The world is filled with aspiring entrepreneurs—people who believe they have what it takes to launch a company and build it into a profitable business. While anyone can start a business, not everyone will succeed.
Research by Harvard Business School Professor Shikhar Ghosh shows that up to 75 percent of startups fail. Another study conducted by the US Small Business Administration Office of Advocacy shows that just over 22 percent of small businesses fail within one year of being launched, while nearly half fail within five years, and approximately two-thirds fail within 10.
In light of these statistics, the question becomes: What does it take to be a successful entrepreneur? What steps can aspiring entrepreneurs take to lay the groundwork for success?
What Is an Entrepreneur?
An entrepreneur is someone who launches a business venture, typically in the form of a company that manufactures and sells a product or provides a service. Entrepreneurs are often viewed as innovators who identify a problem or opportunity, then develop a solution no one else has recognized.
In the online course Entrepreneurship Essentials, it’s noted that “entrepreneurs—either individuals or teams—actively scan the environment for opportunities, or discover them as they live and work. They form hypotheses about what customers want or need and how they can deliver value to the customer.”
Successful entrepreneurs don’t just charge ahead with their ideas. First, they seek to validate there’s demand.
One way they do so is through testing. According to Entrepreneurship Essentials, entrepreneurs “recruit people and invest money to determine if customers will indeed value the product and they can produce and deliver it at an acceptable cost. They often find different, even better ideas once in the marketplace.”
Entrepreneurship Requirements
Do you have dreams of one day becoming an entrepreneur and launching your own company? In addition to a business idea, doing so will require you to possess certain skills and characteristics.
1. Key Entrepreneurship Qualities and Behaviors
Several researchers have tried to pinpoint a specific entrepreneurial personality or profile in an attempt to quantify what makes some more successful than others.
In Entrepreneurship Essentials, it’s explained that there’s no single personality profile that leads someone to success as an entrepreneur. However, there are a number of characteristics shared by some of the world’s most successful entrepreneurs.
Some behaviors that are distinct from personality traits and associated with entrepreneurship include curiosity, pattern recognition, team building, structured experimentation, adaptation, decisiveness, and persistence.
While it can be argued that some people are more inclined to exhibit these behaviors than others, each of these qualities can be acquired through proper training and development.
2. Essential Entrepreneurial Skills
Especially in the earliest stages of launching a business, entrepreneurs are responsible for performing a variety of duties—it comes with the territory. Before you have an accounting department, marketing staff, and product development team, you'll likely need to perform some of these critical responsibilities.
Taking the time to develop certain skills before launching your business can drastically improve your chances of success. Here’s a list of some of the most critical skills all entrepreneurs should have:
- Communication skills, which you’ll leverage daily as you work with vendors, investors, customers, and various members of your growing team
- Organizational skills, which will empower you to work toward your goals efficiently
- Time management skills, which will be essential throughout your career, but especially early on, when you have multiple responsibilities
- Data-driven decision-making, which will enable you to make objective, measurable decisions about your products, services, business, and customers
- Strategic thinking, which will allow you to discover opportunities and threats that guide business decisions more easily
- Accounting basics, which will be especially important before you have a person or team dedicated to managing your business’s finances
- Resilience, because every entrepreneur faces challenges and struggles, and it takes resilience to bounce back
3. An Opportunity or Business Idea
For a new venture to succeed, the business plan must be centered around a solid opportunity. In Entrepreneurship Essentials, an opportunity is defined as a proposed venture to sell a product or service for which customers are willing to pay more than the required investments and operating costs.
An opportunity is more than a product idea, and it extends well beyond the initial act of getting into business. According to Entrepreneurship Essentials, “it’s a plan that shows how a venture will attract, retain, and reward all stakeholders, including customers, founders, employees, investors, distributors, and suppliers.”
That plan doesn’t end once you’ve identified an innovative business idea. Ideally, your concept should be validated before you commit resources, time, and effort to bring it to life. Once validated and pursued, you must constantly reevaluate your business to determine whether you need to adapt to new opportunities or threats.
4. Resources and Funding
Finally, to launch your business, you’ll need a source of funding to purchase equipment and materials, develop your product or service, iterate upon your offerings, and refine your processes. Exactly what funding looks like will vary depending on the type of business you’re launching and your industry.
For some entrepreneurs, self-funding is possible. In such cases, an entrepreneur might set aside enough money to pay for their living expenses while they get their business off the ground, in addition to the costs associated with the launch.
Self-funding isn’t the only option available. There are many other paths you might take, such as:
- Securing an SBA loan from the Small Business Administration
- Raising capital from investors
- Applying for grants (this may be especially suitable for nonprofit organizations)
- Crowdfunding from the public
- Relying on a line of credit
Every form of funding comes with benefits and risks. Self-funding, for example, allows you to retain complete control over your business and potential profits, but also requires you to carry the risk of failure. Raising capital from investors, on the other hand, allows you to spread your risk and, potentially, launch your business quicker—but it forces you to give up a portion of your control. Ultimately, you must decide what makes the most sense for your business.
Your Path to Becoming an Entrepreneur
Countless aspiring entrepreneurs have an interesting, innovative, and compelling business idea, but don’t have the skills or qualities to carry it through to fruition. Similarly, many others have the skills and qualities, but lack an idea to pursue. Even those with a brilliant idea and the necessary skills can fail to get their project off the ground if they don’t have access to funding. Successful entrepreneurship requires a blend of all these components.
The good news is: Successful entrepreneurs aren’t born—they’re made. With the right training, instruction, and development, everyone has the potential to become an entrepreneur.
Are you interested in learning the ins and outs of entrepreneurship? Explore our four-week online course Entrepreneurship Essentials, and learn to speak the language of the startup world.
