how to be a good entrepreneur essay

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So You Want to Be an Entrepreneur?

• Emily Heyward

One founder’s advice on what you should know before you quit your day job.

Starting a business is not easy, and scaling it is even harder. You may think you’re sitting on a completely original idea, but chances are the same cultural forces that led you to your business plan are also influencing someone else. That doesn’t mean you should give up, or that you should rush to market before you’re ready. It’s not about who’s first, it’s about who does it best, and best these days is the business that delivers the most value to the consumer. Consumers have more power and choice than ever before, and they’re going to choose and stick with the companies who are clearly on their side. How will you make their lives easier, more pleasant, more meaningful? How will you go out of your way for them at every turn? When considering your competitive advantage, start with the needs of the people you’re ultimately there to serve. If you have a genuine connection to your idea, and you’re solving a real problem in a way that adds more value to people’s lives, you’re well on your way.

When I graduated from college in 2001, I didn’t have a single friend whose plan was to start his or her own business. Med school, law school, finance, consulting: these were the coveted jobs, the clear paths laid out before us. I took a job in advertising, which was seen as much more rebellious than the reality. I worked in advertising for a few years, and learned an incredible amount about how brands get built and communicated. But I grew restless and bored, tasked with coming up with new campaigns for old and broken products that lacked relevance, unable to influence the products themselves. During that time, I was lucky to have an amazing boss who explained a simple principle that fundamentally altered my path. What she told me was that stress is not about how much you have on your plate; it’s about how much control you have over the outcomes. Suddenly I realized why every Sunday night I was overcome with a feeling of dread. It wasn’t because I had too much going on at work. It was because I had too little power to effect change.

• EH Emily Heyward is the author of Obsessed: Building a Brand People Love from Day One (Portfolio; June 9, 2020). She is the co-founder and chief brand officer at Red Antler, a full-service brand company based in Brooklyn. Emily was named among the Most Important Entrepreneurs of the Decade by Inc.  magazine, and has also been recognized as a Top Female Founder by Inc. and one of Entrepreneur’s Most Powerful Women of 2019.

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How to Be a Successful Entrepreneur

Table of contents, innovative thinking: spotting opportunities, resilience: overcoming challenges, risk management: calculated ventures, networking: building meaningful connections, continuous learning: adapting and growing, references:.

• Blank, S. G., & Dorf, B. (2012). The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company. K&S Ranch.
• Drucker, P. F. (2014). Innovation and entrepreneurship: Practice and principles. Harper Business.
• McGrath, R. G., & MacMillan, I. C. (2000). The entrepreneurial mindset: Strategies for continuously creating opportunity in an age of uncertainty. Harvard Business Press.
• Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. John Wiley & Sons.
• Timmons, J. A., & Spinelli Jr, S. (2012). New venture creation: Entrepreneurship for the 21st century. McGraw-Hill Education.

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10 Characteristics of Successful Entrepreneurs

• 07 Jul 2020

Multiple factors go into starting a successful business venture, including a strong concept and initial funding. But, perhaps the most important ingredient is the entrepreneur. These are individuals who must transform their ideas into a fully operational business.

If you’re thinking about launching your own venture, you might be wondering if you have what it takes to be an entrepreneur . But first, what’s an entrepreneur, and what do they do?

Access your free e-book today.

What Is Entrepreneurship?

While entrepreneurship is commonly thought of as the process of starting a business, there are several nuances to consider.

In the HBS Online course Entrepreneurship Essentials , entrepreneurship is defined as “the pursuit of opportunity beyond the resources currently controlled.” An opportunity can be a myriad of things, but the course describes it as "a proposed venture to sell a product or service for which customers are willing to pay more than the required investments and operating costs.”

Entrepreneurs —either as individuals or in teams—discover opportunities throughout their personal and professional lives. They form hypotheses on ways to deliver value to customers and perform structured tests to validate their ideas. This often involves recruiting teammates through networking and investing funds to determine how they’ll deliver a product or service at an acceptable cost.

Great entrepreneurs come from all walks of life. In Entrepreneurship Essentials, it’s noted that “there’s no single personality profile, and it’s important to pay attention to the entrepreneurial team, rather than focus on the individual.” And while that's true, there are certain characteristics and skills that are particularly important for entrepreneurs to have when starting and leading a venture.

Here are 10 characteristics shared by successful entrepreneurs.

1. Curiosity

Successful entrepreneurs have a distinct personality trait that sets them apart from other organizational leaders: a sense of curiosity. An entrepreneur's ability to remain curious allows them to continuously seek new opportunities. Rather than settling for what they think they know, entrepreneurs ask challenging questions and explore different avenues.

This is validated in the online course Entrepreneurship Essentials , where entrepreneurship is described as a “process of discovery." Without curiosity, entrepreneurs can’t achieve their main objective: discovering new opportunities.

The drive they have to continuously ask questions and challenge the status quo can lead them to valuable discoveries easily overlooked by other business professionals.

2. Willingness to Experiment

Along with curiosity, entrepreneurs require an understanding of structured experimentation, such as design thinking . With each new opportunity, an entrepreneur must run tests to determine if it’s worthwhile to pursue.

For example, if you have an idea for a new product or service that fulfills an underserved demand, you’ll have to ensure customers are willing to pay for it and it meets their needs . To do so, you’ll need to conduct thorough market research and run meaningful tests to validate your idea and determine its potential.

3. Adaptability

Entrepreneurship is an iterative process, and new challenges and opportunities present themselves at every turn. It’s nearly impossible to be prepared for every scenario, but successful business leaders must be adaptable.

This is especially true for entrepreneurs who need to evaluate situations and remain flexible to ensure their business keeps moving forward, no matter what unexpected changes occur.

4. Decisiveness

To be successful, an entrepreneur has to make difficult decisions and stand by them. As a leader, they’re responsible for guiding the trajectory of their business, including every aspect from funding and strategy to resource allocation.

Being decisive doesn’t always mean being correct. Entrepreneurs need the confidence to make challenging decisions and see them through to the end. If the outcome turns out to be less than favorable, the decision to take corrective action is just as important.

Check out our video on the characteristics of successful entrepreneurs below, and subscribe to our YouTube channel for more explainer content!

5. Self-Awareness

A great entrepreneur is aware of their strengths and weaknesses. Rather than letting shortcomings hold them back, they build well-rounded teams that complement their abilities.

In many cases, it’s the entrepreneurial team, rather than an individual, that drives a business venture toward success. When starting your own business, it’s critical to surround yourself with teammates who have complementary talents and contribute to a common goal.

Related: 10 Tips to Help You Boost Team Performance

6. Risk Tolerance

Entrepreneurship is often associated with risk. While it’s true that launching a venture requires an entrepreneur to take risks, they also need to take steps to minimize it.

