You must have heard of this fancy word ‘Entrepreneur’. Ever wondered what does it mean? Well, Entrepreneurship is an emerging career and a profession which many people look up to. Entrepreneurs are nothing but people who are self employed. They instead of working for someone else and earning a salary prefer to work on their own and have profits.
This post is an A to Z guide on Entrepreneurship, covering from the very basic definition of entrepreneurs and gradually scaling up to the level of telling you the ways how you can too become an entrepreneur.
Entrepreneur is a person who starts a venture of his own instead of working for someone else for remuneration. He establishes a business from scratch, and gradually scale it.
Entrepreneurship is a systematic, purposeful and creative activity of organizing resources, undertaking production of commodities, selling them to the customers, generating revenue and profits and doing all this while fulfilling the responsibility towards various stakeholders such as capital appreciation for the investors, quality products at fair prices for the customers and profit for self.
Entrepreneurs play a key role in the growth and development of economy. They are the one who generate employment opportunities and carry the baton of research and innovation for the well being of people. So, entrepreneurship carries the twin angle of monetary and social contribution.
Types of Entrepreneur
There are various kinds of entrepreneurship which people undertake. The 3 major types of entrepreneurship are –
- Social Entrepreneur
Social entrepreneurs are the people whose main focus is not on profit maximization. Rather they aim at solving community-based problems efficiently through creative and innovative solutions.
This however does not means that they don’t aim to generate profits because that would be a Not-for-Profit Organisation. Instead they work on a model which mainly revolves around combating social problems but at the same time generating enough profits and revenues so as to sustain and scale up their social objective.
Scalable start ups are another form entrepreneurship. These are businesses which are innovation centric and start from very small levels. These are the most common form of entrepreneurship in today’s time.
These star ups are funded by different investors and capital ventures to scale up their business if they have a sustainable business model. Many Silicon Valley tech companies fall under this model; they begin in an attic, garage, or home office before eventually scaling into large corporate headquarters. Read our post on’How to Become a CEO’ to get more insights on this.
- Franchise Format
With the supervision of the franchise itself, the Franchise based entrepreneurs open a local franchisee in their community. They sell products of the franchise under a contract and are free to choose the marketing and selling strategy but have to offer standard products of the franchising company.
These entrepreneurs usually have less freedom and autonomy as they are under the control of the franchising company. Therefore, this form of entrepreneurship does not appear as lucrative as the other forms.
Importance of Entrepreneurs
Entrepreneurs are of immense importance for the society at large. They contribut to the economic growth, innovation and create utility for the community. Following are the points illustrating the importance of entreprenuers:
- Contribution to Economy
As earlier said, Entrepreneurs contribute immensely towards the economy. They increase the flow of goods and services in the economy, contribute to GDP of the nation, increase investment and overall development of the economy.
- Add value to Society
Entrepreneurs add value to the society by creating utility in terms of community services which they undertake. They help in awareness creating programmes, open schools and hospitals,undertake corporate social; responsibility and even give employment opportunity to people which in turn increase the standard of living.
- Drive Innovation
Entrepreneurs are the driving force of innovation in any society. They invest heavily in research and innovation related activities and develop new methods, new technologies and new channels for increasing efficiency, generating profits and helping the society to grow and prosper.
How to Become a Successful Entrepreneur
Becoming an entrepreneur is a challenging task, but don’t worry we are here to help you. Just follow the steps given below to become a successful entrepreneur:
Step #1: Chose your Domain
First things first: Chose the domain of business in which you want to become an entrepreneur. Entrepreneurship is a very broad term and hence a good place to start from is to narrow it down to the field you want to work in.
Your entrepreneurial venture may be in any niche – finance, tech, pharma, sports management, Human resource management, or any other field. There are numerous options to choose from.
It is important to choose a correct niche for your business because if don’t start right you are pretty much destined to fail. To chose the right place for you, think of your interest along with the inefficiencies in the current system which you think you can solve because moist of the successful startups are those that solve the existing problems instead of creating something entirely new.
