Entrepreneurship: What is entrepreneurship? / How to become an entrepreneur

 

In a world where the labor market is constantly changing, employment is increasingly seen as too rigid a model that would prevent employees from expressing their full potential. It is in this context that entrepreneurship appears as the path to emancipation, a path which, on the other hand, is not easy.

 

Definition of entrepreneurship

Entrepreneurship refers to the act of carrying out an activity of which one is oneself the initiator, as shown by its etymological meaning. The dictionary indicates synonyms such as to begin, to attempt, to commit or to undertake.

 

Indeed, as a project initiator, it is thanks to the entrepreneur's action plan that the activity can begin and progress. He is also the one who takes the most risks by starting an activity whose only guarantee is his creativity.

 

Entrepreneurship also means making a commitment, both with partners, reassuring them that the current project is a good idea, and with employees, convincing them that the sustainability of the company will provide them with stability in their positions and provides them with career development.

 

Beyond all this, entrepreneurship is defined as the ability to create added value from limited resources, exploit them in order to be able to respond to a demand expressed by consumers.

 

Who can become entrepreneur?

The idea of becoming an entrepreneur often sounds like a dream, and also an ultimate goal for some. What an attractive idea indeed to live from an activity that one has created oneself.

 

Many people let themselves be convinced each year and try the adventure thinking they have found the right concept to create their startups. But entrepreneurship is a profession in its own right that requires well-defined professional qualities and skills such as.

 

Creativity:

The entrepreneur must be able to innovate constantly in order to promote the activity of his company and remain competitive in the face of competition.

Rigor:

He must also be rigorous in order to organize and manage his team.

Humility:

He must have the necessary perspective and be able to question himself.

Self-confidence:

Being the guarantor of the image of the company, he must show confidence and be the first to believe in the success of his company

 

Leadership:

He must be a good leader, have a force of persuasion and make those around him adhere to his ideas.

 

Dedication

It is what motivates the entrepreneur to work hard, 12 hours a day or more, even seven days a week, especially in the beginning, to get the endeavor off the ground. Planning and ideas must be joined by hard work to succeed. Dedication makes it happen.

 

Determination

It is the extremely strong desire to achieve success. It includes persistence and the ability to bounce back after rough times.

 

It persuades the entrepreneur to make the 10th phone call, after nine have yielded nothing. For the true entrepreneur, money is not the motivation. Success is the motivator; money is the reward.

 

Passion

This is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the ability to convince others to believe in their vision.

 

It can’t substitute for planning, but it will help them to stay focused and to get others to look at their plans.

 

“Smarts”

This consists of common sense joined with knowledge or experience in a related business or endeavor. The former gives a person good instincts, the latter, expertise.

 

Many people have smarts they don’t recognize. A person who successfully keeps a household on a budget has organizational and financial skills. Employment, education, and life experiences all contribute to smarts

 

What is the direction to become an entrepreneur?

As a general rule, business leaders agree that having a higher education in the great schools is a considerable advantage and promotes the success of an entrepreneur. Many of these offer several training courses aimed at training future managers who will be able to become tomorrow's entrepreneurs.

 

Coming from a university training, the managers who received these trainings were able to learn how to carry out market research, manage a budget, build a business plan and learn how large companies operate through internships or of alternating training. Clearly, a complete training to prepare them to take on the role of business leader for later.

 

Some institutes are more reputable than others when it comes to these courses.

 

What are the different types of entrepreneurships?

 

Creation out of nothing:

Creating a business when nothing exists is not an easy situation, especially since you will have to face the barriers to market entry and wait before you can manage to establish your product, acquire consumers, but also to convince the and the possible partners of the project (researchers, investors, collaborators).

 

As a result, the degree of innovation required is higher, and so is risk taking. The business plan for this type of creation must also be concrete and be fleshed out with several predictive studies, especially on the financial level, for the project to be viable.

 

Business takeover:

The takeover of a business or activity has a major difference with the creation of a business. The organization exists, it does not have to be created. If it exists, it is then possible to rely on data that describes it in its present, its history, its structure and its functioning.

