With shows like ABC’s “Shark Tank” and CNBC’s “Adventure Capitalists” consistently engaging viewers, it’s safe to say the public is fascinated by the idea of entrepreneurship. There is both risk and reward and a sense of urgency to the world of startups and the visionaries who create them that captures attention in a unique way. So much so, that the number of new business applications filed with the United States Census Bureau increased significantly in 2020 and 2021.
So what does it take to be in the startup world? In short, an idea and the energy to execute it.
What is an entrepreneur?
An entrepreneur is any individual who starts, organizes, and operates a business, often taking on all of the financial consequences themselves. They are usually described as “go-getters” who are interested in trying something new and working for themselves. Sometimes they don’t feel that they fit in the traditional office environment or they are coming from a traditional corporate workplace using what they’ve learned to strike out on their own.
Regardless of their origins, these individuals are critical to a healthy economy and often introduce innovative techniques, products, and ideas to the marketplace.
What characteristics do entrepreneurs have in common?
It’s important to take a minute to consider some characteristics that other successful business owners have in common like:
- Healthy work ethic
- Passion for change
- Internal motivation
- Willingness to learn
Anyone interested in starting their own business has to be willing to embrace all of these characteristics and develop them along their journey. And while these characteristics are just some common building blocks, they do not represent an exhaustive list. Every area of starting a business is different and so many factors play a part in success or failure. Everything from location to experience to time of year can have an impact on an idea gaining traction.
Entrepreneurs start with these qualities but also recognize that they will have to pick the right time and place to put their ideas into action.
What are some common pitfalls of entrepreneurs?
While being a business owner goes hand in hand with unpredictability, there are still many ways to avoid further loss by steering clear of common pitfalls within the industry. Startup owners can sometimes get caught up in the thrill of starting their own business or running a successful business and forget to continue practicing the things that helped them get there in the first place.
By keeping an eye out for these mistakes, they can better ensure their continued and future success:
1. Hiring their best friend instead of the best person for the job
When someone first starts a business it can be tempting to hire the people around them. The convenience of asking the best friend or coworker to come on board can overshadow the right hire. Successful business owners know how to separate their work from the people around them and aren’t afraid of a little extra research and interviewing to find the right fit for their idea. A good business-minded individual hires the right person for the work before considering other factors.
2. Expecting others to feel their passion or work as hard as them
The entrepreneurial spirit often manifests as an intense passion and work ethic. To the startup owner this feels natural because it’s their dream and all they want to do. However, this is an unrealistic expectation to have for those working for them. Even when they hire people to work for them who are similarly invested in the work, it’s still key to remember that everyone works at a different pace and passion level.
3. Letting ego get in the way
Ego is probably the most dangerous quality in an entrepreneur. It’s also one of the most common characteristics. It takes a certain amount of self-assurance, after all, to commit to starting a business. So it’s really not about losing the ego but rather channeling it into something productive.
Business owners who let their egos get in the way will stop listening to advice from others, start doing everything themselves, and base their decisions off of what they want, not what their target market needs. The ego might motivate an individual in the beginning, but longer term success is predicated on them checking their ego and trusting the people they’ve hired to help them.
4. Not taking the time to master finances
Successful business owners have made it their mission to become experts in finances, personal and professional. The two are often linked when it comes to startups but even for established serial entrepreneurs, finances are a huge key to continued success. Becoming financially literate in the finance world is different from personal financial literacy. While there are many opportunities to dive deeper into the area of financial literacy, these are some good places to start:
- Understanding money better
- Using money wisely
- Managing risk with money
Who are you called to be?
Pursue your purpose at PLNU.
4 steps to become an entrepreneur
Entrepreneurs have great ideas. But great ideas are nothing without execution and investment. Here are a few steps budding business owners should follow to achieve their goals:
1. Create a business plan
While creating a business plan may seem overly formal, it is critical to success. Successful startup owners need to communicate their goals and ideas quickly and often, including financial plans. This can also help them determine any blindspots and makes it easy to communicate with future employees.
However, it’s important not to spend too much time in the ideation phase. Not only do successful startup owners develop a well-rounded idea, but they also have to start testing the product with actual clients — not just friends and family. To shorten the time from idea to sale, revise your sales pitch as needed so you can quickly get to the heart of what makes your business, product or service special.
2. Solidify the product
Entrepreneurs are in the business of change and improvement. While many choose to create a brand new product, some choose to improve upon an existing one. In both cases it’s imperative to solidify the product they’re selling.
This means that any testing that needs to be done, has been done. Any surveys on performance have already been sent out and feedback has been received and implemented. Investors are going to need to see solid evidence that a product or improvement is viable.
3. Secure funding
This is the step that most individuals are most nervous about because it involves asking either strangers or friends for financial backing and usually involves the most risk. However, ideas need funding to be executed, so aspiring entrepreneurs need to get comfortable taking cash fast. One of the best ways to make this ask more palatable is by asking for it in steps. Instead of asking for all of their financing at once, ask for a quarter or half and by a certain milestone within a business plan.
4. Adopt the entrepreneurial mindset
Entrepreneurship is an ever-changing career path. The limits for each product, pitch, or idea are rarely the same therefore the path to success can be different for each individual. But what is the same? The mindset. The entrepreneurial spirit is often characterized by growth, determination, tenacity, and a general all-or-nothing attitude.
Successful business owners are people who can fail forward and learn repeatedly as they continue to pursue success. This lifestyle is for individuals who are willing to believe in their ideas more than anyone else and pursue success in the execution of those ideas.
Why grad school helps with entrepreneurship
The image of a struggling single individual with little education who suddenly hits on a fantastic idea, woos an investor or investors, and secures massive success overnight is certainly romantic, but it’s not realistic. Sometimes successful startup owners do come from humble beginnings, but more often than not they are the result of intentional work, education, and planning.
One critical piece of the puzzle to any entrepreneur’s success is their network. Developing a network without an educational background is possible, but much harder and more time-consuming. Imagine someone taking an idea that has real potential and developing it alongside professors with real startup experience, and then being able to test it out with other like-minded classmates. Entrepreneurs who attend graduate school often graduate with a fully fledged business plan and contacts in the field who they can continue to develop relationships with.
Budding business owners who make the choice to attend graduate school and pursue a degree like a Master’s of Business Administration (MBA) benefit from:
- A larger professional network
- Physical and educational resources available to graduate students
- Improved personal branding by achieving graduate credentials
- Mentorship opportunities
With the many program options and the flexibility they offer, anyone interested in starting a business doesn’t need to wait on launching their business to pursue a degree. With PLNU offering MBA programs during the day and evening as well as in-person, hybrid, and fully online options, this degree is more attainable than ever. Schedule a time to talk with a program advisor for PLNU’s MBA programs to find the right program for you and start your journey.