Step #2: Undertake Market Study
This step is crucial as this defines the trajectory of your business. You should undertake a market study and analysis before beginning the production or operations.
A market study is used to analyse the need of consumers in the market, to predict the sustainability of the company among the competitors, fix prices of the products by studying the price sensitivity of consumers and to chalk out a marketing plan.
Market analyses help to evaluate the technical, economical and the financial feasabiltiy of the product. Sometimes it might happen that you may think of a plan but that might not be possible to execute due to financial or economical constraints.
Hope you have taken note of this crucial step, so let’s move to the next step.
Step #3: Equip Yourself with all the Necessary Skills
Learn the various traits of being an entrepreneur before you start. An entrepreneur requires a large number of crucial skills such as team building, resource management, leadership quality, decision making,etc.
Make sure you have some of these necessary skills. It is not compulsory to have all these skills because you will learn a lot of them when you begin. But having some of the most important one’s will ensure that you at least don’t fail due to the factors under your control. Read our post on’Best Skills to Learn in 2021‘ to get an idea about the skills which you must posses.
You may choose to even study further and do an MBA to acquire some of these skills or do any skill enhancement program.
Step #4: Plan an Effective Marketing Strategy
Draw up an appealing and effective marketing campaign for your product. This is essential to make people aware of your product and to highlight its uselfulness for the customers.
In case of start ups 80% of the expenditure is incurred on marketing. This is a clear indication of the importance of a good marketing startegy. There are numerous entrepreneurial ventures coming up each day, and to sustain and aurvive in this highly competitive market is not easy.
But what can ensure not only your survival but also your growth is your utility to the consumer and the connect. And effective marketing is essential for building this connect between the consumer and your company.
Step #5: Networking
You can even think of growing without marketing in today’s highly competitive market. A line is very famous among the entrepreneurs,’A networked individual is much more worthy then a net worth individual’.
While networking is important in all fields, it may be most important for entrepreneurs. It is the way you interact and connect with people and align your ideology with theirs.
Every successful entrepreneur has some of the best networks with the most valuable individuals. Networking helps you to gain different perspective, get expert advice about your business and may even help you to get investors for idea. Your network can also support your business once you open, helping send new customers your way.
Step #6: Learn, Adapt and Improve
Once you have got everything on the track, your job is done. Absolutely No!!
This is where you job actually begins. Being an entrepreneur requires you to be always on your toes. You should learn from each of your mistakes and successes alike, adapt to the changing environment and improve.
This ‘Learn, Adapt and Improve’ has been the mantra behind the success of some of the biggest start-ups, so don’t ignore them. You must be capable of accepting your defaults because the entrepreneurial journey is a roller coaster ride, with many highs and lows and if you don’t have patience and perseverance then you are not going to make it big.
Functions of Entrepreneur
- Organisation Building
Organisation building means building the core team consisting of the co-founders, the Chief operation Officer, the Chief Technology officer and at the same time recruiting employees and the middle level and lower level management. This is the key function of an entrepreneur as the organisation is the one which decides the fate of any business.
- Decision Making
Decision making is yet another important function of an entrepreneur. An entrepreneur must be able to take sensible and logical decisions and that too quickly so as to ensure smooth functioning of the organization as well as to capitalize the available opportunities.
- Risk Bearing
The whole and sole responsibility of any failure rests upon the entrepreneur and so does the risk. Th entrepreneur bears all the risk associated with the business and any failure or any losses has to borne by him which might be very painful. There is no possibility that you hold someone else responsible for the mistakes of your business.
- Make Public Relations
An entrepreneur is the face of his organisation. No matter what the marketing team does or the company as a whole does, only the entrepreneur who is the head of his company would be answerable for that. It is his responsibility to create friendly customer-company relation. He must represent the company on every possible platform and connect to the customers.
While becoming an entrepreneur might look a very lucrative career prospect, it might be as miserable an idea if you go wrong anywhere. Entrepreneurs are necessary and if you want to be one, you must expertise in all the trades of the business because entrepreneurship is not easy. Learn to accept mistakes and learn to improve them and then only you can become a great entrepreneur.