 

Under these conditions, the uncertainty is generally less and the levels of risk much lower. As with the creation of a business, the takeover can be carried out by an individual for his own account or by an existing business. At least two cases of business takeover can be examined.

 

The resumption of business or activity in good health:

Spotting a business for sale when its activity is in full swing would be like falling on a gold mine, which is to say that it is a very rare situation, but likely. This is the ideal scenario for an entrepreneur with the funds to take over such a business.

 

Moreover, it goes without saying that it is for the case of a creation ex nihilo or a takeover, it would be preferable to have already benefited beforehand from a convincing experience in management. 

It is also essential to master the sector of activity of the company to be taken over. It is advisable, in fact, not to waste too much time in learning the business of an entrepreneur.

 

Taking over a business or activity in difficulty:

In this case, it is essential to specify that when the company is in receivership, it is essential to know the legal framework for taking over the company to be taken over. It is also advisable to have relationships with key players in this environment.

 

The cost of buying companies in this situation is naturally much more affordable than those in difficulty, which may seem like an advantage, but keep in mind that they often require a very strong financial recapitalization. Taking over a company in difficulty also requires a good knowledge of crisis situations.

 

Intrapreneurship:

The term intrapreneurship appears for the first time in a writing of which Gifford Pinchot III and Elizabeth Pinchot as the authors. This term refers to the creation or development of a new activity within the same company, a mission that is often the responsibility of the senior executives of the latter. Intrapreneurship can take the form of a branch, or often a relocation abroad.

 

Swarming or Extrapreneurship:

Designating in its first sense, a phenomenon observed within a bee hive, when a part of bees leave the hive with a queen to form a new colony, the term swarming has been extended to the world companies. Spin-off is used to designate a departure accompaniment of its employees by a company by helping them to create their own activities.

 

This is a phenomenon observed most often within companies in the mode of new information technologies. This form of business creation generates 10 times more spin-offs in job creation than a license granted to an existing business to launch a new product on the market.

 

 

Self-employment:

The self-employed status is a self-employed worker scheme accessible to everyone, whether in the context of a main or secondary activity. The main advantage of this scheme lies in the simplification of all the administrative procedures to be followed as an entrepreneur.

 

At the financial level, this scheme also makes it possible to reduce social charges, because instead of all social security contributions, a single payment proportional to turnover must be paid to the competent bodies.

 

Social entrepreneurship:

The basic principle here is to create companies whose economic activity has been designed in such a way as to create "social value", to implement innovative solutions to social problems in the areas of social creation. jobs, sustainable development, the environment, health, or any activity that can benefit society. 

 

Public entrepreneurship:

Public enterprises and the various government establishments at national, provincial or local level, oriented towards the service of citizens, constitute the essence of public entrepreneurship. They contribute to the creation of the collective resources necessary for economic development.

 

Why Become an entrepreneur?

Whether it's becoming self-employed, freelancer, inventor, franchise owner or even being at the head of a multinational; the fact is undeniable, there are great advantages to becoming an entrepreneur.

 

So what could be the reasons for wanting to start your own business to become an entrepreneur?

Be free

Being your own boss allows you to manage your time, to decide without being accountable to anyone (most often), to choose the collaborators with whom you want to work and even sometimes to choose your clients.

 

Create your own job

In a world of work in perpetual renewal, creating your own company can be the best way to find a stable job, without fearing a dismissal and without waiting to find the ideal offer which may never fully meet your expectations.

 

To become rich

The entrepreneur can choose his salary, pay himself a profit-sharing and resell his business with a comfortable capital gain… provided that the business is successful of course. The potential gain is commensurate with the risk you take, and it is frequently higher than in most salaried positions.

 

Take up challenges

Creating a business allows you to innovate, solve problems, change the rules of the game. Entrepreneurship is an ideal activity for those who hate monotony and seek, on the contrary, to be stimulated to surpass themselves on a daily basis. Because in the business world, the unexpected and the challenges are not lacking.

