What is the definition of an entrepreneur?
People often ask us questions about entrepreneurship and what the definition of an entrepreneur is. True, there are differences between a business owner, an investor, a mentor or a self-employed person. Therefore, in this post, you will find answers to the following 10 most asked questions.
If you ask about the true meaning of an entrepreneur, you basically ask about the definition of an entrepreneur. It is much more than someone who starts a business. In short, the true meaning is all about the entrepreneurial spirit. So, it has much more to do with doing business than owning a business.
“An entrepreneur is an enterprising business owner”
Having an entrepreneurial attitude has great overlap with our definition of entrepreneurship, which is:
Seeing opportunities, exploiting them, and creating value.
In other words: “an entrepreneur is an enterprising business owner.”
It is, therefore not if you are an entrepreneur, but if you are entrepreneurial. And that has much more to do with the behavior and competencies than having a registered business.
Entrepreneurs see multiple business opportunities for a product or service to bring to the market. Furthermore, they like to grow independently as a business or enterprise. In other words, they love to be a risk-taker and start more entrepreneurial ventures at the same time or sequentially. Which is also called a serial entrepreneur. See more below for the question on different types of entrepreneurs.
Non-entrepreneurs, however, choose the safety of a steady income above the risks of a business.
The entrepreneurial spirit consists of approximately 13 competencies. Competence means being able to do something very well. These competencies are in random order:
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The business owner organizes, manages and assumes risks only for the sole purpose of earning money. So, not so much a risk-taker as an entrepreneur does, who invented a new product or service for example. So, a business owner is a person who works in a sector on his own account and who assumes the risks.
Strictly speaking, the business owner is someone who has a business. But this says nothing about how entrepreneurial he is.
A business owner runs a business on his own account and at his own risk
Any person who primarily provides in his own income, you could call an independent firm owner or solopreneur. He aims to provide in his own salary.
However, make no mistake. Some freelancers are doing very well and make money, but deliberately not have or want a big company. So, there is nothing wrong with that.
Fortunately, if you don’t want to grow, then you should not and can not be forced to grow. That is the freedom of entrepreneurship.
A businessman or business owner is not entrepreneurial, by definition. He or she is rather the craftsman who is not willing or able to work as an employee.
On the other hand, for the business owner doing business and being entrepreneurial is a lifestyle. Precisely in being enterprising lies his strength.
Good news for everyone who wants to own a business. Anyone can become more entrepreneurial through coaching and personal development. Learn more about entrepreneurial development.
There are many different types of entrepreneurs: solo, creative, technical, hybrid, team, serial entrepreneurs, and so on.
Can you be entrepreneurial without having a business? Yes, you can. There are people who work at larger organizations and who are very enterprising. The only difference is that they don’t own a business (yet). Nonetheless, they possess and demonstrate entrepreneurial skills. So, these types of co-workers are called intrapreneurs.
Nowadays, more and more industries have an increasing need for that intrapreneurial type of employees. Because a lot of changes happen in the world and in the economy right now. This calls for intrapreneurship.
“An intrapreneur is an enterprising employee”
There are several types of investors, like the informal investor or the venture capitalist. Both invest – in exchange for shares – to earn money with it. They take the risk and help the company grow, making it more valuable.
However, the difference with an entrepreneurial leader is that they don’t make the decisions. That is up to the leader of an enterprise. The investors do help the company with contacts from their broad network. The informal investor is mostly a retired entrepreneur who wants to help a younger startup.
When you talk about entrepreneurs, people often see successful business owners. But being entrepreneurial does not mean that someone is also successful. You cannot compare someone who wants to grow with his company with someone who does not want to.
That is why every entrepreneur decides for himself what business success means to him. So, how to define business success then? We define it by the survival of the first 5 years, the early stages of a company. By then, the business plan has been tested and a profitable product-market fit has been established.