EES 102: FUNDAMENTALS OF ENTREPRENEURSHIP

EES 102

Entrepreneurship: Definition, types and reason;

Entrepreneurship refers to the process of creating a new enterprise and bearing any of its risks,
with the view of making the profit. The person who creates a new enterprise and embraces every
challenge for its development and operation is known as an entrepreneur.

An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The process of setting up a business is known as entrepreneurship.
The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and
business/or procedures (Adam Hayes, 2021)

Entrepreneurs play a key role in any economy, using the skills and initiative necessary to
anticipate needs and bringing good new ideas to market. Entrepreneurship that proves to be
successful in taking on the risks of creating a start up is rewarded with profits, fame, and
continued growth opportunities. Entrepreneurship that fails results in losses and less prevalence
in the markets for those involved

(i) A person who undertakes the risk of starting a new business venture is called an
entrepreneur.
(ii) An entrepreneur creates a firm to realize their idea, known as entrepreneurship, which
aggregates capital and labour in order to produce goods or services for profit.
(iii) Entrepreneurship is highly risky but also can be highly rewarding, as it serves to generate
economic wealth, growth, and innovation.
(iv) Ensuring funding is key for entrepreneurs: Financing resources include SBA loans and
crowdfunding.
(v) The way entrepreneurs file and pay taxes will depend on how the business is set up in
terms of structure.

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Small Business vs. Entrepreneurship

A small business and entrepreneurship have a lot in common but they are different. A small
business is a company, usually, a sole-proprietorship or partnership that is not a medium-sized or
large-sized business, operates locally, and does not have access to a vast amount of resources or
capital.

Entrepreneurship refers to an individual that has an idea and intends to execute on that idea,
usually to disrupt the current market with a new product or service. Entrepreneurship usually
starts as a small business but the long-term vision is much greater, to seek high profits and
capture market share with an innovative new idea.

Meaning of Entrepreneur

The entrepreneur is defined as someone who has the ability and desire to establish, administer and
succeed in a start up venture along with risk entitled to it, to make profits. The best example of
entrepreneurship is the starting of a new business venture. The entrepreneurs are often known as a
source of new ideas or innovators, and bring new ideas in the market by replacing old with a new
invention.

It can be classified into small or home business to multinational companies. In economics, the
profits that an entrepreneur makes is with a combination of land, natural resources, labour and
capital.

In a nutshell, anyone who has the will and determination to start a new company and deals with all
the risks that go with it can become an Entrepreneur.

Importance of Entrepreneurship:

(i) Creation of Employment- Entrepreneurship generates employment. It provides an entry-

level job, required for gaining experience and training for unskilled workers.

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 (ii) Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.

(iii) Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and promotes
facilities like higher expenditure on education, better sanitation, fewer slums, a higher
level of homeownership. Therefore, entrepreneurship assists the organisation towards a
more stable and high quality of community life.

(iv) Increase Standard of Living- Entrepreneurship helps to improve the standard of living of
a person by increasing the income. The standard of living means, increase in the
consumption of various goods and services by a household for a particular period.

(v) Supports research and development- New products and services need to be researched
and tested before launching in the market. Therefore, an entrepreneur also dispenses
finance for research and development with research institutions and universities. This
promotes research, general construction, and development in the economy.

Types of Entrepreneurship?

We may define entrepreneurs on the basis of the size of their business, attitude to risk,
purpose/nature of business, ownership, desire for independence and on the basis of specialisation,
among others

A. Classification on the basis of the nature of Business

It is classified into the following types:

(i) Micro Enterprises

These are businesses that employ 1 to 10 workers with a capital base of not more than N1.5
Million.

(ii) Small Business Entrepreneurship-

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Small businesses are thosethat employ between 11 and 100 employees with a capital base of at
least N1.5 Million but less than N50 Million (Alaye-Ogan, 2012).

(iii) Medium Enterprise

A business that has a labour size of between 101 and 300 workers between has a capital base of
over N50 Million but not more than N500 including working capital but excluding cost of land
Alaye-Ogan, 2012).

(iv) Micropreneur

This is a type of entrepreneur who has a small business and plans to keep the business small

(v) Scalable Start-up Entrepreneurship-

This start-up entrepreneur starts a business knowing that their vision can change the world. They
attract investors who think and encourage people who think out of the box. The research focuses
on a scalable business and experimental models, so, they hire the best and the brightest
employees. They require more venture capital to fuel and back their project or business.

(vi) Large Company Entrepreneurship-

Large businesses are thosethat employ over 300 employees with a capital base of at least N200
Million but less than N50 MillionThese huge companies have defined life-cycle. Most of these
companies grow and are sustained by offering new and innovative products that revolve around
their main products. The change in technology, customer preferences, new competition, etc., build
pressure for large companies to create an innovative product and sell it to the new set of customers
in the new market. To cope with the rapid technological changes, the existing organisations either
buy innovation enterprises or attempt to construct the product internally.

(vii) Social Entrepreneurship-

This type of entrepreneurship focuses on producing product and services that resolve social needs
and problems. Their only motto and goal is to work for society and not make any profits.

B. Classification on the Basis of Attitude to Risk

(i) Innovative Entrepreneur. The innovative entrepreneur is concerned with innovative
offerings. Innovation could take various forms such as the creation of unique products

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 or through product differentiation, among others. The innovative entrepreneur is risk-
prone and also a proactive entrepreneur
(ii) The imitative Entrepreneur: this entrepreneur is unlikely to pioneer the creation or
development or a new product, he rather copies existing products to reduce the risk of
uncertainty associated with a new product. This does not rule out the possibility of
improving on the copied product and attracting more attention than the original creator.
A good example is KonosukeMathushita of Japan
(iii) The Fabian or Sceptical Entrepreneur: The Fabian entrepreneur is risk averse so he
is very careful in adopting changes
(iv) The Drone Entrepreneur: the drone entrepreneur belongs to the old school of thought.
He is very resistant to change but very comfortable with maintaining the status quo.

