What is Entrepreneurship? How to Become an Entrepreneur

With the rapid advancement of technology, an evolving work culture and increased access to capital for entrepreneurs of all types, entrepreneurship is an appealing career choice for many. There are currently upward of 582 million entrepreneurs around the world, and according to a recent 2023 RBC poll, a growing number of Canadians (predominantly Millennials and Gen Z) are turning to entrepreneurship as a means to advance their careers and gain greater control over their professional pursuits. In fact, 94 per cent of those surveyed report “being one’s own boss” as their main incentive for doing so, and consider entrepreneurship a preferred alternative to the conventional nine-to-five work week. 

From small businesses to international companies, entrepreneurship is essential for keeping Canada’s economy healthy and balanced. So, what exactly is an entrepreneur, and what are the steps to becoming one? What is the impact of entrepreneurship on society, and why is this role so important? We’ve created a comprehensive guide to entrepreneurship that outlines the skills, steps, and basic business resources required to become a successful entrepreneur and new business owner.

What is the simple definition of entrepreneurship?

Simply put, entrepreneurship is the act of starting a business with the intention of turning a profit. However, the modern definition of entrepreneurship has expanded to include the act of transforming the world by solving large-scale problems. With the advent of the internet, entrepreneurship has the power to create social change through the creation of a service or product that affects individuals in positive ways and addresses social issues with innovative ideas. 

Entrepreneurship is also an opportunity for self-motivated individuals to create their own career path and income by developing goods or services that people want or need. It’s a risky approach to making a living, but it can result in incredible rewards and lasting success.

What is an entrepreneur?

While there have been different discussions on the meaning of entrepreneurship, the general consensus is that it refers to an individual who starts a business with the goal of turning a profit. Entrepreneurs come up with an innovative idea for a good or service and package it to sell to consumers. Entrepreneurs also have the opportunity to enhance an existing product or service and sell it as a superior alternative to meet consumer needs.

Some people fall into entrepreneurship accidentally when their side hustle becomes a full-time gig, such as a photographer who transitions from taking photos in their downtime to launching a full-fledged business. Others dive right into entrepreneurship as their primary source of income, such as the owner of an independent retail store or online marketplace. 

Regardless of how one becomes an entrepreneur, they are an integral part of our economy and society. Without new startup companies and business founders, the majority of innovative products and services we rely on today wouldn’t exist.

What are the 4 types of entrepreneurship?

While there are many different ways to describe entrepreneurship, your business will likely fit into one of these four main categories.

1. Small business

A small business is typically characterized as having a limited number of employees with a niche area of focus. The business owner is also more likely to handle more of the day-to-day operations, including hiring employees. The goal of most small businesses is to turn a profit with an innovative idea that addresses a market demand. Many founders fund their own businesses or rely on small business grants, loans, or crowdfunding.

2. Scalable startup

A scalable startup is a business model that begins with an innovative idea and seeks to expand on a large scale at a rapid pace with big profit returns. These startups are typically designed to attract high-value investments from venture capitalists and are often tech-focused. One great example is Uber, a company that was able to scale up successfully by being technology-driven and expanding globally. In other words: given the right funding, these startups aim to create business models that can be easily duplicated and scaled.

3. Large company

Large companies with an entrepreneurial backbone may regularly introduce new products or services that complement their main roster of offerings. This enables them to stay up-to-date with the evolving technological landscape and compete effectively within their market niche. Major enterprises may also attempt to reach new markets by acquiring smaller companies with an existing customer base.

4. Social entrepreneurship

Social entrepreneurship refers to a business that is focused on having a significant social or environmental impact with a desire to make the world a better place. While traditional business models are profit driven, social entrepreneurship puts the focus on creating social change, which can be considered as important as financial gain. A social entrepreneurship business can be a non-profit, for profit, or a hybrid of the two.

Why become an entrepreneur?

If you feel stuck in your current job and are looking to make a major career change, then becoming an entrepreneur might appeal to you. Or you might have a compelling idea that you’re eager to transform into a sustainable business. There are many perks to starting your own business, including:

Becoming your own boss

You may find entrepreneurship appealing because it gives you the ability to turn a profit on your own terms for a business that you believe in. Maybe you’re tired of working for others and want to strike out on your own, or you’re struggling to find employment. Many are drawn to entrepreneurship because they are self-motivated individuals with an original idea and prefer to be independent when it comes to earning a living.

