What Is Entrepreneurship?
Entrepreneurship is the ability and willingness to conceive , develop and manage a business in order to make a profit.
Of course, we can open the concept and bring other definitions.
Instead of profit, we can put that the entrepreneur’s objective is to create value , to generate a positive impact – which may or may not result in profit.
Who creates a non-profit institution, for example, is it not also an entrepreneur?
In this article, however, we will restrict ourselves to talking about entrepreneurship related to the creation of companies for commercial purposes .
Creation and management , because entrepreneurship can also manifest itself in an organization that is already created.
When a consolidated company ventures to explore a new area or develops an innovative product, it is undertaking.
Whatever the case, we are talking about seeing opportunities and investing time and resources (material, financial and human) to explore them.
These opportunities normally correspond to a problem or a need that the population – or a part of it – has.
How Important Is Entrepreneurship?
Entrepreneurship makes the economy spin and also appears as a possible alternative in the face of high unemployment and lack of opportunities.
The Sebrae survey presented at the beginning of this article is an example of this.
The year 2020 was marked by a pandemic that destroyed several job opportunities , leaving the market even more damaged.
Even so, the year presented the highest number of MEIs opened (2,659,798).
In other words, opening your own business is a great way to create new jobs in difficult times.
But, of course, entrepreneurship is not only important in times of economic recession.
Entrepreneurship and innovation , for example, are concepts that go hand in hand and help in the development of the nation .
From the moment a company creates a solution that, for example, reduces production waste in a given area, it is collaborating to increase the cost-effectiveness of that product or service.
As a result, the time and money saved can be invested elsewhere.
This is one of the consequences of the study Entrepreneurship, Norms, and the Business Cycle , led by Simon C. Parker.
According to the author, economic growth and entrepreneurship go hand in hand, since economic expansion allows new entrepreneurs to invest more and more, generating revenue and work for other companies as well.
Not to mention that, of course, the financing of new businesses is more favorable when the economy is doing well.
And here, we’re just addressing the global benefits.
Nor are we talking about the individual satisfaction of having a business to call your own, being your own boss and often working with something that sparks your passion.
How To Be An Entrepreneur?
Entrepreneurship starts with the idea of a product or service that offers the solution to the problems and needs we mentioned above.
The first step in being an entrepreneur , therefore, is having the foresight to perceive these opportunities.
But this is not mere intuition .
It plays an important role, of course, but it is possible to start from rationality, analyzing facts.
There is more and more data and diverse information to support the creation of new businesses .
Several paths can be chosen, for example:
- Meet a pent-up demand in a particular location
- Develop a new product or service, creating a new audience
- Differentiate yourself and attract attention by improving a product or service that already exists and is known.
Either way, spotting an opportunity and thinking about the solution is just the beginning.
Nobody undertakes if they do not leave the field of ideas.
Entrepreneurship implies taking risks , putting planning into practice and developing a company.
The most appropriate way to do this is to obtain a National Registry of Legal Entities ( CNPJ ), which is the company’s CPF, formalizing the business within the legal rules.
What Is The Profile Of An Entrepreneur?
What differentiates an entrepreneur from other professionals is their creative capacity , their hunger to learn and their ability to adapt.
These are basic features , but there are others.
An entrepreneur does not allow himself to be dominated by his comfort zone, not least because he knows that the success of his business depends on continuous development.
He is also very attentive to the opportunities that may arise and how they are able to be used in the best way.
Entrepreneur’s Core Competencies And Skills
Check out a list of skills and abilities common to the successful entrepreneur.
If you don’t have any of them, don’t be discouraged: there is always time to learn and develop new knowledge:
- Resilience: entrepreneurship requires overcoming a series of challenges. If you want to succeed in this career , you need to learn to deal with these difficulties and overcome them one by one.