C. Classification on the basis of Preneur

(i) Solopreneur: Solopreneur: A solopreneur is an entrepreneur with a one-person
business. He goes solo as far as running the business is concerned. In other words, he
runs the business alone
(ii) Edupreneur: this refers to an entrepreneur who works within the education
sector. Here, we are referring to profitable education; classroom educators, principals,
media specialists, technology integrationists, and other educationists who have
initiated innovations within their local classrooms, building or school system
(iii) E-preneur: the epreneur is an entrepreneur whose business is based entirely online.
Here, e-preneur refers to electronic-preneur
(iv) Socialpreneur: a social preneur is a business owner who runs a business with the sole
purpose of using the business to influence the society or the environment in which he
operates. A very good example is Microfinance institution which provides banking
services to unemployed low-income individuals or groups
(v) Ecopreneur as a third variant of entrepreneurs on the basis of the nature of
business, an ecopreneur is an entrepreneur who operates with due cognisance to the
environment. Thus he adopts the green behaviour towards business.
(vi) Multipreneur

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D. Classification on the Basis of Ownership

Solopreneur: A solopreneur is an entrepreneur with a one-person business. He goes solo as far

as running the business is concerned. In other words, he runs the business alone

E. Classification on the basis of attitude: Here we have sceptical, copycat, research,

determined and accomplished entrepreneurs
F. Classification on the Basis of Function
(i) . Idealist
An idealist is one of the most common types of entrepreneurs. He is generally innovative and
creative by nature. His idealistic nature usually guides his innovative spirit to pursue his
entrepreneurship dreams. And such idealist entrepreneurs are also optimistic by nature.

(ii) Optimizer
These are the entrepreneurs that see the glass as half full. They have a very positive outlook
on life and this optimistic nature of theirs reflects in their business as well. They are also
usually content with owning a business, they derive personal satisfaction from it.
(iii) . Hard Workers
While all types of entrepreneurs work hard for their respective business, this is a special kind
of hard worker. As the name suggests, these are the entrepreneurs that put maximum effort to
ensure their business succeeds. They do not mind the long hours and the toil involved with
building a business. They constantly challenge themselves and work endlessly to ensure the
growth of their business.
(iv) Improver
These types of entrepreneurs have a noble cause to start their business – to improve or better
the world in some way. They wish to run a moral and ethical business. Such entrepreneurs are
very ethical. They will not adopt means that harm the cause in the search for higher profits.
(v) Visionary
These are the entrepreneurs that are the founding members of the business. It was their vision
and objectives that were followed to build the business. These people have the ability to
accurately gauge the future and are also generally curious by nature. They are the original
thinkers of the business.

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 (vi) Analyst
And finally the analysts. These are the problem solvers. They analyse the problems and
complications and find the most suitable and cheap solutions. They are critical thinkers and
logical people by nature. Also, complicated businesses suit them since they are not bothered
by too many complications.
(vii) Jugglers
A juggler is an entrepreneur that likes to handle everything by himself. They are energetic
and enthusiastic entrepreneurs who do not believe in having too many employees or help. So
they handle everything from ensuring project finance to paying the daily bills.

Characteristics of Entrepreneurship:

Not all entrepreneurs are successful; there are definite characteristics that make entrepreneurship
successful. A few of them are mentioned below:

(i) Ability to take a risk- Starting any new venture involves a considerable amount of failure
risk. Therefore, an entrepreneur needs to be courageous and able to evaluate and take risks,
which is an essential part of being an entrepreneur.

(ii) Innovation- It should be highly innovative to generate new ideas, start a company and
earn profits out of it. Change can be the launching of a new product that is new to the
market or a process that does the same thing but in a more efficient and economical way.

(iii) Visionary and Leadership quality- To be successful, the entrepreneur should have a
clear vision of his new venture. However, to turn the idea into reality, a lot of resources
and employees are required. Here, leadership quality is paramount because leaders impart
and guide their employees towards the right path of success.

(iv) Open-Minded- In a business, every circumstance can be an opportunity and used for the
benefit of a company. For example, Paytm (ecommerce website) recognised the gravity of
demonetization and acknowledged the need for online transactions would be more, so it
utilised the situation and expanded massively during this time.

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 (v) Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change in a
product and service, as and when needed.

(vi) Know your Product-A company owner should know the product offerings and also be
aware of the latest trend in the market. It is essential to know if the available product or
service meets the demands of the current market, or whether it is time to tweak it a little.
Being able to be accountable and then alter as needed is a vital part of entrepreneurship.

There are six (6) Soft Skills You Need to Develop as an Entrepreneur

(i) Leadership. Leadership is all about motivating others and helping them find
their best selves. ...

(ii) Teamwork. If you want to be a successful entrepreneur, you have to know how
to work well with others. ..

(iii) .Communication. ...

(iv) Problem Solving. ...

(v) Flexibility. ...

(vi) Time Management.

What are the Soft skills?

Soft skills are personal traits and habits that shape how you work as an entrepreneur and with
others. Effective communication and negotiation, for example, are vital business soft skills for
getting success. Some others include active listening, positive mind-set, initiative, or networking.
When we talk of hard skills vs. soft skills, we realize that soft skills are essential to personality
qualities that can’t be learned from a textbook. In comparison, hard skills are necessary to perform
technical tasks in a business. What skills are needed to be an entrepreneur?

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 10 Soft Skills for entrepreneurial Success
1. Initiative
2. Negotiation
3. Leadership
4. Positive mind-set
5. Networking
6. Communication
7. Creativity (Creativity is defined as the tendency to generate or recognize ideas, alternatives, or
possibilities that may be useful in solving problems, communicating with others, and entertaining
ourselves and others.
8. Active listening
9. Discipline
10. Customer orientation

Hard Skills that Aid Entrepreneurial Success

It is ironic that hard skills are actually easy! It is easier to teach someone how to use MS Excel
than to teach them how to close business deals. Therefore, hard skills are easier to learn. Here are
some of the broader areas of hard skills for entrepreneurs:

(i) Leadership skills

(ii) Business planning skills
(iii) Business executing skills
Among these, business planning and execution can be part of the hard skill development. In this
regard, you can develop hard skills in different functional areas of management.

1. Entrepreneurship Terminologies: Angel Investors, Venture Capitalist Etc

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 Hard Skills for Entrepreneurs

Management
functional Hard skill for entrepreneurs
area

> Business plan

Strategy > Strategic assesment using tools like SWOT analysis, Porters five fo
> Strategizing, Goal setting and managing crisis.