 

To question ourselves

The entrepreneur constantly seeks to improve what he produces and what he sells. He needs to optimize his organization, refine his recruitment, learn about developments in his market and the expectations of his customers… Curiosity and the desire to learn are crucial skills for an entrepreneur.

 

Develop your creativity

Entrepreneurship often requires finding new solutions to overcome obstacles, remove obstacles and improve your offer. The entrepreneur is always on the lookout for original ideas and new concepts to think outside the box, leaving his comfort zone.

 

To be recognized

Everything an entrepreneur accomplishes is directly associated with him, even when the success of the project is the result of teamwork. The entrepreneur is a figure of authority whose successes are much better recognized than if he were a simple employee.

 

Stimulate your employees

The entrepreneur knows that the most lasting successes are built together, and that it is very rewarding to engage your teams around a project that you have created.

 

Give meaning to your life

Creating a company that meets its values and needs allows you to fully accomplish yourself by finding a good reason to get up every morning.

 

To have fun

Realizing your project and seeing it develop brings great satisfaction and pride. To create a brand, to be recognized and appreciated by its customers, to create jobs… entrepreneurship is much more than a job: a constant source of excitement, gratification and surprises.

 

Do you, in turn, want to use your creativity, your energy and your ambition to acquire the fundamentals of management and create your future business?  

 

How to become an entrepreneur

To become an entrepreneur, it is important to follow certain steps. Among the main steps are:

 

1.      Prepare your project upstream;

2.     Choose your legal status;

3.     Drafting articles of association in accordance with the applicable legislation;

4.     Find funding;

5.     Open a bank account dedicated to the company;

6.    Domiciling his business;

7.     Take out professional insurance;

8.    Register your business.

 

It is not enough to accomplish these steps. The creation of a company also implies a personal investment on the part of its creator, who will not only have to master the technical part of the job he intends to exercise but also the legislation applicable to this job.

 

Finally, becoming an entrepreneur implies a certain ability to adapt to economic, regulatory and sectoral changes, to ensure the success of the project.

 

How to prepare your business project?

To ensure the success of the project, and the support of investors, the first step is to prepare a viable and coherent business creation project. For this, various tools are available to an entrepreneur, including:

 

·       The business plan;

·       The financial forecast.

Let’s take a look at the characteristics of these essentials for starting a business.

 

Develop a compelling business plan

Convincing potential investors to join your project requires an in-depth study of the market and the risks involved. This is why it is advisable to take a serious interest in the methods of developing a business plan, which will guide you on the strategy to put in place to carry out your project, and convince investors.

 

Present the business creation project and the founders

First, the business plan must present the context in which the business creation project fits. To do this, you must mention:

 

The problems that the company must face;

The solutions proposed to remedy it;

The objective(s) set by the creators of the company;

The details of the project;

A presentation of the founding partners;

Long-term or medium-term development prospects;

The means put in place to implement its objectives.

To determine these elements, it is therefore essential to carry out a market study prior to the production of the business plan.

 

Do a well-sourced and reasoned market study

To succeed in the world of entrepreneurship, it is important to analyze the market in which one is establishing itself but also the competition. A sourced and reasoned market study is therefore essential.

 

For that, several parameters must be studied:

 

The size of the market and its main players;

The law governing it;

The balance of the relationship between supply and demand;

The competition in place;

The consumer's perception of the product, service or brand;

Technological and environmental issues;

Economic, social and legal constraints.

 

Promote the project through a coherent marketing strategy

In order to show your investment in the success of your project, you will also need to plan an effective marketing strategy, and set it out in the business plan. To do this, start by identifying your target market and their needs. Depending on these parameters, you can establish a marketing action plan, the advertising campaigns to be carried out as well as the budget to be allocated to carry them out.

 

Establish a complete financial forecast

The financial forecast supplements the business plan, by providing investors with precise accounting data.

 

The latter are indeed interested in the ability of the company to make the funds invested profitable, over an average of 3 to 5 years. To make a financial forecast, you will therefore have to calculate concrete accounting elements such as the break-even point or an intermediate management balance.

