Entrepreneurship Explained: What It Is and How to Get Started

Ditching the 9-to-5 for life as an entrepreneur is an exciting prospect for many people. Between setting your own working hours, controlling the direction of your business, and working for yourself (i.e. taking home all the profits that come from your hard work), there’s a good reason that being your own boss is such an enticing idea.

That said, entrepreneurship can be daunting. There’s a lot of strategy and careful planning involved, and – as always – you’re undertaking an element of risk.

If you’re ready for the challenge, becoming an entrepreneur can be incredibly rewarding. In this guide, we’ll reveal what entrepreneurship is, how to decide if it's right for you, and how to get started with a business of your own.

Let’s begin with a brief definition of entrepreneurship.

Let’s take a look at how to get the job done. Here’s how you can become a successful entrepreneur in five steps.

First, you need to find your gap. This is the basis of entrepreneurial success. You don’t need to land on a product that no one else has ever considered, but you do need to find a market that could benefit from a new and improved solution. Here are some points to consider:

• Is there a clear problem that you could solve with your product or service?
• Are there competitors who already have the same idea?
• Is the market stable and projected for long-term growth, or is it a short-lived trend?

The dream scenario is to find a market with a clear issue you can solve with an innovative product or service. Sometimes there’ll be minimal competition, but this is rare; it can also be a sign a market isn’t profitable enough.

Instead, the goal is often to create a product that is superior to the one your competitors offer. If you can build a concept that is better able to solve the unique challenges of your target market, you’ll be in a great position to gain a competitive advantage and carve out market share.

Now that you’ve landed on the product you want to sell, you need to validate whether you’re making the right call. Here are a few ways you can achieve this:

• Design a minimum viable product (MVP)
• Ask your target audience for their feedback and thoughts through surveys and focus groups
• Launch your MVP to a small, select audience to test willingness to pay
• Gather feedback on your product’s perceived value and usability

This step is more than a formality. It can help you decide whether your product is worth pursuing or if it’s time to move on to another concept.

Be willing to listen to feedback and pivot based on the insights you receive, as this can be the difference between launching a market disruptor versus pooling resources and financing into an idea that isn’t likely to take off.

Ready for your product to hit the market? Time to create a strategy that gets it there.

A business plan outlines every consideration, strategy, and tactic that will get your product or service into the hands of your ideal customer. It covers things like:

• Your company’s business model, values, mission, niche, and audience
• The opportunity you’ve discovered
• The product (or products) you’re creating to seize that opportunity
• How you intend to market your product
• The way your business will operate on the day-to-day
• Your current finances and forecasts for the future

While this might be everyone’s favourite part of launching a business, it’s one of the most important. You need to clearly outline your business’s concept, strategy, and ambitions so it’s easy for everyone to understand.

Aside from making it easier to secure investment, this will give you a clear plan that you can use to align your team and stay accountable as you work toward your goals.

Building a brand, designing a product, and launching that product into the laps of your target audience takes cash. Often, the biggest challenge of starting your entrepreneurial journey is securing enough funding to get off the mark. Here are some options available to you:

• Securing investment: One possibility is to build cash from angel investors or venture capitalists who are looking to back ambitious startups in return for equity. This can be a rapid way to build funds, but it can dilute ownership. If you choose this route, you’ll need to create a solid business plan that clearly shows why your brand is a worthy investment.
• Self-funding: If you already have the funds available, it’s entirely possible to launch a business yourself. That said, it’s worth overestimating costs and understanding that you may have to shoulder losses for a while. Some businesses make a huge return within months, whereas others can take years to break even.
• Ask for a loan: A business loan lets you borrow money from a bank or lender. You’ll then repay the amount over time. The only catch here is that you’ll need to prove your business is viable and that you can repay the money. Again, a business plan is helpful here.
• Crowdfunding: Crowdfunding is the practice of gathering a small amount of money from a large ‘crowd’ of people to help fund a new venture. To get started with crowdfunding, you need to have your business plan, a platform through which to reach a new audience, and a way to promote your project.

The right funding path is essential for balancing risk with your long-term vision. Look for an option that supports your goals and your ability to grow sustainably.

As we’ve mentioned, entrepreneurship is rarely smooth, and there are always hurdles to contend with.

We mentioned Canva entrepreneur Melanie Perkins earlier in this article. It’s worth noting that she pitched Canva to more than 100 investors before anyone took a chance and provided funding for her platform. Many potential investors didn’t believe that a young Australian woman could build a global tech company when competitors like Adobe dominated the market.

Moving past pitfalls is always possible. Here are five challenges entrepreneurs face and how to overcome them:

• Getting funded - Funding is a major hurdle for first-time entrepreneurs. Develop the best possible business plan, create a pitch that turns heads, and remember to stay resilient.
• Building a team - It can be hard to find individuals that align with your goals. Focus on hiring people who share your vision and offer clear training opportunities to help your team grow. Remember to be patient when looking for the right talent.
• Standing out - How can you avoid getting lost in a crowded market? It all starts with knowing your audience. Develop ideal customer profiles, then build a product and USP that speaks to them. And don’t forget the importance of quality customer experiences.
• Handling burnout - Entrepreneurship is demanding. To combat burnout, work on managing your time effectively, setting boundaries, delegating where possible, and making space for hobbies and pastimes outside of your work.
• Overcoming setbacks - Roadblocks are part of every business. It’s important to view setbacks not as failures but as an opportunity to improve. Stay resilient and move forward toward a solution with your improved understanding.

There are six primary types of entrepreneurship opportunities. Each of these variations has different goals, risk appetites, and entrepreneurial skills that make them distinct from one another.

Let’s take a look at these six types, alongside some successful entrepreneur examples:

1. Small business entrepreneurship - The backbone of entrepreneurship. These are the local business owners who provide products or services to their community. Janine Allis, for instance, started her multinational company Boost Juice from her home in Australia back in 2000.
2. Innovative entrepreneurship - The visionaries who discover opportunities in untapped markets, disrupt industries, and create demand where none existed before. Think Canva’s Melanie Perkins, who innovated a new way to make graphic design accessible for people with no design experience.
3. Serial entrepreneurship - Individuals who are always coming up with fresh ideas. They typically start multiple businesses or branches in different sectors, each unique from the last. For instance, Ruslan Kogan has expanded kogan.com into retail, mobile, internet, insurance, travel, cars, energy, and beyond.
4. Scalable startup entrepreneurship - These entrepreneurs aim to get their company off the ground and scaling in a rapid timeframe, often with the backing of investment. Atlassian’s Mike Cannon-Brookes and Scott Farquhar, as one example, raised $60 million in venture capital in 2010 to rapidly expand the brand’s global footprint.
5. Intrapreneurship - Rather than work for themselves, intrapreneurs spot opportunities and innovate solutions within an existing corporation. Take Ken Kutaragi, who developed a revolutionary gaming soundchip while working as an engineer for Sony, leading to the release of the iconic PlayStation in 1995.
6. Social entrepreneurship - A social entrepreneur is in it for social impact rather than profit opportunities. For instance, Simon Griffiths developed Who Gives A Crap in 2012 via a crowdfunding campaign. The brand sells eco-friendly toilet paper and has donated more than half of its profits to improve sanitation and build toilets in developing countries.

If there’s anything to learn here, it’s that entrepreneurs come from all backgrounds, and have a variety of motives. All that matters is that you have a clear plan and a drive to succeed.