> Financial planning and

Finance > Fund allocation, cost
> Basic accounting skills

> Salesman skills: lead generation, nurturing and

> Managing relationship with
Marketing
> Social media marketing
> Branding

> Data
Digital
> Web development, SEO, etc

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Management
functional Hard skill for entrepreneurs
area

Human > Hiring talent that can relate to your

Resources > Training and development

A deep dive into the hard skills

Now, let us look at each of these skills in detail:

Strategy

Broadly speaking, entrepreneurship comes under the strategy. The strategy is a functional area of
management that deals with assessing business potential, threats, and opportunities. Additionally,
it also deals with executing business projects and aligning them to the organization’s long term
vision.

Firstly, the founders are expected to prepare a well drafted business plan. This can help them to
pitch their ideas to investors. Additionally, it may also help them to re-iterate their course of
action. Secondly, the entrepreneurs must know how to assess the market. They are espoused with
the responsibility to grow the firm against all external forces.

Finance

Managing finance is a critical skill every entrepreneur must know. At least reading a balance
sheet. Developing the business plan also requires making financial projections for the costs and
revenue. The more detailed the financial projections are, the higher the chances of getting early
funding.

Another critical skill is to manage the cash flow. Most businesses fail due to cash flow problems.
Startups must have clear projections for the next six months. Firstly, the founders must

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appropriate revenue streams. Secondly, they must also address the disbursement of the fund.
Proper allocation of funds can boost growth.

Marketing

Marketing connects the firm with the customer. This connection provides the flow of value to the
customer. Also, it provides the flow of money to the company. Consequently, the work of the
founder is to maximize this flow. This is done through marketing efforts. The entrepreneur must
know how to optimize the 4 Ps of marketing to their advantage.

People don’t see your product. They see your brand. Therefore, it is critical to plan. A founder
must know how they see their brand. They must be aware of the story their brand tells. They are
the storytellers. As a result, founders must develop this hard skill for entrepreneurial success.

Digital

Managing the digital front is also an important hard skill for entrepreneurs. There are a lot of
things to handle on the customer front. Additionally, there are even more things to handle within
the organization. A decent understanding of how websites work, e-commerce, social media, etc
can be quite useful for an entrepreneur.

A good business plan can further benefit from insights. Therefore, the founders are expected to be
thorough with software like Excel, PowerPoint, etc. Additionally, it is really helpful if the
founders know the basics of advanced data analytics like regression, decision tree, etc. Another
aspect where hard skills can help is web development and SEO. Knowing these skills will help the
founders ask for specific output from the developers. It will also help troubleshoot some
problems.

Human Resources

The employees can make or break a firm. It is critical to hire people who can give their best. Also,
it is important to have people who understand the firm’s ideologies. People who align with your
vision will be able to work towards a common goal.

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Additionally, training and developement is a big responsibility of the founders. This aspect of HR
is definitely a plus point. Some learnings that the founders may have would be novel and specific.
It is important to know how to transfer these skills to your employees.

Entrepreneurship Terminologies: Angel Investors, Venture Capitalist

Angel investors are affluent individuals who invest their own money into startup ventures,
whereas venture capital (VC) investors are employed by a risk capital company (where they invest
other people's money).

Differences between an Angel Investor and a Venture Capitalist explained!

SegunOlarinmoye by SegunOlarinmoye July 19, 2019 in Financial Literacy, MSME

Differences between an Angel Investor and a Venture Capitalist explained!

Structure

A Venture Capitalist (VC) is a professional money manager who gets paid to invest the funds of
others, typically institutions. VCs are professional investors who deploy funds from corporate
entities, institutions, and investors into early stage/ high growth companies.

An Angel Investor is just one individual who invests his or her own money.

Range of Amount Invested

Angels typically invest smaller amounts of money (thousands to hundreds of thousands of dollars)
earlier in the life of a company at lower valuations, taking on more risk.

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Poison Pill, White Knight or People Pill: These strategies can help defend your company against a
takeover

How to make your Start-up attractive to an investor

How to make your Start-up attractive to an investor

VCs typically invest larger amounts of money (hundreds of thousands to millions of dollars), at a
somewhat later stage and higher valuations, with slightly less risk.

Backgrounds

Venture capitalists tend to have financial management or professional investment backgrounds,

while angels tend to be former or current entrepreneurs.

Entry stage and use of money

VCs generally invest in companies that have launched their products/services and see that such
products have gained some traction already. When you are ready to take your company to a large
platform and you need funds for expansion, marketing, infrastructure, product, development,
manpower etc., you approach VCs.

Angel investors usually give money that helps the business take the idea off the ground to the
market. There are start-ups that need small amounts to start their projects, and at the initial stages
are looking to manage the business without much input from investors – then, angels come in.

Level of involvement

Angel investors might have valuable advice for you, but they would ultimately have limited
control over how you run your business. They will have equity in your business but will not have
seats on your board, unlike venture capitalists.

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The moment you sign the term sheet of a VC is the moment you have agreed to bringing in more
people into your business, which means that you wouldn’t be the only one who has a say on how
the business will be run.

Time

It will take at least 6 months before a VC invests in a start-up. This is because they will conduct
due diligence, research and other aspects that will help them decide how viable investing in that
particular business will be.

Angels, on the other hand, can make quick decisions as they’re often working alone or have a
personal interest in the business.

Most entrepreneurs are aware that securing investments in their companies could be essential to
the short-term growth and long-term success of their venture. It can often be confusing to know
which investment type might work best for an entrepreneur and business. The question of venture
capitalist versus angel investor often arises.

Venture capital and angel investments offer excellent options to startup businesses. Outside of
choices like securing a bank loan or public offerings, these two investment possibilities are
common alternatives for businesses in need of funding. While the two options are similar in many
ways, they differ in a few key areas. Understanding the differences is vital to making the right
choice.

Venture Capitalist Firms

Venture capitalists are primarily members of firms. Investment firms are staffed with analysts,
partners, and others to ensure deals are soundly vetted. Securing funding from them can be a long
process. So, it’s important for entrepreneurs to do their research to determine which firms best
align with their needs. Most venture capital firms focus on targeted sectors of the business world,
such as software, or on a specific geographical area when entertaining possible investments.

What’s at stake?

An entrepreneur can expect venture capitalists to do a lot of research into possible investments
because they have a responsibility to their firm. Their capital doesn’t come from their own

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pockets. Instead, they get their money from individuals, corporations, and foundations. This
means they are often using the capital of others to make investments, and oftentimes, invest
millions of dollars into companies with proven potential.

An article in Forbes explains that a venture capital firm makes its money through management
fees (a percentage of the amount of capital that they have under management) and carried interest
(a percentage of the profits of the business).