While many things can go wrong when launching a new venture, many things can go right. According to Entrepreneurship Essentials , entrepreneurs who actively manage the relationship between risk and reward position their companies to “benefit from the upside.”

Successful entrepreneurs are comfortable with encountering some level of risk to reap the rewards of their efforts; however, their risk tolerance is tightly related to their efforts to mitigate it.

7. Comfort with Failure

In addition to risk-management and calculated decision-making , entrepreneurship requires a certain level of comfort with failure.

“Of startups that have more than one employee, 70 percent survive at least two years, half last at least five years, and a quarter last 15 years,” says Harvard Business School Professor William Sahlman in Entrepreneurship Essentials . “Even then, only a small fraction of the survivors get to be significant employers.”

The reasons for failure are vast and encompass everything from a lack of business scalability to low product-market fit . While many of these risks can be avoided, some are inevitable.

Despite this, entrepreneurs must prepare themselves for, and be comfortable with, failure. Rather than let fear hold them back, they maintain a positive attitude to allow the possibility of success to propel them forward.

8. Persistence

While many successful entrepreneurs are comfortable with the possibility of failing, it doesn’t mean they give up easily. Rather, they see failure as an opportunity to learn and grow.

Throughout the entrepreneurial process, many hypotheses turn out to be wrong, and some ventures fail altogether. Part of what makes an entrepreneur successful is their willingness to learn from mistakes, ask questions, and persist until they reach their goal.

Related: How to Become a More Resilient Leader

9. Innovative Thinking

Innovation often goes hand-in-hand with entrepreneurship. While innovation in business can be defined as an idea that’s both novel and useful, it doesn’t always involve creating an entirely new product or service. Some of the most successful startups have taken existing products or services and drastically improved them to meet the changing needs of the market.

Although innovation doesn’t come naturally to every entrepreneur, it’s a type of strategic mindset that can be cultivated. By developing your problem-solving skills , you’ll be well-equipped to spot innovative opportunities and position your venture for success.

10. Long-Term Focus

Most people associate entrepreneurship with starting a business. While the early stages of launching a venture, such as securing funding , are critical to its success, the process doesn’t end once the business is operational.

According to Entrepreneurship Essentials , “it’s easy to start a business, but hard to grow a sustainable and substantial one. Some of the greatest opportunities in history were discovered well after a venture launched.”

Entrepreneurship is a long-term endeavor, and entrepreneurs must focus on the process from beginning to end to ensure long-term success.

How to Develop the Qualities of an Entrepreneur

There’s no right or wrong way to be an entrepreneur. Characteristics and behaviors like experimentation, persistence, and innovation can be developed with time, experience, and training. As long as you possess the entrepreneurial spirit, you'll be able to seize opportunities and overcome challenges throughout your journey.

Are you interested in learning the ins and outs of entrepreneurship? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

This post was updated on August 14, 2023. It was originally published on July 7, 2020.

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10 characteristics for becoming a successful entrepreneur

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What is an entrepreneur?

The 4 types of entrepreneurs, what are the qualities of a successful entrepreneur, 5 common mistakes to avoid as an entrepreneur, improve your entrepreneurial skills, are you ready to build the future.

It all starts with an idea. 

Starting a company can be intimidating. You may need to take out a loan, lease a commercial property, or hire staff. The details can feel overwhelming . 

But if you’ve been working a 9–5 for years, you might feel like you’ve stopped growing. You’re grateful for the people who helped you grow because now you’re ready to use your skills in your own business venture. You know have entrepreneur characteristics and want to know where to start. 

The right person will thrive in this environment. They have the entrepreneurial spirit necessary to make it happen and will feel more at peace running their own company than they ever would in an office job.

An entrepreneur is someone passionate and innovative who creates a new business. Their business doesn’t need to reinvent the wheel — your favorite neighborhood café is a business, too — but it takes an entrepreneurial mindset to bring their ideas to life. 

Entrepreneurship is all about pursuing opportunities. It’s about looking for areas to provide a service or a new product the public might need. It’s also about taking the initiative to bring your ideas to life. 

For example, in the 1970s, Steve Jobs noticed computers were popular among hobbyists but inaccessible to the average consumer.  He saw an untapped market with huge potential — he just needed to create user-friendly products. From the Apple 1 computer to the iPhone, he did exactly that. His company became one of the most profitable businesses in the world .

At their core, entrepreneurs are individuals who start a business. But on a deeper level, they’re people who innovate. Someone who starts a business is comfortable with discomfort and pushing the limits of their comfort zone. They see challenges and think of creative ways to overcome them . They fill society with new ideas and keep refreshing the old ones.

When we think of an entrepreneur, we might think of big names like Henry Ford or Bill Gates. But you don’t have to fund a Fortune 500 company to walk in their shoes. 

Entrepreneurs come in many forms, whether they yearn to be their own boss or disrupt the status quo. Here are some common types of self-starters you might run into:

1. The inventor

This person wants to create the next big thing. They see the big picture, imagine products or business ideas that don’t exist yet, and work to bring them into reality. 

2. The small business owner

Small business entrepreneurs employ less than 500 workers. These people operate everything from small consultancies to popular local restaurants. They understand the value of hard work and leading a talented team of employees. 

3. The online entrepreneur 

Whether it’s a side hustle  or a full-time job, these entrepreneurs make the Internet work for them. They might sell products on Etsy, maintain a popular financial blog, or develop software to distribute online. But no matter what, they have a direct relationship with clients through their online business. 

4. The home business owner

These people use their homes as their home base. A family plumbing business might use its home garage to store equipment. On the other hand, an artisan soap maker could use the basement as their production line. These people make their space work for them.

Starting a new business comes with an inherent amount of risk . You can do everything right, but external events could lead to a negative outcome. While there’s no formula for entrepreneurship, there are good or bad entrepreneur characteristics. 

Here are some skills you need to become a successful entrepreneur:

1. Discipline

The number one quality of an entrepreneur is self-discipline . You need to do the work — even when you don’t feel like it. 

If you have a day job, this could mean working long hours . You'll need the self-motivation to wake up early or stay up late as you start your new venture. 

2. Curiosity

The best entrepreneurs always want to learn more . They ask good questions and look for opportunities to grow themselves and their business. These people don’t dwell on what they think they know but instead, change their opinions when presented with new information.

Curiosity to learn is just part of how they approach the world. 

3. Creativity 

This is the spark that drives many successful startups. Creativity isn't just for creatives , it's a skill that everyone can cultivate. Entrepreneurs always look for creative ways to solve problems or deliver a service, often with limited resources.

They look in many different places for inspiration, and their creativity helps fuel their love for what they do . Find what gives you ideas and use it as your fuel. To cultivate this skill, lean on habits that support creativity. It could be music, meditation , or meeting new people. 

