Entrepreneurship for Beginners
Looking to learn more about entrepreneurship and how to live your dreams?
You’re in the right place! In this introduction guide I’ll answer common questions like:
- What is entrepreneurship?
- How has the field of entrepreneurship evolved?
- What are the best places to learn more about entrepreneurship?
- How do you start a successful business?
From the cheese on your sandwich to the international space station, everything that is made by humans is also the result of entrepreneurship.
Someone has seen an opportunity, come up with a solution and made it accessible to others.
Historically this evolutionary process is what has made our society flourish but at the same time brought a lot of problems that we now need to deal with.
Modern entrepreneurship is all about making people and the society they live in grow and flourish.
Seeing opportunities and taking new solutions to market that are both valuable to people and sustainable in the long run.
Entrepreneurship is also about self development, making dreams come true and living your passion possible.
Entrepreneurship for Beginners
There are many things that you need to do to be successful as an entrepreneur. You need to have an innovative idea, market your product or service, and find the right partners or investors. It can be hard work, but if you have the drive and the skillset, entrepreneurship can be very rewarding.
This guide is designed for beginners, and will give you all the tips and tricks that you need to get started.
What is Entrepreneurship?
A simple definition of entreprenurship is:
“Entrepreneurship is when you act upon opportunities and ideas and transform them into value for others. The value that is created can be financial, cultural or social.” – EntreComp 2016
Entrepreneurship is all about making life better for yourself and others!
There are also longer and more elaborate definitions such as this definition from Peter Drucker “a systematic innovation, which consists in the purposeful and organized search for changes and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation.”
Even tough the definition above is great and make it clear that entrepreneurship is a planned process for change it can be seen as a bit complex and and hard to grasp.
Personally I prefer the first, simpler but also more fuzzy ’creation of value’ EntreComp definition of entrepreneurship.
What Is a Entrepreneur?
With the definition of entrepreneurship as the ’creation of value’ as a base, a good definition of a entrepreneur is ’someone that creates and delivers something new that is of value to others’
To be a successful entrepreneur you need a business model that create, deliver and capture value.
Entrepreneurship as a Passion
Entrepreneurship is often seen as a passion, but what does that mean for someone who wants to start their own business?
In order to be an entrepreneur, you need to have a passion for your business and want to make it successful.
Passion can come from many sources- like enjoying working on something new and challenging yourself, seeing the potential in an idea or product, or simply having fun. If you have a strong passion for your business and are willing to work hard, there’s no limit to what you can achieve.
Why Is Entrepreneurship Important for Society and Organisations?
Everything you see around you that is made by humans, good and bad, is also a result of entrepreneurship.
Entrepreneurship is important for society and organisations as it drive change trough innovation.
New and improved products enable organisations to stay in tune with its time and new markets to be developed, create wealth and improve standards of living in a society.
Why Is Entrepreneurship Important for You and Me?
Entrepreneurship is all about change.
It gives people the opportunity to build a better tomorrow and together with others transform the world in a way they want it to be. In this view entrepreneurship can be seen as a tool for self-reliance and empowerment.
Entrepreneurship can also in many cases be seen as a process of self-fulfillment.
A percived but highly uncertain future profit can not be the sole reason why so many spend countless hours and money grinding away on a project.
There need to be something more at play.
Passion is often a factor for succes for many entrepreneurs, people tend to spend time on things they love even if a monetary reward is not guaranteed.
The reward often comes trough self-fulfillment and internal rewards that motivates the hard work.
Entrepreneurship is all about fulfilling dreams, both our dreams as individuals and our dreams as a collective society.
The later can be summed up in the global goals for sustainable development.
The Global Goals For Sustainable Development is a call to action, adopted by all United Nations Member States in 2015, to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
A main point of the global goals is that development must balance social, economic and environmental sustainability.
Even tough you create and deliver something new that is of value to others it is not certain that it is good for them, the planet or the society as a whole in the long run.
As an example cigarettes is a product that provides some value to smokers in the short term but is also harmful and even lethal in the long run.
The same is true with a lot of products on the market.
Think about nuclear bombs, hamburgers, candy, clothes. Almost everything you buy has a up- and down side, a footprint that need to be balanced out.
Capture and delivery of value to shareholders through different financial returns will satisfy the owners needs in the short-term.
But it can in the end lead to a failure if the value that is created is made at the expense of others or the environment.
So, what is sustainable entrepreneurship? Sustainable entrepreneurship is ’creation or extraction of economic, ecological, and social value’.
For entrepreneurship to be truly sustainable you need to add to it’s definition something that makes it mandatory to take in account other values then just purely economical values.
It is not enough to just make some money in the short run.
To be sustainable you need to figure out how the product you offer, also in the long run, can make life better for you, your customers, the environment and society as a whole.
You need a holistic, birds eye view.
