It Takes a Special Person to Become an Entrepreneur: Do you have what it takes?
The entrepreneur has seen the business world change dramatically in the last few centuries from an industry dominated by agriculture to a society driven by steel and plastics to a world that is run by ever-changing technology. But, the one thing that hasn’t changed is the perseverance portrayed by the modern day entrepreneur. Today, more than ever before entrepreneurs face many challenges including: changing technology, diverse workforce populations, and globalization to name a few. Decades ago, when Gordon Moore predicted that every two years technology will show advancement in various areas many professionals were reluctant to accept it, but his statement has been proven to show validity today as seen in electronics like mobile phones, televisions, computers, etc. Furthermore, the United States what was once dominated by mainly European settlers dating back to the 15th century to the early 20th century with immigrants first coming from Western Europe, then Southern Europe, and now Eastern Europe has seen noticeable changes in the countries of origin. Currently, the United States is experiencing immigration mainly from countries/continents like Mexico, India, and Asia and as a result by 2050, the Hispanic and Asian population of the U.S. are expected to reach 48 percent and 9 percent respectively. Also, the U.S. baby boom workforce populations are steady approaching the retirement era of their lives, in fact by 2030, capable workers 65 or older in the U.S. will exceed over 72 million which essentially means that many small business owners and customers within the United States will be a changing face in the next few decades. Lastly, with the advancement of technology entrepreneurs all over the world can conduct business domestically and internationally which can be beneficial but also detrimental to one’s business considering proximity, cultural differences, and language barriers.
Who is an Entrepreneur?
By definition an Entrepreneur is a person who “is a risk taker in the private enterprise system, a person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business.” (Boone & Kurtz, 2011) Also, with a changing society the modern day U.S. entrepreneur more than likely could be a woman, an immigrant, or a college student. For instance, in the U.S. women operate around 9.1 million firms while employing about 27.5 million people. Internationally, businesses owned by women are 23 percent in Japan and one-third in Germany which account for around 1 million jobs. In China, female owned businesses hover around 11-14 percent with this number remaining steady for the last couple of decades. Finally, the educational attainments between genders who own their own business in many countries are usually equal or are slightly more for women than men. (Yu, 2010) Likewise, considering the millions of immigrants pouring into the U.S. every year, many jobs as well as small business owners will more than likely be occupied by an immigrant in years to come. Simultaneously, many former college students just like Alfonso Olvera, Chrissie Harsh, Oprah Winfrey, Michael Dell, Bill Gates, and Paul Allen found success in entrepreneurship by starting their own businesses in the software, baking, communications and technological fields.
Types of Entrepreneurs
There are generally three types of Entrepreneurs: Classic, Serial, and Social. A classic entrepreneur is a person that realizes a business opportunity and uses various resources to develop his/her product such as Henry Ford did who became conscious that it would be more comfortable for people to ride in engine powered vehicles rather than slow bumpy wagons/carriages. A serial entrepreneur is a person that began by starting one business, but eventually opens up additional ones to satisfy the need to make more profit and grow such as Sam Walton who started out with a few Ben Franklin variety stores, then began Walton Five and Dime stores, and eventually springing the biggest corporation in the U.S. being Wal-Mart stores. Lastly, a social entrepreneur acknowledges a problem in society and uses his/her business expertise to develop an innovation that will alleviate some or all of the pressure of that problem such as: Jonathan Ive, Tony Fadell, and Michael Dhuey, engineers at Apple that were behind the creation of the Imac, Ipod, Iphone, and Ipad. Apple’s innovations certainly have solved many communication and technological barriers that the world had that they probably didn’t even realize they endured at the time. Steve Jobs, who recently stepped down as CEO of Apple, encouraged Intrapreneurship, which is “the process of promoting innovation within their organizational structures.” (Boone & Kurtz, 2011) It’s been said that many of Apple’s innovations are the result of Steve Jobs’ charismatic leadership which allows creativity to flow freely within the engineering ranks which inevitably drove the creation of the Ipod that helped saved Apple from its demise.
Motive to Become an Entrepreneur
Universally, it seems that there is not one sole reason why one chooses to become an entrepreneur; there actually are many such as: personal aspirations, lack of advancement opportunities, economic conditions in one’s country, dissatisfaction with a current employer, job layoffs, managing one’s self, increasing personal monetary wealth, potential guard against unemployment, and to increase one’s lifestyle. Some people at a ripe young age due to innate behaviors and environmental influence decide that they would rather run their own business versus working for someone else. Further, a person may feel that they have been overlooked in particular promotions in their current employment, thus decides to venture out and create their own opportunities. In many instances in countries such as Nicaragua, El Salvador, and Honduras, where the poverty rate are highest among the lower continental America nations, starting a business not only provides better income but more opportunities for other citizens to share. (Serviere, 2010) Onward, Gary Huff a formerly employee with Wachovia Bank, decided to depart from his place of employment so that he could pursue his own antique shop because he was dissatisfied with his boss’ leadership.
