What is entrepreneurship, and how does it work in practice? Entrepreneurship is the ability to conceive, manage and carry out projects, transforming ideas into products, services, and businesses. This concept also refers to the initiative to suggest and implement changes in existing companies.
Much is said about entrepreneurship and how entrepreneurs took their ideas and turned them into successful projects. Now, what does that concept consist of? What are your goals? What is needed to invest in it?
To answer all your questions about entrepreneurship, we have prepared this complete guide with everything you need to know about the subject. We include some advice for those thinking of starting a business.
Without further ado, grab your notebook, and let’s get started!
What is entrepreneurship?
Entrepreneurship is the ability to develop and carry out projects, transforming ideas into products, services, and businesses.
We could also understand entrepreneurship as the initiative to suggest and implement changes in companies that already exist in the market.
In the business world, we can say that entrepreneurship is the act of creating new solutions, transforming businesses, modifying processes, and any initiative that promotes the evolution of the market and generates an impact on it.
Likewise, entrepreneurship is a scenario with great potential for professional development. When new businesses emerge focused on satisfying the specific needs of a particular public, entrepreneurs can take advantage of these new consumption habits to identify opportunities.
The “equation” for a startup, according to the North American consultant Steve Cobak, is as follows:
Entrepreneur + Capital = Products + Clients = BusinessWhat does this mean? That undertaking requires an investment, not only financial but mainly time. To achieve success, it is necessary to offer a true solution: dedicate yourself to developing a differential for your business, thinking about how people will use what your business offers in “real life” and why they will choose your brand instead of your brand—the competition.
How did the concept of entrepreneurship arise?
Although today entrepreneurship is a fairly popular word, it is not as current a term as it seems. The concept began to gain notoriety in academia in mid-1945 by the Austrian-American economist Joseph Schumpeter.
Initially, the word was used as a starting point for the “Theory of Creative Destruction,” conceived by the economist. According to Schumpeter, entrepreneurship is a practice limited to versatile people with production skills, financial organization, and sales.
Over time, it transformed the concept into what we know today. Part of this transformation came from academic Robert D. Hisrich’s book Entrepreneurship.
For Hisrich, entrepreneurship is creating something new and valuable, devoting time and effort, and assuming possible economic, psychological, and social risks to obtain financial and personal rewards.
What is it to be an entrepreneur?
From the concept of entrepreneurship, we can define the entrepreneur as the one who leads innovative projects, promotes transformations, and sees opportunities in unexplored places.
An entrepreneur is a person who implements new ideas and makes changes wherever he goes.
In practice, an entrepreneur can be:
- The inventor of a new object;
- The creator of a new product or service;
- The founder of a company or institution;
- The creator of a significant transformation;
- The owner of a website, blog, or online store ;
- And anyone who is behind something new and innovative.
Characteristics of an entrepreneur
The main characteristics of an entrepreneur are:
- Initiative: The entrepreneur knows when to act and does not waste opportunities.
- Self-confidence: He believes in his ideas and knows how to defend them very well.
- Courage – The entrepreneur is not afraid to take risks or fail; Challenges drive him.
- Optimism: negative thinking? No way! An entrepreneur is always optimistic about his projects and ideas.
- Persistence – Giving up is not an option; an entrepreneur is persistent and goes to great lengths to ensure their goals are achieved.
- Resilience: the entrepreneur can face adverse situations and even benefit from them; recovers from difficult situations, learn from adversity, and continues to move towards the future.
- Leadership: acts as a guide for initiatives and teams, leading and directing each project stage.
- Relationship capacity: the entrepreneur knows that teamwork can be much more effective; therefore, he maintains good professional connections.
What are the types of entrepreneurship?
Over the years, the concept of entrepreneurship has not only been transformed. Still, it has also been fragmented, allowing the appearance of different scenarios.
As a result, many types of entrepreneurship exist today as entrepreneurs explore markets to bring their projects to life.
With this in mind, we have made a list of the main types so that you can discover how each one works.
Digital entrepreneurship involves businesses and solutions that are carried out in the virtual environment. Everything developed on the internet, from online stores to applications and social networks, can be understood as part of this category.
In America, for example, there is enormous potential for digital entrepreneurs, especially in everything related to e-commerce: according to the e-Marketer agency, in 2020, the country’s retail e-commerce market had the fastest growth in all the world, showing a 79% increase over the previous year.
