Entrepreneur Definition

What is an Entrepreneur?

An entrepreneur is a person who sees an opportunity and creates a business on their own. There is always a risk of failure in business, and an entrepreneur takes on this risk themselves. However, an entrepreneur also enjoys most of the profits if their new product or service is successful.

Key Takeaways

• “Entrepreneurship" is the action of creating a new business startup and becoming an entrepreneur.
• An entrepreneur is someone who starts a business and assumes most of the risk of failure.
• Successful entrepreneurs keep most of the profits and rewards of the new business venture.
• To fund a new venture, an entrepreneur may need to take out a business loan or look for an investor.

Understanding Entrepreneurs

An entrepreneur is someone who starts a business on their own. The word “entrepreneur" is borrowed from the French language. The French verb “entreprendre" means “to launch" or “to undertake."

Many entrepreneurs create a startup business because they have ideas for innovative products. They may see that consumers need products or services that the market is not currently offering. In this way, they see business opportunities that others do not. Other entrepreneurs will find a way of improving existing products or services. A successful entrepreneur is a risk-taker. They need stamina and passion to run the course.

If successful, an entrepreneur can grow their startup into a successful business which they will run for years. In some cases, the entrepreneur may choose to eventually sell the business. By selling, they would take the profits from the sale rather than continuing to run the business.

Funding a New Business

Entrepreneurs may sometimes have cash flow issues in the beginning. They will often need startup money for supplies, a place to do business, or for other expenses. To cover these costs, entrepreneurs will need to either spend their own money or find other ways to finance their business.

Entrepreneurs often borrow from friends and family. They may also think about taking a bank loan. However, bank loans can be difficult for startup businesses to get. Other ways to raise money might be to look for venture capital or cash infusions from angel investors. When looking for investors, entrepreneurs should have a good business plan. Investors can get more comfortable about investing their money when there is a good business plan.

Forming a Startup Business

Aspiring entrepreneurs should also take the time to think about what type of legal structure their business will have. Common choices for legal structures include limited liability companies (LLCs), partnerships, and corporations. There are tax and liability reasons for business owners to choose one legal structure over the others.

Famous Entrepreneurs

There are many examples of well-known businesses that entrepreneurs started. Some famous entrepreneurs include:

• Steve Jobs of Apple Computers
• Jeff Bezos of Amazon
• Bill Gates of Microsoft
• Serial entrepreneur and famous businessperson Richard Branson

These are only a few of many examples of entrepreneurs who grew small businesses into large corporations.

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