Entrepreneurship 101 — Barbie Patel

If you’ve ever seen shows like Shark Tank, then you might have heard the word “entrepreneur” thrown around here and there. And if your TikTok For You Pages are anything like mine, then you might have seen videos of these entrepreneurs advertising their products or services. But what does entrepreneurship even mean? Is every small business owner an entrepreneur? Do I need a business idea to be an entrepreneur? And, more importantly, how do I become one? In this article, we discuss what entrepreneurship means, the different kinds of entrepreneurs, and if you have what it takes to become one.

What is Entrepreneurship?

Entrepreneurship is essentially the process of setting up a business. The word “entrepreneur” comes from the French verb entreprendre, which means “to undertake.” Although this broad translation doesn’t necessarily encompass all there is about entrepreneurs, it definitely helps to describe them. An entrepreneur is any individual who creates this new business. They are undertaking the responsibility of managing this new company and their employees. They not only create their own business plan, but they also typically hire labor, acquire resources and financing, and provide leadership to the rest of their team. Because entrepreneurs are not only the founders of this new business, but usually manage its operations, they also bear most of the risk. However, with risk comes reward, and entrepreneurs enjoy most of it.

In economics, entrepreneurship is one of the resources that economists categorize as integral to production, along with land/natural resources, labor, and capital. Entrepreneurs use these last three resources to manufacture their goods or services.

4 Types of Entrepreneurs

When we hear the term “entrepreneur,” most of us will usually only think of small business owners. However, there are actually many different kinds of entrepreneurs out there, each with different goals for their business.

1. The Builder

Builders describe entrepreneurs who seek to create a scalable business within a short time frame. Although all entrepreneurs want to see their business grow and succeed, builders typically wait for the best opportunities to generate the most profit. They typically pass small revenue opportunities to focus on large ones. For example, instead of focusing on a $100,000 profit opportunity, they might wait and instead put their efforts into an upcoming $1 million revenue opening. In order to achieve this, they usually focus on building a strong infrastructure by hiring the best talent and seeking the best investors.

2. The Opportunist

The opportunist describes any entrepreneur who acts on the best opportunities handed to them. They have the ability to pick out the best financial opportunities, stay on board during times of growth, and exit when the business has hit its peak. Unlike the builder, who focuses on improving the business to make as much money as possible, opportunists are typically mainly concerned with the profits and wealth that they build.

3. The Innovator.

This type is usually what people think about when they hear the word “entrepreneur.” They come up with an idea for a product or service that isn’t in the market and create a unique business because of it. They include individuals like Steve Jobs, Thomas Edison, and Mark Zuckerberg. Innovators have passion about their products or services, so they consistently work to improve on them. Because of this, they tend to care more about the impact their products and services have on society.

4. The Specialist

Specialists are highly analytical and rise-averse entrepreneurs. They have a strong skill set that is specific in the market they work in, typically through education or an apprenticeship. They build out their business through networking and referrals. Although this causes their businesses to have slower growth than builder entrepreneurs, their goals are less about making as much money as possible, and more about leading their business to success.

4 Types of Entrepreneurship

When most people think about entrepreneurship, they usually think of small businesses. However, just like entrepreneurs, there are many different types of entrepreneurship out there (one of which is small businesses!). If you want to be an entrepreneur, here are the four types of entrepreneurship that you could start.

1. Small Businesses

According to the Small Business Administration (SBA), more than 99% of all U.S. businesses are considered small businesses. No wonder why most people think about small businesses when they think about entrepreneurs! A small business can be anything from local pizza restaurants to daycares to retail stores. These entrepreneurs typically use their own money to get their business off and running, and they usually only see profit when they are successful. They also typically don’t have plans of becoming a chain or franchise, but depending on their success, some of them do. For example, The Halal Guys (if you live in New York City, you know) started out as a small food truck, but they now have over 100 chain restaurants worldwide.

2. Scalable Startups

Now let’s get into the types of entrepreneurs most people don’t know about. Scalable startups typically start with an idea (like any business) and end up gaining attention from investors, which allows the business to quickly grow and scale up. One popular example of scalable startups includes the major technology, software, and internet companies that get their start at Silicon Valley, where they have more opportunities and chances for growth and success.

3. Large Companies

This type of entrepreneurship describes when entrepreneurs work within a larger company as an employee, but they also see potential to spin off new products or services. They utilize the entrepreneurial mindset to employ the resources their current employers have available to them. They adhere to the same or similar market that their employer works in, but they continue to solve potential problems with both current and future customers.

4. Social Entrepreneurship

This last category describes businesses that seek to create positive changes in society. These entrepreneurs launch an initiative or non-profit organization whose primary purpose is to help people, not to make money. They strive to be the change in the world that they want to see. These organizations advocate for racial justice or environmental conservation, or they serve underprivileged communities.

How to Become an Entrepreneur

One of the most important aspects of an entrepreneur is the ability to ensure financial stability. By being financially stable, they are able to have more time to work on building a successful business because they are not worrying about having to keep raising money or paying back short-term loans. Although some have established a successful business without stable finances, most don’t. We just don’t hear about them. So make sure you have the necessary finances to support not only yourself, but other aspects of the business. It’s also important to build a diverse skill set. You’re not only working hard to perfect your product or service, but you also need to network, communicate, and complete your own research. Being an entrepreneur is not only about perfecting your products, but it’s also about how successful you are at being a proactive CEO. As a CEO, you’ll have to be able to network. By networking, you get the chance to meet the right people who can introduce you to contacts in the industry, such as suppliers, financiers, and mentors. Attend conferences, email and call people in your industry, or even talk to friends or family who are in a similar business as you. The more people you talk to, the more other professionals are aware of your business and can guide you along the way.

Questions to Ask Yourself

If you think entrepreneurship is the right path for you, it’s important to ask yourself a few questions before starting:

Do I have the personality, temperament, and mindset of leading my business to success? If not, what do I need to improve on before starting?

Do I have the required resources to devote my time to my business?

Have I identified a problem that I want to solve with my products or services?

Do I have a targeted audience that wants/needs my products or services?

Have I assessed how my business will do in its existing market?

Do I have a marketing strategy so that I can gain potential customers?

How will potential customers reach me?

These are just a handful of questions before jumping into your entrepreneurship journey. It’s easy to get lost in your ideas and aspirations, so make sure to be realistic with your goals and remember that it takes time for any business to succeed.

If you want to read more about Barbie’s journey as a small business owner, check out the rest of her website at barbiepatel.com. Or if you want to learn about Barbie’s bridal agency, visit her website at cinderellabridez.com.