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Entrepreneur Definition

Entrepreneurs

An entrepreneur is a person who sees an opportunity and creates a business on their own. There is always a risk of failure for small business owners. An entrepreneur takes on this risk themselves.

Entrepreneurship has advantages and disadvantages. But an entrepreneur also enjoys most profits if their new product or service succeeds.

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What Is an Entrepreneur?

An entrepreneur is a person who runs their own business. Sometimes, an entrepreneur has a new business idea or wants to enter new markets. Most entrepreneurs are self-employed. They start a business and assume the financial risk of failure.

To fund a new venture, an entrepreneur may need to take out a business loan or look for an investor. Successful entrepreneurs keep most of the profits and rewards of the new business venture.

Understanding Entrepreneurship

Entrepreneurship is the action of creating a new business startup. The word “entrepreneur" is French. It's from the French verb “entreprendre," which means “to launch" or “to undertake." Entrepreneurship involves much risk-taking. Typically, an entrepreneur operates as a sole proprietorship. As a sole proprietor, they are their own boss.

Many entrepreneurs create a startup business because they have an innovative idea, innovative products, or new technology. They may see that consumers need products or services the market does not offer. In this way, they see business opportunities or types of businesses that others don't. Other entrepreneurs will find a way of improving existing products or services.

If successful, an entrepreneur can grow their startup into a successful business that they will run for years. In some cases, the entrepreneur may choose to sell the business eventually. By selling, they would take the profits from the sale rather than continue running 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 other expenses. To cover these costs, entrepreneurs must either spend their own money or find different ways to finance their business.

They also need cash flow and annual revenue. Sometimes, an entrepreneur has investors to fund the new venture.

Entrepreneurs often borrow from friends and family. They may also think about taking a short-term or long-term bank loan. But bank loans can be difficult for startup businesses to get. Financing may also be available from the Small Business Administration (SBA).

Other ways to raise money might be to look for venture capital or cash infusions from angel investors. Successful entrepreneurs may also use a credit card to fund their venture.

When looking for investors, entrepreneurs should have a good business plan. Investors are more comfortable investing their money when a business plan shows the entrepreneur has the know-how to succeed.

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.

Become an Entrepreneur With Legal Help

You could be a success story if you focus on your entrepreneurship plan. Meeting with a lawyer can help you understand your options and how to protect your rights. Visit our attorney directory to find a lawyer near you who can get your dream of owning a new business started.

Ready To Become an Entrepreneur?

A successful entrepreneur is a risk-taker. They need stamina and passion to run their day-to-day operations. Here are some useful articles that can help you decide if entrepreneurship is right for you.

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