Creating a new product or service

Becoming an entrepreneur affords you the opportunity to build a product or service from the ground up, transforming an innovative idea into a viable business. In other words, you have the ability to create something new and bring it to market. However, starting your own business is not an easy endeavor and it comes with its own set of risks. See our guide on the top sole proprietorship advantages and disadvantages in 2023.

Building your own schedule and working from anywhere

Many entrepreneurs are drawn to a lifestyle with flexible hours, which can help achieve more work-life balance. Keep in mind that many entrepreneurs end up investing more hours in the beginning to get their business off the ground, but this may be worth it in the long-term. Being an entrepreneur typically also means creating your own schedule, with the ability to work from home or overseas as often as you see fit.

What are the characteristics and key skills of an entrepreneur?

Though there are various methods on how to become an entrepreneur, many successful business owners tend to share a few key characteristics. These traits are often what contribute to their overall success in growing their company. If you possess some of these key skills, you might just have what it takes to become an entrepreneur.

Entrepreneurs are innovative

Often, the terms “entrepreneur” and “innovator” are used interchangeably. The definition of “innovative” is “original and creative thinking,” with an innovator being someone who introduces new and novel ideas into the marketplace. Entrepreneurs are innovative in how they apply creative thinking to a specific issue, and then create a new product or service as a solution to that problem.

Entrepreneurs aren’t afraid of failure

Because entrepreneurship involves risk and there are no guarantees of success, entrepreneurs need to be resilient and persistent. Many successful entrepreneurs have had to fail and persevere through many challenges to get to where they are today. While many small companies don’t survive their first year of operation, entrepreneurs should also be open to failure and use it as an opportunity to grow. 

As Jolijt Tamanaha, Director of Marketing and Finance of Fresh Prints, says, “Entrepreneurs make their way down a never-ending list of problems with grit, passion, and energy. While intense, being an entrepreneur means you get to live life learning an incredible amount and maximize your impact on the world because you have to tackle the hardest problems.”

Entrepreneurs adapt and evolve

To be successful, entrepreneurs must be able to adapt to changes in the marketplace. This is an important characteristic, as it helps business owners respond to the ever- changing needs of their consumer. Companies should constantly tweak their business models to align with market demands and ensure they aren’t lagging behind their competition. Entrepreneurs must become experts at pivoting and evolving their business models in order to expand and increase their impact.

For example, a business may adjust an existing product to make it more environmentally friendly based on previous user concerns. Another company might add more relevant features to a tech device so it will stand out against competitors. Or an entrepreneur may completely change their service offerings to better respond to the needs of their customer base and to help grow their audience.

According to James Sandoval, Founder and CEO of Measure Match, “Being an entrepreneur means diving headlong into a likely very risky venture of your own making, working long hours, often alone, to carve out a path to success and never, ever giving up.”

How to become an entrepreneur

So now the big question: what are the key steps to becoming an entrepreneur? While the average path for every aspiring business owner will look different (as it will depend on several factors including personal goals, level of risk tolerance and field of expertise) here is a basic rubric for how an individual can become an entrepreneur. 

1. Ensure financial stability

As mentioned briefly above, venturing into entrepreneurship involves a certain level of risk tolerance. If you have a promising business idea, it’s important to first establish the financial resources at your disposal: are you able to access venture capital funding? Can you apply for a small business grant? Should you explore crowdfunding? 

You may also need to dip into your personal savings to fund your company. If this is the case, keep in mind that there is a high level of financial risk when launching your own business, so it’s important to ensure you’re in a stable financial position before you embark on an entrepreneurial pursuit. 

Aim to put together an adequate cash supply to cover your business expenses for at least the first year. This could also mean creating a comprehensive budget plan, ensuring you have separate bank accounts for personal and business costs, and contributing to a contingency fund to cover unexpected expenses.

Being financially stable before you jump into entrepreneurship will ultimately give you more flexibility to build your business over the long term. Another benefit is being free from debt or overhead expenses from the outset. If you do have debt, try to minimize it as much as possible before you start your business. In the beginning, employ yourself to keep your overhead costs down, and as your business expands, only hire employees when your company is financially stable.

