The method of launching, developing and managing a business along with its financial hazards is called entrepreneurship. To define entrepreneurship, it is the enthusiasm to launch an innovative business venture.
On the other hand, it is also the study of the same. The term is used conversely. As a part of the syllabus, it focuses on teaching the process of creating new ventures.
Who is an Entrepreneur?
In the most straightforward words, an entrepreneur is a person who is in charge of an entrepreneurship venture. He/she is the one who administers and builds a business from scratch and deals with the hardships and challenges associated with it. Entrepreneurs are often viewed as an agent of change. It is due to the impact they make on an economy through their ventures.
They take into consideration different factors prevalent in an economy and combine it with their skills to bring new products in the market. In a nutshell, individuals who pair their determination and will with their knowledge to engender, give shape, and develop a business or organisation can be called an entrepreneur.
Types of Entrepreneurship
There are primarily 4 types of entrepreneurship businesses, these are –
The vision of these ventures is to develop new products and services or take innovative approaches to old products. These businesses receive funding from various investors and ventures capitalists. They primarily focus on scalable business models and hire the best minds to achieve this goal.
A notable example that defines entrepreneurship of this category is Facebook.
Social entrepreneurship operates to resolve various social problems. The aim of these businesses is not to generate profits or accumulate wealth but serve a social cause.
The majority of the companies around the globe are small businesses, and they employ the lion’s share of the entire workforce. The main goal of these businesses is to support the families of the individuals associated with it. These businesses do not yield substantial revenues but instead focus on smaller profits, and they mostly depend on a business loan for initial funding.
Examples of such businesses are barbershops, grocery stores, salons, and small restaurants.
Large company entrepreneurship
The most prominent players of the market often engage in entrepreneurship to offer new products and services to their customers. These new offerings revolve around their core products, and they are developed according to the market demands. The large companies either form a partnership with new ventures or buy promising and emerging businesses to fulfil their purpose.
Characteristics of an Entrepreneurship
A few essential characteristics of entrepreneurship are –
Innovation is a gift, and in a world where there is little left to innovate, it is priceless. Therefore, individuals who can come up with the idea that trumps others offering the same services or a completely new product can build a successful business. Innovation can be in the form of a product or a service.It can present a different and unique perspective on existing products or launch a new product.
Building a new business involves risk of failing. An entrepreneur should be fully aware of those risks or be ready-minded enough to evaluate and tackle it as and when one emerges. Therefore, the capacity and courage to take the necessary risk are the building blocks of every successful entrepreneurship venture.
Every new business needs a clear plan or pathway for the future to become a successful one. An entrepreneur with a clear vision for his/her company has the edge over competitors. It is one of the essential features of entrepreneurship.
Moreover, they must realise that every situation is a business opportunity and it can be utilised for the benefit of the company. Entrepreneurs need to be broadminded to build a successful business. They have to assume every possible outcome of various situations and needs to be prepared for that.
An entrepreneur has a perfect plan to develop the business. However, it takes more than just a plan to build a successful venture. A business involves several different factors, and they need to work simultaneously towards the same goal to achieve the target.
That is where the leadership quality of an entrepreneur is tested. It is the job of a leader to assemble the contributing factors and make them work collectively.
Entrepreneurs must be confident about their ideas and have complete faith in it. Without this, it will be difficult for them to motivate and convince others like investors and prospective partners to trust that idea. Degree of adherence to these characteristics of entrepreneurship carries the potential to determine the success or failure of a business.
Importance of Entrepreneurship
The importance of entrepreneurship is more than just profit and loss or success and failure. Its significance in society is much broader.
Every entrepreneurship venture generates employment for a significant number of people. Moreover, start-ups present an excellent opportunity for individuals to gain experience and sharpen up their skills.
New ideas and products
Entrepreneurship is the hub of new and innovative ideas. Moreover, start-ups or small businesses always encourage their employees to think of innovative products or ideas to aid the rapid development of such businesses. Apart from helping the company to generate income, these ideas also play a crucial role in social development.
A rise in the employment rate spurs the economic growth of a country. Entrepreneurship plays a crucial role in that it provides jobs that in turn, increase per-capita income in an economy. As a result, the standard of living also improves. The demand for consumption goods surges which increase the production and the economy of a nation moves forward. It is one of the primary significance of entrepreneurship.
This article offers an insight into the various aspects of entrepreneurship. A detailed study of this concept in line with the syllabus can help students ace their exams. To learn more, visit the official website of Vedantu.
What is Entrepreneurship?
Ans. – Entrepreneurship is the process of building a new business from scratch, taking into consideration its uncertainties as well as its benefits. In other words, it is a venture that connects different economic factors such as labour, land, natural resources, and capital to develop a business.
Who is an Entrepreneur?
Ans. – An entrepreneur is a person responsible for establishing and managing a business venture. He/she is the person who takes up the responsibility and bears the financial risks associated with it.