How to Become an Entrepreneur

An entrepreneur takes on the adventure and risk of starting a new business. These businesses can begin either as side gigs or full-time business ventures. Entrepreneurs start their own businesses and build and scale them to become profitable. 

Explore what entrepreneurs do, how they create a new business, types of entrepreneurs, and tips for getting off the ground and securing funding.

What is an entrepreneur? 

When hearing the word entrepreneur, you may think of someone who has launched their own start-up. While this is true, what really defines an entrepreneur is the entrepreneurial spirit: seeing a need and creating a business that solves that need. As an entrepreneur, you are willing to take a financial and professional risk to bring a business idea to life.

Read more: 10 Steps to Starting a Business

Why are entrepreneurs important?

Entrepreneurs have innovated some of the world’s outstanding creations, using the latest technology or inventing new solutions to create products, services, and experiences consumers need or haven’t seen. From the telephone to the railroad, computers to air conditioning, so much of today’s conveniences were once the brainchild of an entrepreneur.

Additionally, entrepreneurs play a pivotal role in their communities. They identify problems and offer solutions. They also create jobs for other people in the community to earn money and contribute to economic growth. 

What is the best definition of entrepreneur? 

Looking for a straightforward entrepreneur definition? According to Merriam-Webster, the word “entrepreneur” is a noun that means “one who organizes, manages, and assumes the risks of a business or enterprise” [1].

Famous entrepreneurs

Some entrepreneurs go on to lead large companies and gain household name recognition.

A few famous examples of entrepreneurs include:

• Walt Disney: Walt Disney remains a famous entrepreneur for founding the company that bears his name to this day: the Disney Company. He innovated the animated cartoons that made his company famous and continued to explore new ideas with documentaries, theme parks, and other forms of family entertainment. 

• Oprah Winfrey: At the age of 19, Oprah Winfrey started her career as the first female black news anchor in Nashville and continued to rise to a media icon, creating first The Oprah Winfrey Show, then later the media company Harpo Productions and her magazine O, The Oprah Magazine. 

• Steve Jobs: Steve Jobs is famous for founding Apple, along with co-founder Steve Wozniak. Jobs held over 450 patents for new technologies related to personal computing and was awarded the National Medal of Technology and Innovation in Computer Science in 1985 at age 30. 

Is entrepreneurship a good career?

Entrepreneurship may be a great career path if you're a self-starter with a passion for what you do. Initially, the entrepreneurial process can be challenging, but you may find it a lucrative endeavor with the right strategies. As an entrepreneur, you can solve problems and innovate to bring value to the economy and experience personal satisfaction in owning your own company. After starting one business, you may decide to start multiple businesses that reflect your interests, abilities, and understanding of consumers' needs.

Whether scaling your company long-term, starting new businesses, or working as a consultant for other entrepreneurs, it is possible to turn entrepreneurship into a lifelong, full-time career. This career path can lead to financial freedom.

Read more: What Is Entrepreneurship? A Guide

Types of entrepreneurship 

Four types of entrepreneurs exist, each based on a different business model. Explore them in more detail below:

• Large company entrepreneurs: This type of entrepreneur launches businesses within an already established business by acquiring or creating a new internal division. Facebook’s acquisition of Instagram is an example.

• Small business entrepreneurs: This type of entrepreneur might open stand-alone businesses with a few employees. Often, they open a single location with a few employees, such as a restaurant, boutique, or professional service.

• Social entrepreneurs: Combining business with the desire to create societal change with products or services, these entrepreneurs aim to create a sustainable business that can solve a societal problem or address a social issue. Examples include Books to Prisoners and TOMS.

• Scalable start-up entrepreneurs: These innovators often have a novel idea to shake up the market or create a new one and aim to start businesses with the intention of widespread, long-term growth. Examples include companies like Meta and Uber. 

Types of entrepreneurs

If you consider the breadth of companies worldwide and all the different solutions they offer, you can see that companies need other types of leaders to succeed. While every entrepreneur is different, seven types of entrepreneurs you might encounter (or aspire to become) include: 

• The visionary: The visionary is motivated and passionate about their innovative ideas. They create companies that disrupt the market.

• The builder: The builder is an entrepreneur who enjoys building a company from the ground up with solid business principles and a steady hand. Builders lead companies through rapid growth with an eye toward strategy and execution. 