- Leadership: knowing how to motivate, delegate roles and responsibilities, accept and share ideas and inspire
- Flexibility: having the flexibility to adapt to different scenarios, being open to changing your mind and accepting the contradictory
- Organization: setting up and following the created plan, knowing how to manage your time, having a very well defined routine, meeting deadlines and anticipating threats and opportunities
- Ambition: always wanting more and seeking constant development. Study the main trends and specialize more and more
- Persuasion: knowing how to convince investors and customers of the reasons why they should prefer your products and services over those of the competition
- Self-confidence: believing in your project and your ideas without neglecting feedback , of course.
What Drives Someone To Have Their Own Business?
Many factors can motivate people to undertake – from personal issues to lack of employment or the need to increase income .
However, this picture changed in the face of external forces such as the political and economic crisis, which impacted the national economy, causing high unemployment and insecurity about the future.
Thus, as pointed out by the Global Entrepreneurship Monitor (GEM) survey , in 2019 the country reached the mark of 23.3% of initial entrepreneurship rate , with 38.7% of people between 18 and 64 years old investing in their own venture.
The study also showed that for almost 90% of entrepreneurs, the lack of employment was one of the reasons for starting their own business.
Making a difference in the world was the second most cited reason (about 50%), followed by building wealth or earning income (just over a third) and continuing a family tradition (25% of responses).
It is also worth noting that, because of the Covid-19 pandemic , many people were out of work and decided to start a business to pay for the trivial expenses and support their families.
As a result, experts estimate that a quarter of the adult population is working in their own company, with necessity as the main reason.
Market Entrepreneurship Vs Social Entrepreneurship: What Are The Differences?
As stated earlier, the main objective of entrepreneurship is the generation of value and this is very clear when we compare the market model and social actions.
Both types aim for some positive return.
However, the former is more focused on establishing competitive advantages, standing out from the competition and, of course, making a profit.
Social entrepreneurship, on the other hand, has another type of concern.
Their actions are geared towards some problem in society .
Thus, the action is more focused on the establishment of partnerships and the rearrangement of relations between government, community and the public sector.
In other words, the model seeks to cause some kind of social impact , mitigating a local demand.
This does not mean to say, for example, that market entrepreneurship is not concerned with the benefits it can bring to society.
After all, its purpose is to address, precisely, a population problem, to attack a specific situation.
A company that produces hand sanitizer, for example, meets a latent global demand , which is the need to sanitize our hands more often during the pandemic.
Still, it fits as a market entrepreneurship, because, despite this social concern, its focus is on the profit from the sale of these products.
It is different, for example, from a small sewing workshop that makes fabric masks with the leftover material and then distributes them free of charge or at cost price to needy communities.
Here, we have a case of social entrepreneurship.
Types Of Entrepreneurs
The cool thing about entrepreneurship is that anyone can start a business and prosper from it .
And that’s true even if it doesn’t have the characteristics we talked about above, since all of them can be developed.
In this way, the business world aggregates the most diverse profiles, because there are infinite possibilities of areas to be explored.
But we can define some valences to classify the entrepreneur in a generic profile, as we will show next.
It is normal for the person to lean more to one side than the other, but keep in mind that the ideal is always to find a balance between the two possibilities.
Bold Or Conservative?
The bold entrepreneur is the one who is more willing to face risks , unlike the conservative, who does not like to take risks.
While the first can, like Icarus , fly very close to the sun and burn his wings, the second sins precisely for never trying something new.
Solitary Or Sociable?
There are people who prefer to work alone, and others who like to mobilize large numbers of people.
The need for socialization depends a lot on the work area, but it’s good not to isolate yourself , as well as not to force interactions.
Execute Or Coordinate?
A manager who shows his employees that he is capable of executing and not just giving orders earns a lot of points.
But he cannot immerse himself in practical work and forget to coordinate projects and think about the company’s strategy .
Kind Or Tough?
Agreeableness is positive, but it cannot become a tendency to take things personally – or help employees to have this understanding.
On the other hand, the boss who is tougher in the personal relationship runs the serious risk of crossing the line and demotivating his employees.
What Do You Need To Know Before Starting A Business?
It is possible to undertake by offering a service, developing a product, providing consultancy , bringing people and companies together (collaborative economy) or making investments.