Investor Involvement

Venture capitalists act as limited partners, providing help to build successful companies in a
market they have deemed has potential. They are less likely than angel investors to provide capital
to companies that don’t have at least some proven success in their markets. Venture capitalists
usually participate in a round of investment referred to as Series A. When a company is targeted
for Series A investment, it usually has a track record of sales or steady customer interest already.

Venture capitalists are often trusted advisors to entrepreneurs and use their connections to build a
customer base or help the businesses in their portfolio overcome obstacles. Also, many venture
capitalist firms ask for board involvement, either in the form of a director seat or as an observer.

In short, venture capitalists usually work with a firm and expect to be involved in the operations
and growth decisions of a business. Entrepreneurs can usually expect a larger investment from
venture capitalists than they can from angel investors.

Angel Investors

An angel investor, sometimes called a business angel, usually works alone and are the first
investors in a business. They’re often established, wealthy individuals looking to provide money
as capital to a business they believe has potential. The companies they invest in are at an early
phase in their lifecycle and looking for initial investments in their venture. This is commonly
referred to as the seed round. Another Forbes article points out that at this stage of the business
lifecycle, the business may simply be an idea or a prototype.

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What’s at stake?

Some angel investors are lawyers, doctors, or other professionals, while many are entrepreneurs
who have found success and want to invest their own money in businesses with potential.

A business angel gives an entrepreneur money in exchange for a percentage of equity in his or her
business. According to Entrepreneur, most angel investors must meet the Securities Exchange
Commission’s definition of an accredited investor, which means they have a net worth of
$1,000,000 or more and make at least $200,000 dollars a year.

Entrepreneur also states that angel investments usually are around $600,000. Business.com quotes
most business angels as investing between $25,000 and $100,000 versus an average $7 million
dollar investment from venture capital firms.

Investor Involvement

Angel investors are involved at varying degrees when it comes to the day-to-day operations of the
organization. Angel investors often don’t do as much initial company research and valuation as a
venture capitalist firm does since they are investing their own money and don’t answer to other
members of a firm or their own investors.

The level of involvement of an angel investor is different than that of a venture capitalist. They
are primarily there to offer the financial support to get a business off the ground. While some
simply provide the investment and hope for a return, others do become interested in the day-to-
day operations of the business, especially if they have expertise in the area. Still, they are not
obligated to be involved so support and mentorship may vary between investors depending on
their portfolios. A popular angel investor is Mark Cuban who, according to a contributed piece in
Forbes, had 110 investments in 2018.

To sum up, angel investors offer a lump sum of money in exchange for equity, usually before a
company proves itself in the market. While angel investors often offer less of an investment than
venture capitalists, they are not as involved in the direction of the business, leaving that to the
founders.

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Choosing the Right Type of Investor

The right type of investor for a company depends largely on the type of business, the needs of the
entrepreneur, and where the company is in its lifecycle. While there’s no absolute right answer
when considering venture capital versus angel investment, there’s likely a right answer at any
given time for each business.

When evaluating funding options, entrepreneurs must consider the immediate and long-term
needs of the company, level of involvement needed from a trusted mentor, and the amount of
equity and control the founders wish to maintain moving forward.

Angel investors and venture capitalists are far from the only avenues entrepreneurs have to secure
funding for their budding companies. Small business loans and crowdfunding will also finance a
start-up business. Many entrepreneurs fund their ventures through their own savings. Still, finding
a venture capitalist or angel investor who believes in a business is a fantastic way to get an idea
off the ground and possibly gain some mentoring and connections.

CULTIVATING AN ENTREPRENEURIAL MINDSET

What is an Entrepreneurial Mind-set?

An entrepreneurial mind-set is a set of beliefs, thought processes, and ways of viewing the world
that drives entrepreneurial behaviour. Typically, entrepreneurs firmly believe it’s possible to
improve their life situation and live life on their own terms. They also believe in their ability to
learn, grow, adapt, and succeed.

The mindset of successful entrepreneurs is different from the mindset of traditional workers in
many ways. For example, if a traditional worker needs to earn more money, they’ll often brush up
their resume and look for a better paid job. However, someone with an entrepreneurial mind-set
would look for ways to earn money by starting or growing a business.

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Here’s the thing: Anyone can develop the mind-set of a successful entrepreneur. As the founder of
Ford Motor Company, Henry Ford once said, “Whether you think you can or think you can’t –
you’re right.”

The Importance of an Entrepreneurial Mindset

The power of an entrepreneurial mindset is obvious when you think about it. Entrepreneurs
succeed like they do because they think, act, and view the world differently from most people.

There are so many reasons that make an entrepreneurial mindset matter. Developing an
entrepreneurial mindset can help to reduce doubt, fear, and anxiety. It can also help to drive
action, focus, and growth.

It suffices to say that an entrepreneurial mentality is the foundation of business success. Now, let’s
explore how entrepreneurs think.

How to Think Like an Entrepreneur: 20 Entrepreneurial Mindset Characteristics

If you want to learn how to build an entrepreneurial mindset, you need to know how successful
entrepreneurs think. Here are 20 essential entrepreneurial mindset characteristics. Entrepreneurs
are:

1. Independence
This is one of the most important aspects of the entrepreneurial mindset.
Entrepreneurs don’t follow the crowd or look to others to be given instructions. Instead, they
listen to their gut and carve their own path. As Apple’s founder, Steve Jobs, said, “Don’t let the
noise of others’ opinions drown out your own inner voice.”
Entrepreneurial Mindset: Steve Jobs Quote

2. Taking Responsibility
The independent mindset of successful entrepreneurs stems from taking full responsibility.

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Entrepreneurs don’t blame others for their life situation – they empower themselves by taking
responsibility for improving it. Failure, success, life circumstances – it doesn’t matter what it is.
Even if something isn’t your fault, by taking responsibility for it, you’re empowered to improve it.

3. Perception of Abundance
A key part of the entrepreneurial mindset is abundance. Entrepreneurs know they can improve a
situation, make more money, and create new opportunities. The sky is always the limit. As a
result, entrepreneurs don’t hoard money or knowledge. They’re open, generous, and understand
that “you get what you give.”

The author and entrepreneur Robert Kiyosaki once wrote, “I have never met a rich person
who has never lost any money. But I have met a lot of poor people who have never lost a
dime.”

