically, or in people's lives. You can shape a company culture, support causes, or solve big problems.

Cons of being an entrepreneur

• Financial risk - You might invest your own money without a guaranteed return. Your income can be unstable, especially early on.
• Uncertainty and stress - There's no job security and you are responsible for your success or failure. This can add constant pressure to perform, pivot, or make big decisions.
• Long hours and hard work - Especially at the start, entrepreneurs often work far more than a 9-5. You may also have to do everything yourself, from sales and admin to customer support.
• Isolation - Being your own boss can be lonely, especially without a team or support network. Lack of structured feedback or collaboration can also be tough.
• Responsibility overload - You're accountable for every part of the business, including your employees and customers, plus the legal and financial responsibilities. Wearing too many hats can lead to burnout.
• Delayed gratification - Success often takes time and can be years, not months. You may also go through periods without pay or recognition.

What's the difference between an entrepreneur and a small business owner?

While all entrepreneurs are self-employed, not all self-employed individuals are entrepreneurs - some are better categorised as small business owners.

There are differences between the two. Entrepreneurs typically:

• devise untested ideas
• make high-risk decisions that have a potentially significant long-term impact
• delegate management to experts, meaning that the company can easily continue to function without the entrepreneur's input if and when they move on
• aim to generate buyer interest in their business.

In contrast, small business owners typically:

• solve existing and sometimes obvious local problems
• make low-risk decisions that ensure short-term security
• manage their employees closely, meaning that the company may struggle to function without the small business owner's input
• have little or no intention of ever selling their business.

How do entrepreneurs finance new ventures?

Even the smallest enterprise requires huge effort and dedication. Entrepreneurs often work extremely long hours initially, spending as much time as possible on their plans.

As described in how to start a business, funding possibilities for start-up businesses do exist. However, in order to get this support, you'll need to first complete plenty of market research and write a successful business plan. Indeed, the majority of entrepreneurs self-fund most of their initial costs, usually through their savings.

However, entrepreneurs can take several financial shortcuts. For example, many ventures begin at home rather than in business premises, and cash flow can become a big problem once the organisation outgrows the home working environment. At this point, expenditure may well temporarily outweigh income.