Whatever the path, try to answer the following questions before starting the project:
- What is your entrepreneur profile ? Following the types we talked about above, how would you define yourself?
- What is your purpose? What motivates you to undertake, besides money?
- What is the value offered? What exactly are you going to offer your future customers?
- How will you produce this value? What resources (raw materials, capital, people and partners) will be mobilized?
- Who are the future customers? What are they looking for, what is their age, gender, social class, etc.?
- What makes your product or service different? What will you offer that the competition doesn’t?
- What will your dedication be? Are you going to quit your job to open a business or develop it little by little, in your spare time?
- What structure is needed? Can work be done from home or do you need an office or point of sale?
- Where to settle? If it is necessary to look for a commercial point , what is the ideal location for it?
- What bureaucracy involves the business? What are the legal formalities that need to be fulfilled for the opening and operation of the company? Is it feasible to fulfill them?
Of course, some answers can change as things go along, but it’s important to have them very clear in your head before opening the business.
The Link Between Entrepreneurship And Innovation
The concepts of entrepreneurship and innovation are similar. To innovate is to create something new , while entrepreneurship is to create a new business.
What happens is that if this business doesn’t bring anything different than what existing companies offer, your chances of success decrease.
In other words, it is recommended to always seek innovation when starting an enterprise, because starting from scratch and fighting with companies that have been in the market for decades is very difficult.
It is worth noting that, to innovate, it is not necessary to be an inventor and create an amazing, completely new product.
Sometimes the opportunity is in creating a niche in a very traditional area, seeking a differentiation that no one thought of before.
Coming from a family with a tradition of growing coffee since 1886, entrepreneur Liana Baggio Ometto innovated by launching a line of flavored coffees, hitherto unheard of in the country.
Great example to be inspired by, isn’t it?
Is It Worth Taking An Entrepreneurship Course?
You have probably heard someone say that “the market is the best school”, or that “it is in practice that you learn”.
Really, you will never really understand what the challenges and difficulties , joys and satisfactions of an entrepreneur are, if you don’t feel it in your skin.
But this does not mean that formal learning is expendable.
On the contrary, it guarantees valuable lessons that are sometimes only learned in practice when a failed project and a huge loss happen.
Qualification is essential, and you can start with a bachelor’s degree in Business Administration from Fundação Instituto de Administração (FIA) , the only graduate in the field in the country to earn top marks in all assessments.
If you already have a degree, don’t stop there.
The postgraduate course in Business Management, Innovation and Entrepreneurship is a great option.
For those who already have a business, but don’t want to stop growing , our recommendation is the MBA Business Management: Market Intelligence .
How To Choose The Ideal Segment To Start A Business?
If you have the dream of starting a business, but don’t know where to start , these six tips can help you choose the ideal segment to open your business:
1. Study The Market
Try to opt for a business that has an emerging market and that still has a lot to be explored .
In this sense, betting on a more specific niche can be a good idea, seeking lower competition and a more segmented audience.
2. Know Your Strengths
It’s easier to start in an area that you already have a certain domain , so you don’t have to start everything from scratch.
It might be interesting to make a list of your main interests and select those ideas that you think are most likely to succeed.
3. Assess Your Investment Ability And Risk Tolerance
Some ventures require a larger initial investment.
If you don’t have enough money for this capital injection and you are afraid to take out loans, it may be better to opt for a cheaper business model.
4. Find Your Differential
In a market where there are several “more of the same” solutions, having some competitive edge is fundamental.
Several sectors ask for innovation, so present something creative and have an entire audience at your feet.
5. Focus On Solving A Problem
The first question you should ask before becoming an entrepreneur is: what does this product/service add to people’s lives ?
When you have this answer, your business already has a purpose to open its doors.
6. Use Indicators For Your Decision Making
The numbers don’t lie.
If you are afraid to invest in a certain type of business, try to do your research first .
Make a benchmark and see if there are successful cases in your segment.
If so, it’s a strong indicator that your niche can be scalable and profitable.
