The goal of entrepreneurship is to turn risk into reward through a new business venture. Anyone interested in using a Master of Business Administration (MBA) or an Executive MBA (EMBA) to become an entrepreneur should be aware of the emerging trends in technological innovation and work dynamics that can contribute to a successful business.
To learn more, check out the infographic below, created by Washington State University’s Executive Master of Business Administration program.
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<p style="clear:both;margin-bottom:20px;"><a href="https://onlinemba.wsu.edu/blog/trends-in-entrepreneurship/" rel="noreferrer" target="_blank"><img src="https://s3.amazonaws.com/utep-uploads/wp-content/uploads/wsumba/2023/05/16061319/WSU-MBA_EMBA-2022-Q1-Infographic-101422-JG-1.png" alt="An overview of key trends in entrepreneurship that are driven by tech innovation, and tips for starting a business from home." style="max-width:100%;" /></a></p><p style="clear:both;margin-bottom:20px;"><a href="https://onlinemba.wsu.edu" rel="noreferrer" target="_blank">Washington State University </a></p>
Entrepreneurs apply innovation to chart their own path through the business landscape. Entrepreneurial trends reflect this drive to innovate and are poised to shape business for years to come. Who becomes an entrepreneur, though, and what trends are emerging?
Who Is an Entrepreneur?
From a gender standpoint, the data shows that most entrepreneurs are men: 77.5% identify as male, compared with 23.4% identifying as female, while 0.2% of entrepreneurs fall under the self-describe category.
Additionally, 84.7% of entrepreneurs are white or Caucasian. Hispanics and Asians each represent 4.1% of entrepreneurs; 4% are Black; and 2.7% are in other racial categories.
Motivation for Entrepreneurship
The motivation for becoming an entrepreneur varies. Many took the leap due to dissatisfaction with corporate America (60.9%) or to be their own boss (47.6%). Some stated they wanted to pursue their own passion (31%). Others said they pursued entrepreneurship because they were laid off by former employers or had their jobs outsourced (23.4%), they weren’t ready to retire (22.7%), an opportunity presented itself (21.4%), or for other reasons (14.4%).
Technical Innovation and Entrepreneurship
However an individual entered entrepreneurship, there are several reasons for them to integrate forward-thinking technology into their entrepreneurial strategies. Tech innovation can help them automate daily tasks, optimize processes, improve customer targeting, and free up time that can be applied to developing better business strategies.
Tech integration can also deliver several key benefits to entrepreneurs. It can enable entrepreneurs to broaden their marketing options and deliver more efficient financial services. Additionally, it can improve security and provide entrepreneurs with better communication methods.
Six Key Trends Driven by Tech Innovation
Innovative tech doesn’t just improve entrepreneurial strategies. It also has a proven track record of initiating paradigm-shifting entrepreneurship trends.
1. Digital Nomadism
Digital nomadism is the process of working remotely via communication and information tech. Digital nomads aren’t tied down to a singular location. This allows them to work anywhere, including different states or countries. Digital nomadism can offer entrepreneurs enhanced freedom and flexibility, with more time to travel.
2. Niche Markets
Niche markets are hyperfocused on specific and customizable customer interest. Entrepreneurs can use tech to connect with specific audiences with more efficiency. They can also provide diversity in application. This diversity could be tied to a specific concept, such as fashion, food, or accessories, or to specific consumer types, such as LGBTQ+, vegans, and eco-conscious customers. Niche markets can also allow entrepreneurs to potentially tap into a market on a deeper level than traditional mass markets.
3. Subscription-Based Businesses and Services
Subscription-based businesses and services provide consumers with scheduled deliveries of a diverse range of products or services, such as cosmetics or alcohol. This innovation can allow consumers to customize service. In addition to tangible items, subscription-based services can be the actual delivery method of service, such as a streaming service. This model can offer customers predictability, and it can allow entrepreneurs to scale efficiently and build customer relationships organically.
4. Disruptive Technologies
Disruptive technologies offer a unique version of a traditional product or service. Examples include e-commerce, online news sites, and ride-hailing apps. Disruptive technologies improve on traditional products or services, and they also provide an opportunity to connect with otherwise overlooked customer groups and segments.
5. Mobile Commerce
Mobile commerce uses tech to create shopping opportunities via smartphone apps or websites. It enables entrepreneurs to tap into an increasingly relevant—and lucrative— market. In 2021, mobile commerce generated more than $360 billion in sales, and it’s projected to reach $710.42 billion by 2025.