4. Willingness to try things

As an entrepreneur, you’ll constantly be presented with new tasks that challenge your skillset. Resourcefulness goes hand-in-hand with experimentation and problem-solving. Be ready to get creative, think outside the box , and pull from your vast network, experiences, and skills to take on a challenge. 

Prepare to watch your solution fail, too. It’s inevitable, and every failure is an opportunity to learn and improve on your ideas. 

If you strategize well and outline metrics for tracking success, you can quickly make adjustments and find appropriate solutions. Show your product to a trusted group of friends, read market research to see if there’s adequate demand, and stay up-to-date on the latest industry news.

These strategies will help you take calculated risks while trying new things.

In the business world, you’re only as good as your word. Honesty and integrity are important traits of an entrepreneur. These personality traits will reap several benefits:

• You will develop a reputation as a strong and honest communicator
• Your employees will value your leadership
• Clients will know you can deliver on your promises
• People will be more willing to lend you money for your next idea
• Your community will support you during tough times

6. Always have a plan

Successful businesses leave little up to chance. They look far into the future , with backup plans to adapt to unexpected events.

You should have a vision for your company 5–10 years from now . To bring that vision to life, you can use the SMART goal-setting method to set short and long-term business goals .

These are goals that are:

• Specific: What is the exact outcome you’re hoping for?
• Measurable: How will you know you achieved this outcome?
• Achievable: Is it reasonable for you to expect to achieve this goal?
• Realistic: Can you arrive at your goal with your current resources?
• Time-Bound: Do you have a clear deadline for your goal?

Each goal should build on the last, bringing you closer to your vision and closer to reality. Also, remember that a lot can change over the years. You’re allowed to adjust your plan if needed.

7. Understanding the value of self-care

Great leaders understand that exhaustion and overwork are a recipe for disaster. They may have all the skills in the world. But, without proper wellness , they won’t be able to execute. Budgeting time for self-care will pay you back tenfold.

The same philosophy applies to your employees. Make sure they understand the value of their work and encourage them to rest when they need it. They will pay you back with a positive attitude and stronger work ethic.

8. Taking risks

Risk takers often do well as business leaders. But you should be clear on your approach, and have a backup plan ready to go should things go awry. 

This is a characteristic of a good entrepreneur because business owners often need to go off the beaten path. This can be scary but entrepreneurs must set aside their fears and take the leap needed to make their vision come to life.

9. Adaptability

The world is constantly changing — and so is how we do business. Entrepreneurs have no shortage of unexpected challenges and surprise opportunities, so they must act quickly and efficiently.

This adaptability is what makes a successful business, and it’s particularly true for entrepreneurs with a Millennial workforce . Rather than trying to force templates that worked in the past, entrepreneurs must be flexible to changing norms like hybrid work models and offering better employee work-life balance .

10. Persistence after failure

Successful entrepreneurs understand that failure isn’t the end of the world. Instead, failure is a rehearsal for success. Persisting despite any roadblocks increases your confidence, conviction, creativity, and innovation.

If you fail, you learn lessons to apply to the next challenge and teach yourself you’re grittier than you thought. All that radical thinking may lead to radical results. 

It’s easy to make mistakes if this is your first time launching a business, but maybe we can help you avoid a few. Here are some things to look out for:

1. Not sticking to your budget

It’s easy to get carried away when you’re starting out. Be careful not to blow your budget too quickly. Stick to the essentials for now, like hiring the right staff, investing in the right tools, and building out your client list. The rest will come later.

2. Making ill-advised hiring decisions

Your business will thrive or die based on who you hire. Choose your employees wisely. Look for people who share your entrepreneurial mindset and have experience working at a new business. 

It’s also useful to find people who have different expertise than you to cover any of your blind spots. If you think you're team could use assistance in getting up to speed, you might want to think about providing them with business coaching .

3. Setting unachievable goals

Don’t expect to make the NASDAQ in your first year. Set achievable goals when you’re starting out. Stick the to SMART method we outlined above.

4. Forgetting to delegate

You hired great people. Use them! Many entrepreneurs don't know how to delegate to others or they're afraid to. Consider whether you need to own a task. You can't control everything so only keep the most important ones.

Assign tasks based on others' strengths, set clear expectations, and check in with them regularly. They’re your team and they will deliver. 

5. Making decisions out of fear

Clear your head before making big decisions. Emotions like fear, anger, or frustration can cloud your judgment. 

When you encounter a stressful situation, take a step back, be mindful of your feelings , and approach the problem later with a clear mind .

Modern leaders need an increasingly long list of managerial skills . Here’s what you should work on as you develop your business:

• Persuasiveness
• Problem-solving
• Communication skills
• Flexibility
• Self-motivation
• Active listening

You might have the seed of an idea — but now it’s time to water it.  

With careful training, planning, and execution, you can watch your idea grow into a successful business. Before you know it, customers will be enjoying the fruits of your labor.

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Elizabeth Perry, ACC

Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships. With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.

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10 tips for becoming a successful entrepreneur.

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Wilbert is the Founder and CEO of  Think Act Prosper , a global media and education company.

An entrepreneur is someone who comes up with ideas, products or services to solve problems for the world. The path of entrepreneurship is built differently for every individual, but all successful entrepreneurs need to be prepared for failure and criticism, and they should constantly be learning and improving themselves.

There is no secret recipe or holy grail to becoming a successful entrepreneur, but here are 10 tips to assist you on the journey ahead:

1. Develop a business plan.

A business plan materializes your ideas onto paper and helps you to envision how your business will be operated. In brief, your business plan should at least answer the following questions about your business:

• What is your product or service? What are your priorities?

• Where will you be operating your business? Where do you want to be in five years?

• When will your business operate?

• Why should people buy your product/service?

• Who is your target segment? Who is your competition?

• How will the day-to-day operations be run? How will you deal with unforeseen emergencies?

These are just a tiny sample of questions to start your brainstorming process. The more questions you can answer, the more clarity you have about running your business.

2. Be frugal.

Think twice before buying anything or signing a lease. To determine if the expenditure is a necessary and good investment, refer to your business plan and ask yourself how your purchase will contribute to the success of the business, as well as any additional costs you could be incurring, such as depreciation and maintenance costs. Always aim to do more with less , and look for ways to reduce costs, such as bartering with other companies.

3. Continuously educate yourself.

Be a voracious learner. You can attend live seminars or classes online. I also recommend reading books by a successful entrepreneur you admire. Even if they aren't in the same field as you, you could learn a lot from both their successes and failures. Observing how they solve problems can give you tips on resolving your quandaries.

4. Build a winning team.

Behind every successful business is a reliable and competent team. This can include engaging an online personal assistant or working with a skilled accountant. Considering sales are the lifeblood of every business, I recommend making your first hire someone who can facilitate revenue by either increasing sales or making the sales process more efficient. I also recommend recruiting people who can take charge of multiple things for greater efficiency.

