What is Entrepreneurship? Meaning, Types, and Examples

What is Entrepreneurship?

Entrepreneurship is starting up a business while building and scaling it to generate a profit. This is a basic definition but quite limiting. The contemporary definition of entrepreneurship involves transforming the world by discovering big problems and solving them. An entrepreneur establishes a firm to realize their idea which implies entrepreneurship. This brings up labor and capital to produce goods and services for profit-making.

This activity involves an entrepreneur who takes actions that are directed towards changing the world.

Entrepreneurship involves a high level of risk-taking but also highly rewarding. It serves in terms of generating economic wealth, growth, and innovation.

4 Types of Entrepreneurship

There are different types of entrepreneurs as well as the types of businesses they create. These include;

Small Business Entrepreneurship

This is the idea of opening a business without expanding it into a large venture or opening many branches. A single-location restaurant or a retail shop to sell your handmade goods are examples of small business entrepreneurship. Usually, these individuals invest their own money and succeed in their business if it generates a profit, which is their sole aim. They don’t have investors from outside and they will only take a loan if it helps in continuing the business.

Scalable Startup Entrepreneurship

Scalable startup entrepreneurship refers to a business model where an entrepreneur starts up an organization based on a unique idea. It has to do with everything that ranges from creating a plan to launching up the business. This type of entrepreneurship begins with a vision that they can create some changes in the world. Their investment comes from the venture capitalist, that is a private equity investor, and also by employing efficient workers.

Large Company entrepreneurship

Large company entrepreneurship is the creation of a new business division within an existing organization. This also refers to the organizations that have a solid set of life cycles. They solidly involve in sustaining innovation and providing a new set of products.
The Chief Executive officers of these companies can either foresee a new market for the company or the individuals in the company generate new ideas that they take to the senior management to commence the process.

Large companies address the needs and opportunities of an existing company through innovation

Social Entrepreneurship

The goal of social entrepreneurship is to create a benefit to society and humankind. They focus on helping communities or the environment through their products and services. They are not driven by profits but rather by helping the world around them. Most examples of this form of entrepreneurship take the form of non-profit organizations.

Who is an Entrepreneur?

An entrepreneur is a person who starts up a business with the sole aim of making a profit. In other words, he is a person who embarks on the risk of starting a new business enterprise.

An entrepreneur is an individual who starts up a new business, bearing most of the risks as well as enjoying most of the rewards. The process of starting up the business is known as entrepreneurship. We see entrepreneurs as innovators, sources of new ideas, goods, services, and businesses.

The meaning of entrepreneurs goes beyond just becoming a business or job creator. They are some of the world’s most powerful world changers, also, they imagine the world differently.

Entrepreneurs play a key role in every economy through the use of their skills and initiatives necessary to anticipate the areas of need and bring new ideas to the market. Successful entrepreneurship receives the reward of profit. Narrowly, profit is the reward for entrepreneurship but looking at it broadly, there are other rewards such as fame and continuous growth opportunities.

Why do people become entrepreneurs? Every entrepreneur has their own reasons behind them becoming the bosses of themselves. Some of these reasons include the need for more freedom and making an impact in an economy, out of many reasons. They have control over their lives by living based on their own terms.

Importance of the entrepreneur

Job Creation

It is because of entrepreneurs that jobs exist. Without them, jobs would not exist. They involve in the risk of employing themselves with the ambition of continuing the growth of their businesses. This amounts to the creation of new jobs. The more their business keeps growing, the more jobs they create for the unemployed.

Innovation

Most of the greatest technologies in the present society come as a result of businesses. These advances in technology come about because of the need to solve problems, create efficiencies, or improve the world. Entrepreneurs are highly innovative and in periods where technology advances more and more, there is usually an entrepreneur responsible for it.

Creation of change

Entrepreneurs have a very big dream. Because of this, some of these ideas naturally bring a change worldwide. Most times, they can create new products that solve burning problems or take up the challenge to bring to existence things that never existed before. Many targets making the world a better place with their products, ideas, or businesses.

