What is entrepreneurship? Many entrepreneurs are often mistaken to be business experts who have taken the time to study business theory and principles. While that is certainly true, in large part, there are many principles that all entrepreneurs must consider before they begin their ventures.
First, what is entrepreneurship? Many entrepreneurs are often confused by this term. The truth is, entrepreneurship involves three elements: risk, opportunity, and growth. Risk refers to the potential danger to the well-being of an enterprise. Opportunity refers to the chance that something can be achieved through careful planning and a keen eye to details.
While it is possible to start-ups can create wealth for entrepreneurs, they must also carefully consider their risk tolerance, their resources (in terms of time, money, and others), and their vision. All three elements can be a delicate balance, and new ventures need to consider these things carefully if they wish to succeed. In addition, entrepreneurs must be constantly aware of the need to stay on track, and they must always evaluate potential opportunities. Finally, entrepreneurs must remain open to growing rapidly, both financially and organizationally, while maintaining strict budgetary guidelines.
Next, what is entrepreneurship? Most businesses, both large and small, have one thing in common. They are long-term ventures. The most successful businesses have a long-term mission and focus on providing services or products that will be around for the long-term. If the company does not have long-term plans, it is likely that the enterprise will fail, and the proprietor will have wasted a tremendous amount of time and money.
When it comes to “entrepreneurship,” however, there is often a lot of confusion as to what type of person should be regarded as an entrepreneur. For one thing, not all entrepreneurs are “brilliant” or “fastidious” in their pursuits. As one famous venture capitalist has said, there are only two types of entrepreneurs: the ones you know, and the ones you don’t.
Entrepreneurs are those who, with some research, come up with an idea for a new enterprise and pursue it with careful planning and execution. Entrepreneurs must also have a strategic plan in place. This strategic plan is generally developed by one or more members of the venture team. There are some entrepreneurs who are good “writers,” who can write a compelling business plan. These entrepreneurs are, of course, exceptionally intelligent, and may well possess the “intuit” or “writing” skill necessary to achieve great success.
A truly “brilliant” entrepreneur understands how to build sustainable advantages – the ability to gain a foothold, to grow to a significant size, and then to maintain that size and power over a long-term period. Just as an oil company needs to find oil reserves wherever they are found, so too do early entrepreneurs need to locate and exploit niche markets. But for them, the secret of long-term success requires a long-term plan. The best entrepreneurs are not interested in being involved in a business for which they cannot figure out the next step.
The third key trait most entrepreneurs must have is the ability to think creatively and “outside the box.” Too many entrepreneurs fall into the trap of repeating the same strategy, to following the same procedures, to building the same initial infrastructure. They do not look to innovation or creativity in their operations. Their strategies simply do not evolve. Those who value creativity and are capable of “outside the box thinking” will, over time, be the ones to create truly innovative businesses.
The fourth trait is vision. A young company may possess the best management practices in the world, but if it has no direction, no strategic planning, and no vision, then all that it is worth has little to offer to investors. Visionaries bring a new approach to running a business. They help businesses think about future profitability. In other words, if a young company does not have a long-term strategy, it cannot be expected to invest its profits in expansion. Visionaries are also the ones who believe that businesses should be operated efficiently – and that means investing in human resources, in equipment, in building controls, and in control systems.
The fifth trait, discipline, is related to the second trait, vision, and is closely related to the fourth trait, but it is a more generalized trait. A good entrepreneur will have a firm organizational structure and a disciplined workforce. Entrepreneurs must take discipline not only in the workplace but also in their personal relationships and in their interactions with customers. Personal discipline also leads to profitability, because entrepreneurs who do not set boundaries and expectations for themselves will easily become discouraged. And finally, although this may seem to be the most unrelated trait, openness to change and flexibility are important for entrepreneurs because they allow them to adapt to changes in their environment and in their customers’ expectations.
The last trait, openness, is related to entrepreneurs’ ability to trust others and to be flexible. Entrepreneurs must be willing to let others manage their own work processes and to make changes to the organizational structure in order to meet their own needs. They also need to be open to accepting input from employees and customers. If an entrepreneur allows others to make decisions or to implement organizational structures, then he is unlikely to become flexible or to learn quickly.