The key is to recruit the best people to help you achieve your goals, but more importantly, people who share your vision. Every teammate might bring a different skill set to the table, but the entire team should always be on the same page about the company’s vision and values.

5. Find a mind-body-soul balance.

Make sure you eat healthily and find time to declutter your mind. Your personal wellness is as important as your company’s bottom line. Even if your office is at home, find ways to unplug from work and recharge by going for a walk or exercising to release some endorphins (your body’s natural feel-good chemical). Excessive stress is detrimental to your health. Remember that your business thrives only if you do.

6. Take advantage of free marketing tools.

Some free marketing tools such as Google My Business and social media can be used for marketing and promotion. Many businesses create Facebook peer groups to spread the word and interact with like-minded people.

A valuable lesson I learned was that having excellent marketing on a decent product or service is better than having little marketing on an excellent product or service. The more people who know of your company, the better. Moreover, this ties in with tip No. 2 about being frugal and doing more with less: If you can gain publicity for no cost, why not?

7. Find a mentor.

Having a mentor you can trust is a valuable asset. Whether you’re in a mastermind group or have stayed in touch with your former teachers or other business associates, guidance is always valuable. Work with someone who has climbed that very mountain you are trying to navigate to shorten your learning curve.

8. Don't be afraid of networking.

Don't be afraid to seek help. Most of us have contacts who can contribute to our success. I’m not saying you should call them up and immediately start pitching to them, but you can always meet them to catch up over coffee or a meal and see if there is any way that they’re able to help.

You could also start with LinkedIn, which was meant for business networking in the first place. A friendly greeting and introduction with no expectations of any outcome is all it takes to start a conversation with a stranger. It might seem unpleasant and awkward at first, but the more you do it, the easier it becomes. I believe your network is your net worth.

9. Be financially prepared.

Starting a business always costs more than anticipated. You can allocate part of your revenue into an emergency fund to prepare against unexpected financial emergencies. As a last resort, you might have to take loans or inject your own money into the business. However, always pinpoint the root cause of the financial problems and resolve them if they are within your scope of control. 

10. Invest in insurance.

Risk management is a major part of an entrepreneur’s work. Every decision carries its own risk, some of which are completely unpredictable. No one will ever be able to predict what could happen tomorrow, so you should spare no expense to keep your business and property protected. I've observed many business owners who regret not purchasing insurance, only after misfortune strikes and their bill comes due. Consult an insurer to find out how to protect yourself and your business. Your future self will be thankful that you did.

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How To Become a Successful Entrepreneur

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The way to success in business is challenging. What does it take to be a successful   entrepreneur ? Robert Kiyosaki, the famous American inventor ,businessman, the author of best-sellers Rich Dad Poor Dad ,Rich Dad’s Cashflow Quadrant, serves an inspiration for many people in the business world. Here are his top success principles .

First of all, Robert Kiyosaki thinks that the more you experience, the smarter you become. His life story proved this .He started several businesses and some of them went bankrupt. After the failure of his businesses he decided to make small investments into real estate and that experience made him a great real estate investor today.

Secondly, Kiyosaki strongly believes that the more you give ,the more you receive. If you create an excellent product for your customers , so in return they will buy more and become your customers. Robert Kiyosaki made a lot of money but he gave a lot of money to the world. According to him, what we think will determine the results in our life. When he was broke, he used this as an opportunity to learn and grow. The main thing you need to do is to change the way you think. As a result, your life will change too. “ Your biggest asset is you”, as Robert Kiyosaki said.

The rule of thumb in business is FOCUS which means Follow One Course Until Successful. That is what Kiyosaki did after a real estate investment seminar in 1997 and he followed it until he became successful. If you want to be rich , you have to stay focused until you achieve a result.

Kiyosaki also considers that hard times bring new opportunities. When things are tough, the economy will go down and there are a lot of opportunities for business. Robert made more money when the economy was in crisis.

Most famous entrepreneurs failed many times before they became successful. For example, the billionare entrepreneur Jack Ma failed his university entrance exams twice and was rejected from thirty jobs before he founded China’s most successful technology company Alibaba. That’s why it is very important to get over the failure if you want to succeed. As Robert Kiyosaki advised not to be afraid to lose.

One of the success lessons from Kiyosaki is to be financially educated. He believes that you have to equip yourself with the necessary financial education if you want to earn income in your business. In his books he teaches how to build passive income which makes you rich.

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Therefore, the key factor for success is to build and acquire assets that will give you passive income.”The Rich Dad company is getting stronger because every year we add more assets”, as Robert Kiyosaki admitted.

Another suggestion from Kiyosaki is to stop saving money and hedge it against inflation.

In his book Rich Dad Poor Dad he says that the rich do not work for money , they use their money to work for them. They work to acquire more assets which provide them with passive income .

Summing it up, if you follow these Robert Kiyosaki’s tips ,you are sure to succeed in your business. If you want to be financially educated, his best-seller Rich Dad Poor Dad is for you.

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How To Be A Successful Entrepreneur Essays Example

Type of paper: Essay

Topic: Entrepreneurship , Bachelor's Degree , Success , Love , Life , Job , Development , Workplace

Published: 03/27/2020

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This work is about successful entrepreneur and some specific characteristics a successful entrepreneur must possess. Today an entrepreneur is one of the spread professions. However not all people know what it represents in particular. From this paper you can find out what a person should do in order to be a successful entrepreneur. Everyone wants to be successful in his life no matter what kind of job he does. In order to be successful in any sphere, first of all, you must be hard-working. You can achieve nothing without hard work in your life. Nothing comes to you like a charm. You must earn it for your labour. All successful entrepreneurs started from little work, they were not born like this. They pass through different phase in their life and achieve their goal. Of course, it is not so easy road, which you must get over. There are ups and downs in any work in life and you should stay strong in order to be a successful entrepreneur. There is great range of people today, who can be the best example of successful entrepreneurs we can learn from. Bill Gates, Michael Dell, Larry Ellison, Ted Turner, Phil Knight, Vince McMahon, Rupert Murdoch and Steve Jobs are one of them, who made the grade and became famous due to their great work. They see any opportunity to make money. We should mind that they are also ordinary people as we are, and any of us could be in their shoes. You should just believe in yourself and never give up. I think that all people are able to do that. I think that first thing that can help us to be a successful entrepreneur is love for your job. It is not only about entrepreneurs, but all jobs in our life. They say “Do what you love or love what you do”. In my opinion, only great desire to work can bring you success. There are a lot of situations in our life everyone face every day, which may be both good and bad. However, none of them must have been a reason for you to stop. You can never know what is in store for you. Whatever happens in your life, you should never quit, if you really love your job. If you fail, just accept your failure as a second chance to fulfill yourself and show that it is not a limit for you stop, and it can only make you stronger. I consider that any failure in our life is the best teacher. It said “do not be afraid to fail, but be afraid not to try”. So just mortgage yourself to a cause. You should remember that anything that's done is done for the best. Secondly, in order to be a successful entrepreneur you must have all characteristics of a leader. This means that first of all you must be ambitious. In case you face any problem during your career path you must have an ambition to solve them easily. Leaders do not stay in one place. They set goal and go ahead to achieve it in any possible ways. Furthermore, you must be patient and be a man of spirit. Never lose your courage and strive for your dream. All famous successful entrepreneurs had kept going to their goals for long time because of their patience. They gathered experience for years and never gave up on their dreams. Moreover, leaders are self-motivated, which is also good step to your goals. They challenge themselves to learn more new things and develop their knowledge constantly. They must be perfect example that other people can set as a role model, who will motivate them and inspire to work hard. Finally, you must be disciplined and well-organized to be a good entrepreneur. You must be ready for any problem you may face in your life career. So you must take your time to plan and organize all your actions and focus on your goals. You must be disciplined enough to achieve your objectives. Evaluate all pros and cons of your job and try to make the right decisions. Do not stuck in one place and develop your abilities and skills. Also value your time and try to spend it to develop your personality.

