Entrepreneurs: Spark plugs in a free-market economy
Blockbuster businesses start with an idea and an eagerness to work.
Back at work after the Labor Day holiday? Thank an entrepreneur.
Capitalism cannot exist without entrepreneurs, the men and women who take the risks and start the businesses that produce the goods and services we all enjoy. Almost every entrepreneurial business begins with one or two individuals, an idea and a kitchen table.
Microsoft began with two university students, Bill Gates and Paul Allen, and an idea to develop a software program they could sell to an emerging computer company. Sam Walton started Wal-Mart with a single store offering low-priced products in a small town in Arkansas. Many entrepreneurial companies and fortunes begin with individuals selling single products or services out of their homes and going from door to door or office to office.
This ability to define an unsatisfied need accurately and create a product or service people will buy, at a price they are willing to pay, is the key to successful entrepreneurial activity. It has been noted that to prosper as a socialist you need to threaten the people, but to prosper as a capitalist you need to please them.
The entrepreneur is the spark plug in the free-market economy. The vision of providing a product or a service that people are willing to pay for, combined with the ability to produce that product or service at a cost below the market sales price, propels the entrepreneur into action. Giving people what they want, at prices they can afford, is the essence of capitalism.
Free societies depend on the activities and successes of entrepreneurs to drive them forward. Entrepreneurs create wealth, jobs, profits and new opportunities. Entrepreneurial activity generates the tax revenues to pay for roads, hospitals, schools, national defense and everything else our nation needs to survive and prosper.
As Winston Churchill explained: “Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it is a healthy horse, pulling a sturdy wagon.”
Small- and medium-size businesses, started by entrepreneurs, create 70 percent to 90 percent of all new jobs in America. While large companies have been laying off tens of thousands of people in recent years, small companies — sometimes just mom-and-pop operations — have been steadily hiring and growing.
Each year, the World Bank produces the report “Doing Business.” It measures the ease of starting and building a business, taking into consideration laws, regulations, taxes, economic climate, distribution channels and many other factors for more than 150 countries around the world.
According to this report, year after year, the United States is one of the easiest countries in the world in which to start a business, taking less than 24 hours from having a business idea to registering it online to engaging in actual business activities. In fact, in America you can decide to start a new business over lunch and be buying and selling products and services that afternoon, even before you think of a name or open a bank account.
Entrepreneurs believe and accept that the road to success is paved with hard work. Most self-made millionaires in America are entrepreneurs, founders of their own businesses, engaged with people who work with and for them. Eighty-five percent of successful entrepreneurs attribute their success to hard work. They start a little earlier, work a little harder, and stay a little later, often for many years, before they become successful.
“I studied the lives of great men and famous women,” President Harry Truman said, “and I found that the men and women who got to the top were those who did the jobs they had in hand, with everything they had of energy and enthusiasm and hard work.”
Labor Day may mean little more to most people than backyard barbecues and the end of summer. The fact that we live in a society that gives us the freedom to succeed at whatever business venture we choose is something we should be grateful for every day.
- Ed Feulner is founder of the Heritage Foundation.
Originally appeared in The Washington Times.