4. Goal-Oriented
Entrepreneurial thinking is goal-orientated.
In other words, successful entrepreneurs don’t have wishes and dreams – they have goals and
plans. So, when creating an entrepreneurial mindset, set SMART goals – goals that are:
(Specific, Measurable, Attainable, Relevant, Time-sensitive)
5. Not Afraid of Failure
When learning how to think like an entrepreneur, you need to look at failure differently to most
people. Entrepreneurs don’t fear failure – they appreciate it. Each “failure” is simply a stepping
stone to learn from, helping to move you closer to success. As the famous inventor Thomas
Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.” Failing at
something certainly doesn’t mean that you’re a failure – just that something didn’t work out
as you’d hoped, and you need to try again. Entrepreneurial Mindset: Thomas Edison Quote

6. Growth-Oriented
Stanford University psychologist Dr. Carol Dweck studied failure and said, “For 20 years, my
research has shown that the view you adopt for yourself profoundly affects the way you lead your
life.”

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Specifically, she found that there are two main types of mindset: fixed and growth. Someone with
a fixed mindset believes that who they are is relatively permanent and they can’t change very
much. The entrepreneur mindset is growth-oriented. Entrepreneurs believe that they can grow as
people, learn new things, and develop new skills. They believe that – with some consistent effort –
they can shape themselves into whoever they want to be.

The best-selling author and entrepreneur Hal Elrod said, “Your level of success will rarely
exceed your level of personal development because success is something you attract by the
person you become.”
In other words, personal growth tends to create success. So, keep trying to improve yourself.

Entrepreneurial Thinking: Hal Elrod Quote

7. Feedback-Seeking
The most successful entrepreneurs aren’t worried about looking cool – they just want to succeed,
and they know that learning from feedback will help speed up the process.
Dr. Carol S. Dweck said, “Why waste time proving over and over how great you are, when
you could be getting better?” In short, don’t look for validation, seek feedback.

8. Learning-Oriented
Most people spend their spare time seeking entertainment, whether it’s social media, Netflix,
gaming, reading novels, or hanging with friends. However, entrepreneurial thinking is more
concerned with learning and development. Consequently, instead of watching TV, entrepreneurs
may take an online course to help them move toward their goals.
Instead of gaming, entrepreneurs will often spend hours tweaking their sales funnel.
And instead of scrolling through social media, entrepreneurs are more likely to listen to
motivational podcasts or read business books.
As the entrepreneur and speaker Jim Rohn said, “Formal education will make you a living; self
education will make you a fortune.”

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9. Forward-Thinking (Proactivity)
If you want to learn how to think like an entrepreneur, you need to think long-term.
The famous billionaire investor Warren Buffett said, “Someone is sitting in the shade today
because someone planted a tree a long time ago.” Successful entrepreneurs know that big goals
take a long time to achieve. So, they start with their goal and work backward, reverse-engineering
every step of the way. In other words, “If I want this, I need to do that. But to do that, I need to do
this,” and so on.They keep working and are patient when it comes to rewards – they know that
the tortoise always beats the hare.Entrepreneurial Mindset: Warren Buffet Quote
10. Self-Accepting
Many people struggle with self-acceptance. When you don’t like something about yourself, it’s
easy to devalue or even hate yourself. But if you develop a growth mindset, you know you can
always change and improve. S o, successful entrepreneurs accept themselves as they are, warts
and all. They know who they are is transient, and they’re working on becoming the person they
want to be.

11. Self-Aware
Entrepreneurs know that the only thing holding us back is ourselves (because they take full
responsibility, remember!) As a result, they practice self-awareness. They pay close attention to
their strengths and weaknesses, which allows them to improve faster and play to their strengths.

12. Collaborative
Great businesses require teamwork – after all, Jeff Bezos didn’t build Amazon alone. So, if you
want to think like an entrepreneur, you need to think in terms of “we” instead of “I.”
There’s an African proverb that says, “If you want to go fast, go alone. If you want to go far, go
together.” As a result, successful entrepreneurs think collaboratively and practice their leadership
skills.Entrepreneurial Mindset: African Proverb
13. Courageous
It’s not easy to start a business. As the famous management consultant Peter Drucker said,
“Whenever you see a successful business, someone once made a courageous decision.”

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But this doesn’t mean that entrepreneurs aren’t afraid. Nelson Mandela, the activist and former
president of South Africa, explains, “I learned that courage was not the absence of fear, but
the triumph over it.”

14. Comfortable with Discomfort

Courage leads to an essential entrepreneurial mind-set characteristic: learning to be comfortable
with discomfort. Growth and expansion require you to move beyond your comfort zone. So, when
developing an entrepreneurial mind-set, practice leaning into uncomfortable situations, such as
rejection. For example, after realizing his fear of rejection was holding him back, the entrepreneur
and keynote speaker Jia Jiang spent 100 days getting rejected on purpose!

15. Adaptable
Entrepreneurs have big goals, and they know it’s impossible to see the entire staircase before
climbing. But they climb anyway, safe in the knowledge that they can always adapt to new
developments. For example, if your first product fails, try another one. And if your Facebook ads
still don’t generate sales, hone your skills.

16. Problem-Solving
Entrepreneurs look for problems and try to find ways to solve them. If you think about it, this is
the essence of every business. For instance, plumbers fix broken pipes, Netflix cures boredom,
and car manufacturers help people get around. Brian Chesky, the co-founder of Airbnb, said, “If
we tried to think of a good idea, we wouldn’t have been able to think of a good idea. You just
have to find the solution for a problem in your own life.”

17. Driven and Tenacious

Drive is an essential part of the entrepreneurial mind. Entrepreneurs are self-motivated and driven
to achieve their goals. They work hard and enjoy the ride, knowing that they’ll reap the rewards
down the line. The entrepreneur Mark Cuban said, “It’s not about money or connections. It’s the
willingness to outwork and outlearn everyone when it comes to your business.” Similarly,
entrepreneurs set out to achieve their goals come hell or high water. When the going gets tough,
they stick with it – they don’t give up. As Henry Ford, founder of Ford Motor Company, said,

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“When everything seems to be going against you, remember that the airplane takes off
against the wind, not with it.” Entrepreneurial Thinking: Mark Cuban Quote
18. Focused
Successful entrepreneurs are focused on achieving their goals. They’re focused, never
procrastinate, and always prioritize the most important tasks. To do this, ask yourself, “Will this
help me to achieve my long-term goals?” If the answer is yes, then ask, “Is this the most important
thing to do right now?”

