THE BLOG

Ten Reasons Why Everyone Can Be an Entrepreneur

13/05/2015 15:53 BST | Updated 13/05/2016 10:59 BST

By Caroline Appel, Luisa Bonin and Andrew Devenport

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Bike entrepreneur Edinaldo Souza, in Curitiba, southern Brazil.

To celebrate the 10th anniversary of Aliança Empreendedora, the Brazilian member of Youth Business International which has supported 19,000 low income microentrepreneurs, we have compiled 10 arguments which deconstruct myths many people have about becoming an entrepreneur.

Here are the first five arguments - the next five will come in next week's column.

1. Entrepreneurship is not a gift, and nobody is born an entrepreneur

Saras D. Sarasvathy, author of "Effectuation - Elements of Entrepreneurial Expertise" (2008), interviewed 52 entrepreneurs from 17 states in the United States, whose revenue varied from US$200million (£130million) to US$6.5billion (£4.2billion), and from these expert entrepreneurs, concluded that entrepreneurs are characterized by certain types of action, rather than inherited personality traits.

That means that anyone is able to learn how to act entrepreneurially, because it is a matter of individual choice and not a natural tendency, a gift or a consequence of the environment to which the person belongs.

In addition, the "Anatomy of an Entrepreneur" research, conducted by the Kauffmann Foundation, found that 52% of successful entrepreneurs are the first ones in their families to start a business. Among these successful cases are Bill Gates (Microsoft), Jeff Bezos (Amazon), and Larry Page and Sergei Brin (Google).

2. You don't need much money to start a business (and sometimes you don't need any money)

Sarasvathy's research also concluded that expert entrepreneurs base their decisions on five principles. The first one is "The Bird-in-hand principle": in order to start a new venture, it is necessary to focus on the means instead of on the objective. This means that instead of defining a goal and searching for investment in order to reach it, expert entrepreneurs analyse the resources that they already have at their disposal or that they can obtain through their network and, from that, they develop one or more business ideas.

This approach also enables the entrepreneur to not rely on large loans or get into debts at the beginning of the new venture, which is always the most challenging time for an entrepreneur.

So, at first, the entrepreneur will only risk what they can lose, and as time goes by, they will learn how to take greater risks in the future. This attitude describes the second principle listed by Sarasvathy: "The Affordable Loss principle".

According to the research "Brazilian entrepreneurs: profile and perceptions" (Endeavor and IBGE, 2013), many Brazilians list a lack of financial resources as one of the main reasons not to start a new venture.

So, if you are thinking of starting a business but are concerned that you don't have enough money, how about trying to make that great idea come true by starting with what you have at hand?

3. You don't need formal education in order to be an entrepreneur

Global Entrepreneurship Monitor's 2014's executive report, which places Brazil as one of the most entrepreneurial nations, shows that most established entrepreneurs in Brazil did not finish high school.

How can this be?

The Kauffmann Foundation has extensively researched how education may help entrepreneurs to grow, and understands that the best moment for entrepreneurial training is when they are starting a business or planning an expansion of an existing venture.

According to the article "Can Entrepreneurs Be Made?" by Vivek Wadhwa, this means that "what entrepreneurs need isn't the type of abstract course they teach in business schools, but practical, relevant knowledge". At present, this type of knowledge is not part of the curriculum of many universities around the world.

If you are starting a new venture or planning on making changes in a working business, have you thought about searching for support in your region?

4. Size and success are not synonyms

In most countries around the world, at least 90% of businesses are micro or small companies that are responsible for creating the majority of work positions in the country. In Brazil, they represent 40% of wages paid and are responsible for generating 27% of the internal GDP. In other words, micro and small businesses have an enormous impact on our economy.

When you think about successful entrepreneurs, what names come to your mind? Most people still link success to the size or the revenue of a business. However, the idea of success varies from one person to another and it has to do with each person's dreams. Many people do not dream of having big businesses but rather of having their own businesses, even if small. As long as they are well developed and showing good results, this is also success.

Now, when you think of successful entrepreneurs, how about remembering those entrepreneurs that make a great difference in the trade of your local community?

5. Bankruptcy and previous failures do not make anyone into bad entrepreneurs. Making mistakes is part of the process.

Before succeeding in creating the light bulb, Thomas Edison went through 10,000 prototypes. Legend has it that Colonel Sanders, founder of KFC, tried to sell his recipe of fried chicken to 1,009 restaurants before actually finding a customer, and Richard Branson has had many failed ventures out of the hundreds he has set up. There are many stories like this: Henry Ford, Walt Disney, Oprah Winfrey and even J.K. Rowling failed before reaching success.

What do these stories have in common?

Sarasvathy listed "The Lemonade principle" as the fourth principle that guides expert entrepreneurs. According to the author, more important than failure itself is learning how to manage it and how to use it favoring the business and the entrepreneur's development as an entrepreneur. This principle suggests that interventions be recognized and appropriated, taking advantage of surprises instead of trying to avoid them, overcome them or adapt to them.

In short, "The Lemonade principle" is the ability to transform the unexpected into value or profitability, that is, taking seriously the expression: "If life hands you lemons, make a lemonade".

Eric Ries, in his book "The Lean Startup", states that mistakes are beneficial to the development process of a new business. However, he says that it is important to fail as soon as possible and to learn as quickly as possible! In other words, entrepreneurs should keep their failures small and should also eliminate them while they are not creating bigger problems.

What do you say: how many times are you willing to try?

Next week, we'll publish the final five reasons why everyone can be an entrepreneur.