And this is precisely what entrepreneurship and entrepreneurs does best, come up with solutions to complex problems worth solving.
So to sum it up. To be a sustainable entrepreneur you have to: At the same time as you give people what they need and want you also make the world a better place as well as provide economic value to you, your company and the community you live in.
To be a successful sustainable entrepreneur you need a business model that create, deliver and sustain value rather than just simply make money by capturing value.
Can Anyone Become a Entrepreneur?
Yes, anyone can become a entrepreneur.
There is no magical entrepreneurial gene and you can find successful entrepreneurs from every demographic.
However, everyone is not going to have the same level of success as an entrepreneur.
How to Become an Successful Entrepreneur?
According to the European Commission ”Entrepreneurship refers to an individual’s ability to turn ideas into action”.
The entrepreneurial process has three steps:
1. Find Opportunities
Entrepreneurs are constantly scanning for opportunities.
Usually it comes down to trying to find out how the resources the entrepreneur has access to can be best combined to fix problems.
2. Talk to Others
By talking to others, both customers and potential partners, even your competition, you can get access to new resources and more knowledge/insight that in turn can lead to a much better idea.
3. Create Something That Is Valuable for Others and Take It to the Market
In a fast and lean startup the first step is usually to figure out your business model and do tests on the market to see if it is a good fit
Often you can do this in a small scale on a hobby level.
If the model seems to work and if you want to fully realize (scale up) the idea you need to start a company if you don’t have one already.
How to Start a Business? – 7 Steps to Start a Business:
The steps to start a new business are similar in most countries.
Step 1. Do Market Research and Write Your Business Plan
The first step when starting a business is always to get to know your market and customers. Who are your primary customers? What are their needs and wants that you should aim to fulfill? How do you reach and build relationships with your customers and what is the best way to get your products to them?
Step 2. Get Funding for Your Business
Are you going to fund the business yourself or do you need to get money from others?
If you need external cash you need to be able to communicate your idea and business model. Often you already have a business plan or prospect that you made in step 1 that you can use when you talk with the banks about loans or try to find partners that are willing to invest in your project.
Finding the capital for a business that’s just starting is always a complicated topic, but nowadays there are a lot of good options — specially thanks to the Internet.
- Angel investment
- Venture capital
- Business incubators/accelerators
- Renting and leasing
- Reciprocal Guarantee Companies
You can also go to business associations, chambers of commerce, public bodies and other institutions that may have agreements with financial institutions or programs that facilitate financing for new companies.
Step 3. Decide on a Business Name, Legal Structure and Location of the Business
To be able to register a company you need to come up with several different alternatives of company names. It is important that the name is unique so it can’t be confused with any other company in the same sector. You also need decide on a legal structure and where the business is located.
There are many people that decide to become self-employed because it seems to be too complicated to create a society.
However, I recommend you to analyze the benefits that each legal form has for your business. They could be:
- Greater accessibility to subsidies
- Better image for suppliers and customers
- More possibilities of tax relief
- Limitation of liability
Step 4. Register Your Business and Get Tax Ids
After you have registered your new business you will get the tax IDs that you need to get going.
Step 5. Open a Bank Account for Your Business
Opening a bank account is usually pretty straight forward.
The hardest part is usually to decide which bank to go with and usually it comes down to which bank offers the best interest on their loans.
Nowadays it is also good to have more than one bank so if you run into problems with one you can quickly change.
Step 6. (If Needed) Get Permits and Licenses
The delay of a permit or license may mean that the business, despite being ready to go, have to wait to start the activity.
If you need any permits and licenses you need to get them sorted asap and then it’s launch time 🙂
Step 7. Launch
A modern approach to starting a business is to start quick and grow from a small scale with fast iterations (often referred to as a lean startup).
First look for prospects who become fans of your ideas or the people who can give you some feedback to make your product or service more attractive.
Try to build your client base first, then you can start investing the money to improve your business.
Who Can Help You Start a New Business?
In most countries and local communities there are organizations that can help you out trough these steps if you are interested to start a new business.
To get started with your Entrepreneurship project, be sure to check out our extensive list of resources. This includes communities, articles, videos, and tools that will help you get started quickly and smoothly.
Communities and Websites:
- Entrepreneur on Reddit
- Entrepreneurship on Pinterest
- #entrepreneurship on Twitter
- Entrepreneurship on Quora
- Entrepreneurship on Youtube
Beginner Guides related to Entrepreneurship
Games Related to Entrepreneurship
See the full list of business and entrepreneurship games
What Are the Most Important Skills Entrepreneurs Need?
To be a successful entrepreneur that is able to ”turn ideas into action” there are a few core competences that are important to develop.
A simple list of core entrepreneurial competences consist of six categories:
A entrepreneurial principle called affordable loss tells us to ”never risk more then you are prepared to loose”,
However as Christopher Paolini wrote in his first novel, Eragon, “Without fear there cannot be courage.”