Entrepreneurs give to society

While some entrepreneurs have the mindset of the rich, being greedy and evil, they most times do more for the good of society than an average person. When they make more money, they pay more in taxes and this helps in the funding of social services. Entrepreneurs have a very large share in donating to non-profit and charitable organizations. Some seek to invest in creating solutions to assist poorer communities, for example, good health care and water supply.

Increase in national income

Entrepreneurship adds to a country’s national income (GDP). They generate new wealth in an economy. When there is an improvement in products and services and new ideas,  there will be growth in new markets and new wealth.

Reasons why people become entrepreneurs

To change the world

Many entrepreneurs struggle to make the world a better place. Most of them believe in eliminating poverty, creating a practical and game-changing product, or space exploration. They basically build a brand in service of others. Also, they use their businesses to raise capital quickly to proceed into their commitment to making the world a better place.

They don’t want a boss

Entrepreneurs always face challenges with having a boss, they tend to feel trapped and tied down. Some of them have the feeling that they have better and more effective ways of doing things. Others dislike the fact that they do not have creative freedom. These factors attract them to entrepreneurship since they want to succeed on their own terms.

They want flexible hours

Entrepreneurship is peculiar to those who need flexible hours. For example, disabled people always enjoy entrepreneurship because it allows them to work when they can. Also, students enjoy the flexibility to work around their demanding schedules as well as their course loads.

They want to work from anywhere

Alongside flexible working hours, those who do not want to be tied down in a particular location involve in entrepreneurship. They may not want to work from the same location every day because it can be easily boring.

They cannot get a job

Many set up a business enterprise as a result of the fact that they cannot find a job. Instead of remaining unemployed, they try to create opportunities for themselves. A graduate may decide to start up an online store to build up his resume. Parents may decide to set up a business to enable them to feed their family and provide shelter for them.

They don’t fit into the corporate environment

We may come across entrepreneurs who will say that stuffy corporate environments place restrictions on their growth. It is possible to find some in the corporate environment trying to gain more power in their role and understand how everything fits together.

Curiosity

Entrepreneurs love to find out answers to the result of a thing, “what will happen if….?”. They love learning and experimenting. They read different business books to enhance their knowledge. Entrepreneurship is appealing to them because it allows them to learn the most in a limited amount of time. Their curiosity allows them to grow continuously.

They are ambitious

Those individuals who love to attain difficult goals are meant to be entrepreneurs. Because there is no limit to their achievements, they constantly find their projects growing beyond their imaginations. When challenges come up, they find the means of overcoming them thereby reaching their goal because they are unstoppable.

Types of Entrepreneurs

Opportunists

Opportunistic entrepreneurs are optimistic, they have the ability to grab financial opportunities and getting in at the right time. They stay on board during the time of growth, and exit when the business gets to its peak.

These types of entrepreneurs place their concern on the profits and the wealth they will build. They are attracted to ideas where they can create real income. Because they look forward to finding well-timed opportunities, opportunistic entrepreneurs can be highly reactive.

Innovators

These are rare sets of individuals that come up with great business ideas or products that no one else has thought about. Practical examples include Mark Zuckerberg who worked on what they loved and through that, they found business opportunities.

Innovators care more about the impact that their products and services will have on their societies rather than just focusing on money. They are idea-generating individuals and they usually leave the day-to-day running of the business to those that are more capable in that area.

Specialists

This set of individuals are highly risk-averse and analytical. They have a strong set of skills in specific areas acquired through education and apprenticeship. Such entrepreneurs will build out their business through networking and referrals which results in slower growth than a builder entrepreneur.

7 Characteristics of Entrepreneurs

  • Versatile
  • Flexible
  • Money-saving
  • Resilience
  • Focus
  • Business smart
  • Communication

Versatile

An entrepreneur should be capable of doing many things. It is important to personally the sales of his enterprise and interactions with customers whenever it is possible. The clearest way to obtain transparent feedback about the target market is direct client contact. This also helps to know what an entrepreneur should do better. If direct client contact is not always practical, they should train employees to invite comments from customers. This makes customers feel more empowered and happier clients are more likely to recommend the business to others.