Myths And Truths About Entrepreneurship
As we explained above, there are different definitions for what it means to undertake, but this concept is surrounded by fantasies.
Fueled by celebrity stories and photos, many of them show entrepreneurs enjoying a glamorous lifestyle , full of parties, champagne and fun.
But not quite.
Until the company is established, it is more common for the owner and his partners to work longer than they would if they were in a traditional job.
That’s because they will need to structure the entire company, dealing with complex issues and sometimes performing operational tasks while they don’t have a larger team.
In this topic, we’ve gathered other myths and some truths for you to know before choosing this path.
Follow up!
Entrepreneurship Is About Taking A Dream Off Paper
True, with reservations .
The beginning of a venture requires a good idea and a lot of motivation to put it into practice, so it is interesting that this idea is part of the entrepreneur‘s dreams.
However, he must be aware that not everything will be exactly as he dreamed , since the business will have to be validated with potential customers and, in some cases, presented to potential investors.
Both situations may suggest the need for changes to the original project so that the proposed solution has adherence in the market.
That is, the dream can change to adapt to reality.
Entrepreneurship Requires Only Knowledge In The Business Area
Myth .
Once you are at the head of your company, you will take on management and leadership activities that require knowledge to be successfully executed.
Of course, your technical expertise will be essential, particularly in the early years of the venture, when you may need to perform the service directly for one or more customers.
However, as the client base and its team grow, the tendency is that its schedule will be much more occupied by the routine of administration and business management.
So, don’t fall into the trap of deepening knowledge only in the area of your solution.
Entrepreneurship Is About Solving Something That People Need
truth .
For your business to take off, it is essential to find a solution to a demand that has not been resolved to the satisfaction of the consumer.
Once they identify value in your product or service , it will be easier to close a deal and build a relationship.
That way, you’ll build up a sufficient customer base to keep the business going.
Entrepreneurship Guarantees A Quick Financial Return
Myth .
Even if you have the right tools, extensive technical and management knowledge, you will hardly make a profit in the first few months.
Therefore, it will be necessary to have some cash in hand for the business to work at the beginning, in addition to good planning to understand how long the return will come .
If the idea is to make money fast, it might be smarter to seek advice on financial investments and choose the most advantageous one.
Entrepreneurship Involves Taking Risks
truth .
Whether you are bold or conservative, the act of starting a business certainly involves risks.
Low adherence to the product or service, unfair competition, defaults and bankruptcy are some of the dangers any business is exposed to, and the key to dealing with them is planning and monitoring.
So, before launching your idea, define a business model, put together a coherent plan and gather basic information for the health of the company.
As you progress through your plan, monitor the results to see if everything is going well or if adjustments need to be made.
What Are The Main Challenges Of Entrepreneurship?
In the same way that entrepreneurship has its positive points, choosing this career also means having to face a series of challenges, such as:
- Dealing with the inexperience of a new career
- Going from being the employee who performs tasks to being the boss who finds the solutions
- Project costs before opening the business and keep the balance sheet balanced
- Persuading investors and customers that what you offer is, in fact, different from what your competition delivers
- Conquer and retain customers
- Assembling a team, after all, you can’t do everything alone
- Knowing how to deal with the pressure of the competitive job market
- Reconciling professional and personal life
- Take care of the bureaucratic part (contracts, permits, taxation).
13 Essential Tips For Starting A Business
Assuming that you have a good, viable and promising idea, to put it into practice, follow the following advice:
1. Dedicate Yourself
Nothing comes for free .
Without hard work, it’s virtually impossible to get a business off the ground and make it thrive.
If you intend to start developing it in your spare time, while maintaining your work as an employee in a company, you need to be consistent .
In other words, don’t get discouraged with the fact that things are going slowly and keep doing a little bit each day, until you see that it’s time to dedicate yourself to the project full time.
2. Study
That’s what we talked about in the previous items.
If you have the opportunity, pursue an undergraduate or graduate degree in Business Administration.
Unable to commit to a long course?
Check out the options for FIA extension courses , which are also very interesting, including EAD (distance) training.
