Introduction to Entrepreneurship
The word entrepreneur originated from the French word meaning “To Undertake” which was first introduced and used by the Irish French - Economist Richard Cantillon. In the 19th century, a French economist ‘Jean-Baptiste Say’ is believed to have coined the term ‘entrepreneur’. He defined an entrepreneur as one who undertakes an organization, specifically a contractor, acting as an intermediary between capital and labor.
There has been considerable attention paid to the term entrepreneurship over the past few years, as many people realized that entrepreneurs organizing small firms immensely contribute to the economic growth of a country. Developing countries have introduced taxes and policies to encourage the planning and implementation of small businesses with the belief that small businesses can potentially develop into large businesses.
Read the following article to know the 4 key elements of becoming a successful entrepreneur.
What is Entrepreneurship?
An entrepreneur is the person who manages, organizes, and assumes the risk of a business or enterprise. In the other words, an entrepreneur is a person who is dedicated to discovering something new, exploiting the novel conception, and vision into gainful opportunities by bearing the risk involved in the process. The entrepreneur is the one who conceives the idea of establishing an enterprise, living with it and finally establishing an enterprise. Entrepreneurship refers to the process of activities undertaken by an entrepreneur in an organization. Entrepreneurship is the important component that influences the economic growth of a country and also influences the overall competition of a country.
The entrepreneurship process involves the identification, evaluation, and implementation of new business ideas. The process also incorporates establishing new business firms and organizations. Innovation also becomes an integral part of the process. This process results in the generation of employment opportunities and improves the living standard of the people as well as influences the growth and development of a country.
Entrepreneurship is both a science as well as an art. As a science, it lies in the proven process of planning and managing a business. As an art, it lies in the innovative thought, implementation, and growth of a business.
Entrepreneurship is the vigorous, social process where individuals alone or in partnership identify opportunities for innovation and act upon them by transforming ideas into practical target activities whether in social, economical, or financial factors.
The above definition indicates that entrepreneurship:
Has positive effects on individuals
Has impact on the social-economic well-being of a society
Is vigorous or dynamic
Has adverse impact on the economic well-being of society
Let us now discuss the key elements of an entrepreneurship
What are the Key Elements of an Entrepreneurship?
These four key elements of entrepreneurship include innovation, organization, risk and vision. In the following section, all these elements have been discussed briefly
Innovation is considered as the key factor in the concept of entrepreneurship. An entrepreneur adds to the economy in terms of innovation and discrepancy and the degree of these assures a positive outcome. The entrepreneurs carry out imaginative and unique thoughts on the available situations and strive to foster something new. It can be in terms of a new product, production technique, technology, marketing strategy, and so on.
The organization is another key element of successful entrepreneurship. Without organization, everything will become disorganized and unmanageable which further will cause losses, decreasing business goodwill, unsatisfied customers, and mental stress to the staff due to which the workers may leave the organization Hence it is insignificant to maintain a decent organizational structure within the company, which defines who will perform a specific task and the way that task would be performed.
All businesses involve risks and in entrepreneurship, it is the sole responsibility of the entrepreneur only as it is a “one-man-show”. Without taking risks, a business cannot flourish but on the other hand, indulgence in excessive risk-taking may lead to severe losses. Risk-taking is another word for exploiting opportunities and gaining a competitive edge over others performing in the same market. This way, the business and the economy both are facilitated.
An entrepreneur must have a strong vision if he wants to succeed in the business. The foresight of the entrepreneur determines how the business and other business policies will run. The way the entrepreneur visualizes his business in the coming years is how the business moves forward and the profitability is earned. Keeping the vision in the head, the tasks are identified, performed, risks are taken and organizational culture is brought forth. It is important to set long-term and short-term goals for a business so that the organizational objectives are learned.
That’s almost all there is to explain the concept of entrepreneurship and its basic elements of it. An entrepreneur needs to control the whole business performance, tackle the workforce, monitor the market trend, and modify business policies to meet customer demand. Thus he/she needs to master all the four elements of entrepreneurship to reach new heights of success with the business.
At last, it is concluded that entrepreneurship can be observed as an identifying change, pursuing opportunities, taking risks and responsibilities, innovation of existing or new products, employing the better use of resources, creating new values that are significant for customers, and repeating the process all over again and again.
FAQs on Four Key Elements of Entrepreneurship
1. What are the types of Entrepreneurship?
There are four major types of entrepreneurship. These are:
1. Small Business Entrepreneurship: Small businesses like grocery, travel agencies, hairdressing, carpentry, etc fall in this group. Family members or local employees run this entrepreneurship. These are less likely to take over other businesses and they often take business loans from known friends or other acquaintances.
2. Scalable Startup Entrepreneurship: It involves scalable businesses and recruits employees based on their experience and merit. These are often capable of changing the world. They require bigger loans and capital.
3. Large Company Entrepreneurship: These go by specific life cycles and modify business policies according to the customer choice, market competition, technology, etc, and put in more innovative ideas in developing products or services.
4. Social Entrepreneurship: These are oriented towards social problems and needs. Earning profit is not primary here. Doing good for society is the main focus.
2. What are the characteristics of an Entrepreneur?
To be successful in an entrepreneurship venture, a person needs to possess certain qualities. These are:
Risk-taking Ability- Risk is an important part of any new business venture. But it plays a significant role in entrepreneurship because here the entrepreneur bears the entire risk of the business. Hence the entrepreneur must be adventurous and a risk-taker.
Leadership Quality- Entrepreneurial leadership incorporates organizing and encouraging a group of people to attain a common goal through innovation, risk optimization, taking advantage of opportunities, and managing the dynamic organizational environment.
Open-mindedness- The market is always changing and the opportunities need to be readily opted for so that the most out of the circumstance can be made.
Flexibility- Customer preference and market trends are not static and thus the product or service should also be flexible to meet the demands
Knowledge about the Product- Without in-depth knowledge about what is being offered, entrepreneurs cannot withstand the competition.
Perseverance- Entrepreneurs must be strong-willed and never give up in adverse situations. They must possess a rock-solid determination to survive and grow.
3. Why is Entrepreneurship important?
The importance of entrepreneurship can be observed in the following points:
Employment and income generation.
Implementation of innovation in the development of products, services, technologies, etc
Diversification of society.
Social needs are met.
The standard of living is improved as income increases.
Continuous research and development are promoted as the concept are all about bringing new items to the customers.
The overall economy is developed.