Today, we face a number of global challenges. From global warming and climate change, through oceans full of plastic waste. Yet, in the face of these challenges, we require new ideas and innovation to set about creating sustainable solutions. Enter the social entrepreneur, looking to create a business with purpose. In order to create enterprises that step up to some of these challenges that we face, social or otherwise, the importance of an entrepreneurial mindset should not be overlooked. An entrepreneurial mindset provides individuals with the ability to adapt to certain conditions effectively.
Therefore, the way entrepreneurs think and approach challenges is key to the success of their initiatives5.
In the UK the social enterprise sector employs well over a million people. Whilst a survey by Deloitte found that in younger generations, or millennials, 86% think that business should be measured in more than just financial performance10. As such we believe we’re just seeing the start of entrepreneurs creating businesses that make a difference to people and planet.
For those who decide to create their own enterprises, the rewards can be compelling. Yet, the world of business is one that is filled with challenges. In fact, running a business or considering running a business is not for everyone. Some people, understandably, prefer the safety of a 9-5 job and a regular salary.
In the UK, around 660,000 businesses are registered each year. Despite this, 20% of them will close within a year while that figure rises to 60% within three years4. Whilst there are many reasons for this, it can often be put down to a lack of entrepreneurial mindset.
So, the importance of an entrepreneurial mindset will play a part in the success of an individual. With this in mind, what is an entrepreneurial mindset?
What is the Definition of an Entrepreneurial Mindset?
An entrepreneurial mindset is a state of mind that an individual possesses. The way they think and their attitude towards the pursuit of their goals is an important tool that enables them to undertake entrepreneurial activities.
They are people who take advantage of opportunities. They are innovators and creators who due to their way of thinking, their mindset, give their business the best chance of surviving6. However, when it comes to starting or growing a business, how does that help?
Effectively, it means that they are courageous in the decisions they make. They will actively seek clients and take risks. However, they also possess a range of other characteristics that help to make an entrepreneurial mindset so important.
Characteristics of an Entrepreneurial Mindset
There are many characteristics to an entrepreneurial mindset2. While not every entrepreneur will possess them all, most who start out on the journey will possess them in varying degrees. The others will work to improve aspects of their entrepreneurial mindset over time.
Any business owner who wants long term success will understand that the customer is the backbone of the business. Therefore, they will make it their priority to deliver satisfaction but they won’t stop there. They will continue to grow and evolve in order to meet their customer’s ever-changing demands.
A business is not all about the products or services it offers. It is also about giving people what they want and expect7. Theorists also argue that the internal customer plays a huge role. Entrepreneurs will also recognise and develop the value of the people and the talent around them.
In the case of social enterprises, the customer is often the group of people that the business is looking to help or provide a service for. As such, the social entrepreneur is driven to make a difference for these people, their “customers”.
Any sort of distraction can lead entrepreneurs to take their eye off their business. This can result in lost momentum or worse lead to disaster.
However, high performing entrepreneurs are able to focus entirely on their business to make it work. They implement a level of focus across the business working consistently to ensure all areas perform at their very best. Or as best as they are able.
Entrepreneurs Immerse Themselves in The Learning Process
Any successful enterprise will not standstill. If it does, then the chances of failure increase. The mindset of successful entrepreneurs is one that seeks to continue to learn, seeking out new ideas and techniques.
They readily implement new thinking and ideas into their business and evolve. Being in business is competitive and staying ahead of competitors requires entrepreneurs to constantly learn.
You’ll often recognise those with an entrepreneurial mindset seeking inspiration from others in their field and those from slightly further away. With so much knowledge available online, they’ll take the time to learn from the successes (and failures) of reference companies in their sector.
For example, looking at Amazon and Jeff Bezos’ leadership principles to glean clues as to quite how he built one of the worlds most successful companies. Or actively seeking out and making time for a mentor who might have been there and done it before. Or regularly attending conferences or networking event despite a huge todo list in order to pick up nuggets of insight and keep current.
Learning from Failure
Every business will experience failures. Yet for those with an entrepreneurial mindset failure spurs them on. It enables them to identify what works and what doesn’t3.
As such, failure encourages business owners with an entrepreneurial mindset towards success. However, setbacks won’t keep them down for long because they always look to get back on their feet again.
Many of the characteristics of an entrepreneurial mindset cross over with the qualities of a growth mindset. Resilience, excitement facing down challenges and continually growing in order to realise goals all resonate with the mindset required to get businesses off the ground and turn them into successes.
An Adaptive and Open Mind
Opportunities and challenges can arise at any moment. As a result, the entrepreneurial mindset propels entrepreneurs to adapt and look at new ways of working. When they have the ability to adapt and react quickly, they can stay one step ahead of challenges and market shifts.
They are mindful of the moment. At the same time, they share their focus across a longer-term horizon in order to keep pushing towards their longer-term goals.
The success of a business relies on people. This can include customers, employees and even other business owners. An entrepreneur will value people and will have the ability to interact and communicate effectively.
Entrepreneurs are Doers
Successful business owners are people who believe in doing something. This is part of the entrepreneurial mindset. They will see that there is a problem and then seek out a solution to the problem. They like to take control and be proactive in the way that they operate8.
Crucially you’ll find those with an entrepreneurial mindset consistently delivering. For they innately know that talk and plans don’t result in outcomes and progress alone. But rather execution is what will drive forward their endeavours.
Entrepreneurs Understand the Importance of Listening
Entrepreneurs don’t possess every single skill required to make a business a success. However, they do have the ability to listen actively. Often, they will surround themselves with people who have the skills that they don’t and this enables them to collaborate and find success by listening.