2. Cultivate a diverse skill set

Business entrepreneurship is not a linear path. It requires continuous learning and challenging the status quo. In other words: the most successful entrepreneurs are visionaries who are innovative and forward-thinking. It also means being inquisitive and challenging industry norms. This is why continuous education is integral for any aspiring business person.

Begin by creating a list of your current skills and identifying any gaps. Then, think about how you can learn more about the skills you might need to develop further. This could mean enrolling in regular online courses to deepen a relevant skill set, attending industry conferences, or staying up-to-date with technological advancements. 

For example, maybe you have a strong sales background, but lack bookkeeping experience so you sign up for courses online or within your community. Or perhaps you have strong interpersonal skills, but struggle with using social media to promote your business. A quick search will find you a great number of online resources with tips and guides to get you on the right track.

Cultivating a diverse set of skills will afford you the ability to better problem solve in the day-to-day operations of your business, and enable you to become more self-reliant. As the expression goes, “if you’re not moving forward, you’re falling behind.”

3. Do your research

Before you leap into a new career, take some time to research existing small businesses and learn more about what entrepreneurship is all about. Read business books and blogs about entrepreneurship, listen to podcasts, and follow inspiring founders on social media. You may want to focus your research on the specific industry that your new business idea would fall under (taking a look at what’s already available and the competitors within that industry). Or, if your business will be woman-led, read up on other inspiring female entrepreneurs. 

Consume as much information as you can so you are aware of what works and what doesn’t. Information is power, and luckily there are many free resources you can use to start your business. 

4. Identify a problem to solve

Every worthwhile venture begins with a compelling business idea. So if you’re wondering how to become an entrepreneur, ensure you’ve identified a promising business opportunity. This often stems from pinpointing a problem that needs solving (or improving) within a specific industry niche. 

Determine which problem you are most passionate about solving, and why. The “why” will keep you motivated on your entrepreneurship journey and act as a reminder of who (or what) you’re dedicating your work towards. If you’re stuck on this step, here are a few key questions to hopefully inspire you:

• What challenges have I faced in my daily life that could be leveraged to create a unique business opportunity?

• Can I turn an existing hobby of mine into a unique business idea?

• What are current industry trends and how do I anticipate them evolving?

• What would make my business idea valuable to customers?

• How would I differentiate my business from competitors?

5. Create a unique solution

Successful entrepreneurs often respond to a problem with a solution that is unique and impactful. Be as specific as possible, and consider how the problem is currently being addressed to determine how you will improve it. Speak with industry experts, analyze your competition and commit to in-depth research. From there, you’ll be well-positioned to ask insightful questions and form an action plan to help address them.

For example, perhaps you notice there is a lack of access to fresh produce in a nearby small community. So you come up with a unique solution of creating a mobile grocery store that provides fresh produce to the neighbourhood on a weekly basis. 

6. Network, network, network

Entrepreneurship won’t always appeal to the introvert at heart, but building connections is vital to the success of your business. Networking has the potential to open up doors to financial support and mentorship possibilities, and even business collaborations. Connecting with industry experts also provides opportunities to share knowledge and acquire key insights you may not have otherwise accessed. Not to mention, the more people you meet, the more prospective customers you’re ultimately engaging with.

This could also mean reaching out to other business founders within your community to build your network. Ask them how they handle the challenges of entrepreneurship, from incorporating to merchandising to content marketing. Think about how you can collaborate with other entrepreneurs and support each other, whether it be partnering on a product or participating in a community event. Building strong community ties with other entrepreneurs will help you grow your company in a sustainable way and stay connected to those around you. 

7. Lead by example

Lastly, becoming an entrepreneur requires a strong sense of leadership. Not only should you possess a sense of purpose, resiliency, and effective communication skills, you should also have a high level of emotional intelligence. This means demonstrating empathy towards employees and inspiring them to excel. Leading by example also means having integrity and dedicating yourself to your own personal growth – don’t assume you have all the answers, but rather commit to continuous learning and improvement.

How does entrepreneurship impact the economy?

Entrepreneurship has an important impact on the economy in several ways, including:

Entrepreneurship increases employment

By going into business for themselves, entrepreneurs create their own employment. If they are successful, they may also employ others and help increase employment related to their operations, such as outsourcing to a supplier for their business.