As long as we stay within our comfort zone there is no need to feel any fear. Everything within this zone is known, familiar and stress free routine. Stuff you can do with ease.
Stepping outside of this cozy bubble and into the more or less unknown usually causes anxiety.
However, the more new things you experience and more things you learn the larger your comfort zone becomes.
The larger your comfort zone becomes, the more options you have and more stuff you can do.
You can build more stuff if you have have more lego blocks to play with.
The more times you take a small step outside your comfort zone the easier it becomes.
Courage can be learned and the ”stronger” and better you become at overcoming unknown obstacles the easier it is to have courage.
Entrepreneurs try their best to avoid risk and not to risk more then what they can loose, but they also see risk as a cost for gaining more options to do things.
2. Uncertainty Management
Regarding Charles Darwins survival of the fittest, Clarence Darrow once said, “It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change.”
Change and uncertainty brings opportunities.
Successful entrepreneurs tend to love opportunity and self fulfillment and therefore often thrive in a new, complex or ambiguous and uncertain enviroment.
Uncertainty management is strongly connected to courage.
The more you have expanded your comfort zone, the more you know that you can handle most things that comes your way.
Wich brings us to the next competence on the list.
Even tough Iron Man is a great innovator and entrepreneur he can’t save the world alone.
He still needs the skills and resources that the rest of the Avengers bring to the table.
You do not need to be a superhero to be a great entrepreneur.
You need help from a great team to delegate or outsource to.
To be a successful entrepreneur it is important to be able to take responsibility for both your own as well as your teams work and development.
You need to develop the grit and internal motivation needed to be driving and persevering and not giving up despite adversity.
Initiative as a competense is about being able to be proactive and act without others saying.
To be able to take initiative and be proactive you need to also have a vision of the future and what you want to achieve. A successfull entrepreneur is constantly scanning and on the lookout for opportunities and threats.
By taking the initiative and being the ”Pilot-in-the-plane”, the entrepreneur becomes master of his or her destiny rather than the prisoner of circumstances.
Creativity is about being able to contribute to finding new, unconventional and innovative solutions.
By combining resources in new ways, you can solve the market’s needs in a better way. This can result in new products or methods of production / distribution.
You can read more about entrepreneurial competences at the ltu site.
It is trough repetition and evaluation of our successes and failures that we improve and I think that most entrepreneurs and scholars agree that entrepreneurial skills and competences are best learnt by doing, trough processes of detecting possibilities and ”turning ideas into action”.
In other words: Entrepreneurship and entrepreneurial competencies are best learnt trough entrepreneurship.
To be able to realize possibilities and new ideas you will also need to identify and learn new things.
In entrepreneurial learning you can not be a passive learner waiting to be spoon-fed some predefined body of knowledge.
This form of learning is a life long process where you will constantly improve your entrepreneurial competences and take initiative to learn new things depending on what you are working on for the moment.
The EntreComp Framework
EntreComp is a program launched by the European Commission designed to help entrepreneurs at all levels develop their skills and competences.
EntreComp describes the 15 skills, knowledge and attitudes that represent the entrepreneurial mindset and are needed to be able to create value for others.
These entrepreneurial competences are divided across three main areas:
|Ideas and opportunities||1. Spotting opportunities|
4. Valuing ideas
5. Ethical and sustainable thinking
|Resources||6. Selfawareness and selfefficacy|
7. Motivation and perseverance
8. Mobilizing resources
9. Financial and economic literacy
10. Mobilizing others
|Into action||11. Taking the initiative|
12. Planning and management
13. Coping with uncertainty, ambiguity and risk
14. Working with others
15. Learning through experience
The 15 competences is also mapped with a progression from beginner to expert:
In the beggining of the entrepreneurial journey you rely on support from others!
Level 1. Discover
Here you discover your qualities, potential, interests and wishes. You also try recognise different types of problems and needs that can be solved creatively. Finally, you will at level one try to develop individual skills and attitudes as much as possible.
Level 2. Explore
Different approaches to problems can be explored, att the same time concentrating on diversity in order to develop social skills and attitudes that are tolerant of other viewpoints.
Level 3. Experiment
Critical thinking is an essential skill for entrepreneurs, as it can help them create value for their businesses. To improve critical thinking skills, entrepreneurs can take action trough various practical entrepreneurial experiences, such as starting and running a business in simulation or a live situation.
Level 4. Dare
In order to make an impact on the world, its important to focus on turning ideas into action in “real life.” This involves taking responsibility for our actions and being accountable to those we affect.
Level 5. Improve
On level 5, you are getting better at turning your ideas into action, you take on increasing responsibility for creating real value for others. You also become knowledgeable about entrepreneurship at this progression level.
