How to become an entrepreneur
While there is no one “right” way to become an entrepreneur, the general career trajectory usually looks something like this:
- Develop an idea for a unique or in-demand business.
- Learn about and gain experience in a range of business roles, including finance and accounting, management, and marketing.
- Make a business plan and establish a source (or sources) of funding.
- Recruit talented workers and managers with the skills needed to develop, test, implement, support, and maintain the company’s products.
- Devise strategies for launching the product or service and for attracting and retaining customers.
- Once the company is established, seek ways to grow revenue by expanding into new areas and product lines.
- As the company matures, the founder’s role is likely to include both long-term strategic planning and short-term tactical management and financial decisions.
- Pursuing a Master of Business Administration (MBA) or similar management-focused degree provides entrepreneurs with the skills they’ll need to succeed at every step of the process as they realize their business goals.
What Are the 4 Types of Entrepreneurship?
Anyone interested in starting and running their own business should consider which entrepreneurial model they prefer: small business, scalable startup, large company, or social entrepreneurship.
Small businesses represent the overwhelming majority of U.S. entrepreneurial ventures. A small business could be any company, restaurant, or retail store that’s launched by a founder, without any intention of growing the business into a chain, franchise, or conglomerate. For example, opening a single grocery store falls under the small business model; creating a nationwide chain of grocery stores doesn’t. Small business entrepreneurs usually invest their own money to get their companies off the ground, and they only make money if the business succeeds. According to the Small Business Administration (within the updated FAQ), more than 99% of all U.S. businesses fall into the small business category
Scalable startups are less common than small businesses, though they tend to attract a lot of media attention. These businesses begin on a very small scale, often as just the seeds of an idea. This seed is then nurtured and scaled, typically through the involvement of outside investors, until it becomes something much larger. Many Silicon Valley tech companies fall under this model; they begin in an attic, garage, or home office before eventually scaling into large corporate headquarters.
Sometimes, entrepreneurs work within the context of a larger, established company. Imagine that you work at a large auto manufacturing company. Through careful market research, you realize there is a high demand for motorcycles, and that your company has many of the technologies and processes in place to branch into motorcycle production. You go to your boss and ask for the funding to launch a brand-new motorcycle division, and you are approved. This is an example of what the large company entrepreneurship model might look like in practice.
The final model to consider is social entrepreneurship, which seeks innovative solutions to community-based problems. According to Investopedia, social entrepreneurs “are willing to take on the risk and effort to create positive changes in society through their initiatives.” In other words, a social entrepreneur launches an organization that’s fundamentally about enacting positive social change, not merely generating profits. The social change in question may pertain to environmental conservation, racial justice, or philanthropic activity in an underserved community.