Economies are powered by innovation. Much of that innovation derives from forward-thinking individuals who possess the drive, skills, and background to turn a business vision into reality. The importance of entrepreneurs extends beyond the effect those individuals have on their own companies, however. They impact their broader communities, and, in some cases, even the world. Show
Entrepreneurs have played a pivotal role in the growth of the U.S. economy since the 19th century. They spur industry transformations, create entirely new markets, and help to build resilient communities. Investopedia describes four ways entrepreneurs benefit society:
The companies that entrepreneurs found tend to mirror their founders’ personalities. Entrepreneurs come from every economic and social background. To prepare for the challenges of translating innovation into rewarding business ventures, entrepreneurs rely on the training and experience they receive from programs such as the Master of Arts in Management and Leadership degree. Successful entrepreneurs make their dreams and the dreams of others come true. They are able to match their personality, skills, and creativity with customer needs and market opportunities. This guide explains the importance of entrepreneurship, presents the various types and styles of entrepreneurship, and describes the skills that are most essential for reaching your entrepreneurial goals. Types of EntrepreneurshipMost people think of an entrepreneur as someone with dreams of becoming a titan of industry. While many would-be entrepreneurs have lofty goals, most hope only to create a successful business, whether that success spans the globe or reaches no farther than their local community. Types of entrepreneurship range from hometown storefront businesses to technological innovations that can change the world. These snapshot profiles of various entrepreneur types demonstrate the range of opportunities available to people who dream of starting their own business. Small-Business EntrepreneursThe U.S. Small Business Administration (SBA) reports that small businesses generate 44% of all business activity in the country. Small-business entrepreneurs differ from other small-business owners in their company’s legal status: Entrepreneurs generally incorporate their businesses, while owners operate as sole proprietors, partnerships, or other nonincorporated entities. Small-business entrepreneurs take greater risks than the typical small-business owner, and they tend to rely on a broader set of skills that encompass high-level thinking, analytical reasoning, and complex interpersonal communication. Investor EntrepreneursThe roles of investors and entrepreneurs are typically seen as complementary but distinct: Entrepreneurs seek investors to bankroll their new companies. However, some entrepreneurs focus solely on providing financial backing to new business entities. Investor entrepreneurs may start their careers in one of the two roles and segue into a hybrid of both to tap the strengths of each. For example, entrepreneurs may feel the need to continually tweak their operations, which can prevent business processes from being firmly established. By taking an investor role and purchasing an ownership share in a business, entrepreneurs are likely to address business opportunities more strategically to capitalize on short-term performance as well as long-term goals. Technology EntrepreneursAs new technologies permeate industries of all types, it could be said that all entrepreneurs are technology entrepreneurs in some regard. However, over the past 40 years the image of technology entrepreneurs has been dominated by billionaires such as Bill Gates, Jeff Bezos, and Mark Zuckerberg. What distinguishes this type of entrepreneur is their practical application of scientific innovations to solve business problems. Technology entrepreneurs are characterized by their passion and unshakeable belief in the inherent value of the products or services they create. Becoming a tech entrepreneur typically entails working long hours and making financial sacrifices in the short term for the prospects of long-term gain. Tech entrepreneurs must also possess the ability to sell their ideas, persevere through hard times, and make others feel as enthusiastic about their ideas as they do. Internal EntrepreneursInternal entrepreneurs, or “intrapreneurs,” apply the principles of entrepreneurship to projects within an existing company or organization. One important distinction between entrepreneurs and intrapreneurs is the latter’s lack of personal investment, which reduces the impact of potential failure on any individual. Intrapreneurs tend to be self-motivated, proactive, and innovative employees who create an entrepreneurial spirit within their team. When companies give employees the freedom to experiment and grow within an organization, they can benefit from the success of their employees’ internal projects. However, firms that fail to personally recognize the work of intrapreneurs risk seeing them leave to become true independent entrepreneurs. Online EntrepreneursInternet-based businesses offer many advantages to entrepreneurs, including low startup costs and the ability to establish an online presence quickly to take advantage of the fast pace of changing markets. However, the low barrier to entry can be a dangerous illusion for online entrepreneurs who fail to realize the hard work and perseverance required to achieve their business goals. Online enterprises require the same time and effort commitment as other forms of entrepreneurship, and they are subject to their own challenges, many related to technology. For example, an online business will likely rely on partnerships with many different service providers, an outage at any of which could knock the business offline. Entrepreneurship StylesJust as no two companies are identical, each entrepreneurial endeavor is as unique as the person behind it. Entrepreneurship styles are as varied as the ideas that spur entrepreneurs to action. One key for entrepreneurial success is to create a company whose strengths match the prominent characteristics of its founder. Matching Entrepreneurship Approach to PersonalityAn entrepreneur’s personality, background, and experience influence their approach to starting a business. These are among the most common entrepreneurship styles:
Entrepreneurs Whose Businesses Match Their PersonalitiesJust as Steve Jobs’ larger-than-life personality was the perfect fit for his dream of making computers “for the rest of us,” as Apple’s marketing slogan proclaimed, other important entrepreneurs succeed by applying their unique, inimitable style to the task of devising brand-new solutions to real-world problems.
