The world is full of aspiring entrepreneurs—people who believe they have the vision and drive to start a company and grow it into a thriving business. Although anyone can launch a business, not everyone succeeds.
Research by Harvard Business School Professor Shikhar Ghosh reveals that up to 75 percent of startups fail. Additionally, Zippia reports that 22 percent of small businesses don’t make it through their first year, half fail within five years, and around two-thirds fail within ten years.
In light of these numbers, one might ask: What does it take to succeed as an entrepreneur? What steps can hopeful entrepreneurs take to lay the foundation for success?
What is an Entrepreneur?
An entrepreneur is someone who starts a business venture, often in the form of a company that creates and sells a product or provides a service. Entrepreneurs are typically seen as innovators who spot a problem or opportunity and develop a unique solution.
In the online course *Entrepreneurship Essentials*, it’s noted that “entrepreneurs—whether individuals or teams—actively look for opportunities, or they discover them through their daily lives and work. They form hypotheses about what customers need or want and how they can provide value to customers.”
Successful entrepreneurs don’t just jump into their ideas. Instead, they first validate that there is a real demand.
One way they do this is through testing. According to *Entrepreneurship Essentials*, entrepreneurs “bring people together and invest money to see if customers will value the product and if they can produce and deliver it at a reasonable cost. Often, they discover different or even better ideas once they’re in the marketplace.”
Requirements for Entrepreneurship
Do you dream of starting your own company one day? Beyond having a business idea, there are certain skills and qualities you’ll need to succeed.
1. Key Traits and Behaviors of Entrepreneurs
Researchers have long tried to identify a specific personality type or profile to explain why some entrepreneurs succeed more than others.
In Entrepreneurship Essentials it’s explained that there isn’t one personality profile that guarantees success. However, some of the world’s most successful entrepreneurs do share certain traits.
Some key behaviors tied to entrepreneurship include curiosity, pattern recognition, team building, structured experimentation, adaptability, decisiveness, and persistence.
While some people may naturally show these behaviors more than others, each of these traits can be developed with the right training and experience.
2. Critical Entrepreneurial Skills
Especially in the early days of launching a business, entrepreneurs must handle a range of duties. Before you have a team to manage accounting, marketing, or product development, you’ll likely need to take on these responsibilities yourself.
Building certain skills before starting a business can greatly improve your chances of success. Here are some of the most important skills all entrepreneurs should have:
Communication Skills: You’ll need these daily to work with vendors, investors, customers, and your team.
Organizational Skills: These will help you work efficiently toward your goals.
Time Management Skills: These are essential, especially early on when you’ll have many responsibilities.
Data-Driven Decision-Making: This skill allows you to make objective, measurable choices about your products, services, business, and customers.
Strategic Thinking: This will help you identify opportunities and threats to guide business decisions.
Basic Accounting Knowledge: This is especially important before you have someone to manage your business’s finances.
Resilience: Every entrepreneur faces challenges, and resilience helps you bounce back from setbacks.
3. A Solid Business Opportunity
For a business to succeed, its plan must be centered around a promising opportunity. In Entrepreneurship Essentials, an opportunity is described as a venture to sell a product or service that customers are willing to pay for at a price higher than the costs involved.
An opportunity goes beyond a product idea; it includes a plan to attract, retain, and benefit all involved parties, such as customers, founders, employees, investors, distributors, and suppliers.
The process doesn’t end once you find an innovative business idea. Ideally, your concept should be tested before you invest significant resources into it. Even after launching, it’s crucial to continuously assess your business to determine if adjustments are needed to adapt to new opportunities or challenges.
4. Resources and Funding
Finally, you’ll need funding to launch your business. Funding is necessary to purchase equipment and materials, develop products or services, make improvements, and refine processes. The specific funding you’ll need depends on your business type and industry.
Some entrepreneurs can self-fund, saving enough to cover their living expenses and startup costs. However, self-funding isn’t the only option available. Other paths include:
– Securing a loan from the Small Business Administration (SBA)
– Raising money from investors
– Applying for grants (especially for nonprofits)
– Crowdfunding
– Using a line of credit
Each funding option has pros and cons. For instance, self-funding lets you maintain full control over your business but also means carrying all the risk. On the other hand, raising capital from investors allows you to share the risk and may speed up your launch, though it requires giving up some control. Ultimately, you’ll need to decide which option makes the most sense for your business.
Your Path to Becoming an Entrepreneur
Many aspiring entrepreneurs have interesting, innovative, and marketable business ideas but may lack the skills or qualities to make them a reality. Others may have the skills but lack a business idea to pursue. Even those with a solid idea and the necessary skills can struggle if they don’t have access to funding. Successful entrepreneurship is a combination of all these elements.
The good news is that successful entrepreneurs are made, not born. With the right training, guidance, and practice, anyone has the potential to become an entrepreneur.