If you have entrepreneurial ambitions discover the skills and characteristics you'll need to succeed
An entrepreneur can be defined as a person who devises, sets up and runs a new business or businesses. Successful, well known entrepreneurs include Mark Zuckerberg, Lord Alan Sugar, Bill Gates, Karen Brady, Sir Richard Branson and Justine Roberts.
What's the difference between an entrepreneur and a small business owner?
While all entrepreneurs are self-employed, not all self-employed individuals are entrepreneurs - some are better categorised as small business owners.
There are differences between the two. Entrepreneurs typically:
- devise untested ideas
- make high-risk decisions that have a potentially significant long-term impact
- delegate management to experts, meaning that the company can easily continue to function without the entrepreneur's input if and when they move on
- aim to generate buyer interest in their business.
In contrast, small business owners typically:
- solve existing and sometimes obvious local problems
- make low-risk decisions that ensure short-term security
- manage their employees closely, meaning that the company may struggle to function without the small business owner's input
- have little or no intention of ever selling their business.
How do entrepreneurs think of new ideas?
Entrepreneurs' ideas often grow from their qualifications, skills, interests or personal circumstances, and are usually formed in response to an unmissable market opportunity.
However, while all entrepreneurs require an inventive mind in order to identify trends and possibilities, not all entrepreneurs create completely new products. Similarly, a product's inventor may work alongside an entrepreneurial individual who can help to market their product and create a successful business.
If entrepreneurship appeals to you but inspiration is yet to strike, start by conducting some market research in your area of interest. Try to identify any gaps - is there space for a new product or a need for a new service? Networking can also provide inspiration. Join relevant industry organisations and attend events to meet like-mined people and engage with industry leaders.v
What characteristics does an entrepreneur need?
Five skills to succeed in business - creativity, knowledge, leadership, organisation and self-belief - are further discussed in is self-employment right for you?
However, the differences between being an entrepreneur and a small business owner mean that entrepreneurs also need to be:
- Decisive - Entrepreneurs are confident self-starters with the resilience to overcome any problems and the belief that they'll learn from any mistakes they make.
- Innovative - Always looking to create better products or services, entrepreneurs continually strive to reinvent their business.
- Flexible - Most entrepreneurs initially assume multiple functions within their business, in areas including sales, recruitment and product development.
- Passionate - A genuine love for their product or service, not to mention their customers is essential.
- Resourceful - A successful entrepreneur knows how to work with what they’ve got and utilise the resources they have. They also know how to create opportunities.
- Results-orientated - Continually seeking to raise the bar entrepreneurs don't simply achieve their targets.
- Risk-taking - Prepared to take calculated risks, but never reckless ones, entrepreneurs characteristically sacrifice short-term income to maximise long-term gain.
- Persistent - Not every idea or business venture will be a success, but the best entrepreneurs have the resilience to pick themselves up after a failure and the perseverance and tenacity to keep going.
- Visionary - Entrepreneurs don't simply dream big. Their actions turn ideas into reality and they're savvy enough to identify future business opportunities.
As well as possessing these entrepreneurial skills, you'll also need to be wise enough to ensure that any shortcomings that you possess are compensated for. This usually requires recruiting other individuals and the ability to attract external support.
How do entrepreneurs finance new ventures?
Even the smallest enterprise requires huge effort and dedication. Entrepreneurs often work extremely long hours initially, spending as much time on their plans as possible.
As described in how to start a business, funding possibilities for start-up businesses do exist. However, in order to get this support you’ll need to first complete plenty of market research and write a successful business plan. Indeed, the majority of entrepreneurs self-fund most of their initial costs, usually through their savings.
However, entrepreneurs can take several financial shortcuts. For example, many ventures begin at home rather than in business premises - and cash flow can become a big problem once the organisation outgrows the home working environment. At this point, expenditure may well temporarily outweigh income.
Find out more
- Discover the 7 mistakes to avoid when setting up a business.