Flexibility

Business ideas should be able to change over time. Also, entrepreneurs should be able to adjust to feedback from customers.

Money-Saving

A successful business should be able to maintain a steady cash flow which is useful in daily maintenance. Bookkeeping whereby they weigh the income and the expenditure is important. Entrepreneurs can reduce and limit the risks of running out of funds.

Resilience

It can be extremely difficult for one to run his business especially the one he started from scratch. It requires enough time, dedication, and even failure. In times of difficulty, a successful entrepreneur has to be resilient, and have to keep pressing forward when they face rejection and failure.

Starting a business is a learning process that usually comes with frustrating challenges especially when money is on the line. It is important not to give up through difficult moments in order to succeed.

Focus

This is similar to resilience, a successful entrepreneur should remain focused. He should be able to eliminate the noises and doubts that associate with running a business. Losing focus will amount to failure. A business owner can sustain his business when he remembers why he started the business and remain on track to see it through.

Business Smart

It is important for an entrepreneur to know how to manage money as well as understanding the financial statements in order to be able to run the business. He should be able to know his revenues, costs, and how to increase/decrease them. Avoiding unwholesome cash spending will help to keep the business going.

One should know his target market, competitors, strengths, weaknesses, and implement a sound business strategy. This will provide a forum for handling difficult situations in the business.

Communication

Effective and successful communication is critical in almost every aspect of life irrespective of what one does. It is very vital in running a business. Sharing ideas with potential investors, sharing business plans with employees, and negotiating contracts with suppliers all require successful and effective communication.

Examples of entrepreneurs

Mark Zuckerberg, before building Facebook, created many products. He created an instant tool for messaging that his father used in his dental practice to communicate with his receptionist. He also created music software that Microsoft and AOL were interested in buying, even though he was only a teenager. In the year he first started Facebook, he already had one million users. Now, he has a net worth of $68.3 billion.

Sara Blakely was one of the first creators of ladies leggings. She first started her Spanx brand in 1998. Her brand specializes in shapewear and it also includes bras and panties. She also the invented arm tights, which allows women to wear their summer clothing year-round. At a point in time, Blakely was the youngest self-made female billionaire.

How to Become an Entrepreneur

Ensure Financial Stability

Financial stability is recommended though not a strict requirement. Starting up a business with an adequate supply of cash and ensuring continuity can help a potential entrepreneur, not worrying about making quick money.

Build a Diverse Skill Set

After having strong finances, it is necessary to acquire a different set of skills and apply them to the real world. It is possible to carry out this simultaneously with ensuring financial stability.

One can achieve this step through learning and trying new tasks in the real-world setting. For example, a potential entrepreneur who has a background in finance can go into a sales role in their existing company to learn skills that are necessary for success.

Consume Content Across Multiple Channels

There is a need to layout contents in an orderly manner. These contents may come in the form of podcasts, books, articles, or lectures. One important thing is that there should be varieties in what the content covers no matter the channel. Aspiring entrepreneurs should always get familiar with the world around them for them to be able to look at industries from a renewed perspective thereby giving them the ability to build a business around a particular sector.

Identify a Problem to Solve

After consuming different contents across multiple channels, a potential entrepreneur will be able to identify different problems to solve. An adage in business reveals that a company’s product or service has to solve a particular problem either for another business or a group of consumers.

A potential entrepreneur can build a business in line with solving a problem if he identifies that problem.

Solve That Problem

After identifying a problem, it is necessary to prefer solutions, this defines a successful startup. Solving a particular pain point for other businesses or the consumers is known as “adding value within the problem”. It is only through adding value to a specific problem that an entrepreneur becomes successful.

For example, one finds out that the process involved in fixing an appointment with a dentist is complicated for patients. This is causing that dentist to lose customers. Adding value to this problem can be that one builds an online system of appointment thereby making it easier to book appointments.