 

Other elements will have to be prepared, preferably with the help of an accountant in order to avoid errors.

 

Estimation of income and expenses of the company;

Adequacy Report;

Projected income statement;

Financial plan.

 

How to find financing as an entrepreneur?

When setting up a business, regardless of its legal form, it is important to raise funds. For this, entrepreneurs have several solutions:

 

Make personal contributions;

Seek private funding.

Use government aid for business creation;

 

Personal contributions

The personal contributions of an entrepreneur are generally the main source of financing for a company. Indeed, it is important that the registered capital deposited is sufficient for investors and banking establishments to follow you in your project.

 

To determine the amount of personal contribution required, the entrepreneur must:

 

Accurately assess the real cash needs of his future business;

Define the minimum percentage of contribution to be allocated to optimize its chances of gaining the confidence of banking establishments and investors (to obtain a loan more easily for example).

 

 

For these purposes, it is important to know that it is possible to make several kinds of contributions such as:

 

In cash:

This is some amount of money directly deposited in the company's bank account;

In kind,

In other words, the contribution of movable or immovable property to the capital of a company;

In industry,

This means that some partners will make their know-how and skills available to a company.

 

Friends and family:

These people believe in the entrepreneur, and they are the second easiest source of funds to access. They do not usually require the paperwork that other lenders require.

 

Credit cards:

The entrepreneur's personal credit cards are an easy source of funds to access, especially for acquiring business equipment such as photocopiers, personal computers, and printers.

 

 

Private funding

Private organizations can also help you become an entrepreneur. Indeed, some private entities or mechanisms make it possible to collect the funds necessary for the development of an entrepreneurial activity. You can therefore use:

 

Banks:

Banks are very conservative lenders. As successful entrepreneur Phil Holland explains, "Many prospective business owners are disappointed to learn that banks do not make loans to startup businesses unless there are outside assets to pledge against borrowing.

 

Many entrepreneurs simply do not have enough assets to get a secured loan from a lending institution.

 

However, if an entrepreneur has money in a bank savings account, she can usually borrow against that money. If an entrepreneur has good credit, it is also relatively easy to get a personal loan from a bank. These loans tend to be short-term and not as large as business loans.

 

 

Venture investors:

This is a major source of funding for startup businesses that have a strong potential for growth. However, venture investors insist on retaining part ownership in new businesses that they fund.

 

Formal institutional venture funds

These are usually limited partnerships in which passive limited partners, such as retirement funds, supply most of the money. These funds have large amounts of money to invest.

 

However, the process of obtaining venture capital is very slow.

 

Corporate venture funds

They are large corporations with funds for investing in new ventures. These often provide technical and management expertise in addition to large monetary investments.

 

However, these funds are slow to access compared to other sources of funds. Also, they often seek to gain control of new businesses.

 

Angel investors

They tend to be successful entrepreneurs who have capital that they are willing to risk. They often insist on being active advisers to businesses they support.

 

Angel funds are quicker to access than corporate venture funds, and they are more likely to be invested in a startup operation. But they may make smaller individual investments and have fewer contacts in the banking community.

 

At the benevolence of Business Angels, investors looking for interesting opportunities to invest their money.

 

Government programs:

Many national and regional governments offer programs to encourage small- and medium-sized businesses.

 

 

The legal status to choose for business as an entrepreneur

 

In order to determine the type of business to create, the first question to ask yourself is whether you plan to undertake alone or with others. Depending on the case, the options will be limited to you, you will have to choose between the sole proprietorship or the corporate form.

 

  

undertake alone

To undertake on your own, you will have to choose from the following legal forms:

 

Sole proprietorship;

Sole proprietorship with limited liability;

Single-person simplified joint-stock company;

Microbusiness.

Each of these statuses has its own specificities, so you need to consult specialist to help you determine the best for you.

