Importance of Entrepreneurial Mindset

Entrepreneurial Mindset - Importance For Growth and Impact

Today, we face many 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. 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. Enter the social entrepreneur looking to start a business with a purpose.

Importance of an Entrepreneurial Mindset

An entrepreneurial mindset allows individuals to adapt to certain conditions effectively. Therefore, how entrepreneurs think and approach challenges is key to the success of their initiatives3.

In the UK the social enterprise sector employs well over a million people. While a survey by Deloitte found that in younger generations, or millennials, 86% think that we should measure business success in more than just financial performance8. As such, we believe we're just seeing the start of entrepreneurs creating businesses that make a difference to people and the planet.

The rewards can be compelling for those who decide to create their own business. Yet, the world of business 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 small businesses will close within a year, while that figure rises to 60% within three years2. While there are many reasons for this, we can often put it down to a lack of entrepreneurial mindset.

So, the importance of an entrepreneurial mindset will play a part in an individual's success. 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. How they think and their attitude toward pursuing 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 give their businesses the best chance of surviving due to their entrepreneurial thinking6, positive attitude, and mindset. 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 in the pursuit of entrepreneurial success. However, they also possess a range of other characteristics that help to make an entrepreneurial mindset so important.

Characteristics of an Entrepreneurial Mindset

Entrepreneurial Mindset - Being and Act
Photo by Danielle MacInnes on Unsplash

There are many characteristics of an entrepreneurial mindset. 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 in daily life and over time.

Having the right mindset alongside the capability to hit sales objectives, innovate or manage high-performing teams set the entrepreneur up for the ride ahead.

Customer Driven

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 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 expect4. Theorists also argue that the internal customer plays a huge role. Entrepreneurs will also recognize 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. As such, the social entrepreneur is driven to make a difference for these people, their "customers."

Focused

Any sort of distraction can lead entrepreneurs to take their eyes 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. The entrepreneur mindset implements 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

The mindset of successful entrepreneurs is one that seeks to continue learning and seeking out new ideas, skills, and techniques. Any successful enterprise will not stand still. If they do, then the chances of failure increase.

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 recognize 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 for self-education 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 how he built one of the world's 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, networking events, or engaging in public speaking. Despite a big to-do list, entrepreneurial behavior constantly picks up nuggets of insight and keeps current.

Whereas some may progress through formal education, the entrepreneur tends to learn from doing and getting stuck in.

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't.

As such, failure and making mistakes encourage business owners with an entrepreneurial mindset toward success. However, setbacks won't keep them down for long because they always look to get back on their feet again, learning from each and every business failure and problem-solving regularly to ensure constant improvement.

Many of the characteristics of an entrepreneurial mindset cross over with the qualities of a growth mindset. Resilience, excitement in facing down challenges, and continually growing in order to realize goals all resonate with the growth 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 to keep pushing toward their longer-term goals.

People Skills

The success of a business relies on people. This can include customers, employees, and even other business owners. An entrepreneur will value people, at work and in their personal life, and will have the ability to interact and communicate effectively.

They'll recognize the importance of bringing people with them on their entrepreneurial journey, as they can't do it all themselves. They'll champion communication skills throughout the business, knowing these fuel the collaboration and connections that create effective teams and drive progress. They'll value life skills and experiences that help bring rounded perspectives into their organizations.

Entrepreneurs are Doers

A successful entrepreneur believes in doing something. 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 how they operate5. This is part of the entrepreneurial mindset.

The best entrepreneurs innately know that talk and plans don't result in outcomes and progress alone. But rather execution is what will drive forward their endeavors. Crucially you'll find those with an entrepreneurial mindset self-motivated and consistently delivering.

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 they don't, enabling 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. Their competitive nature encourages them to assess, plan to beat and act to overtake the competition. This brings out a competitive streak that sets entrepreneurs apart.

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 that they can think of related to how the competition might approach it.

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. Most often, competitor moves and challenges will be out of the entrepreneur's complete control, and rather than stay the course, they'll respond to meet the challenge head-on with agility.

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 them7. Leadership certainly is a skill that can be learned over time and through practice. As such, entrepreneurs will look to develop leadership qualities through constant learning.

In turn, they successfully lead and manage the people around them to realize 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 own company into a success.

Even though these qualities come naturally to most entrepreneurs, 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?

Always be learning
Photo by Daria Nepriakhina on Unsplash

It is possible to develop an entrepreneurial mindset1. They are the skills and attributes that individuals and aspiring entrepreneurs can learn to express and utilize. 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, individuals must focus on the value 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 are part of the process while maintaining a positive attitude can help individuals to move forward along the path of success and take responsibility for their decisions.

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, it will allow them to be inspired and learn from the entrepreneurial mindsets of others.

In contrast, if we surround ourselves with the wrong people, they can cause us to lose motivation. The wrong influences can prevent many 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, so it can take time to practice decisiveness. 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. And then, they speak confidently of their choices to help others understand why and get behind the actions needed to deliver.

Self-doubt rarely creeps into their confident decision-making. This is because they are prepared for any outcome through the right mindset for progress and moving forward. A bad decision is met with the chance to learn. This can help individuals make a change and utilize 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. If we stop and think about some famous entrepreneurs, from Steve Jobs to Elon Musk, we can recognize their tenacity and vigor to learn and achieve.

Despite this, an entrepreneurial mindset changes and helps define how an individual approaches the pursuit of a thriving business. They look at things differently and can adapt, which makes them apt to progress in the building of 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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1Entrepreneur revolution: How to develop your entrepreneurial mindset and start a business that works. Daniel Priestley. 2018.
2Redefining Business Success: Distinguishing Between Closure and Failure. Headd, B. Small Business Economics (2003) 21: 51. https://doi.org/10.1023/A:1024433630958
3J. 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
4Crane, 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
5Proactive Behavior: Meaning, Impact, Recommendations. Source: Business Horizons, May/Jun99, Vol. 42 Issue 3, p63, 8p, 1bw Author(s): Bateman, Thomas; Crant, J. Michael
6Ari 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
7Leitch, C. M., & Volery, T. (2017). Entrepreneurial leadership: Insights and directions. International Small Business Journal, 35(2), 147–156. https://doi.org/10.1177/0266242616681397
8“Pro-business,” but expecting more. The Deloitte Millennial Survey 2017.

Jen’s a passionate environmentalist and sustainability expert. With a science degree from Babcock University Jen loves applying her research skills to craft editorial that connects with our global changemaker and readership audiences centered around topics including zero waste, sustainability, climate change, and biodiversity.

Elsewhere Jen’s interests include the role that future technology and data have in helping us solve some of the planet’s biggest challenges.

Main Photo @korpa on Unsplash
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