Entrepreneurship opens up new markets and stimulates the economy

Entrepreneurs create new businesses all the time by inventing goods and services or improving existing ones. This creates a ripple effect that helps open up new markets in the economy. By creating new products and services, entrepreneurs help keep the economy healthy and innovative. Given that capitalism is a profit-and-loss system, entrepreneurs help uncover what consumers want and determine what drives profit.

Entrepreneurship helps increase national income

Another way entrepreneurship affects the economy is by increasing the gross national income (GNI), which is the total amount of money earned by a nation’s people and its businesses. With increased employment, people in the economy earn more and contribute more in taxes. This enables the government to spend more on public projects and services. Entrepreneurship is a critical driver in creating a robust economy, and an essential aspect of many economies around the world.

Entrepreneurship furthers social change in society

Entrepreneurs deviate from the status quo and push the economy in new and exciting directions. Often, entrepreneurs are the catalyst  for the latest, greatest products, and as a result, render old methods and systems obsolete. They can also bring more awareness to a gap in social services or goods and identify weak spots in society.

Entrepreneurship creates a healthy, balanced economy

Left unregulated, research has shown that entrepreneurship can lead to unfair market practices and corruption, as well as income inequality. This is why the government often helps develop the entrepreneurial ecosystems, supporting entrepreneurs through programs and venture capitalism to maintain a healthy, balanced economy. The government also supports business incubators, education programs and other resources to encourage entrepreneurship.

Who are some noteworthy Canadian entrepreneurs?

Canada boasts a great number of successful entrepreneurs across many industries. Each success story has its share of unique challenges, but there is much inspiration and knowledge to be learned from these prominent figures.

Harrison and Wallace McCain

Perhaps two of the most famous Canadian entrepreneurs, Harrison and Wallace McCain are best known as the McCain brothers. They are the co-founders of the frozen foods empire McCain Foods Limited, which launched in 1956. The company grew out of their father’s seed potato farm, where they cut potatoes and froze them as fries. From there, the business venture quickly became the world’s largest supplier of frozen foods, opening international factories and supplying more than one-third of the global market for French fries.

Shahrzad Rafati

Founder of BroadbandTV (BBTV) the third largest video property in the world, Shahrzad Rafati is an entrepreneurial success. Her Vancouver-based digital entertainment company follows close behind Google and Facebook, providing high-quality online content across the globe. Rafati dove into entrepreneurship as a recent graduate, recognizing the potential of online video content and the need for a business model that benefits content creators as well as consumers. She founded BBTV in 2005, and is now focused on cultivating a new generation of content creators in Canada and beyond.

Xue Wu

Dr. Xue Wu is the co-founder and CEO of Geneseeq Canada, a leader in biomedical research. Her company uses comprehensive genomic testing to develop better cancer care and therapies for patients. With its headquarters in China and Toronto, Geneseeq encourages collaborations with pharmaceutical and biotech companies and cancer research facilities to improve early cancer detection and monitoring. This business venture is a great example of providing an essential service that will create positive change and have a lasting impact on society.

Jenny Bird

Canadian entrepreneur Jenny Bird began her jewellery business in 2008 and quickly turned it into a global success. Fashioning high quality-jewellery at a reasonable price, Jenny Bird is now sold at more than 500 retailers around the world. The company boasts showrooms across major cities and has exceptionally strong brand recognition.

John Molson

Best known as the founder of Molson Brewery, John Molson began his entrepreneurship journey at the ripe age of 18 thanks to funding from his grandmother. Molson quickly expanded his company and constructed Lower Canada’s first distillery, establishing Molson as the fifth-largest brewery in the world. He also used his entrepreneurial success to support social causes like Montreal’s art sector, the construction of Canada’s first railway, and Montreal’s premier public healthcare facility.

Claudette McGowan

After more than 20 years of success in the technology industry, Claudette McGowan went on to found Protexxa in 2021, a Canadian-based cybersecurity software company that leverages artificial intelligence to identify online threats. While she ended up raising nearly $5 million in VC dollars, doing so was no simple feat. With a rise in cyber threats as society continues to become more interconnected, McGowan recognized it as an opportunity to leverage her skill set and contribute to the betterment of society. 