• The hustler: The hustler is willing to work hard to create a company through determination and the motivation to reach their goals. These entrepreneurs find a thrill in the personal victory of building a successful company and are willing to persevere through challenges.

• The imitator: An imitator is an entrepreneur who creates a company around the belief that they can improve on someone else’s idea and make it better. Although imitators get a bad reputation because of their work on other people’s ideas, these entrepreneurs are important drivers of innovation and help the market refine the best ideas. 

• The analyst: The analyst seizes an opportunity when the data says the time is right. This kind of entrepreneur analyzes the market to find new opportunities and calculates their business decisions. 

• The buyer: The buyer is an entrepreneur who wants to purchase an existing company and help it grow or expand. These entrepreneurs often pair well with visionaries or builders because the buyer can take over a company when their counterpart has another big idea. 

How to become an entrepreneur

To become an entrepreneur and experience business success, you'll need to follow several key steps, as outlined below:

1. Conduct research. 

Research is vital to the process, particularly as it helps you understand whether a product or service will be viable and the market it might fit into. Consider the following questions to help you learn about your new business venture:

• Is your idea solving a problem that needs fixing? 

• How can you disrupt long-standing industries or niche markets with fresh approaches? 

• What does your competition look like? Analyze competitors to discover gaps in the market that your business and its products could fill.

Read more: Competitive Product: Definition + How to Analyze One

2. Build a network.

Once you’ve determined whether your idea can become a successful business, focus on filling your network with individuals who will support you. Attend networking events in your area and connect with investors, lawyers, and anyone who can help along the way. Consider finding a mentor to advise you as you work out the details of your business’s operations. 

Read more: How to Use LinkedIn: A Guide to Online Networking

3. Get organized.

Organizing your idea into actionable steps and a clear plan is vital in starting a business. Create a business plan and consider getting it professionally reviewed by an experienced entrepreneur, potential investor, early potential customer, or someone in your field of expertise. You can also hire someone to write a business plan or use free online resources to create one. 

Additional organizational tasks include:

• Establishing your business as a legal entity by incorporating it.

• Open a business bank account.

• Create a proof of concept as early as possible to attract investors to help fund your business.

4. Get funding.

Taking out a loan can often help in the early phases of building a business by supplementing any existing entrepreneurial resources you may already have. Determine what type of loan you’ll need and the payments you can afford. Gather all required documentation required by the lender. Entrepreneurs may apply for several different types of business loans, such as lines of credit, personal loans for business use, and US Small Business Administration (SBA) loans. 

If you’re seeking out investors, be ready to present your business plan, including financial plans and why the investor would benefit from funding your idea.

5. Build and test.

Building and rolling out your minimum viable product (MVP) can help engage your first potential customers and validate your idea. The initial version of your concept doesn’t have to be perfect to gauge interest. Getting input from a variety of people is an opportunity to see what works and what doesn't. This trial-and-error phase is essential to the long-term success of your business. 

After gathering data and implementing changes from your test run, fine-tune your products and business plan.

6. Scale your business.

Take the money you’ve raised and allot what’s needed to build and scale your business. Many successful business owners suggest scaling your business based on your overall goals. Manage your cash flow accordingly, and you may see the growth that matches your initial dreams for the company or beyond.

Read more: Your Guide to Small Business Accounting

Resources for entrepreneurs

As an entrepreneur, you will have a broad range of available resources to help support you throughout your journey. Explore a few helpful ones for first-time and seasoned entrepreneurs alike: 

• The US Patent and Trademark Office provides the resources you need to file for a patent, trademark, or copyright.

• PRLog offers free and discounted options for press release distribution to search engines, news websites, and journalists.

• US Small Business Administration (SBA) provides resources to help you start your business, including information on SBA-guaranteed loans.

• FindLaw Small Business Center gives entrepreneurs access to legal forms and helps find answers to common legal questions. You can also search for lawyers on its website.

• SCORE connects you to a network of small business mentors for free.

As you grow your business, consider recruiting a board of advisors who can provide counsel, advice, and support for your business.

Start your entrepreneurship journey with Coursera

Succeeding as an entrepreneur requires more than just a great idea. Understanding the process of starting a business, leveraging available resources, and developing your skills can make all the difference. Continue learning and building your entrepreneurial mindset by taking online courses on Coursera and building foundational business development skills.