What Is an Entrepreneur? Reasons To Become an Entrepreneur

The term “entrepreneur” means different things to different people. For some, it’s the Silicon Valley founder who transforms a garage startup 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 2025, Americans are filing more than 440,000 business applications per month—a rate 90% higher than before the pandemic, according to the US Small Business Administration. And according to Shopify data, the number of Shopify store owners who’ve made a first sale has increased sevenfold since 2018.

The entrepreneurial journey can vary widely but many aspiring entrepreneurs share common traits and motivations. Learn what it means to be an entrepreneur, with insights on what it takes from founders who’ve done it. 

What is an entrepreneur?

An entrepreneur is someone who builds or operates their own business. Many entrepreneurs begin with a business idea—a new product, a specialized service, or a unique business model—that taps into a market opportunity. More broadly, entrepreneurs can include self-employed providers, makers, and creators like writers, illustrators, influencers, and marketing consultants.

In any category, entrepreneurs are often regarded as risk-takers: innovators willing to invest in something new, or step outside of the typical corporate path, with no guarantee of success. The entrepreneurial mindset also often includes passion, grit, the drive to solve problems, and a desire to bring ideas to life.

Entrepreneurs make money in a variety of ways, and many cultivate multiple revenue streams. A graphic designer may sell logos to businesses and offer training courses to aspiring designers. A writer may pen a monthly column for a trade publication and work shifts editing copy for another client’s website. An ecommerce wine store could generate revenue through sales to customers while offering paid tasting classes and organizing trips to wine-producing regions. 

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. Similar to a paycheck as a regular employee.

• Distributions. For S corporations and limited liability companies (LLCs) taxed as S corps, payments taken from company profits, which reduce the owner’s equity in the business. 

• Dividends. After-tax profits from a C corporation that 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 less common. Any business owner can potentially make money from selling their company if that’s their end goal. 

What’s the difference between an entrepreneur and a small business owner?

Although entrepreneurs and small business owners may own and operate companies, several factors differentiate the two. Entrepreneurs often focus on innovation and thus tend to take more risk. By contrast, business owners might employ a traditional business model or take over an existing company or franchise, and they often focus on operational efficiency rather than market breakthroughs.

Reasons to become an entrepreneur

• Define your lifestyle
• Develop your skills
• Make a positive social impact
• Forge a new path

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

Define your lifestyle

In traditional jobs, your work path is often fixed and set by supervisors: You have a defined role, work toward goals determined by others, must request vacation days, and may be laid off for no specific reason. But entrepreneurs can exercise more control over their working conditions, lifestyle, and future.

Before founding skin care brand Salt and Stone, Nima Jalali had a career as a professional snowboarder—but he always knew it had an expiration date. “You get older and your career starts to kind of 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.” 

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 goal—it’s almost beside the point. Instead, some entrepreneurs commit themselves to a cause and focus on improving their communities, physical spaces, or society.

At Actively Black, 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 him, money is simply a tool to expand, support aligned organizations, and further their mission. The company has invested 10% of its 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 an episode of Shopify Masters.

Riley cofounder Fiona Parfrey launched her organic period-care brand after she volunteered in Kenya and discovered that 65% of Kenyan girls miss 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 said 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 thrust into the role. Aloha Collection’s Heather Aiu cofounded her “splash-proof” bag company after the real estate market crashed, leaving her mortgage banking career on the rocks.

“In two weeks, half my office was gone and I thought, ‘What would I do if I had a mortgage to pay or children to support?’ I started thinking about my affluent clients I did home loans for, and they all had their own businesses,” she says.

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. 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.

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, it’s easy for naysayers to point out all the ways your business plan could go awry. But successful entrepreneurs don’t get discouraged by setbacks.

Jake Miller, founder of beverage appliance brand Fellow, says “really smart people make bad entrepreneurs because they’re smart enough to see all the reasons why they shouldn’t pursue their ideas.” He jokes he was just “stupid enough” to believe he could succeed.

Sergio Tache, founder of Dossier perfumes, calls this “delusional optimism.” He says it’s a must-have quality, “because 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.” A “glass-half-empty kind of person” will have a hard time, he says on Shopify Masters.

Risk tolerance

Part of that delusional optimism means being a risk taker. Only about half of businesses survive beyond their fifth year, and that figure falls to nearly a third after 10 years. “You have to be a bit mad, a bit brave and a bit stupid, perhaps, because the odds are always stacked against you,” says David Abrahamovitch, founder of sustainable coffee producer Grind.

Smart entrepreneurs plan ahead, but many risks are unpredictable. Who, for example, could have foreseen COVID-19? It’s essential to accept that you can’t plan for everything.

“Not knowing what we’re getting ourselves into has been a real advantage to us,” says Sadie Bowler, cofounder of haircare company Sadie B. “We’re willing to take the risks and push forward when it’s hard because we don’t know how bad it could get.”

Ryan Babenzien, the serial entrepreneur behind sneaker brand Greats and showerhead brand Jolie, echoes this sentiment. “[Entrepreneurs] certainly don’t play it safe. 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

When those inevitable risks become reality and the company faces reversals, it’s essential that an entrepreneur has the fortitude to fight through it.

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,” Fishwife’s Becca says 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 Grind’s David. After all, “if you don’t believe your own decisions, no one else will.”