Entrepreneurship is the development of a business from the ground up — coming up with an idea and turning it into a profitable business. But while the definition of entrepreneurship may be simple, its execution is much more difficult.
"Entrepreneurship is the journey of opportunity exploration and risk management to create value for profit and/or social good," said Ajay Bam, a lecturer at the Lester Center for Entrepreneurship at the University of California, Berkeley's Haas School of Business.
Bam said entrepreneurship entails recognizing the right opportunity, finding resources — such as funding and tools — to pursue the opportunity and creating the right team to do so. People who are thinking about starting their own business must really be aware that successful entrepreneurship involves much more than having a great concept, said Elizabeth Amini, CEO and co-founder of Anti-Aging Games LLC, a company that develops online games to train memory and focus, and an adjunct professor at the University of Southern California's Marshall School of Business.
"Most people think being an entrepreneur is all about coming up with an idea, but that's just one part," Amini told Business News Daily. "It's also important to know right from the start how you will reach interested customers in an effective and affordable way."
MJ Gottlieb, co-founder of Hustle Branding, a company that provides business consulting on brand management, and author of "How to Ruin a Business Without Really Trying" (Morgan James Publishing, 2014), said it takes a special kind of person to become a successful entrepreneur.
"An entrepreneur is someone who can take any idea, whether it be a product and/or service, and have the skill set, will and courage to take extreme risk to do whatever it takes to turn that concept into reality and not only bring it to market, but make it a viable product and/or service that people want or need," Gottlieb said.
Although there are no specific traits all entrepreneurs share, there are certain characteristics that most successful entrepreneurs possess, according to the University of Illinois Center for Economic and Financial Education:
- Ability to plan: Entrepreneurs must be able to develop business plans to meet goals in a variety of areas, including finance, marketing, production, sales and personnel.
- Communication skills: Entrepreneurs should be able to explain, discuss, sell and market their goods or services.
- Marketing skills: Good marketing skills, which result in people wanting to buy goods or services, are critical to entrepreneurial success.
- Interpersonal skills: The ability to establish and maintain positive relationships with customers and clients, employees, financial lenders, investors, lawyers and accountants, among others, is crucial to the success of the entrepreneur's business venture.
- Basic management skills: Even if entrepreneurs hire others to deal with the day-to-day tasks of the business, entrepreneurs need to know whether their company has the correct resources.
- Leadership skills: The ability to develop a vision for the company and to inspire employees to pursue it is imperative for success.
Many of history's top business leaders earned their success thorough entrepreneurship, including Henry Ford, Walt Disney, Coco Chanel, Ray Kroc, John Rockefeller, Mary Kay Ash, P.T. Barnum and Estee Lauder. Mark Cuban, Richard Branson, Bill Gates, Oprah Winfrey, Donald Trump, Martha Stewart and Russell Simmons are among today's most successful entrepreneurs.
Research shows that Americans are increasingly choosing entrepreneurship as the career of choice. A study by Intelligent Office revealed that nearly 65 percent of workers would rather be an entrepreneur or independent employee than work in an office. In addition, data from the Ewing Marion Kauffman Foundation's Index of Entrepreneurial Activity shows that in 2013 12.2 percent of people ages 18 to 64 plan to start their own business within the next three years — up from 7.3 percent in 2010.
Gottlieb, Bam and Amini offered several key tips for those wanting to enter the world of entrepreneurship:
- Learn from others' failures. Rather than admiring the small percentage of businesses that grow to become successful, study those that end up failing. Gottlieb said this research will greatly increase your chances of success, since most companies have made common mistakes that have led to their demise. He said that having the humility to learn from the mistakes of others before making them yourself is the secret to success.
- Make sure this is what you want. Because entrepreneurship entails so much hard work, it is critical to ensure you're following the right path, Amini said. "If this is something you really want, then think long-term, and be persistent," she said. "The vast majority of great entrepreneurs failed multiple times before they finally found the business idea that took off and brought them success."
- Solve problems. Entrepreneurs should always be in search of problems to solve and not the other way around, Bam said. In other words, "they should not start with a solution looking for a problem," he said.
- Be passionate. To be successful, you should find your passion and then build a business around that, Gottlieb said. "The passion is what will get you through the stumbling blocks and prevent you from quitting in the middle of the race," he said.
- Get advice from those who have done it. Amini advised would-be business owners to find mentors who are successful, as well as to read books, network with people they admire and look into great educational programs to help them throughout the process.