6. The Gig Economy
The gig economy is a term describing flexible, temporary, or freelance roles. It can integrate tech from other trends, such as digital nomadism. The gig economy has increased opportunities for potential gig workers through a variety of services, including ride-hailing services, performing household tasks, running errands, and restaurant or store delivery services.
What Is the Gig Economy?
The gig economy, driven by short-term or freelance contracts rather than permanent jobs, often relies on emerging tech and mobile applications. While the jobs in the gig economy are sometimes referred to as “side hustles,” they can lay the foundation for more traditional lines of entrepreneurial work.
Gig Economy Participation in 2021
In 2021, 16% of Americans had performed gig work at some point in their lives, a number that breaks down into 17% men and 15% women. Additionally, 9% of Americans had performed gig work in the past 12 months, with 31% of them stating gig work was their main source of income.
Among individuals who had earned money via gig work, 30% were Hispanic, while 20% were Black, 19% were Asian, and 12% were White. Additionally, 40% were in the 18-29 age group, 18% were in the 30-49 age group, 13% were in the 50-64 age group, and 7% were 65 and older.
Gig Economy and Technology
Tech innovations play a key role in the gig economy’s growth. Some of the most prominent examples of such innovations include app-based work opportunities, direct connections with customers, and the ability to work from anywhere.
Some entrepreneurial pursuits that might be considered gig economy roles are actually skilled freelancing; traditional, professional independent work performed in the creative, skills, and service sectors. Examples include writing, computer programming, IT, consulting, marketing, and design.
Freelancers contributed $1.3 trillion to the American economy in 2021. Nontemporary freelancers made up 35% of the freelance market, and 51% of traditional skilled freelancers held postgraduate degrees. The benefits of skilled freelancing include remote work capacity, flexibility, solid earning potential, and improved career satisfaction.
How Gig Work Evolves to More Traditional Forms of Entrepreneurship
Tech’s ability to make gig work more accessible can provide a means to transition into skilled freelance roles. Cultivating a specific skill can enable an individual to offer services to traditional employers that may not have the budget or bandwidth for traditional hires. Plus, building a strong portfolio or book of business may make it easier to attract potential clients and land contracts. Finally, increasing the number of clients could lead to starting a business that hires new employees.
How to Start a Business From Home
A successful remote or home-based business builds from the ground up. Understanding the basic building blocks before trying to bring an idea to life can help entrepreneurs achieve their business goals.
Take the Appropriate Steps to Start Out
The first step for entrepreneurs should be to determine if their business structure is going to be a limited liability company (LLC), a sole proprietorship, a partnership, or a corporation. Next, they should obtain the proper permits and licenses from their city or county of operation. After they apply for an employer identification number (EIN), they should open a business checking account, a process that can include applying for a business credit card.
Once these steps are completed, entrepreneurs should create a business plan with a built-out marketing strategy. A business plan should include an executive summary, a company description, a summary of market research and potential, a competitive analysis, a product or service description, a developed marketing and sales strategy, business financials, an organization and management description, a funding request, and an appendix of official documents.
Consider a Business Loan
A business loan can be crucial, but an entrepreneur has a variety of loan types to consider: term loans, SBA loans, equipment loans, business lines of credit, invoice financing, microloans, business credit cards, invoice factoring, personal loans, and merchant cash advances.
It’s important for entrepreneurs to determine their loan eligibility and an affordable loan payment amount. They should also decide on the use of collateral, which correlates with secured and unsecured loans. Secured loans require business collateral, which can be seized if the loan isn’t repaid. Unsecured loans, on the other hand, may require a personal guarantee, which requires personal repayment if the business can’t repay. In this scenario, lenders may be able to seize personal assets. Entrepreneurs should also take the time to compare small-business lenders.
When an entrepreneur applies for a business loan, they should be prepared to furnish several materials. These materials include their business name and address, business tax ID number, business plan, business loan proposal, business financial statements, and personal details of company owners.
Treat Your Home Like a Business
If you’re thinking of starting your business at home, it’s important to weigh the pros and cons of doing so. The pros include minimal overhead, no commute, self-employment, and home office tax deductions. The cons include potential work-life disruption, potential lack of space, distractions, lack of guaranteed income, and potential disruption for neighbors.
You’ll also want to consider other elements prior to starting your business from home. This includes dedicating a space for work in your home, setting up social media channels, and investing in accounting infrastructure, either through accounting software or via an accountant or bookkeeper.
Achieve Success as an Entrepreneur
Even as advancements in technology open more opportunities for entrepreneurship, success still depends on people making smart, well-informed choices. By taking some key steps, dedicated individuals can turn their ideas into a satisfying, self-guided career.