It is also worth watching the lectures of the TED Talks event – at this link , you can check the content in Portuguese.
3. Read
After completing the course, continue studying on your own .
Cultivate the habit of reading, even if it is reading works of fiction or another area of knowledge.
Nothing is more beneficial to the intellect.
For inspiration, think of Bill Gates and Warren Buffett , voracious readers who are among the richest men in the world – just take a look at Buffett’s recommended reading .
4. Learn From Mistakes
You will be wrong .
This is not a possibility, it is a certainty.
The big question is how you will react to these errors. Crying?
No, instead it is necessary to accept them and, before turning the page, reflect on what they have taught you so as not to make the same mistake again.
5. Know How To Delegate
If you want to grow your business, you need to trust other people to delegate important tasks to them.
Improve your talent selection and development processes and you will find that delegating tasks will become much simpler.
6. Lead
Are you a leader or just a manager ?
Always keep in mind the difference between the two: the leader inspires, the manager commands.
If you genuinely care about your employees, that they improve their skills and grow within the company, you will be seen as a real leader.
7. Expand Your Vision
It is important to have a 360-degree view of the company and to know at least the basics about each activity it develops.
And, more than that, knowing how the various internal processes relate to each other, which characterizes the true systemic view .
8. Be A Good Salesperson
You may be wondering why be a good salesperson, if you will have a partner or team to make sales.
The reason is quite simple: you will need to sell your idea to everyone .
From investors to partners and customers, everyone should “buy” your solution, that is, believe that it has a chance of yielding a successful business.
To do so, it will be necessary to raise convincing arguments, just like a salesperson who has an eye on goals and commission.
It may be interesting to study some sales techniques for different types of audience.
9. Ask For Help
The entrepreneur‘s path is often lonely, because he needs to commit himself to bring his project to life .
However, this does not mean that he should do everything alone, without any guidance or accompaniment.
Even if you don’t have a partner or a team, use your network (your network of contacts ) to clarify doubts and get help with different issues.
After all, no one can master all areas of knowledge, nor have all the answers.
When facing difficulties to work your cash flow , comply with legislation or promote your business, ask for help from experts or more experienced entrepreneurs.
10. Take Calculated Risks
Taking risks is essential to scaling a solution and growing the business .
However, the dynamics of identifying and calculating risks can scare the entrepreneur who is not familiar with the business world.
But you can start small , collecting data on possible decisions and their impacts.
Thus, you will be able to choose the most coherent risks for your venture, avoiding large losses.
In addition, taking calculated risks increases the competitiveness of your business, reducing the chances that it will be overtaken by the competition because it has become obsolete.
11. Focus On The Journey
Don’t measure your results based on one or a few unfortunate episodes.
Of course, when starting a business, you have a purpose and you want to be successful.
However, achieving success does not sum up the life of an entrepreneur.
As we mentioned above, there will be mistakes, failures and even failures that can have a big negative effect on the company’s image, finances and reputation.
In these moments, it is important to rescue your motivation, keep your head high and remember that failures are also part of the journey.
12. Validate Your Ideas
To paraphrase executive Sam Walton , “ there is only one boss: the customer” .
The more satisfied he is, the more money he takes to his company, in addition to recommending his services to more people.
It is he who must approve your ideas, otherwise they will not be salable – much less profitable.
The consumer must be heard from the beginning of your company, validating the solution that will be the basis of the business.
Afterwards, the ideal is to consult a few selected customers so that they can give feedback, evaluate changes and adaptations so that your product or service becomes more and more interesting.
13. Build Solid Relationships
Even if your business is B2B (business oriented), you will always deal with people and you must work to make a good impression.
Note that we didn’t say “first impression” but “impression”, as each interaction counts towards building a quality relationship that doesn’t fade over time.
We are not suggesting that you befriend all partners, suppliers and customers, but that you cherish valuable connections .
It may not seem very useful at first, but an active network offers a number of advantages, such as relevant information, access to events and data, learning and even connecting with potential investors.