Tonia Jahshan

Tonia Jahshan is an entrepreneur who founded Sipology by Steeped Tea. Inspired by a memorable cup of Cream of Earl Grey, she decided to launch a company that offers high-quality tea with fun, bold flavours (from “Bubbly Banana Bread” to “Chocolate Chili Chai”). After a successful appearance on “Dragons’ Den,” Jahshan received investment in her company and grew Sipology into a successful business that spans across Canada and the United States.

Jodie Morgan

This Canadian entrepreneur recognized that Canada has a plastic problem and created a unique solution. As the CEO of GreenMantra, her company turns plastics into synthetic waxes and other chemicals that can be reused in other industries. With the goal of creating a more circular economy that upcycles and reuses, rather than disposes, Jodie Morgan has emerged as a leader in the renewable resources industry, making a strong environmental and social impact as a result.

Business ideas for entrepreneurs

There are endless opportunities for entrepreneurs when it comes to starting your own business. In case you’re feeling overwhelmed, here are some great business ideas to get you started.

Start an online store

There are so many benefits to opening an online store. The first is the money you’ll save by not having a brick-and-mortar location. There are also a few different strategies for investing and effectively managing inventory to prevent losing money if your products don’t sell as well as expected. 

If you’re a crafty entrepreneur, you could sell handmade items that are made to order. Another idea is to offer print-on-demand products through a third-party company. This enables you to create, customize, and sell your own designs without having to worry about order fulfillment or shipping. 

If you’re not interested in being a part of the creative process and would prefer to sell items that someone else has designed, dropshipping could be the perfect fit for you. When you open a dropshipping business, you avoid having to spend any money upfront on inventory, as your supplier fulfills all of your orders.

Open an in-person service-based business

If you’re trained in some sort of service that requires a physical location, why not open your first brick-and-mortar location? Examples of service-based businesses include hairdressers, pet groomers, dry cleaners, consulting firms and fitness studios. If you don’t have any training in a specific niche, you may want to pursue a degree that’s particularly suited for entrepreneurs.

Start freelancing from home

One of the most accessible and inexpensive ways to start your own business is to become a freelancer who works remotely. There are plenty of options for starting a business from home, such as teaching online, graphic design, content editing, or working as a virtual assistant.

Top resources for entrepreneurs

Now that you understand the meaning of entrepreneurship and how you can start your own business, we’ll introduce a few useful resources that will help set you up for success. 

Financial resources 

Black Entrepreneurship Program

This program is a partnership between the Government of Canada, Black-led business organizations, and financial institutions. It’s designed to help Black Canadian business owners build and grow their businesses successfully.

Government of Canada small business loans

The Government of Canada provides loans for small businesses to help finance new companies with gross annual revenues of up to $10 million. 

BDC Small Business Loan

The Business Development Bank of Canada (BDC) offers loans of up to $100K for Canadian businesses that are generating revenue and have been operating for at least 24 months.

Futurpreneur Canada

Futurpreneur is a Canadian non-profit organization that aims to support aspiring business owners between the ages of 18-39. The company offers low-interest business loans and will finance up to $20K per business. Futurpreneur also partners with BDC which can provide an additional $40K. It also has a respected mentorship program that connects young entrepreneurs with business experts within their network.

Educational resources 

Ownr Blueprint

Ownr’s completely free business plan builder is the perfect way to bring your entrepreneurial dreams to life. We’ll walk you through ten different modules, asking simple questions about your business idea, from your name and location, through to some simple financial modelling tools. At the end, you’ll be able to download, print, and share your professional-level business plan, and take the next step in your journey.

BDC articles and tools

In addition to providing small business loans, the BDC offers tons of free online tools to support entrepreneurs, teaching them everything from how to start a business to the best way to handle finances and hire employees.

Canadian Innovation Centre Entrepreneur Training

The Canadian Innovation Centre offers a number of practical education and training programs for entrepreneurs in the form of videos, presentations, and other resources.

MaRS Discovery District

This Toronto-based innovation hub supports entrepreneurs in so many ways – from providing physical co-working spaces to organizing networking events to helping connect new business owners with venture capitalists and investors for funding. They also have robust online resources thats inclides a startup toolkit and various workshops. 

Startup Canada

Startup Canada is another Canadian non-profit that empowers entrepreneurs with the support and resources required to launch and build their business. The company helps inspire startups through comprehensive programs (such as their Women Exporters Program that provides targeted support to female entrepreneurs), free educational resources (including podcasts) and networking events.

