Despite difficult challenges, entrepreneurs are “the engines of growth” that are transforming the American economy. According to the Small Business Administration, entrepreneurs start more than 600,000 businesses in the United States every year. How important are small businesses to the U.S. economy?
Let me share with you some recent information published by the U.S. Small Business Administration’s Office of Advocacy. Small businesses…
- Represent 99.7% of all employer firms.
- Employ just over half of all private sector employees.
- Pay 44% of total U.S. private payroll.
- Generate 64% (net) of new jobs over the past 15 years.
- Create more than 50% of the nonfarm private gross domestic product (GDP).
- Hire 40% of high-tech workers, such as scientists, engineers, and computer programmers.
- Are 52% home-based and 2 percent franchises.
- Produce 13 times more patents per employee than large patenting firms.
Since small businesses have such an important impact on the business cycle, what drives entrepreneurs to create something, out of nothing? For that matter, what is an entrepreneur, and what makes him or her tick? Consider Sam Walton, one of the greatest entrepreneurs of the 20th century who once said, “I have always been driven to buck the system, to innovate, and to take things beyond a place where they’ve been.”
What is an entrepreneur?
The French word, entrepreneur, means an enterpriser. An enterpriser is person who undertakes an enterprise or business, with the chance of profit or loss. An entrepreneur is an individual who uses venture capital to start and finance a new enterprise, and who assumes the financial risks associated with owning, operating, and managing an enterprise.
Entrepreneurs come in many varieties and tend to develop innovations and create jobs. As a result, according to the SBA, they are vital to a stable and robust American economy. While many consider entrepreneurs to be visionaries, dreamers, and charismatic leaders, not all entrepreneurs share these characteristics.
Most entrepreneurs are individuals who march to their own drums, and who have the drive, determination, and perseverance to bring ideas and opportunities to life. Entrepreneurs usually have a clear, communicable vision, a passion for their areas of interest, the motivation to take their vision to market, and the perseverance to continue despite obstacles and setbacks.
The entrepreneurs are, without a doubt, horses of a different breed. Entrepreneurs are mavericks with vision and determination to create a company that takes the vision to market.
Entrepreneurs, as a group, want to architect and control their own destinies. They are inspired to launch their own business ventures and are driven to identify and exploit high-potential, business opportunities. They are typically obsessed with all aspects of their chosen area of expertise. Entrepreneurs have an itch to create a new life, be their own boss, follow their own path, and shed the constraints of the 9-to-5 work world.
Entrepreneurs move on ideas—ideas that are often generated by a flash of inspiration and that are frequently overlooked by others. Entrepreneurs can change directions quickly as conditions evolve. They can navigate transitions, tolerate uncertainty, and can balance continuity with change. Most importantly, they are tenacious! They follow projects through to completion and do not give up easily, even in the toughest of times.
What drives a person to start an entrepreneurial journey?
There are as many reasons that individuals start new businesses as there are people… Although motivations vary from individual to individual, the most common driver that individuals cite as their reason for starting a new enterprise is their desire for independence. Entrepreneurs want to be autonomous. They want to have the freedom to act independently in achieving their desires and goals.
Entrepreneurs also start businesses for many other reasons. Here are a few additional reasons:
- Sense of accomplishment: Entrepreneurs have the need to achieve and experience a sense of accomplishment.
- Innovation/Invention: Entrepreneurs have a drive to invent new products, services, processes, markets or opportunities, and to create new rules of competition.
- Career transition: Entrepreneurs often make career transitions upon job laid off, downsizing, outsourcing, retirement, or the desire for independence.
- Recognition: Entrepreneurs hunger for: status, power, or recognition for the value of an idea or an enterprise.
- Wealth building: Although entrepreneurs may become wealthy individuals, entrepreneurs typically do not consider wealth creation as their primary goal – wealth creation presents itself as the byproduct of the entrepreneurial adventure.
- Principles: Many entrepreneurs are driven to build businesses that are governed by deeply-held principles and values that contribute to their community and to society as well.
What motivates an entrepreneur is the drive to control his own schedule, manage his own workload, and steward his own destiny. Entrepreneurs want to envision a future where they are doing what they love to do!