Network Like Crazy

Networking is vital for every new entrepreneur. Meeting the right people that can contact you with people in your industry such as the right suppliers, financiers, and even mentors can make up a successful entrepreneur. Most times, entrepreneurs cannot do it on their own, they need others too.

Attending conferences, emailing and calling people in the industry, speaking to family and friends that are in a similar business will help in exposing you to the world. You can as well discover people that can guide and direct you. Once you connect with the right people, it becomes much easier to conduct a business.

Lead by Example

It is necessary for every entrepreneur to be a leader within his company. A leader needs to be hardworking, motivate, and inspire their employees to arrive at their best potentials. This will lead to the success of the business/company.

Quotes about entrepreneurship

Peter Drucker quotes, “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and can turn both to their advantage.” Niccolo Machiavelli.

In Richard Branson’s words, “From my very first day as an entrepreneur, I’ve felt the only mission worth pursuing in business is to make people’s lives better.”

“A person who sees a problem is a human being; a person who finds a solution is visionary, and the person who goes out and does something about it is an entrepreneur.” – By Naveen Jain entrepreneur

Reid Hoffman quoted that “An entrepreneur is someone who jumps off a cliff and builds a plane on the way down.”

“The number one reason why people fail in life is that they listen to their friends, family, and neighbors.” –By Napoleon Hill.

“It’s not about ideas. It’s about making ideas happen.” –By Scott Belsky.

Phil Libin pointed out that “There are lots of bad reasons to start a company. But there is only one good, legitimate reason, and I think you know what it is: it’s to change the world.

These are a few entrepreneurs’ quotes out of many. It is important to understand that these quotes form the basis of the true picture of entrepreneurship.

What are entrepreneurial skills?

Entrepreneurial skills can include a wide range of various sets of skills like technical skills, leadership and business management skills, and creative thinking. Developing one’s entrepreneurial skills can mean developing several sets of skills because it is applicable to many different job roles and industries. For Example, if you want to be a successful business owner, it is necessary that you develop your business management skills. Also, to build and maintain successful project teams there is a need for you to improve your leadership and communication skills.

Entrepreneurial skills include both soft and hard skills. Entrepreneurs need to develop a variety of skills to accommodate their business growth and brands.

Examples of entrepreneurial skills

  • Business management skills
  • Teamwork and leadership skills
  • Communication and listening
  • Customer service skills
  • Financial skills
  • Analytical and problem-solving skills
  • Critical thinking skills
  • Strategic thinking and planning skills
  • Technical skills
  • Time management and organizational skills
  • Branding, marketing, and networking skills
  • Business management skills
  • Teamwork and leadership skills

You can improve your entrepreneurial skills by taking a business course and study in that line, seek experienced mentors who can help you in developing those skills, build your leadership skills, attend business workshops, and learn to manage your finances.

CEO Vs Entrepreneur

While an entrepreneur is in charge of building a business, a CEO is in charge of running a business once the entrepreneur has already built it.

The skills of CEOs focus basically on maintaining and growing an already established business while entrepreneurs’ skills focus on coming up with new ideas, liaising with investors, and building a business infrastructure with limited resources.

Entrepreneurs usually don’t have training while CEOs need to have a degree in business and years of experience in leadership and management. There are exceptional cases where the entrepreneur is as skilled and experienced as the CEO, this naturally makes them less effective leaders.

Conclusion

The entrepreneur is the chief coordinator of the processes of production. He organizes all factors of production in order to obtain maximum production of all goods or services. He acts as a coordinating agent in a capitalist economy and this coordination takes place in the form of diverting resources towards new potential profit opportunities.

The entrepreneur channels various resources (tangible and intangible) towards the capital formation.

He sees possibilities and solutions where an average person sees problems and frustrations.

Understanding what entrepreneurship means can help more people to recognize the value they can contribute to the world.

Entrepreneurship is a major element for the growth of an economy because it contributes greatly to a country’s gross domestic product. It provides employment to the unemployed and also raises the standard of living in an economy.

To be a successful entrepreneur, it is important to acquire the skills necessary to sustain your business. This helps to accommodate business growth and brands.

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