Competition is a Driver
When someone believes in what they do, they want to be the best at it. This brings out a competitive streak that sets entrepreneurs apart. Their competitive nature encourages them to assess, plan to beat and act to overtake the competition.
Often for social entrepreneurs, this manifests itself as relentlessly finding solutions and means to resolve the issue or support the cause they are working towards. For example, they are up against a societal or environmental challenge which can be thought of similarly to the competition.
Driven by the competition, in whichever way it might be defined in each circumstance, is about knowing who and what they are up against and pursuing the win.
Natural Leadership Skills
Entrepreneurs have the ability to define a direction they wish to pursue. Along with this, they also have the ability to successfully lead others and bring them with them9. Leadership certainly is a skill that can be learned over time and through practice. As such entrepreneurs will look to develop leadership qualities thought constant learning.
In turn, successfully leading and managing the people around them to realise their goals.
This aspect of the entrepreneurial mindset understands the importance of teamwork as well as offering support and rewarding people for performing.
These attributes all feed into an entrepreneurial mindset. They provide individuals with the ability to become successful in their market and turn their business into a success.
Even though these qualities come naturally to them, they still have to harness them. They are qualities that inspire and encourage others. Effectively, the entrepreneurial spirit filters throughout a business.
Can You Develop an Entrepreneurial Mindset?
In some cases, it is possible to develop an entrepreneurial mindset1. They are the skills and attributes that individuals can learn to express and utilise. However, what does it take to develop it?
Value should Be The Focus and Not Time
In order to create and develop an entrepreneurial mindset, it is important that individuals focus on the value that they can offer through their efforts. Therefore, it is not about how long it took them to deliver the results.
Effectively, the customer or client is not interested in how long it took you to get to where you are today. All they are interested in is the way in which a product or service can benefit them.
Face Up To Fears
Fear is all part of running a business and being an entrepreneur. However, becoming an entrepreneur will require individuals to face fears. The fear of failure is often one of the main concerns. Despite this, understanding that fear and failure is part of the process can help individuals to move forward along the path of success.
Enhance the Mindset With the Right People
Jim Rohn, a personal development author, says that we are the average of the five people we spend most of our time with. In a business sense, this means being around the right people. If individuals surround themselves with other entrepreneurs then it will allow them to be inspired and learn from the entrepreneurial mindsets of others.
In contrast to this, if we surround ourselves with the wrong people then they can cause us to lose motivation. The wrong influences can prevent entrepreneurs from developing their entrepreneurial mindset.
It’s About Making Quick Decisions
An entrepreneur has the ability to gather information and make decisions promptly. This is not something that comes easily to most and so, it can take time. This is particularly true if an individual has spent all of their life as an employee.
Decision making is the cornerstone of business success. In business, entrepreneurs prefer to make any decision as opposed to not making any decision.
This is because they are prepared for any outcome. A bad decision is met with the chance to learn. This can help individuals to make a change and utilise a strategy that will work.
Why An Entrepreneurial Mindset Matters
Starting a new enterprise is a bold move. It requires a certain level of courage and bravery while facing up to the potential of failure. Despite this, an entrepreneurial mindset changes and helps to define the way in which an individual approaches things. They look at things differently and have the ability to adapt and that makes them apt to progress building a successful business.
As far as business goes, there are failures and successes around every corner. However, the desire to succeed underpins the entrepreneurial mindset and the qualities and attributes that come with it.
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Sources & References:
|Entrepreneur revolution: How to develop your entrepreneurial mindset and start a business that works. Daniel Priestley. 2018.|
|Littunen, H. (2000), "Entrepreneurship and the characteristics of the entrepreneurial personality", International Journal of Entrepreneurial Behavior & Research, Vol. 6 No. 6, pp. 295-310. https://doi.org/10.1108/13552550010362741|
|Politis, D. and Gabrielsson, J. (2009), "Entrepreneurs' attitudes towards failure: An experiential learning approach", International Journal of Entrepreneurial Behavior & Research, Vol. 15 No. 4, pp. 364-383. https://doi.org/10.1108/13552550910967921|
|Redefining Business Success: Distinguishing Between Closure and Failure. Headd, B. Small Business Economics (2003) 21: 51. https://doi.org/10.1023/A:1024433630958|
|J. Michael Haynie, Dean Shepherd, Elaine Mosakowski, P. Christopher Earley, A situated metacognitive model of the entrepreneurial mindset, Journal of Business Venturing, Volume 25, Issue 2, 2010, Pages 217-229, ISSN 0883-9026, https://doi.org/10.1016/j.jbusvent.2008.10.001|
|Ari Hyytinen, Mika Pajarinen, Petri Rouvinen, Does innovativeness reduce startup survival rates?, Journal of Business Venturing, Volume 30, Issue 4, 2015, Pages 564-581, ISSN 0883-9026, https://doi.org/10.1016/j.jbusvent.2014.10.001|
|Crane, F. G., & Sohl, J. E. (2004). Imperatives for Venture Success: Entrepreneurs Speak. The International Journal of Entrepreneurship and Innovation, 5(2), 99–106. https://doi.org/10.5367/000000004773863255|
|Proactive Behavior: Meaning, Impact, Recommendations. Source: Business Horizons, May/Jun99, Vol. 42 Issue 3, p63, 8p, 1bw Author(s): Bateman, Thomas; Crant, J. Michael|
|Leitch, C. M., & Volery, T. (2017). Entrepreneurial leadership: Insights and directions. International Small Business Journal, 35(2), 147–156. https://doi.org/10.1177/0266242616681397|
|“Pro-business,” but expecting more. The Deloitte Millennial Survey 2017.|