Arlene Jones another former employee with Wachovia Bank, decided to start her own home daycare business when she got laid off in 2006. Consequently, Boone and Kurtz argue that there are four main points why people would choose to become entrepreneurs. They argue that a benefit of being an entrepreneur is the independence that is entailed. One has the freedom to make their own business decisions of what is good and bad for their firm. As well, they have the opportunity to gain valuable experience in management, understanding customer behavior, marketing, and dealing with suppliers/distributors, all the while setting their own hours of operation. Likewise, there is an old belief among business individuals that one cannot reach one’s full financial potential if you’re working for someone other than yourself and in many instances this is true. Often, many people come up with product inventions and become millionaires/billionaires from sheer thoughts of practicality of making their own lives easier by creating a product that they couldn’t find in regular stores, while other inventors just had an extremely creative mind such as Thomas Edison who has over 1,000 patents to his name and Alexander Graham Bell, the creator of the telephone. Another factor is job security. Out of the top 100 businesses in the United States in the 20th century less than 15% have survived the long run. Therefore, just because a company initially has positive financial assets and revenue does not guarantee that they will be able to adapt to changing consumer preferences as well as workforce and technological changes. So, at least by operating your own business one has the ability to run it the way one chooses to and hopefully in the long run one’s firm will survive, thus they will remain employed. Finally, research shows that increased educational attainment, good health, good relationships, minimal stress and wealth will lead to a greater life expectancy and a better lifestyle. (Atchley & Barusch, 2004) It seems that in many instances owning your business can also lead to a better lifestyle. Stress and lack of flexibility is some of the main causes why employees are dissatisfied and unhappy with their careers, so owning their own business can alleviate much of that pressure of working at a stressful job, lessen the restriction from spending time with one’s family, promote taking care of one’s children, increase spending time with ailing elderly parents or just allowing one to relax for a day. Although, Boone and Kurtz stresses that obtaining your own business doesn’t necessarily mean less hours worked, but rather the benefit is the ability to choose which hours are worked.
A good measure of determining if one obtains the characteristics of an entrepreneur is comparing these eight qualities with your own: Vision, High Energy Level, and Need to Achieve, Self-Confidence and Optimism, Tolerance for Failure, Creativity, and Tolerance for Ambiguity, and Internal Locus of Control. In many instances, what sets an entrepreneur apart from the rest of the workforce population is that they usually develop a vision of a product or technological innovation or a service to make either their lives or other people’s lives easier or more enjoyable. By making this vision possible it requires a person with a high energy level, spending countless hours perfecting their craft on whatever that may be. They also display a persistent work ethic of a need to achieve, thus failure is not an option for them. Also, they obtain a high sense of confidence that enables them to attempt various business ventures when others might not be so bold. Therefore, even when they do fail they have an immune reaction to it that pushes them even further to attempt a new business venture at the end of an old one. Likewise, when an entrepreneur does succeed it’s because they have a sense of creativity that allows them to explore different avenues of creating different ways to solve problems in everyday life or even improving an already existing product by making it more practical than the one before. Further, a successful entrepreneur realizes that many business ventures are ambiguous because often business plans and innovations are not guarantees that it will be a success. Nevertheless, in the midst of a failure in the business plan and predicted results, a prepared entrepreneur will make adjustments to steer their business in the right direction in order to be prosperous. Finally, in general the most successful people are the ones that identify with making good decisions, but also acknowledge when they choose poorly. One will find often that if a person does not own up to one’s mistakes they will never learn from them, thus will fail to improve of what they don’t want to accept or realize as a failure.
All over the world new businesses are beginning and some will be successful in the long run, but most will not. For an entrepreneur to be successful they have to have a good product or service, a detailed adequate business plan, quality workers to help run it, and a quality leader to push it forward. Without these components it’s more than likely the business will not be a success. Also, as with anything to be successful at something one has to have their heart in what they do. Persons like Thomas Edison, Bill Gates, Paul Allen, Richard Branson and Steve Jobs do not just like what they do, they love it. It is who they are and their innovations, leadership qualities and personality traits will forever be identified with their names. Although, entrepreneurship dates back centuries, the types of entrepreneurs and the motive to become one still remains relatively unchanged.
- Nearly Half of Innovative U.S. Startups Are Founded by ‘User Entrepreneurs,’ According to Kauffman Foundation Study (kauffman.org)
- 10 Entrepreneur Qualities That Tag You as Fabulous (startupprofessionals.com)
- Mark Cuban: What Entrepreneurs Need to Know Before Starting a Business (entrepreneur.com)