Allen, K. (1995), Launching New Ventures: An Entrepreneurial Approach, Upstart Bergman, P.T. (2002), The Essential Guide to Web Strategy for Entrepreneurs, Prentice Hall PTR Finley, L. (1994), Entrepreneurial Strategies: Text and Cases, PWS-Kent Publishing

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Successful Entrepreneur: Main Characteristics Essay

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An Entrepreneur is a person who owns an enterprise; he/she manages the enterprise and assumes all the risks of that enterprise. “The difference between a successful entrepreneur and a failed one is that a successful entrepreneur is the one who lives in the future and is creative,” (Scarborough, 2003). They will always thrive on any change that is before him. When we relate this character to Bill, we see Bill as innovative and a good craftsman to the point of him being loved by the customers including Mr. Hugo.

There are some characteristics traits which make Bill to be a self confident man, this has been seen when the owner wants to give the control of the shop to Bill after he retires from the shop and he knows that Hugo Shop will prosper under the control of Bill. Bill is realistic, he accepts the management of Hugo shop because he knows the problems Mr. Hugo was going through in maintaining the shop and thus is in a position to deal with those problems if they arise. “Mr. Hugo and his wife found satisfaction in the symbol of success in their business and they wanted to continue that tradition of success with the shop; they are leaving the shop to Bill because he is the right candidate” (Scarborough, 2003).

There are some characteristic traits which can hinder Bill from succeeding in his new business. Firstly lack of planning, business planning is so important, “it requires one to analyze every business situation and problems which may occur in the day to day running of the business” (Scarborough, 2003), and it is through business planning that one is able to achieve set goals that you have set for your business. Secondly if Bill does not manage his money wisely he is bound to fail miserably because the lifeblood of any business is the cash flow. Bill needs to buy inventory and pay for the raw materials that are needed in the shop and at the same time he needs money to pay for his wages. Bill should be keen when handling money, he should make sure that the cash flow in the Hugo shop keep flowing and the bills are paid right on time because many business have wound up due to the owner negligence with the cash of the business.Bill should take everything seriously in order not to fail, but if he become lazy he will be easily be sidetracked by the business and he will no longer be motivated in the running of the business.

In order for Bill’s business to succeed he must take many things into consideration. Firstly, Bill should remember it is through the customers and not about the products or the services that he will be selling or the price that he will be selling his products, “but if the customer is satisfied, the business will succeed “(Moore 2005). Anything Bill will do to his business must be focused on customers including all the policies of the business and he can achieve this through advertising, “opening early and closing late than the normal business around that location and lastly he must be friendly to his customers” (Moore, 2005).

The terms of sales by Mr. Hugo were good because instead of being given a lump sum of money at a go. Mr. Hugo knew Bill was a hardworking man and he can turn the shop into a successful one when it is under Bill management, part of the profit which will be realized under Bill’s ownership will go directly to Mr. Hugo, with that he will have a say on the shop even if he retires.

Reference List

• Moore, C.W. (2005). Small business management: an entrepreneurial emphasis . New York: Cengage Learning Publisher.
• Scarborough, N.M. (2003). Effective small business management: an entrepreneurial approach . London: Prentice Hall Publisher.
• Innovation and Creativity in Entrepreneurship
• Customers May Expect Using Timeshare Units Benefits
• Effective Communication Strategies in "Les Miserables" by Victor Hugo
• "The Hunchback of Notre Dame" by Victor Hugo: New Historicism Approach
• Liminality in "The Speckled People" by Hugo Hamilton
• Manu Chandaria - Famous Enterpreneur Across Africa
• Small Business Success Survey
• Accreditation and It’s Importance in Business
• Entrepreneurship in the Modern Economy
• Entrepreneurship Amidst Economic Downturns
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2021, December 26). Successful Entrepreneur: Main Characteristics. https://ivypanda.com/essays/successful-entrepreneur-main-characteristics/

"Successful Entrepreneur: Main Characteristics." IvyPanda , 26 Dec. 2021, ivypanda.com/essays/successful-entrepreneur-main-characteristics/.

IvyPanda . (2021) 'Successful Entrepreneur: Main Characteristics'. 26 December.

IvyPanda . 2021. "Successful Entrepreneur: Main Characteristics." December 26, 2021. https://ivypanda.com/essays/successful-entrepreneur-main-characteristics/.

1. IvyPanda . "Successful Entrepreneur: Main Characteristics." December 26, 2021. https://ivypanda.com/essays/successful-entrepreneur-main-characteristics/.

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IvyPanda . "Successful Entrepreneur: Main Characteristics." December 26, 2021. https://ivypanda.com/essays/successful-entrepreneur-main-characteristics/.

Essay on Why Do I Want To Be An Entrepreneur

Students are often asked to write an essay on Why Do I Want To Be An Entrepreneur in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Why Do I Want To Be An Entrepreneur

Introduction.

I want to be an entrepreneur because it gives me the freedom to express my ideas. It’s like being a painter, but instead of a canvas, I use business strategies to create my masterpiece.

Independence

Being an entrepreneur means I am my own boss. I can make decisions and set my own rules. This freedom allows me to shape my business in a way that matches my vision and values.

Entrepreneurship allows me to be creative. I can come up with new ideas for products or services and bring them to life. This is exciting and fulfilling, like solving a puzzle.

I want to make a difference in the world. As an entrepreneur, I can create jobs, solve problems, and contribute to the economy. This gives me a sense of purpose and accomplishment.

In conclusion, I want to be an entrepreneur because it allows me to be independent, creative, impactful, and constantly learning. It’s a challenging but rewarding path that I am excited to embark on.