19. Action-Oriented
“Wantrepreneurs” like to read books, watch videos, and make plans – but they never actually get
down to business and work. Entrepreneurs have a bias for action. They know that knowledge
without action is meaningless. As the entrepreneur Walt Disney said, “The way to get started is
to quit talking and begin doing.”
20. Decisive
The entrepreneurial mind is decisive. Entrepreneurs must confront problems and make many
decisions every day – often with inadequate information to help.

Successful entrepreneurs decide and then get back to work. They know that “you can always edit
a bad page. You can’t edit a blank page,” as the author Jodi Picoult said. So practice
decisiveness – for example, next time you’re in a restaurant, look at the menu once, decide, and
order with confidence.

Summary: How to Develop an Entrepreneurial Mindset

Having an entrepreneurial mindset will allow you to think, act, and perceive the world differently
from the average worker, setting the foundation for success.

Note: You can’t develop an entrepreneurial mindset overnight.

But, by understanding some key entrepreneurial mindset characteristics, you can watch your
behavior and learn how to think like an entrepreneur. In summary, the 20 entrepreneurial mindset
traits are:

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Independence,
Responsibility,
Abundant
Goal-orientation
Not afraid of failure
Growth-oriented
Feedback-seeking
Learning-oriented
Forward-thinking
Self-accepting
Self-aware
Collaborative
Courageous
Comfortable with discomfort
Adaptable
Problem-solving
Driven and tenacious
Focused
Action-oriented
Decisive

(a) Glass is half-empty

(b) Marketers perception of a village where no one wore shore

Entrepreneurial Thinking

Entrepreneurial thinking is all about harnessing passions, skills, experience, knowledge and
insights, resources and networks to spot and take advantage of opportunities at the right
time and in the right way

Entrepreneurial thinking skills refer to the ability to identify marketplace opportunities and
discover the most appropriate ways and time to capitalize on them. Sometimes, it is simply

25
 referred to as the ability to find and pursue the problem-solution fits. Entrepreneurial
thinking is the ability to see things differently than the rest of the world but, it is not
necessarily an inherent trait and can be easily developed or improved. It is more like a state
of mind that opens your eyes to new learning opportunities and helps you grow in your role.

paper, entrepreneurial thinking is understood as a collection of innovation, creativity, ability

to be self-motivated, flexible and adaptable, opportunity driven, and focused on creating
values while considering their people and team (Hnatek, 2015)

5 Ways to Cultivate an Entrepreneurial Mind-set

1. Prioritize learning and growth. It's all too easy to look at a successful entrepreneur and assume
they've got it all figured out. ...
2. Set goals (and make daily progress on them) ...
3. Get comfortable being uncomfortable. ...
4. Embrace risk. ...
5. Spend time with other entrepreneurs.

1. Set clear goals. Setting a goal—speaking it to the universe, writing it down, mentioning
it to friends and family who will hold you accountable—can subtly influence aspiring
entrepreneurs to work towards that goal bit by bit each day. If you don’t feel like you’ve
clearly articulated your goals, set aside some time to brainstorm until you know exactly
what you’re aiming for. Bus the goals should be SMART
2. Practice being decisive. Entrepreneurs, innovators, and new business owners must
develop the ability to analyze a situation, absorb the relevant data, and make a confident
decision. Small businesses and start-ups can be ruined by indecision, which is why
making a decision with confidence is one of the most vital entrepreneurial skills. You
can practice decisiveness in the real world or in your personal life, whether you’re

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 ordering at a restaurant or making evening plans. Practicing making small decisions with
confidence will pay off when you’re faced with big challenges in your business.
3. Redefine failure. Failing typically has negative connotations, but the best entrepreneurs
turn failure into something positive. Failing indicates that you’ve tried something, which
can be a scary thing to do. True failure is not trying at all. Practice failure dialogues. You
can do this in your notebook or with a friend. Have them ask you about your failures
every day for a week. Answer honestly. Soon, you may find that instead of feeling
shame when you discuss your failures, you’ll feel pride at showing off what you’ve
attempted.
4. Face your fears. Many entrepreneurs fear public speaking, failure, and embarrassment.
The only way to chisel away at that fear is to expose yourself to it. Getting rejected again
and again will anesthetize you to the letdown. Take a public speaking class—anything to
get you more comfortable in front of a crowd. If you want to improve
your communication skillset, take an acting or stand-up comedy class. Both will force
you to confront your vulnerability and get you accustomed to talking to strangers. Plus,
you’ll learn the importance of good timing and delivery—a skill that is as key in sales
and daily life it is in acting and comedy. If you want to increase your critical thinking or
problem-solving abilities, take a debate class. It will force you analyze two ways to look
at an issue and will help you anticipate objections potential customers may have to
buying your product.
5. Remain curious. Curiosity is one of the most important traits for entrepreneurs. To
constantly learn and maintain your competitive edge, you must always seek out new
people and new experiences. Never lose the curiosity to see around corners.

Sources of Business Ideas

It is not enough to take to any business. The entrepreneur must search for a business idea that
appeals to his interest. He must be convinced from the onset and determined to succeed. Some of
the viable sources of business ideas are:

(i) Entrepreneurs’ interest/passion/hobbies

(ii) Past work experience

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 (iii) Strengths and weaknesses. An entrepreneur should exploit his/her and steer clear of the
weaknesses
(iv) Friends and family members
(v) Distribution channels. Their proximity to the consumers places them in a good position
to advise on a good source of business idea
(vi) Travel: Travelling to different parts of the country or to different countries can
expose the intending entrepreneur to different ways of doing things or producing,
which may prove valuable at home. To this end, travel exposes the intending
entrepreneur to many available alternatives
(vii) Books and magazines: business publications inform of current trends in the industry,
best practices, general business environment, and legal issues, among others.
(viii) Current Trends: it is important to take note of the current trends, examine the national
and global environment to see where it is headed in terms of what is perceived to be in
vogue. Current trends can reveal opportunities and/or threats
(ix) Research Organisations: By virtue of their research insights research organisations are
good sources of business ideas
(x) The Internet (very reliable)
(xi) An identified need or gap is a very viable source of business idea
(xii) Mass Media: The mass media is another good source of business idea through
advertisements, public opinions and business discussions
(xiii) Industrial Surveys: Reveals customers’ needs and hence proves to be a very reliable
source of business ideas
(xiv) Brainstorming
(xv) Sleep on it (Dreams). Dreams can also prove to be very useful sources of business
ideas. In order to benefit fully from dreams, it is advisable to write down the dream
immediately to avoid forgetting the crux of the dream

