Entrepreneurs and entrepreneurships explained in less than five minutes
An entrepreneur is typically an individual who creates a new business, plays an active role in its operations, assumes most of the financial risk, and enjoys most of its success. The process of creating a new business is known as entrepreneurship and is often driven by new ideas for products or services.
The idea of an entrepreneur continues to evolve and expand, from the founder of a startup to a small business owner to the leader of a corporate organization. As entrepreneurship becomes more critical to the human work experience, it’s essential to understand how and why it works.
An entrepreneur is a person who pursues an opportunity, often commercially driven, to bring a new product or service to market with limited resources and high risk. The process of creating a new business is entrepreneurship, also defined as organizing limited resources to capitalize on a business opportunity. In short, an entrepreneur is someone who identifies a need for a new product, process, or service and builds a business around that need.
A common type of entrepreneurial pursuit is a startup, which is a business entity created by an entrepreneur after they have identified a compelling opportunity for growth. According to the Center for American Entrepreneurship, growth is the primary objective for entrepreneurs who launch startups—more so than being one’s own boss.1
Examples of well-known startups are Wayfair, Shopify, and Uber. These businesses have grown past the startup phase because of their realized growth—the ultimate goal.
An entrepreneur is an individual who organizes the resources to exploit a commercial opportunity through a process known as entrepreneurship. This opportunity could be:
Entrepreneurs often start their endeavors by bootstrapping—clearing their savings to cover costs and keeping expenses to a minimum because of limited capital or investment. They do this in the hopes of growth and big rewards.
The process of entrepreneurship can vary depending on the individual. However, a classic example of an entrepreneur, the founder, will often take the following steps to begin the entrepreneurship process:
Many startup founders follow a similar route, but the focus remains on finding the idea, gathering resources, launching the concept, and seeing a future path.
There are different types of entrepreneurs you may identify with, and here are a few prime examples.
A founder is the classic example of an entrepreneur following through on an entrepreneurship venture. A startup founder sees the growth potential in an idea and brings it to fruition. Founders may not necessarily remain with their company for the long term, yet they retain the founder title.
An intrapreneur is a more updated version of an entrepreneur. As described by Deloitte, the role of an intrapreneur is to develop “radical” innovations within an existing company. An intrapreneur may be part of an innovation team or simply find new opportunities for their company.2
Finally, a CEO may not be considered a traditional entrepreneur, yet the definition of an entrepreneur as a person who organizes resources to pursue a commercial opportunity aligns with a CEO’s day-to-day leadership (i.e., organizing) of the business in its endeavors (i.e., commercial opportunities).
As mentioned, entrepreneurship takes many forms, and the broadened understanding of today’s entrepreneur can even include a small business owner. However, there are some key differences as shown in the table below.
Entrepreneur
· Has a goal of working for themselves and transforming a market
· Is risk-tolerant and takes on greater risk
· Strives toward large financial gains for the future
· Creates a highly detailed business strategy
Small Business Owner
· Has a goal of working for themselves and adding to a market
· Is risk-conservative and takes on less risk
· Strives toward day-to-day financial freedom
· Creates a simpler business strategy
While an entrepreneur may take on more risk for much larger rewards than a small business owner, both parties are focused on commercial opportunities that can meaningfully change or add to their market,
