What Is an Entrepreneur? Reasons to Become One

The term “entrepreneur” means different things to different people. For some, it’s the Silicon Valley founder who transforms a garage start-up into a billion-dollar unicorn. For others, it’s the creator who turned their passion project into a thriving online business. In reality, entrepreneurs are both these things—and more.

Entrepreneurship is on the rise. As of 2026, Americans are filing an average of 509,000 business applications per month, according to the US Small Business Administration. Per Shopify data, the number of store owners who’ve made a first sale has increased sevenfold since 2018.

Though the entrepreneurial journey can vary widely, many aspiring entrepreneurs share common traits and motivations. Learn about different types of entrepreneurship and what it takes to be an entrepreneur, with insights from founders who’ve done it.

What is an entrepreneur?

An entrepreneur is someone who builds or operates their own business. The term “entrepreneur” encompasses those who begin with a business idea, like a new product, as well as self-employed individuals like writers, illustrators, influencers, and marketing consultants. 

The entrepreneurial mindset includes passion, grit, the drive to solve problems, and a desire to bring ideas to life. Entrepreneurs can also be risk-takers: innovators willing to invest in something new, or step outside of the typical corporate path, with no guarantee of success.

Types of entrepreneurship

There are many different types of entrepreneurship. They include:

Small business entrepreneurship

The US Small Business Business Administration defines a small business as independently owned with fewer than 500 employees. A small business is not the main player in their field. 

Fresh Sends is an example of a small business. On an episode of Shopify Masters, Cofounder and CEO Ty Hiss shared that her floral delivery company employs around 20 people, making them much smaller than competitors like FTD and 1-800-Flowers. Their competitive edge is the ability to personalize orders with curated add-on gifts and occasion-specific packaging and cards.

Social enterprise entrepreneurship

Social enterprises include both nonprofits and for-profit businesses that focus on creating social change or making a positive impact.

Outdoor gear brand Cotopaxi is an example of a social enterprise. The business donates at least 1% of their revenue to nonprofits working to reduce poverty through education and healthcare. 

Scalable startup entrepreneurship

A scalable startup is an innovative company that can grow at a quick pace, particularly into different markets with the help of investors and a lot of capital.

Netflix is an example of a company that scaled quickly with venture capital funding. 

Large company entrepreneurship

Large company entrepreneurship is when an established company takes an entrepreneurial approach by developing new products or strategies to stay relevant. 

Stark Carpet is a family-run luxury rug company founded in 1938. On an episode of Shopify Masters, third-generation owners Chad and Ashley Stark share how they brought new energy to the business by expanding from wholesale-only into direct-to-consumer with sub-brands.

Reasons to become an entrepreneur

• Define your role and lifestyle
• Gain more financial security
• Develop your skills
• Make a positive social impact
• Forge a new path
• Enjoy a lower barrier to entry

Setting out to become an entrepreneur and start a new venture offers a number of benefits and rewards, including the chance to: 

Define your role and lifestyle

In traditional jobs, your boss sets your work path. You have a defined role and work toward goals that others determine. But entrepreneurs have more control over their working conditions, lifestyle, and future. 

They set their limits, which can contribute to entrepreneurship feeling like it’s an easier path than traditional work. Shopify research found that respondents were more likely to say employment takes more effort than entrepreneurship. In the US, 46% said entrepreneurship was easier, versus 24% who said a traditional job is easier. 

For Nima Jalali, the founder of Salt & Stone, entrepreneurship was a way of having control over his career. Before founding the brand, he had a career as a professional snowboarder. He always knew it had an expiration date that he couldn’t set. 

“You get older and your career starts to go downhill a little bit, right?” Nima says on an episode of the Shopify Masters podcast. For his next act, he knew he wanted something that could go the distance. 

“I just wanted something that I can work on now, and continue to work on for the rest of my life,” he says. “And so that was the plan with this brand.” 

Gain more financial security

While entrepreneurs may have to work to turn a profit with their business, this path can also be more financially secure. According to a Shopify study, less than 3 in 10 respondents across markets said a traditional paycheck felt more stable than entrepreneurship. 

This was true for Heather Aiu, who started waterproof bag brand Aloha Collection with Rachael Leinaʻala Soares. Before she started her business, she worked in private mortgage banking and saw half her office let go in two weeks. This inspired her to start a business. 