250 Words Essay on Why Do I Want To Be An Entrepreneur

Passion for creativity.

Being an entrepreneur means creating something new and unique. I want to be an entrepreneur because I love the idea of turning a simple thought into a successful business. It’s like painting on a blank canvas, where the colors are my ideas and the brush is my hard work.

Freedom and Control

As an entrepreneur, I get to be my own boss. This means I can make my own decisions, set my own goals, and work at my own pace. This freedom and control are very appealing to me. It’s like being the captain of my own ship, steering it in the direction I want.

Opportunity to Learn

Every day as an entrepreneur brings new challenges and opportunities to learn. From managing finances to understanding customer needs, every task is a learning experience. This constant learning and growth is something I look forward to as an entrepreneur.

Making a Difference

Entrepreneurs can make a positive impact in people’s lives through their products or services. I want to be an entrepreneur because I want to make a difference. I want to create something that can bring a smile to someone’s face or make their life a little easier.

Financial Independence

In conclusion, becoming an entrepreneur is about much more than just making money. It’s about passion, freedom, learning, making a difference, and financial independence. These are the reasons why I want to be an entrepreneur.

500 Words Essay on Why Do I Want To Be An Entrepreneur

Being an entrepreneur means starting your own business and taking on financial risks in the hope of profit. It’s a path that requires courage, creativity, and a strong desire to succeed. I want to be an entrepreneur for several reasons.

Opportunity to Innovate

Being an entrepreneur gives me the chance to bring new ideas to life. I can find creative ways to solve problems and make people’s lives better. This is exciting because it means I can make a real difference in the world. I can create products or services that people need and want, and that can change the way we live and work.

Personal Growth

Running a business is a great way to learn and grow as a person. I’ll face many challenges and obstacles, but overcoming them will make me stronger and smarter. I’ll learn about different aspects of a business, like marketing, finance, and management. I’ll also learn about myself – my strengths, my weaknesses, and my ability to handle stress and uncertainty.

Leaving a Legacy

Finally, I want to be an entrepreneur because it gives me the chance to leave a legacy. My business could be something that lasts long after I’m gone, benefiting future generations. It could also inspire others to pursue their own entrepreneurial dreams.

In conclusion, being an entrepreneur is about more than just making money. It’s about having the freedom to pursue your passions, the opportunity to innovate, the chance to grow as a person, and the possibility of leaving a lasting legacy. It’s a challenging path, but one that can be incredibly rewarding. And that’s why I want to be an entrepreneur.

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Home — Essay Samples — Business — Business Success — The Most Important Skills You Need To Have As An Entrepreneur

The Most Important Skills You Need to Have as an Entrepreneur

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Skills and Behaviors that Make Entrepreneurs Successful

What makes a successful entrepreneurial leader?

Is it the technical brilliance of Bill Gates? The obsessive focus on user experience of Steve Jobs? The vision, passion, and strong execution of Care.com’s Sheila Lirio Marcelo? Or maybe it’s about previous experience, education, or life circumstances that increase confidence in a person’s entrepreneurial abilities.

Like the conviction of Marla Malcolm Beck and husband Barry Beck that high-end beauty retail stores and spas, tightly coupled with online stores, was the business model of the future, while other entrepreneurs—and the investors who financed them—declared such brick-and-mortar businesses were dinosaurs on their way to extinction. The success of Bluemercury proved the critics wrong.

“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders”

Despite much research into explaining what makes entrepreneurial leaders tick, the answers are far from clear. In fact, most studies present conflicting findings. Entrepreneurs, it seems, are still very much a black box waiting to be opened.

A Harvard Business School research team is hoping that a new approach will enable better understanding of the entrepreneurial leader. The program combines self-assessments of their skills and behaviors by entrepreneurs themselves with evaluations of them by peers, friends, and employees.

Along the way the data is also allowing scholars to study attributes of entrepreneurs by gender, as well compare serial entrepreneurs versus first-time founders.

“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders,” says HBS Professor Lynda Applegate, who has spent 20 years studying leadership approaches and behaviors of successful entrepreneurs. “Part of the problem is that people usually focus on an entrepreneurial ‘personality’ rather than identifying the unique skills and behaviors of entrepreneurs who launch and grow their own firms.”

Complicating this understanding are the many types of entrepreneurial ventures that exist, says Applegate. These can include small “lifestyle” businesses, multi-generational family businesses, high-growth, venture funded technology businesses, and new ventures designed to commercialize breakthrough discoveries in life sciences, clean tech, and other scientific fields.

“These types of ventures seem to both appeal to and require different types of entrepreneurial leaders and we are hoping that our research will help us understand those differences—if they exist,” says Applegate, the Sarofim-Rock Professor of Business Administration at HBS and Chair of the HBS Executive Education Portfolio for Business Owners & Entrepreneurs.

The answers are already starting to come in, thanks to initial results from a pilot test of “The Entrepreneurial Leader: Self Assessment” survey taken by 1,300 HBS alumni. Results allowed the researchers to refine the self-assessment and to create a second survey, “The Entrepreneurial Leader: Peer Assessment.” Both are being prepared for launch in summer 2016.

The team included Applegate; Janet Kraus , entrepreneur-in-residence; and Tim Butler, Senior Fellow and Senior Advisor to Career and Professional Development at HBS and Chief Scientist and co-founder of Career Leader.

Dimensions of entrepreneurial leadership

A literature review combined with interviews of successful entrepreneurs helped the team define key factors that formed the foundation for the self-assessment. These dimensions were further refined based on statistical analysis of the pilot test responses to create a new survey instrument that defines 11 factors and associated survey questions that will be used to understand the level of comfort and self-confidence that founders and non-founders have with various dimensions of entrepreneurial leadership.

These 11 dimensions are:

• Identification of Opportunities. Measures skills and behaviors associated with the ability to identify and seek out high-potential business opportunities.
• Vision and Influence. Measures skills and behaviors associated with the ability to influence all internal and external stakeholders that must work together to execute a business vision and strategy.
• Comfort with Uncertainty. Measures skills and behaviors associated with being able to move a business agenda forward in the face of uncertain and ambiguous circumstances.
• Assembling and Motivating a Business Team. Measures skills and behaviors required to select the right members of a team and motivate that team to accomplish business goals.
• Efficient Decision Making. Measures skills and behaviors associated with the ability to make effective and efficient business decisions, even in the face of insufficient information.
• Building Networks. Measures skills and behaviors associated with the ability to assemble necessary resources and to create the professional and business networks necessary for establishing and growing a business venture.
• Collaboration and Team Orientation. Measures skills and behaviors associated with being a strong team player who is able to subordinate a personal agenda to ensure the success of the business.
• Management of Operations. Measures skills and behaviors associated with the ability to successfully manage the ongoing operations of a business.
• Finance and Financial Management. Measures skills and behaviors associated with the successful management of all financial aspects of a business venture.
• Sales. Measures skills and behaviors needed to build an effective sales organization and sales channel that can successfully acquire, retain, and serve customers, while promoting strong customer relationships and engagement.
• Preference for Established Structure. Measures preference for operating in more established and structured business environments rather than a preference for building new ventures where the structure must adapt to an uncertain and rapidly changing business context and strategy.