Level 6. Reinforce
By now you are likely aware that entrepreneurship is all about creating value for others. In this level, you will be working with others to solve increasingly complex challenges. This will require both skills and collaboration. Be sure to focus on working well with others, reinforcing what you have already learned about entrepreneurship.
At the expert levels, you are in the ‘driver seat’ and are making a real difference to the world.
Level 7. Expand
Problem solving in an environment with high uncertainty is challenging, and requires a lot of competences. At this level focus is on the competences needed in managing complexity and dealing with a uncertain and constantly changing environment.
Level 8. Transform
At the final level, focus is on challenges that, trough competences in R&D and innovation, drive real life change and growth.
Entrepreneurship Stats and Facts
You Are Never Too Old to Start a Business
60 percent of all small businesses are started by people between the ages of 40 and 60.
They either resigned from their jobs, got their retirement early or were laid off from work.
These people are combination of folks who either started a business forced by circumstances or simply had a dream that they wanted to turn into reality.
What make this data even more interesting is that 4 percent of people who started in business late were in their 70s. A classic example of people who start their business late is Colonel Sanders of Kentucky Friend Chicken fame who started this famous restaurant after retirement.
Goes to show age is never a factor to go into business.
Most Businesses Are Small, Very Small
You can make a go of a business even without people working for you. This is true for enterprises which rely entirely on your own talents and skills.
You can have your accounting outsourced to other people who are not necessarily your employees. So, 62 percent of businesses who have the owner himself as the solo employee takes out the labor cost out of the equation which is usually the biggest expense in a business.
Brazil, with 53 percent, is the country with the biggest percentage of businesses having only one employee.
Entrepreneurs Want to Stay Entrepreneurs
97 percent of folks who have had experienced both the joys and hardships of owning a business say they would never go back to working for someone else.
They appreciate the allure of being in control of their time and energy into creating products and services which serve needs, and in turn, reap them a tidy profit.
They like the fact that their potential for revenues are infinite while being an employee sucks them in into a predictable monthly income.
More Women Are Becoming Entrepreneurs
The number of female entrepreneurs are rising and to day there is more than 252 million women entrepreneurs around the world and more than 40% of all US businesses are owned by women.
According to a survey made by Visa the main motivation for women to start a business is to pursue and live their passion (48% say it is the main reason).
Why Do We Love Entrepreneurship?
Entrepreneurship is one of the most admired qualities in people. It is seen as a way to achieve success and create something new. There are many reasons why we love entrepreneurship..
Top 5 Reasons Why We Love Entrepreneurship
1. Entrepreneurship is all about taking risks. When you are an entrepreneur, you are risking your time, money, and effort into something that could be successful or not. This is what makes entrepreneurship so exciting and challenging.
2. There is always room for improvement when it comes to anything. As an entrepreneur, you never stop learning and growing. You constantly have to find new ways to improve your business or product if you want it to succeed.
3. Entrepreneurship creates jobs. When businesses start up, they need employees to run them and help make them successful. In fact, in the end all jobs were created because of entrepreneurship!
4. Entrepreneurship is personal. When you start your own business, it is your vision that you are bringing to the table. You are in charge of everything, and that is a very empowering feeling.
5. Entrepreneurship offers a sense of independence. When you are your own boss, you have the freedom to make decisions and work towards your goals without any interference from others. This can be a very liberating experience.
How to Show and Celebrate Your Passion for Entrepreneurship?
There are alot of different ways to celebrate your passion for entrepreneurship. Here are 5 ideas to get you started:
- Start a blog and write about your journey as an entrepreneur. Share tips and tricks, challenges you’ve faced, and the successes and challenges that you have overcome.
- Attend entrepreneurship events in your area or nationally. Network with other entrepreneurs, learn new concepts, and find inspiration to keep moving forward.
- Celebrate each step of the way by taking pictures, writing down milestones, or creating a “Wrap-Up” post summarizing your journey so far.
- Celebrate milestones such as breaking sales records or hiring new employees.
- Take time for yourself every once in a while and enjoy some “me time” – whether that means watching a movie or sitting on the beach reading a book. Entrepreneurship is full of hard work and constant hustle; take care of yourself so you can continue to give 110%!
Entrepreneurship is what drives our organizations, businesses and society forward. Entrepreneurship is all about coming making the most of our resources, taking advantage of opportunities and coming up with new valuable solutions.
Everything we see around us that is human made is also a result of entrepreneurship, for better or worse.
Entrepreneurship as a concept has no inbuilt ethics that forces what is made to be good for everyone in the long run. For that we need to talk about sustainability, circular economy or sustainable entrepreneurship / business.. We should be able to make a living and at the same time not destroy people or the planet in the process.
In this introduction guide we have learned the basics of entrepreneurship, what it takes to start a successful business and being a driving force within organizations. We hope that this will help you on your path to grow and follow your passions.