 

Doing business together

The exercise of a business activity is limited to certain legal forms. Among the following list, some forms of companies are also dedicated to certain types of activities, such as the SCI which is reserved for real estate. Here are the different types of companies that it is possible to create several:

 

Limited liability company;

Simplified joint-stock company;

Public limited company;

General partnership;

Partnership limited by shares;

Simple limited partnership;

Cooperative production company;

Civil societies: , etc.

 

Each of these statuses has its own specificities, so you need to consult specialist to help you determine the best for you.

 

What tax regime should be favored to become an entrepreneur?

 

Depending on the legal form chosen, 3 tax regimes may apply. Indeed, some regimes, such as micro-fiscal or income tax are reserved for certain statuses, or even subject to conditions in order to be applicable.

 

The choice of tax regime must be made according to the following parameters:

 

The legal form chosen to become an entrepreneur;

The sector in which you operate;

Your needs and the specifics of your project.

The micro-fiscal system

This is a particularly advantageous scheme, to which micro-entrepreneurs and certain individual entrepreneurs may be subject.

 

 

The income tax system

Certain professions and categories of companies benefit from the  IT regime, the personal tax which applies to the income of a natural person. This is particularly the case for liberal professions, family SCIs or even SARLs and SAS which can, under certain conditions, select IR for a period of 5 years following the date of the start of activity.

 

Importance of Intellectual property

 

Intellectual property is a valuable asset for an entrepreneur. It consists of certain intellectual creations by entrepreneurs or their staffs that have commercial value and are given legal property rights.

 

Examples of such creations are a new product and its name, a new method, a new process, a new promotional scheme, and a new design.

 

A fence or a lock cannot protect these intangible assets. Instead, patents, copyrights, and trademarks are used to prevent competitors from benefiting from an individual’s or firm’s ideas.

 

The purpose of intellectual property law is to encourage innovation by giving creators time to profit from their new ideas and to recover development costs.

 

Intellectual property rights can be bought, sold, licensed, or given away freely. Some businesses have made millions of dollars by licensing or selling their patents or trademarks.

 

Every entrepreneur should be aware of intellectual property rights in order to protect these assets in a world of global markets. An intellectual property lawyer can provide information and advice.

 

The main forms of intellectual property rights are:

 

Patents:

A patent grants an inventor the right to exclude others from making, using, offering for sale, or selling an invention for a fixed period of time - in most countries, for up to 20 years. When the time period ends, the percent goes into the public domain and anyone may use it.

 

Copyright:

Copyrights protect original creative works of authors, composers, and others. In general, a copyright does not protect the idea itself, but only the form in which it appears - from sound recordings to books, computer programs, or architecture.

 

The owner of copy-righted material has the exclusive right to reproduce the work, prepare derivative works, distribute copies of the work, or perform or display the work publicly.

 

Trade Secrets:

Trade secrets consist of knowledge that is kept secret in order to gain an advantage in business.

 

 “Customer lists, sources of supply of scarce materials, or sources of supply with faster delivery or lower prices may be trade secrets,”

 

 “Certainly, secret processes, formulas, techniques, manufacturing know-how, advertising schemes, marketing programs, and business plans are all protectable.”

 

Trade secrets are usually protected by contracts and non-disclosure agreements. No other legal form of protection exists. The most famous trade secret is the formula for Coca-Cola, which is more than 100 years old.

 

Trademarks:

A trademark protects a symbol, word, or design, used individually or in combination, to indicate the source of goods and to distinguish them from goods produced by others.

 

For example, Apple Computer uses a picture of an apple with a bite out of it and the symbol (®) which means registered trademark. A service mark similarly identifies the source of a service.

 

Trademarks and service marks give a business the right to prevent others from using a confusingly similar mark.

 

In most countries, trademarks must be registered to be enforceable and renewed to remain in force. However, they can be renewed endlessly.

 

Consumers use marks to find a specific firm’s goods that they see as particularly desirable — for example, Barbie dolls or Toyota automobiles. Unlike copyrights or patents, which expire, many business’s trademarks become more valuable over time.

 

The business creation stage of an entrepreneur

Thank you for reading this article. We look forward to give more resources for your entrepreneurship career.