SOME SUCCESSFUL ENTREPRENEURS

1. AlikoDangote

AlikoDangote was born on April 10, 1957 in Kano, Kano state Nigeria. AlikoDangote’s
grandfather, the late AlhajiSanusiDantata provided him with a small capital to start his own

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business in Kano. Dangote started trading in commodities and building materials then moved to
Lagos in June 1977 and continued trading in cement and other commodities. Since inception,
Dangote Group has experienced phenomenal growth on account of quality of its goods and
services, its focus on cost leadership and efficiency of its human capital. The Dangote Group's
interests spans a range of sectors in Nigeria and across Africa in cement, sugar, salt, pasta,
beverages, real estate, oil and gas, telecommunications, fertilizer and steel sectors of the economy.
Dangote had started very small with a seed capital provided by his grandfather and built a world
class conglomerate in less than twenty years. Dangote’s experience shows that “Entrepreneurial
greatness can be achieved even from a very small beginning.”
In 2008, thirty-one years from the time he moved to Lagos, AlikoDangote emerged the richest
black man in the world with a net worth of $3.3 billion dollars according to the Forbes Magazine.
There is no gainsaying that Dangote’s group of companies have been doing well. Fox
example, Dangote Sugar Refinery is the most capitalized company on the Nigeria Stock
Exchange, valued at over US$3 billion with AlikoDangote's equity alone topping US$2 billion. In
addition, Africa's largest Cement Production Plant is the Obajana Cement plant which belongs to
the Dangote group. A major credit to Dangote is that consistent with entrepreneurial behavior, he
was able to develop new and unique products and services for the market which never seemed to
have existed.

Godwin EseweiEhigiamusoe

Dr. Godwin Ehigiamusoe (born August 21, 1958 ) is a Nigerian entrepreneur, microfinance
practitioner, investor, and philanthropist. He is the founder of LAPO Microfinance Bank, a non-
profit pro-poor financial institution headquartered in Benin, Edo. Ehigiamusoe specializes in
microfinance, micro-insurance, agriculture, micro-leasing, healthcare, and education.

Ehigiamusoe’s charitable foundation focuses on the upliftment of people and contributing to

helping people transform. He is the author of three books and is the recipient of several awards
and honors. Ehigiamusoe has been featured in several media outlets for his groundbreaking work
such as The Guardian, This Day Live, The National Online NG, Vanguard News, The Nation
Newspaper, Naira Metrics, and others

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Early Life and Education

Ehigiamusoe earned his Bachelors in Sociology in 1981 and Master in Sociology of Development,
with a specialization in Development Studies in 1996 degrees from the University of Benin. He
then furthered his education and obtained a Doctorate in Policy and Development studies with
emphasis on microfinance policy instruments and financial inclusion at Ambrose Alli University,
Ekpoma, Edo State.Ehigiamusoe has also participated in various educational and capacity
building Programme such as the Financial Institution Programme for Enterprise Development,
Kennedy School of Government, Chief Executive Programme (CEP), Lagos Business School(W),
Lagos, Social Entrepreneurship Programme, INSEAD Business School, and Sustainable Banking,
University of Edinburgh.
Career
Ehigiamusoe since the beginning of his career worked in the microfinance sector as a rural
cooperative officer. He founded LAPO (Lift Above Poverty Organization) in 1987. It is a pro-
poor development organization with operations in Nigeria and Sierra Leone.
LAPO, founded in 1987 with the mission to assist the poor to break out of the grip of poverty by
having access to credit facilities to invest in small and medium scale enterprise, is today a
phenomenon in Nigeria and in some West African States.

When the organisation transformed into a microfinance institution in the 1990s, it incorporated
social development programmes as a major component in achieving organizational goals. LAPO’s
activities include gender sensitization aimed at reducing the level of gender inequality and social
exclusion and health awareness activities initially centeredaround reproductive health and child
survival, and prevention, care and treatment of HIV/AIDS, malaria and other tropical diseases.

Since its foundation, LAPO has demonstrated uncommon commitment to poverty alleviation
through the provision of an array of responsive social and economic empowerment services to
disadvantaged groups delivered on a sustainable basis. Issues addressed are economic
powerlessness, ill-health, poor nutrition, discrimination, low self-esteem, ignorance, social
exclusion and gender inequality through the implementation of credit, social empowerment and
sustainable livelihood programmes.

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The introduction of the microfinance policy by the Federal Government led to the emergence of
LAPO Microfinance Bank Limited. Since 1987, LAPO has blossomed into a system of vibrant
semi-autonomous institutions which include LAPO Microfinance Bank Limited, a leader in micro,
small and medium enterprise financing in Sub-Saharan Africa, Micro-Investment Support
Services (MISS), a pioneer in micro-leasing business in Nigeria; LAPO Institute, a centre for
research and training in Microfinance and Enterprise Development and LAPO Microfinance
Company, Sierra-Leone.

The organisation has recorded impressive performance and growth over the years in economic and
social empowerment. In 2016 alone, institutions within the LAPO system in and outside Nigeria,
disbursed loans to the value of N140.4 billion. LAPO currently has a staff strength of 7,233. Our
customer base stands at 2.9 million in 30 states in addition to the Federal Capital Territory.

Indeed, LAPO has contributed a great deal to capturing and fortifying the informal sector of the
Nigerian economy. With his Spartan discipline, deep sense of mission and skilful organizational
ability, Ehigiamusoe irradiated faces of poor women who had no start-up capital with joy when he
founded LAPO and worked the organization to its tilt to be able to make credit facilities available
to them.

With his foresight and ingenuity, he broke the glass ceiling for millions of Nigerian women. And
this is a true, original story that is unfolding. He is the Mohammed Yunus of Nigeria. He has
actually lifted many people out of poverty. Imagine the level of employment he has created in the
society. He is one of the major contributors to the resilience of the Nigerian economy. With this
kind of contribution, the Nigerian economy cannot collapse largely because of the enormity of the
informal sector in the Nigerian economy

He stepped down as the MD of LAPO Microfinance bank in November 2019. LAPO, under the
leadership of Ehigiamusoe, has evolved into a vast collection of mutually reinforcing
institutions/businesses providing social and economic empowerment services to Nigerians and
Sierra Leoneans.