Frequently asked questions about entrepreneurship

What is the difference between an entrepreneur and an intrapreneur?

While both “intrapreneur” and “entrepreneur” refer to individuals with a forward-thinking mindset, an entrepreneur refers to someone who is completely autonomous in their business-making decisions and operates their own company. An intrapreneur, on the other hand, is someone who has an entrepreneurial spirit, but works within an existing organization to help them create and innovate.

Is an entrepreneur the same as a business owner?

While entrepreneurs are typically considered business owners, not all business owners are entrepreneurs. A business owner could have founded their own company, but it also refers to individuals who purchase an existing business or franchise (in which case, they’re not an entrepreneur). There are other distinctions, too: entrepreneurship refers to individuals who are forward-thinking, eager to solve a current industry problem and actively engaged in their company’s success. A business owner could invest in a company but have others manage it and be less hands on with day-to-day operations.

Is being an entrepreneur considered a profession?

This is a highly debated topic that can be argued both ways. While entrepreneurship is typically not considered a profession in the traditional sense, there are many academic institutions that offer degrees in entrepreneurship, and it’s certainly a sought-after career path. However, to state entrepreneur as your profession might come off as ambiguous. Instead, think critically about the business idea you want to pursue to better define it.

Can someone be an entrepreneur and not own a business?

In general, being an entrepreneur refers to someone who operates their own business and has taken on a great level of risk to do so. Sometimes, however, the term entrepreneur can be used more loosely to describe a type of person (someone with an entrepreneurial spirit) who is innovative and apt at problem solving. 

Is entrepreneurship easy?

No. Entrepreneurship is a difficult pursuit. Starting your own business comes with a great number of challenges and requires a high level of resiliency. You must be in a stable enough position to take on risk and be prepared to fail (and learn from your mistakes). Being a successful entrepreneur also means adapting to industry trends and technological developments and staying on the pulse of what is current. While it’s a demanding path it can also be an incredibly rewarding experience for many people.

Does entrepreneurship always involve something new?

While entrepreneurship is synonymous with innovation, it doesn’t mean an aspiring entrepreneur must create something from scratch. Often, an individual will look at a current product or service and conceptualize a way to improve it. In fact, this is how many of the products we rely on today came to exist (bubble wrap originated as wallpaper and frisbees were invented with the intention of being pie containers).

What are the benefits of entrepreneurship?

There are plenty of advantages to entrepreneurship. As mentioned above, it grants people the opportunity to become their own boss and turn an original idea into a viable business. Entrepreneurship also has a positive impact on society: opening up new markets to help drive progress and stimulate the economy. It can also lead to more job creation, and helps promote social change by shining a spotlight on important issues (whether it be environmental or educational).

What is an industry in entrepreneurship?

In the context of entrepreneurship, an industry refers to the sector of the economy that your business will fall under. Examples of common industries include: technology, healthcare, manufacturing, retail, real estate, environmental or health and wellness.

Are entrepreneurs born or made?

Similar to many aspects of life, the answer to this question is not black and white. While some individuals may have a stronger natural desire to learn and innovate compared to others, entrepreneurship also requires experience, knowledge and education. It also involves a great deal of tenacity and the confidence in yourself to persevere. 

Make your dreams of entrepreneurship a reality 

In this comprehensive guide to business and entrepreneurship, we’ve covered what entrepreneurship is all about, including the successes, challenges, skills, and steps you can take to become a business owner. Hopefully you’re feeling well-versed in the subject and inspired to pursue this fascinating and fulfilling career path.

Entrepreneurs are problem solvers and change-makers

Entrepreneurs focus on finding solutions to address an issue or problem. This means they often have to think critically to come up with a unique solution. They focus on how they can make an issue better or improve on an existing solution to a problem. 

Often, entrepreneurs act as change-makers, advocating for a shift in the way things are normally done. In fact, many entrepreneurs come up with business ideas by engaging with their community and considering the gaps that can be filled with a good solution. 

We’ll end with the words of founder and CEO of NeuroFlow:

“Entrepreneurship means being the one who is willing to take a leap, work hard enough to sacrifice everything else around you, all in the name of solving problems, because no one else is capable or possesses the desire.”