While the 11 factors provided some level of discrimination between founders and non-founders, five factors showed statistically significant differences. For example, founders scored significantly higher than non-founders on “comfort with uncertainty,” “identification of opportunities,” “vision and influence,” “building networks,” and “finance and financial management.” Founders also had significantly lower ratings on their “preference for established structure” dimension.

Entrepreneurial leadership differences between founders and non-founders

Although some of the factors—like comfort with uncertainty and the ability to identify opportunities—seemed like obvious markers for entrepreneurial success, the study built a statistically reliable and valid tool that can be used to deepen understanding, not only of founders versus non-founders, but also of differences and similarities among founders who start and grow different types of businesses, between male and female founders, serial founders and first-time founders and founders from different countries.

In addition, a deeper examination of the individual questions that make up each factor provides richer descriptions of specific behaviors and skills that account for the differences in the profile of entrepreneurs who are launching different types of ventures and from many different backgrounds.

Take vision and influence, for example. Although it is a long-standing belief that great leaders have vision and influence, the researchers found that entrepreneurial leaders have more confidence of their abilities than the average leader on this dimension—and that leaders working within established firms actually rated themselves much lower.

Financial management and governance turned out to be another non-obvious differentiator.

“Financial management is a skill that all of our HBS alumni should feel confident in applying,” Kraus says. “Yet among the alumni surveyed in the pilot, those who had chosen to be founders rated themselves as much more confident in their financial management skills—especially those related to managing cash flow, raising capital, and board governance—than did non-founder alumni.”

Self-confidence in financial management and raising capital was especially strong for male entrepreneurs, she says. “Our future research will broaden our sample beyond HBS alumni to enable us to differentiate between those who graduated with and without an MBA, and to assess confidence in raising capital and financial management and a wide variety of other skills by different types of founders and non-founders.”

Efficient management of operations was another crucial, yet less obvious, factor. “While we often think that employees within established organizations would be more confident in their ability to efficiently manage operations, we were surprised to see that it is a distinguishing and differentiating attribute of entrepreneurs,” says Kraus. “All entrepreneurs know that they must do more with less—which means that they must work faster and with fewer resources.”

Differentiating male and female entrepreneurs

The pilot study allowed researchers to examine gender differences. While men and women rated themselves similarly on many dimensions, women were more confident in their ability to “efficiently manage operations” and in their “vision and influence,” while men expressed greater confidence in their “comfort with uncertainty” and “finance and financial management."

Entrepreneurial leadership differences between male and female founders

These differences rang true for Kraus, herself a serial entrepreneur who founded and grew three successful entrepreneurial ventures.

“Successful women entrepreneurs that I know have lots of great ideas, and are super skilled at creating a compelling vision that moves people to action,” she says. “They are also extremely capable of getting lots done with very little resources so are great at efficient management of operations. That said, these same women are often more conservative when forecasting financial goals and with raising significant rounds of capital. And, even if they have a big vision, they are less confident in declaring at the outset that their goal is to become a billion-dollar business.”

Indeed, research confirms observations that women start more companies than men, but rarely grow them as large.

Based on his earlier research, these results also resonated with Tim Butler: “When it comes to self-rating on finance skills, women are more likely than men to rate themselves lower than ratings given them by objective observers. There are definitely implications for educators when lower self-confidence in skills associated with entrepreneurial careers becomes a significant obstacle for talented would-be entrepreneurs.”

The researchers hope to deepen their understanding of male and female entrepreneurial leaders as they collect more data.

Differentiating serial founders and first-time founders

Not all founders are cut from the same cloth, the study underscores. Analysis of the pilot data also revealed important differences between first-time founders and serial founders—those who launch and grow a number of new ventures, such as Elon Musk (PayPal, Tesla Motors, SpaceX) and research team member Kraus (Circles, Spire; peach).

One key difference the research team discovered: serial founders appear more comfortable with managing uncertainty and risk. That doesn’t mean they enjoy taking risks, Kraus says, “but they appear to be confident that they are adept and capable of knowing how to ‘de-risk’ their venture and manage uncertainty from the very beginning."

Entrepreneurial leadership differences between serial founders and non-serial founders

While the data are not yet robust enough to say so with certainty, Kraus believes that serial entrepreneurs often enjoy launching businesses where the risk is highest because of confidence in their ability to manage uncertainty, and perhaps because they enjoy the process of creating clarity from uncertainty.

Other factors that set serial entrepreneurs apart from one-timers include confidence in their skills at building networks, securing financing and financial management, and generating creative ways to identify and meet market opportunities.

FUTURE OPPORTUNITIES

As more people take the assessment and HBS develops a richer data set, scholars, educators, entrepreneurs and those who support them will be able to develop insights that will have a number of payoffs.

“The entrepreneurial leaders we know are constantly searching for tools that can help them become more self-aware so they can be more effective,” Kraus explains. “This tool is going to be uniquely useful in that it was specifically developed to help entrepreneurs gain a deeper understanding of the skills and behaviors that they need to be successful.”

In addition, researchers will be able to examine the data by age, gender, country, industry, size of company, pace of growth, and type of venture “to understand the full range of entrepreneurial leadership skills and behaviors, and how different types of entrepreneurs are similar and different,” Applegate says. “These insights will enable us to do a better job of educating entrepreneurs, designing apprenticeships and providing the mentorship needed.”

The data will also be useful in identifying skills and behaviors needed to jumpstart entrepreneurial leadership in established firms, and in understanding how an entrepreneurial leader continues to lead innovation throughout the lifecycle of a business—from startup through scale-up.

“Today, I often see that the creativity and innovation that was so prevalent in the early days of an entrepreneurial venture gets squeezed out as the company grows and starts to scale,” says Applegate. “But, rather than replace entrepreneurs with professional managers, we need to ensure that we have entrepreneurial leadership and creativity in all organizations and at levels in organizations. We hope that our research will help clarify the behavior and skills needed and, over time, will help us track the entrepreneurial leadership behaviors and skills of companies of all size, in all industries, and around the world.”

Given the critical importance of entrepreneurial leaders in driving the economy and improving society, shockingly little is understood about them. The data and analysis emerging from HBS will provide important insights that can help answer the questions, “What makes a successful entrepreneurial leader and how can I become a successful entrepreneurial leader?”

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This Is the Tell-Tale Sign That Your Business Idea Is a Winner, According to Investors On the season 11 finale of "Entrepreneur Elevator Pitch," contestants lay it all on the line for the chance to transform their businesses and their lives.

