How to become an entrepreneur

What do Google, Coca Cola, Amazon, Walt Disney, Apple, Nike and Starbucks all have in common? These companies, among the most successful in the world, were all founded in the United States. Entrepreneurs — people who start their own businesses — are a vital part of the economy in the U.S., a country long celebrated as a hotbed of innovation with a healthy creative pulse. Some argue that this ethos stems from a long tradition of individualism and self-reliance, and others praise the relatively free markets and business-friendly policies of the government. In any case, many of the world's most successful companies get their start on American soil.

Becoming an entrepreneur is not for the faint of heart. It requires long hours, hard work, adaptability and a thick skin. What are some of the most common traits of people who start businesses?

The characteristics of entrepreneurs

Entrepreneurs often have a business degree in a subject such as management or marketing, but that's not always the case, and it's not all they need to be successful. Psychology Today (PT) reported that entrepreneurs tend to have a specific personality. Using the "Big Five Dimensions," PT found that they're typically high in the following traits:

  • Openness to experience — a willingness to consider new ideas
  • Extraversion — the desire to be the center of attention and interact with others
  • Conscientiousness — a tendency to work hard and follow rules

Alternatively, entrepreneurs were found to be low in the following dimensions:

  • Agreeableness — a wish to be liked by others
  • Neuroticism — a general emotional instability often characterized by worrying

In addition to these attributes, Chris Coleridge, a researcher from the London School of Economics, described the "e-gene," a collection of six sometimes surprising characteristics that are often found in successful entrepreneurs:

  • A difficult background or broken family
  • Minority group status
    • For example, immigrants to the U.S. are twice as likely to start businesses than native-born individuals
  • Disability
  • Love of risk-taking and unbreakable optimism
  • Need for achievement outweighing a need for power
  • Independence and social distinction

How entrepreneurs get started

Although the psychosociological factors listed above are associated with higher rates of entrepreneurialism, they aren't sufficient to create a company. lays out a list of essential steps for hungry business-creators:

  • Identify the right business
    • Take into consideration your own interests, intuition and businesses you admire
    • Fill a gap in the market by solving a common problem
  • Create a business plan

    • Write down the following to provide focus to your idea:
      • What am I building?
      • What promise am I making to customers?
      • What are the specific objectives and action plans which will get me there?
  • Know your target audience

    • Who will this serve?
  • Understand your personal finances

  • Choose the right kind of money

    • What type of business are you building?
      • Lifestyle business (typically a smaller initial investment)
      • Franchise (moderate investment)
      • High-tech business (significant capital investment)
  • Build a support network

    • Cultivate supporters, advisors, partners, allies and vendors
    • Join your local Chamber of Commerce or other business groups
    • Tap into local, national, social and other types of networks
  • Spread the word

    • Take advantage of a variety of promotional tools, including online marketing, public relations, blog posts, articles, speeches, email, newsletters and word-of-mouth

Possible barriers to success

While having a certain personality or planning advantage can predispose some to becoming entrepreneurs, there are several common barriers to success as well. In 2009, the Ewing Marion Kauffman Foundation surveyed 549 founders of successful companies in a range of high-growth industries. A commanding majority of the respondents mentioned the following stumbling blocks:

  • Inability or unwillingness to take risks: 98%
  • Time and effort requirements: 93%
  • Difficulty getting funding: 91%
  • Business management skills: 89%

The ancient philosopher Seneca once said that, "Opportunity is when luck meets preparation." The keys to building a thriving company lie not only in the gritty groundwork laid by the hopeful founders, but in the context of that work, the right timing, place and message. The visual below covers some of the common characteristics shared by entrepreneurs as well as some little-known facts about starting businesses.

Please reference the visual below for more information and a full list of sources.

how to become an entrepreneur
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