Entrepreneurs Arise from Diverse BackgroundsAny field can serve as a springboard for a successful new business enterprise. Entrepreneurs arise from a range of educational, technical, and business experiences that include management, technology, sales and marketing, and scientific research. In addition to an abiding passion to see their innovations realized, entrepreneurs share certain characteristics:
Entrepreneurship SkillsGrowing a business requires a diverse set of skills, but the one trait that ties them all together is leadership. Entrepreneurs transform an idea into a product or service that has value to customers. Each step in the process from creating the business plan to achieving profitability calls for a range of organizational and interpersonal skills, all of which depend on leadership. Important entrepreneurship skills run the gamut from understanding the risks versus rewards of the business venture, to having a plan in place for responding as circumstances change. These are the capabilities that entrepreneurs need to make their businesses thrive:
Benefits of EntrepreneurshipThe benefits of entrepreneurship extend beyond the businesses they establish. Entrepreneurs improve the lives of individuals and communities, as well as the overall economy. Entrepreneurs have been instrumental in spurring social change and improving the way people live and work. They help raise the standard of living for everyone by creating jobs and making products safer, less expensive, and more functional.
Despite the many benefits of entrepreneurship, it has inherent risks. Lack of appropriate government oversight can result in unfair labor practices, corruption, and criminal activity. Also, new business ventures have a high rate of failure: According to data from the U.S. Bureau of Labor Statistics (BLS) cited by Fundera, 20% of small businesses fail in the first year, 50% fail within five years, and 70% fail within 10 years of opening. The benefits of entrepreneurship are realized only after much preparation, planning, and hard work. An Education Geared to the Needs of EntrepreneursEntrepreneurs need the right foundation in business and management. A program such as Maryville University’s online Master of Arts in Management and Leadership can offer the crucial training and skills innovators need to succeed. Courses such as Interpersonal Management Skills, Enterprise Planning and Control, Leadership, and Organizational Behavior and Development prepare tomorrow’s important entrepreneurs for the challenges they will face as they pursue their career goals. Discover more about how the Master of Arts in Management and Leadership program helps people planning a career in business gain the entrepreneurial skills they’ll need. Recommended Reading Exploring Entrepreneurship: Starting and Operating a Small Business Four Ways a Business Degree Can Prepare Entrepreneurs for Economic Volatility Ethical Leadership in Business: Why It Matters Sources The Balance Careers, “Important Skills Entrepreneurs Need with Examples” The Balance Small Business, “9 Essential Qualities of Entrepreneurial Leadership” The Balance Small Business, “What Is an Entrepreneur?” Business News Daily, “Entrepreneur or Small Business Owner: Which One Are You?” Entrepreneur, “The Hard Truth You Need to Know Before Becoming an Online Entrepreneur” Entrepreneur, “This Tool-cum-Skill Is a Must if You Are Turning Entrepreneur This Year” Entrepreneur, “The True Failure Rate of Small Businesses” Entrepreneur, “Why Entrepreneurs Need to Be Good Managers and Great Leaders” Fundera, “What Percentage of Small Businesses Fail (and Other Need-to-Know Stats)” Influencive, “How to Transition from an Entrepreneur to an Investor, According to Jeremy Harbour” Investopedia, “How Jeff Bezos Became the World’s Richest Man” Investopedia, “The 10 Greatest Entrepreneurs” Investopedia, “What Is Intrapreneurship?” Investopedia, “Why Entrepreneurship Is Important to the Economy” U.S. Small Business Administration, “Small Businesses Generate 44 Percent of U.S. Economic Activity” |