“I started thinking about all of my affluent clients that I did home loans for,” she says on Shopify Masters. “They all had their own businesses. So I thought to myself, ‘OK, I need a backup plan. I’m in a volatile real estate industry. I should start a business.’”

Develop your skills

Entrepreneurs tend to wear a lot of hats, which can be both daunting and exhilarating. You might enjoy diving more deeply into the creative side that was missing from your corporate job by building a brand from the ground up. But you also may need to learn skills that are entirely new to you, like finding suppliers or bookkeeping. 

Whether you’re stretching yourself with something completely different or digging into the areas you enjoy, every entrepreneur develops new skills along the way. 

“People should embrace that opportunity to gain that many skills,” says Becca Millstein, cofounder of premium tinned seafood company Fishwife, on Shopify Masters. “It is truly the rarest professional opportunity.”

YouTube chef and serial entrepreneur Wil Yeung sees skill acquisition as a natural extension for entrepreneurs who always want to learn more about the world around them. 

“Curiosity is a powerful trait as an entrepreneur,” he says. “It’s almost like you’re a scientist: ‘I wonder what would happen if I tried this, if I do it this way or that way.’ It keeps me fired up.”

Make a positive social impact

For some entrepreneurs, making money isn’t the main goal. Instead, they commit themselves to a cause and focus on improving their communities, physical spaces, or society.

Actively Black founder Lanny Smith says profit wasn’t even part of the conversation as he and his cofounder discussed building an athleisure brand to empower the Black community. For Lanny, money is simply a tool to expand, support aligned organizations, and further the company’s mission. They have invested 10% of their revenue into the Black community, including to organizations that support areas like mental health, social justice, and physical fitness.

“It was: How do we build something to positively impact our community and our people?” he says on Shopify Masters.

Riley Cofounder Fiona Parfrey launched her organic period-care brand after she volunteered in Kenya and discovered that 65% of Kenyan girls missed school every month because they didn’t have access to menstruation products.

“From our very first day, we have been donating a portion of every single sale to fighting period poverty,” Fiona says on Shopify Masters. These funds pay for activities like doctor-led school visits to educate Kenyan students about menstrual health, and support of grassroots volunteer group Positive Period Ireland.

Forge a new path

Some entrepreneurs find themselves out of options and use entrepreneurship as a life vest. 

Adrian Solgaard struggled to find a job before he found long-term success with his luggage company, Solgaard. When he launched a Kickstarter campaign to fund a solar-powered backpack, he was practically broke.

“I was left with 637 euros in my bank account and was thinking, ‘What am I gonna do?’” he says on Shopify Masters. In a six-week sprint, he created a prototype of the Lifepack backpack and built the Kickstarter campaign that would eventually raise $1.2 million.

Enjoy a lower barrier to entry

If you’ve been thinking about starting a business, now might be the perfect time. A Shopify study found that 86% of entrepreneurs in the US say it’s easier to start a business now than it was a decade ago. 

One reason is AI: 67% of US entrepreneurs say AI tools make it more possible to start a business. 

For example, if you want to start an ecommerce business, you can use Shopify’s AI store builder to quickly design your site using plain-language prompts—no coding or design experience needed. When your shop is live, you can use the built-in AI assistant Shopify Sidekick to generate images and copy for product listings and get your store up and running. 

How to become an entrepreneur

1. Identify a problem
2. Develop a solution
3. Validate your business idea
4. Secure funding
5. Launch and manage your business

Follow these steps to become an entrepreneur:

1. Identify a problem

Launching a business often starts with identifying a problem. 

For example, Dan Demsky was inspired to found his wool apparel brand Unbound Merino after he and his wife committed to traveling with carry-on suitcases only. He read that merino wool was ideal for travel because it’s lightweight and anti-odor. However, all the merino clothing he could find was too outdoorsy.

Dan had his lightbulb moment on a trip that took him to an upscale cocktail bar. “I’m wearing this shirt that looks like I should be walking with a canoe over my head,” he says on Shopify Masters. 

“I feel so out of place. I’m like, ‘Why is no one making merino wool T-shirts that you can dress up a little bit?’ I can still go on that hike during the day and have that performance, but I can go out [at night].” 

