We explain what an entrepreneur is, their top qualities, importance, and difference with a businessperson. In addition, we explore what a startup is.
What is an entrepreneur?
An entrepreneur is a person who has the drive and will to start a business venture for commercial purposes, and does so independently. An entrepreneur differs from a businessperson, who runs a business organization or corporation with a more complex structure.
An entrepreneur may become a businessperson if the business activity develops and grows into a formal structure with a larger scale.
Entrepreneurs usually have the ability to adapt to major changes, are willing to face new challenges, economic risks, and are constantly learning. Some people choose entrepreneurship as a lifestyle, while others become entrepreneurs when they are unable to access the labor market.
- An entrepreneur is a person who runs a business activity independently.
- An entrepreneur differs from an employee, who maintains an employment relationship with an employer through an employment contract.
- Entrepreneurs may work on their own, outsource some tasks, or hire people, depending on the type of business entity they set up.
- See also: Empowerment
Characteristics of an entrepreneur
The main characteristics of entrepreneurs include:
- Eagerness to learn. An entrepreneur will face new challenges even if the business activity lies within their field of expertise, being the only person responsible for running the whole business and managing it integrally. For example: An entrepreneur manufacturing t-shirts for wholesale should consult an accountant to take care of administrative and tax matters.
- Adaptability. An entrepreneur will face unforeseen situations, such as errors due to lack of experience, or new state regulations that may directly or indirectly affect the business activity. It is necessary for an entrepreneur to be autonomous and flexible to remain active over time.
- Being organized. An entrepreneur should manage their time and work effort efficiently to achieve profitable results over time. Otherwise, investment would be higher than profit. Being organized also involves learning to delegate or outsource certain tasks.
- Perseverance. An entrepreneur must be patient to see their work bear fruit, from the time the business is set up until it becomes lucrative and recognized by consumers. It is important to maintain contact channels with customers and take advantage of opportunities to make the work known through digital media or points of sale.
- Continuous improvement. Entrepreneurs should always be ready to optimize their work, their production processes, their communication, and their products and services, with the aim of improving and being more competitive in the market.
Importance of entrepreneurship
An entrepreneur can grow either a small business or a large company. Either way is key to the development of a nation's economy, by being a source of employment, promoting consumption, and contributing to the individual's economic autonomy.
Starting a new business involves facing various risks that are beyond the entrepreneur’s control, even when the person gives their best. For example, a world market crisis, or a national economic crisis will impact businesses.
The essence of an entrepreneur has to do with the search for opportunities, both related to the person's skills as well as to the need for a product or service for which they think there may be demand.
- For example: In 1970 Steve Jobs was an entrepreneur who saw an opportunity with great potential in the market. He noticed that computers were only accessible to a specific audience and not to the average consumer. He thus came up with the idea of creating devices that were easy to use as well as appealing. Today, Apple Inc. is one of the most profitable companies in the world.
Goal of entrepreneurship
Every entrepreneur must have a mission for their business, that is, a clear and realistic purpose based on objectives, besides generating economic profits. In addition, they must state the vision, which is the way they will carry out the business mission.
With a clear mission and vision, an entrepreneur can plan their business for the coming years, as a guide to focus daily efforts and objectives.
The steps to create a startup are:
- Setting objectives. Objectives should be clear, specific and realistic. They should answer the question: What do we hope to achieve with the business?
For example: sell wholesale, generate specific high-value sales, be recognized as synonymous with quality, among other goals.
- Define medium-term goals. Daily objectives are the business’ driving force; however, setting medium and long-term goals allows the business to endure over time.
For example: planning the launch of a new product for the middle of next year.
- Valuing work. Knowing to value their work and make it profitable is key to every entrepreneur. At the initial stages of a business activity it is often difficult to estimate the amount of money, time, resources and energy required. It is necessary to calculate the relationship between cost and productivity to be able to estimate profit.
- Measuring productivity. Activity growth can be analyzed through indicators that are useful for decision-making. Common sense is not always the best way to follow, that is, you can work hard and put in the best effort, but if you miss the target, wrong decisions can be made.
What is a startup?
The term startup refers to young business ventures and companies that develop products or services through new technologies bringing innovative ideas. They typically experience rapid growth during the initial stages of the business and sustain themselves over time.
- For example: Prothesia 3D is a Mexican startup that develops customized orthotics and prosthetics. Through 3D printing software, it manufactures medical devices tailored to each patient at a low cost.
- BBVA (2022). ¿Qué es ser emprendedor?. BBVA.
- Perry, E. (2022). The 8 characteristics vital for becoming an entrepreneur. Betterup.
- Huerta, A. J. (2022). Qué es emprender: importancia, ejemplos y consejos. TiendaNube.