Business entrepreneurship involves the creation and development of traditional business enterprises.
It contemplates the creation of products and services in general to obtain an economic benefit. Entrepreneurs working in this area must carefully observe the market’s new needs since that is where the opportunities arise.
Corporate entrepreneurship, or entrepreneurship, occurs within an organization and focuses on developing improvements. Whether with new solutions or with the restructuring of processes, the objective of the corporate entrepreneur is to promote transformations.
This model is prevalent in more modern companies, such as startups, with a strong culture of sharing ideas. Corporate entrepreneurship is usually very positive for companies seeking to update their processes and stand out in the market.
Social entrepreneurship was designed to implement community-oriented improvements. For this reason, it differs significantly from the other models since the institutions focus on carrying out projects that help some group or cause.
Within social entrepreneurship, we can mention Non-Governmental Organizations (NGOs) that work to combat hunger, for example. Social entrepreneurs are quite different from others as they focus on upholding their ideals and ensuring that their institution positively impacts society.
Green entrepreneurship is related to social entrepreneurship; the difference is in the focus of these organizations, which consists of preserving the environment.
In this model, institutions are created to address public interest environmental issues. Usually, they do not seek economic benefits but monitor and intervene directly in agendas that may threaten the environment somehow.
Female entrepreneurship encourages and promotes the presence of women in all markets. The idea is to ensure that the female company in positions of power becomes common.
The role of a female entrepreneur also involves finding opportunities to promote diversity in the business environment. Likewise, she seeks to support projects created by other women and strengthen a network of connections between professional women.
Individual entrepreneurship is about small businesses managed by a single person.
Professionals who develop and offer services independently, such as registered managers, can be considered sole proprietors. What differentiates this model from others is the absence of partners and investors.
Corporate entrepreneurship, for its part, promotes the union of several entrepreneurs with a common goal. In these cases, professionals join forces to bring a specific project to life.
It works like a support network, where each entrepreneur offers what they have. Based on the concept of a collaborative economy, all decisions are taken together in a democratic way, as well as the distribution of expenses and benefits obtained.
6 tips to start a business
When it comes to entrepreneurship, nothing is set in stone. We are talking about a scenario that promotes changes and transformations.
However, it is possible to establish some practices that can help you start a successful business and, below, we share them with you:
- Define your activity
First, you must analyze all the possibilities and understand which one makes the most sense with your idea.
For example, you can ask yourself these questions:
- Are you going to transform your project into a physical product?
- Does your idea correspond more to a service such as the sale of online courses or consultancies?
- Is it going to develop in the online or offline market?
- Does it have a social purpose?
- What will be your market niche, that is, that group of consumers that have not yet been served by the competition and represents a business opportunity for you?
Remember that knowing where you want to act is the first step to shaping your project.
- Create a Spread
If you are thinking of developing a product or service that, in some way, already exists in the market, you must differentiate yourself.
You must do a good market and competition analysis and identify opportunities to offer something better, superior, innovative, or, at least, highly competitive.
- Validate your idea
After defining your project and just before you start working on it, it is essential to talk to people who can identify with the solution you are developing and listen to what they have to say.
The feedback of other people can be very enlightening for your creative process. It can generate essential contributions to the project. Unless you’re creating something uniquely personal, make sure your idea makes sense to others.
- Make a financial plan
Starting a project, however simple it may be, will require investment. Therefore, you must put all the necessary costs on paper to make your idea a reality.
A financial plan will help you organize and control all your business expenses. In this way, you will be able to work with peace of mind, knowing exactly how much you need to spend and how much you have available for it.
- Find partners and investors
If your project aims to reach a competitive market, the ideal is to have the help of partners and investors. In this way, your idea will not only be validated but also financed by agents who will help you make it a reality.
However, this is something you have to look at very carefully. Remember that business partnerships are formalized through legal contracts, so take the time to read them carefully to ensure the terms are favorable for your business.
- Build an organizational culture
It is advisable to seek to ensure your business’s health and growth. Creating an organizational culture will allow you to manage your company more practically and effectively.
The idea of organizational culture is to promote a healthy dynamic among all employees and partners. It tends to improve team productivity and business development.
Even if your project is already stable, remember that it started with an idea. Everyone around you has something to contribute, so listen to them. By cultivating a collaborative culture, your project can grow even more!
Are you thinking of becoming a digital entrepreneur? How about creating your online store and selling online? Show the world what you are capable of doing.