2. Develop a solution

Once you know the problem you’re trying to solve, you can start working on a solution. Some entrepreneurs choose to create a prototype to see if their solution will work or if they need to tweak it. 

When Julie Carty founded LatchLight, a wearable light for breastfeeding parents, she knew she wanted something that was easy to turn on and off, hands-free, and not disruptive to parents or their babies. With that knowledge, she created her first prototype by carving a silicone spoon with a razor. 

From there, she worked with different designers and created nine prototypes until she had developed the right product. Her final prototype gave her an opportunity to test it with parents, doulas, and lactation consultants. 

3. Validate your business idea 

Validating your idea shows whether there’s a market for your business. Here are a few ways other entrepreneurs have validated their ideas:

Collect contact information

Hydration brand Waterboy gauged interest in their products by setting up a landing page. Whenever they would post viral content on TikTok, they would encourage users to go to their website and sign up to receive updates via email and text on the product’s launch.

“We didn’t have any product, but it was enough to give you an idea for what the product could be and what it would solve,” says Mike Xhaxho, cofounder and CEO at Waterboy, on Shopify Masters.

This led to a contact list of about 20,000 people. 

Waterboy created their landing page on Shopify. To set up something similar, you can download a page builder app on the Shopify App Store and drag and drop components to create the page you want. 

Set up a crowdfunding campaign

Another way to determine if there’s interest in your product is to set up a crowdfunding campaign. That’s what Will Nitze, founder of protein bar company IQBar, did. 

Will started by contacting manufacturers to learn about their minimum order quantity. One manufacturer told him that he’d need to order 20,000 bars, so he decided to try to raise enough money on Kickstarter to place the order.

On Shopify Masters, Will explains how he leaned into his college community by gathering email addresses of other Harvard alumni and directing them to the Kickstarter. He was able to raise $30,000, which validated that his was a product people wanted to purchase

Soft launch your product

A soft launch has many benefits, including giving you an opportunity to ask for feedback. That is what coffee concentrate brand Kloo did when they soft launched to friends, family, and people who came across their brand. 

“During this time, we asked for lots and lots of feedback from customers,” says Claudia Snoh, founder at Kloo, on Shopify Masters. “I would text them, email them, ask to speak to them on the phone, whether we knew them or not personally.”

At the tail end of the soft launch, Kloo also asked customers to fill out an extensive survey, which helped them learn more about their target customer and their shopping habits. This helped them adjust their branding, packaging, and pricing to align with what their customers expected. 

4. Secure funding 

There are several ways you can fund your new business venture, including: 

• Bootstrapping. Bootstrapping is when a business owner funds their business on their own. Natural skincare brand Three Ships Beauty started with the two cofounders putting in $2,000 each. 

• Friends and family loan. Some businesses turn to friends and family to lend them money. For example, Rosie Johnson asked her dad for $5,000 to help print materials for her fragrance brand, By Rosie Jane. 

• Revenue-based financing. Business owners repay this type of loan through a portion of future revenue. The Shopify Capital loan is an example of revenue-based financing.*

• Bank loans. Businesses can take out a bank loan or a personal bank loan from private banks. Nicola Hamilton funded Issues, an independent print magazine storefront, through bootstrapping and a $40,000 small business loan. 

• Equity financing. With equity financing, you raise money by selling a portion of the ownership to investors. Nancy Twine, founder of haircare brand Briogeo, started her business by bootstrapping and using credit cards for six years before turning to private equity firm VMG Partners. 

If you seek outside investment, you might need a business plan. In addition to showing investors your expected operating expenses and projected revenue, a business plan can also help you get organized and prepare for the realities of entrepreneurship.

5. Launch and manage your business

Finally, you can launch your business. A store launch checklist can ensure you don’t skip any steps. 

For your day-to-day operations, there are several tools you can use to stay on track or working toward your goals. For example, you can use Shopify’s Analytics to track sales and sessions per user. This information can help you make informed decisions about your business. 

You can also use Shopify Messaging to communicate with your audience and track what messages resonate most with them, so you can build campaigns that will perform well.

What are the personality traits of a successful entrepreneur?

• Optimism
• Risk tolerance
• Resilience
• Passion
• Vision
• Decisiveness

Although entrepreneurs and their businesses are each unique, they tend to possess or develop a few common and crucial traits:

Optimism

When you’re starting something from scratch, things can go awry. Yet successful entrepreneurs don’t get discouraged by setbacks.

