An entrepreneur is someone who creates a new business; while they bear most of the risks, this person also enjoys most of the rewards deriving from this venture. Entrepreneurs have an important part to play in any economy, deploying the initiative and skills necessary to bring new ideas to market. Successful entrepreneurship results in growth opportunities and profits.
What Are the Different Types of Entrepreneurship?
Broadly speaking, there are four main types of entrepreneurship. These are scalable start-up, small business, large company and social entrepreneurship. The latter focuses on helping the environment or communities via their services and products. The goal of this type of entrepreneurship is to create something that benefits society and humankind.
Getting Started as an Entrepreneur
For those interested in getting started as an entrepreneur, it’s important to first identify a profitable business idea: this is one of the most important business decisions that a new entrepreneur will make. The product or service should be one that meets a need, serves a passion or solves a problem; it’s also vital that this product or service offers the potential for growth, rather than representing a passing fad.
Experienced entrepreneurs – like Jordan Diment, who is the founding director of numerous companies – know that once a product or service has been developed and validated, a business plan should be written. Key elements that should be included in this plan are the business’s target audience and how this will be reached, the business model, full financial details and projections, and the marketing strategy.
Securing Funding
Before the new entrepreneur launches their business, funding must be secured. The most common ways of doing this are via self-funding, taking out a business loan and obtaining funding from venture capitalists. The latter comes in the form of a venture fund or angel investor; in return for the investment, an equity stake in the company or convertible debt (debt that can be converted into equity at a later date) is provided.
What Are Some Common Pitfalls of Setting Up a New Business?
There are some common pitfalls that all new entrepreneurs need to be aware of when setting up their business. Running out of money is the challenge most likely to be faced by a start-up. Having a comprehensive business plan in place can help to avoid this, as well as a willingness to be adaptable and shift direction. Carrying too much debt, an entrepreneur not keeping their business and personal life separate, and internal conflict are also all significant risks.
For more information about getting started as an entrepreneur, take a look at the embedded PDF.