In 2012, Ehigiamusoe was appointed as the chairman of the Orange Insurance Brokers Limited,
an insurance brokerage firm. Three years later he also became the chairman of Orange Printing
and Publishing Company. In 2019, Ehigiamusoe became the chairman of GOXI Microinsurance

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Company Limited, Nigeria’s first license specialized Microinsurance Company and Benin
Medical Care, a medical and diagnostic facility in Benin City. He also serves as the chairman of
TDS technologies limited, LAPO Institute for Management Studies, and GOBETH Reliance
Investment Company Limited

2. Elon Musk

Elon Musk is a South African-born American entrepreneur and businessman. Elon Musk launched
his first company, Zip2 Corporation, in 1995 with his brother Kimbal Musk. In 1999 he founded
who founded X.com which later became PayPal. Musk founded his third company, Space Travel
Technologies Corporation (SpaceX) in 2002 with the intention of building spacecraft for
commercial space travel. Elon Musk founded Tesla motors in 2003. Elon Musk became a
multimillionaire in his late 20s when he sold his start-up company, Zip2 to a division of Compaq
Computers. In August 2008, Tesla announced plans for its Model S the company's first electric
sedan that was reportedly meant to take on the BMW 5 series. Elon Musk launched a landmark
commercial spacecraft in 2012 On May 22, 2012, Elon Musk and SpaceX made history when the
company launched its rocket into space with an unmanned capsule. In January 2017, Musk
launched the Boring Company, a company devoted to boring and building tunnels in order to
reduce street traffic. In late March 2018, SpaceX received permission from the U.S. government
to launch a set of satellites into low orbit for the purpose of providing Internet service. The
satellite network, were named Starlink. Musk is the co-founder, CEO and product architect at
Tesla Motors a company formed in 2003 that is dedicated to producing adorable, mass-market
electric cars as well as battery products and solar roofs.

The 4 Major Business Organization Forms

Business organization is the single-most important choice you’ll make regarding your company.
What form your business adopts will affect a multitude of factors, many of which will decide your
company’s future. Aligning your goals to your business organization type is an important step, so
understanding the pros and cons of each type is crucial.

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 Your company’s form will affect:
(i) How you are taxed
(ii) Your legal liability
(iii) Costs of formation
(iv) Operational costs

Legal liability is a person or entity’s legal responsibility under the law. If a person or entity (such
as a company) does not uphold this responsibility, they may be sued. The court proceedings may
find the person or entity liable for paying the complainant for bodily injury, property damage, lost
wages, etc. Lawsuits can cost substantial amounts of money, sometimes in the millions

Legal Responsibilities may generally include the following: Ensuring that sales agreements do
not have unfair conditions or terms; honouring customers' guarantees; ensuring that the company's
products are safe and do not cause any harm to people who use or consume them; complying with
rules on sale practices such pricing, among others

Cost Formation means all expenses incurred in connection with the establishment and
registration of the Fund, including execution and registration of the Constitutive Documents,
issue, legal costs, printing, circulation and publication of the Offering Document, announcements
describing the Fund and expenses incurred

Operational costs: Operating costs or operational costs are the expenses which are related to
the operation of a business, or to the operation of a device, component, piece of equipment or
facility.

There are 4 main types of business organization: sole proprietorship, partnership, corporation, and
Limited Liability Company, or LLC. Below, we give an explanation of each of these and how
they are used in the scope of business law.

Sole Proprietorship

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 A sole proprietorship is a business that can be owned and controlled by an individual, a company
or a limited liability partnership. There are no partners in the business.

The legal status of a sole proprietorship can be defined as follows:

(i) It is not a separate legal entity from the business owner

(ii) The business owner has unlimited liability (i.e. the business owner is personally liable for
all the debts and losses of the sole proprietorship)

(iii) It can sue or be sued in the owner’s name

Advantages of sole proprietorship:

(i) All profits are subject to the owner
(ii) There is very little regulation for proprietorships
(iii) Owners have total flexibility when running the business
(iv) Very few requirements for starting—often only a business license
Disadvantages:
(i) Owner is 100% liable for business debts
(ii) Equity is limited to the owner’s personal resources
(iii) Ownership of proprietorship is difficult to transfer
(iv) No distinction between personal and business income

Partnership

These come in two types: general and limited. In general partnerships, both owners invest their
money, property, labor, etc. to the business and are both 100% liable for business debts. In other
words, even if you invest a little into a general partnership, you are still potentially responsible for
all its debt. General partnerships do not require a formal agreement—partnerships can be verbal or
even implied between the two business owners.

Limited partnerships require a formal agreement between the partners. They must also file a
certificate of partnership with the state. Limited partnerships allow partners to limit their own
liability for business debts according to their portion of ownership or investment.

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 Advantages of partnerships:
(i) Shared resources provides more capital for the business
(ii) Each partner shares the total profits of the company
(iii) Similar flexibility and simple design of a proprietorship
(iv) Inexpensive to establish a business partnership, formal or informal
Disadvantages:
(i) Each partner is 100% responsible for debts and losses
(ii) Selling the business is difficult—requires finding new partner
(iii) Partnership ends when any partner decides to end it
Corporation
Corporations are, for tax purposes, separate entities and are considered a legal person. This means,
among other things, that the profits generated by a corporation are taxed as the “personal income”
of the company. Then, any income distributed to the shareholders as dividends or profits are taxed
again as the personal income of the owners.

Advantages of a corporation:

(i) Limits liability of the owner to debts or losses

(ii) Profits and losses belong to the corporation
(iii) Can be transferred to new owners fairly easily
(iv) Personal assets cannot be seized to pay for business debts

Disadvantages:

(i) Corporate operations are costly

(ii) Establishing a corporation is costly
(iii) Start a corporate business requires complex paperwork
(iv) With some exceptions, corporate income is taxed twice

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 Limited Liability Company (LLC)

Similar to a limited partnership, an LLC provides owners with limited liability while providing
some of the income advantages of a partnership. Essentially, the advantages of partnerships and
corporations are combined in an LLC, mitigating some of the disadvantages of each.

Advantages of an LLC:
(i) Limits liability to the company owners for debts or losses
(ii) The profits of the LLC are shared by the owners without double-taxation
Disadvantages:
(i) Ownership is limited by certain state laws
(ii) Agreements must be comprehensive and complex
(iii) Beginning an LLC has high costs due to legal and filing fees

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