Sergio Tache, founder of Dossier perfumes, calls this “delusional optimism,” which he believes is a must-have quality for an entrepreneur. “If you really start thinking about what you’re doing, it’s a little bit nuts. You’re hoping this random business you started is going to grow,” he says on Shopify Masters.

Risk tolerance

Being a risk taker can benefit business owners, especially when the statistics show that not every business will be a success. Only about half of businesses survive beyond their fifth year, and that figure falls to nearly a third after 10 years. 

Ryan Babenzien, the serial entrepreneur who founded sneaker brand Greats and showerhead brand Jolie, says risk-taking is necessary for business owners. 

“[Entrepreneurs] certainly don’t play it safe,” he says. “Most people are afraid to start things because it’s an enormous risk. You’re risking it all: Whether you’re 20 or 30 or 40, there’s a lot on your plate. There’s a reason most people don’t do it.” 

Resilience

Sometimes taking risks doesn’t pay off. A successful entrepreneur has the resilience to overcome the obstacles that will inevitably come their way.

These setbacks may come in the form of business challenges like a lackluster product launch, a middling marketing campaign, or a supplier who lets you down.

Ben Amanna’s boxing apparel brand Boxraw experienced a failed partnership deal with a famous boxer. “That ordeal broke my heart,” Ben says on Shopify Masters. “I considered this guy a friend, almost like family. … It was a tough pill to swallow, but it toughened me up a hell of a lot.”

Passion

When you have passion for your company, it helps drive your stamina for dealing with adversity, putting in long hours, and continuing to do hard work.

“I can’t imagine working this hard and staying this driven about something I wasn’t totally passionate about,” says Becca Millstein, cofounder at Fishwife, in an interview with Shopify. “You have to be completely obsessed with your idea and with your company.”

Vision

Maintaining a clear vision of what you want to achieve helps you lay the foundation for your new business venture. Taking the time to write a vision statement can be a helpful exercise to articulate why you’re doing this—not just for yourself but for your team, customers, and investors.

“Clarity of vision, to me, is determinative of which brands will succeed and which don’t resonate with people,” Becca says. “If you can’t articulate your vision, it will be really hard creating something that people connect with.”

Decisiveness

Confidence in your vision will also give you the strength to make hard decisions and stick to them. As the leader of your company, your conviction is the North Star that guides day-to-day operations and long-term strategy.

“The worst thing an entrepreneur can be is indecisive and lacking in direction,” says David Abrahamovitch, founder of sustainable coffee producer Grind, on Shopify Masters. “If you don’t believe your own decisions, no one else will.”

How do entrepreneurs make money?

Entrepreneurs make money in various ways, and some cultivate multiple revenue streams. For example, Kevin Espiritu founded Epic Gardening as a blog that made money through ads before expanding into YouTube, launching a podcast, and starting an ecommerce shop selling gardening supplies.

In some cases, entrepreneurs may make little to no money, especially in the early days of their venture. Once money is coming in, you can pay yourself as an entrepreneur in a few ways: 

• Owner’s draw. You take money from your business bank account as cash flow permits.

• Salary. You pay yourself a salary, similar to a paycheck as a regular employee.

• Distributions. You set up your business as an S corporation or limited liability company (LLCs) taxed as an S corp and take payments from company profits, which reduces the owners’ equity in the business. 

• Dividends. You set up your business as a C corporation and the after-tax profits are distributed to owners or shareholders, rewarding them for investing in a profitable business.

In the Silicon Valley–style startup model, where many entrepreneurs seek an exit event like a buyout or an initial public offering (IPO), equity is the primary method for returns—though this is a less common way to make money. Any business owner can potentially make a profit from selling their company if that’s their end goal. 

*Shopify Capital loans must be paid back within 18 months, and minimum payments apply at 6 and 12 months. Merchants must pay a minimum of 30% of the Total Payment Amount within sixmonths of receiving funding and an additional 30% within 12 months of receiving funding.

This article is focused on industry standards and descriptions are not specific to Shopify's financial suite of products. To understand the features of Shopify’s lending products, please visit shopify.com/lending.

Available in select countries. Offers to apply do not guarantee financing. All financing through Shopify Lending, including Shopify Capital and Line of Credit products, is issued by WebBank in the United States.