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Entrepreneurship: A Journey to Start a Business

VSAT 2023

Introduction to Entrepreneurship

Last updated date: 23rd Jan 2023
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Entrepreneurship is the ability and willingness to plan, set up, and manage a business enterprise - along with all of its potential risks - in order to turn a profit. The term entrepreneurship includes the creation of new companies and creating economic value. The concept of entrepreneurship also involves the inventions of technologies into new products and services that lead to a better customer experience.

Entrepreneurship


Entrepreneurship


Importance of Entrepreneurship

  • Entrepreneurs Provide Job Opportunities:

There are several ways that entrepreneurship promotes economic growth. The most straightforward one is through creating job opportunities. At the simplest level, entrepreneurs create jobs for people and provide them with money to spend by starting earn-money initiatives that stimulate economic growth. It is in charge of producing jobs with various educational qualifications.

  • Entrepreneurs Increase Competition & Boost Productivity:

Entrepreneurs put pressure on established businesses to up their game because they frequently enter the market with lower prices and a wider selection of goods. This may lead to established market participants reevaluating their strategies, raising their value, bringing down their expenses, and improving their efficiency.

  • Entrepreneurs Establish New Businesses and Markets:

The needs of the public will vary as global trends continue to shift, providing entrepreneurs with a chance to launch new ventures. Entrepreneurs may look for other markets for their goods and services if a market is saturated; this can be seen as having a beneficial effect on the economy. Even completely new sectors that serve as the catalysts for future expansion could be founded by entrepreneurs.

  • Entrepreneurs Increase the Country's GDP:

Entrepreneurs' innovative goods and services open up new markets and generate revenue. Gains in revenue resulting from entrepreneurship may also help to raise the GDP of the nation. Higher taxation and government spending translates into investments in underperforming industries and human resources.


Importance of Entrepreneurship


Importance of Entrepreneurship


Entrepreneurship and Its Characteristics

An entrepreneur is an individual who establishes and manages their own company. Typically, they are the ones that have the business's initial concept and then gather the funding needed to make it a reality.

Entrepreneurship includes risk-taking, as the entrepreneur is the one who takes the risk of establishing a new business. However, they also have a strong sense of drive and motivation since they are committed to seeing their idea through to completion and have faith in it.


Characteristics of Entrepreneurship

Defining entrepreneurship and characteristics of entrepreneurs are as follows:

  • Vision:

To successfully establish a new firm, the entrepreneur must be able to develop and communicate a clear vision of what the new venture will do. This is done while encouraging people to participate in the new business.

  • Creativity:

A new business venture needs to be infused with creativity and originality by the entrepreneur. Creating a new enterprise with plans to outsmart the competition requires expertise and imagination.

  • Focus:

The company's vision must be upheld by the entrepreneur with uncompromising diligence. It's incredibly simple to stray off track, especially if the initial idea needs to be modified. Interestingly, many prosperous businesspeople are easily bored.

  • Passion:

Entrepreneurs need a strong sense of passion and the will to succeed in their own business endeavours.

  • Perseverance:

The entrepreneur must possess the perseverance to press on in the face of seemingly insurmountable challenges.

  • Ability to Take Risks:

Starting a new business entails a significant amount of failure risk. As a result, an entrepreneur must be bold and capable of evaluating and taking risks, which is a necessary component of becoming an entrepreneur.

Characteristics of Entrepreneur


Characteristics of Entrepreneur


Types of Entrepreneurship:

Entrepreneurship is typically classified into four types:

  • Small Business:

A small business is described as a privately owned company, partnership, or sole proprietorship with fewer employees and less yearly income than a corporation or regular-sized business. The concept of "small" in terms of eligibility for government assistance and favourable tax treatment differs by country and industry.

  • Scalable Startups:

A startup entrepreneur who believes in the power of their idea launches a company. They draw intelligent investors and support unconventional thinking. They employ the smartest and the brightest employees because the research focuses on scalable businesses and experimental models. They need more venture capital to support and fuel their initiative or business.

  • Social Entrepreneurship:

This kind of entrepreneurship is centred on creating goods and services that address societal issues and needs. Their sole mission and objective are to benefit society rather than generate a profit.

  • Large Business:

Organisations with a strong set of life cycles are a requirement for large company entrepreneurship. Supporting innovation and creating new product categories are strongly prioritised. It involves catering to the preferences of the customer and fending off fresh rivals. It simply refers to the development of new business within the existing corporation.


Case Study

Three male business owners, Sumit, Manveer, and Aditya, deal with handmade products. All of their items are sourced from rural and indigenous women. They made the decision to hold a hygiene camp in rural regions using some of the money they made that year. They will hand out kits containing soap, toothpaste, and brushes, and they also intend to stage a street play to emphasise the value of hygiene.


Q. What four values are conveyed by the gesture above?

Ans. From the situation above, the following values may be derived:

  • Promoting rural workers by giving them economic possibilities in their own communities, hence reducing migration to big cities

  • People's living standards are improving.

  • The organisation's social responsibility towards society.

  • Educating them on the importance of hygiene.

Summary

  • Entrepreneurship is the ability and willingness to plan, set up, and manage a business enterprise—along with all of its potential risks—in order to turn a profit.

  • The creation of new companies is the most well-known example of entrepreneurship.

  • An entrepreneur is an individual who establishes and manages their own company.

  • Typically, they are the ones that have the business`s initial concept and then gather the funding needed to make it a reality.

Entrepreneurs are often risk-takers, as they are taking on the risk of beginning a new firm.

FAQs on Entrepreneurship: A Journey to Start a Business

1. What is the relationship between innovation and entrepreneurship?

Entrepreneurship is sown by the seed of creativity. Entrepreneurship is the process of innovation. Drucker agrees and goes on to explain that "innovation" is the process by which the entrepreneur either develops new resources that produce wealth or supports current resources that already have a high potential for doing so. It's critical to understand that innovation requires action, not just the generation of novel concepts. People may have evolved into inventors after completing the illumination and verification stages of creativity, but they have not yet evolved into innovators.

2. Who is the father of entrepreneurship?

The father of entrepreneurship is thought to be Joseph Alois Schumpeter. He is recognized as one of the greatest minds of the 20th century. The best-known contributions of Schumpeter are his views on business cycles, the growth of capitalist economies, and the idea of entrepreneurship. According to Schumpeter, each entrepreneur's area of expertise requires a high level of imagination or invention. He saw entrepreneurship as a stimulus for economic development - a process he called "innovation" - by preventing the economy from becoming stagnant.

3. What are the responsibilities and roles of an entrepreneur in an organisation?

Roles and responsibilities of the entrepreneur in relation to the business are as follows:

  • An entrepreneur recognises opportunities in the market to build a competitive advantage.

  • An entrepreneur needs to gain control of limited resources to run the business. 

  • As an entrepreneur, the person is also involved in purchasing or acquiring materials from the suppliers. 

  • Such a person is also involved in the marketing of products and does competitor analysis. 

  • Fostering a culture of respect throughout the company.

  • Managing customer and supplier relationships. 

  • An entrepreneur also creates employment opportunities for people.

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