By Dan Bova Edited by Jessica Thomas Aug 21, 2024

Key Takeaways

• Be clear and crisp with your pitch — investors' time and attention are limited.
• Demonstrate sales traction to show investors a path to huge gains.
• Walk in with confidence — investors are hoping that you are the next big thing!

It's the season 11 finale of Entrepreneur Elevator Pitch , and contestants are fired up for their final chance at winning life-changing money from our board of investors.

Watch as hopeful entrepreneurs step into our elevator and have just 60 seconds to pitch their big ideas. If our board of investors likes what they hear, the elevator doors open, and negotiations begin. But if the investors don't like what they hear, the elevator heads back to the ground floor, game over. "I'm not in the business of wasting time," says investor Rogers Healy , owner and CEO of Morrison Seger Venture Capital Partners.

Yes, it can be brutal, but don't get it wrong — investors might quickly turn down pitches, but when they see something they like, they pounce. "I cannot wait to see what happens if he gets into the boardroom!" says investor Marc Randolph, co-founder of Netflix, after hearing one particularly intriguing concept. Here's the thing: In the entrepreneurship game, when big money meets big ideas, everybody wins.

Related: Here's the One Word That Makes Investors Want to Hear More About Your Business

Find out who scores and who strokes out — plus learn how to get featured on a future episode. "I can't wait to see who shows up next season!" says serial entrepreneur and investor Kim Perell. Think you have what it takes to win in the elevator? Apply now!

Season 11, Episode 8 Board of Investors

• Marc Randolph , co-founder and first CEO of Netflix, master of scaling
• Kim Perell , CEO of 100.co , serial entrepreneur and investor
• Rogers Healy , owner and CEO of Morrison Seger Venture Capital Partners

Season 11, Episode 8 Entrepreneurs

• Kyle Schiedemeyer, founder of Birdie Bombs , grip-n-rip alcohol shots made for golfers
• Brian Wholeman, founder of EZ Shade , an inexpensive and easy way to hide bare bulbs

Related: Is This Business Idea Too Good Not to Steal? Find Out on This Episode of 'Entrepreneur Elevator Pitch.'

How to Watch

Season 11 of Entrepreneur Elevator Pitch is presented by Amazon Business. New episodes stream on Wednesdays on Entrepreneur.com and EntrepreneurTV . Follow Entrepreneur Elevator Pitch on Facebook , YouTube and IGTV .

Entrepreneur Staff

VP of Special Projects

Dan Bova is the VP of Special Projects at Entrepreneur.com. He previously worked at Jimmy Kimmel Live, Maxim, and Spy magazine. His latest books for kids  include  This Day in History , Car and Driver's Trivia Zone ,  Road & Track Crew's Big & Fast Cars , The Big Little Book of Awesome Stuff , and  Wendell the Werewolf . 

Read his humor column This Should Be Fun  if you want to feel better about yourself.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Celebrity endorsement can be good for brands, but it’s a complicated relationship

Professor of Marketing, Royal Holloway University of London

Disclosure statement

Sameer Hosany does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Royal Holloway provides funding as a member of The Conversation UK.

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The UK’s advertising watchdog has banned online adverts for two nutrition brands, for their failure to disclose a well known businessman’s financial interest in the companies. Huel and Zoe had run adverts featuring testimonials from the entrepreneur and podcaster Steven Bartlett, who also appears on the popular BBC show Dragons’ Den.

The Advertising Standards Authority ruled that revealing Bartlett’s commercial relationship with the companies was key for customers to make an informed decision about the product. Not to do so, according to the regulatory body, was “misleading” . The two companies had argued in response that the average consumer would understand the commercial relationship and that explicit disclosure was unnecessary.

The controversy certainly highlights the sometimes blurry world of celebrity endorsements. Research has shown just how damaging such partnerships can be for both businesses and celebrities when things go wrong – and what they can do about it.

For most celebrities, whether they’re actors, athletes, musicians, chefs or models, chances are that some business would like to be associated with them and their popularity. And evidence does suggest that celebrity endorsements can have a positive impact on brand recognition, consumer behaviour and sales.

Big companies know this, and are often prepared to spend huge amounts of money seeking fame and influence. For example, McDonald’s once spent more than US$8 million (£6 million) launching a meal with branding linked to the Korean boy band BTS. And Nike has been successfully linking itself to elite athletes for decades, becoming one of the world’s most ubiquitous and valuable brands in the process.

But it’s not always a smooth process. When celebrity associations don’t go to plan, brands can be exposed to financial risk and reputational damage. Evidence collected over 25 years shows that a celebrity scandal can result in a decrease in stock prices for brands they endorse.

Back in 2009, firms linked to the golfer Tiger Woods lost up to US$12 billion as share prices dropped over 2% after revelations emerged about his personal life . Companies including Nike, General Motors, Gatorade, Gillette and TAG Heuer were faced with difficult decisions about how to mitigate the damage.

Research also suggests that brands should be prepared to terminate their relationships with celebrities. But in practice, there is a high degree of uncertainty about how to respond to these issues.

Another study indicates that a high proportion (59%) of companies faced with such situations actually decided to do nothing, preferring to wait for the whole thing to blow over.

Of course, complications can occur in the opposite direction too. And some contracts contains “reverse moral clauses” which allow celebrities to suspend or terminate their contracts if a company they are linked to is involved with some kind of political, social or environmental scandal.

For example, Lady Gaga ended a partnership with Target when the retailer received criticism over donations to a political action group perceived as being anti‐LGBT. ( Target responded that it was committed to the LGBT community). And Canadian singer The Weeknd cut ties with H&M after it was accused of racist marketing. (H&M apologised .)

These potentially complex relationships may be behind a noticeable shift in the world of celebrity endorsements – when famous people, rather than being the face of someone else’s company decide to set up their own brands.

Celebs going solo

Hollywood actors Ryan Reynolds and George Clooney for example, are said to earn more money from their alcohol brands (Reynolds makes gin while Clooney prefers tequila) than they do from acting. And retired tennis superstars Serena Williams and Maria Sharapova generate significant revenue from their clothing and skin care lines.

Kim Kardashian – who once said , “I’m an entrepreneur, ambitious is my middle name,” – launched a clothing brand which four years later was valued at US$4 billion . YouTubers KSI and Logan Paul combined their online popularity with astute marketing tactics to run a highly successful energy drink brand.

These entrepreneurial moves demonstrate the profitable power of fame in business. And by setting up their own brands, the risks of attaching your famous name to a company that becomes problematic or controversial is reduced.

Name recognition and huge social media mean celebrities can call more of the shots and enjoy greater creative autonomy . And there is evidence that consumers have a more favourable attitude towards brands which are celebrity-owned brands versus those that aren’t.

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