It’s hard to resist the allure of entrepreneurship with shows like Shark Tank on air. It pulls our insatiable need for creating an idea and building it to be something of value. People line up to have their product and ideas pitched on the show in hopes that the likes of Lori Greiner, Kevin O’Leary, Daymond John, Robert Herjavec, Mark Cuban, or Barbara Corcoran will invest in their dreams. Some are able to raise capital, others are able to increase product awareness from what is known as the “Shark Tank Effect”, and the rest leave without a deal. Getting to this point is no easy feat!
There is signification interest in entrepreneurship globally. While this may seem like a bold thing to say, evidence supports the claim. A survey by the Global Entrepreneurship Monitor indicated that more than 110 million people, from young adult to retirement-aged adults, started a business. Add another 140 million in the same demographic who’s businesses are less than three years. This shows that roughly 150 million people recently started businesses around the globe. What we also see, is that the highest rate of entrepreneurial activity occurs in countries with lower income. When high paying jobs are scarce, entrepreneurship tends to correlate.
One thing to note, is whether entrepreneurs are starting businesses to take advantage of an opportunity or out of necessity. High-income countries are usually drawn to attractive opportunities, whereas lower income countries finds that a majority of their population is drawn to entrepreneurship out of necessity due to a lack of career opportunities.
Oftentimes, it is stated that a majority of businesses fail- citing that 80-90% of businesses will not make it past the first few years. This is a bit of an overstatement. It is more likely that 50% of businesses will fail within the first few years. While this number is still relatively high, there are ways to effectively execute your business idea to maximize the chances of a successful venture. We will cover them throughout this blog.
What is Entrepreneurship?
We often associate entrepreneurship with risk taking, however it may be better described as a person who undertakes a new venture. While this in the traditional working sense, is deemed risky, our new working ecosystem is proving that entrepreneurship, solopreneurship, and artisanship is becoming more normal. Moreover, an entrepreneur recognize opportunities, identifies a solution, assembles the necessary resources, and then transforms these key components into viable business that the market demands.
Consider entrepreneurship as the processes that an individual pursues to achieve a financial reward for the value provided. It is the art of turning an idea into a business. Typically the characteristics of an entrepreneur involve creativity, motivation, and savvy risk taking. It’s important that we look at each of the steps of entrepreneurship and breakdown what it takes to launch successful new ventures.
Why Become an Entrepreneur?
There are three primary reasons that people will forgo conventional work employment to launch a new venture: Become their own boss, pursue their own ideas, and financial rewards.
Be Your Own Boss
This is one of the reasons that is most often stated. It doesn’t mean that entrepreneurs are difficult to work with or that they are poor with authority, rather many people that choose to pursue entrepreneurship are tired of traditional jobs. The corporate structure can feel like a frustrating and sluggish waste of time that drones on for decades while suffocating the very existence of someone that naturally comes up with ideas. Sometimes the want and desire to become your own boss comes from realizing that it’s the only way that you’ll ever achieve your personal or professional goals.
Pursue Your Own Ideas
Secondly, people will go their own way in business upon realizing that the idea for a product or service can be instrumental for a target audience. They have a desire to see these ideas materialized into a successful venture. While they have the capital and resources, corporations will have layers of processes that slow down and logjam the go-to-market strategy that entrepreneurs crave. Without the ability to get their ideas out, entrepreneurs feel unsatisfied and will leave and take a risk to see their own ideas come to fruition.
Financial Rewards
Finally, many people launch new ventures in order to make money. They want to become rich. Usually, this is a secondary motivation behind the two mentioned previously. The average entrepreneurs will make less or a similar amount to what they were making in their jobs, while taking on a considerable amount of responsibility. Sure, the lore of successes like some of the famously recorded entrepreneurs on Shark Tank can lure in the financially ambitious crowd. However, making a profit and raising capital is typically not the foremost reason. Money is a signifier that the idea of the entrepreneur is as big as s/he envisioned, and the financial reward is commensurate with the value the business brings to people.
In Closing
Yes, the thrill of watching entrepreneurs take their ideas from the ground up is such a driving force. You might say to yourself, “I can do that!” And you can. Understand what an entrepreneur is and know you why. If you want to come up with great ideas you need to read this article. Once you finish, you’ll be able to write your plan and get started with launching your new venture. In the event that you need to expand or raise capital, your pitch to Shark Tank is just a fin and gill away.