What does it mean to be an Entrepreneur?
An Entrepreneur is someone who takes a risk to start a new business. Nearly every business that exists (apart those created as spin-offs of other businesses, or by government intervention) was started by one or several entrepreneurs, who took a risk to launch a new company.
Who becomes an Entrepreneur?
Starting and running a small business is not for everyone, partly because there is a huge amount of risk involved, and partly because it takes a huge commitment of time and resources.
Entrepreneurs are people who are willing to risk a tremendous amount of time and energy, not to mention money and other resources, to try to launch an entirely new enterprise. The potential rewards can be huge – if their business is profitable, they can keep all the profit or themselves. But the risks are also massive, since over 90% of new businesses fail within the first 5 years.
What Affects The Success Rate Of New Businesses?
Even if a person has a great business idea they would like to peruse, there are many other factors that can play a huge role in determining their success.
- Taxes: A new business owner might not realize their entire tax burden at the end of the year, and end up with a bill they did not account for. Huge unpaid tax bills are a big reason why new business owners often need to close their doors.
- Regulations: If you want to open a restaurant or a cafe, you will need to have certain licenses, and pass regular health code inspections. Many new business owners under-estimate the time and effort necessary to get and maintain these licenses, which drains their resources while they try to catch up.
- Education: Most new business owners do not have a background in business. This means that the accounting and management skills necessary to run and grow their company need to be learned – if not, it can cause a business to fail very quickly.
- Research Support: If you want to launch a new product for sale, you will probably have a large amount of research and development to do while you develop it. Some places are more friendly than others in terms of giving tax breaks and other incentives for research. Many fresh start-up companies trying to develop a new technology run out of funding before they can get their product to market.
What Benefits Are There To Starting A Business?
With the huge cost of trying, and the massive failure rate, why do so many new businesses start every year?
Long Term Growth
Governments love new businesses, because entrepreneurs are the most likely candidates to be working hard on new research and technologies that drive long-term economic growth. New businesses are a massive source of creativity in every industry – even if your business fails, if you had a great idea that you just couldn’t bring to market, there is a good chance someone will try to acquire your technology and apply it themselves (Google is famous for encouraging start-ups that can help grow its online ecosystem).
For the entrepreneur, if your start-up is successful, the potential rewards are limitless. Since your profit is based on how successful your business is, many entrepreneurs see starting their own business as the best way to ensure they are getting paid for the value they create in the long term, rather than asking for raises and promotions while working for someone else.
If you start your own business, it probably won’t be long before you need to hire workers. New start-up businesses growing and hiring is one of the most effective means of job-creation.
Entrepreneurs are often more willing to hire younger and less experienced workers too, which means that joining a start-up as an employee can be a great way to launch a successful career. Of course, this comes with the risk that the company you join will fail, leaving the employees out of the job too.
One pitfall of many start-ups is hiring too many new workers too fast, anticipating growth that might not come as quickly as the owner had hoped. On the other hand, some start-ups are very afraid to hire new workers, which means that their current employees get quickly over-worked.
What Resources Exist To Help Entrepreneurs?
Nearly every state, and most cities, have some sort of program to help encourage new businesses. This can be anything from low-rent and low-tax “business incubator” zones of towns, to income tax credits, to research grants, and everything in between.
Governments, not-for-profit organizations, and even for-profit companies also run “Business Incubators”, which exist to pool the resources of many start-ups together to save cost and build skills (for example, saving cost on office space, having an accounting staff shared between all the companies in the incubator, ect).
Many colleges and universities also offer special course part-time courses to help teach new and potential entrepreneurs basic business skills, like basic accounting and management.
Nearly all of these programs are operated independently by local and regional businesses and governments, so if you are interested in starting a business try to find information for your area on any programs that are available.