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Entrepreneurship and its Characteristics

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What is Entrepreneurship?

Entrepreneurship is the ability and willingness to create, organise, and manage a business enterprise, including all of its uncertainties, in order to earn profit. The most visible example of entrepreneurship is the establishment of new businesses. Entrepreneurship involving land, labour, natural resources, and capital can yield a profit. The entrepreneurial vision is defined by exploration and risk-taking, and it is an essential component of a nation’s ability to succeed in an ever-changing and more competitive global marketplace.

What is Entrepreneurship?

Entrepreneurship is defined as the process of establishing one’s own business as opposed to engaging in any other economic activity, such as employment or practising a profession. An entrepreneur is someone who establishes his own business. The process’s output is the business unit which is referred to as an Enterprise.

Entrepreneurship is also responsible for the creation and expansion of opportunities for the other two economic activities, that is, Employment and Profession. Every country, whether it’s developed or developing, requires entrepreneurs, whereas a developing country requires entrepreneurs to kickstart the development process, and a developed country requires entrepreneurship to sustain it. 

In the current Indian context, where employment opportunities in the public and large-scale sectors are shrinking on the one hand, and vast opportunities arising from globalisation are waiting to be exploited on the other, Entrepreneurship has the potential to propel India to the heights of becoming a super economic power.

Characteristics of Entrepreneurship

The characteristics of entrepreneurship are as follows:

1. Adaptability:

The business environment is constantly changing, making it difficult for entrepreneurs to adapt. Every day brings new challenges, but also new opportunities. However, it is extremely difficult for an entrepreneur to prepare for every scenario, evaluate it, and adapt it so that the business is not impacted by these unexpected changes. However, in order to be successful in the market, they must closely analyse the environment and adapt to any potential changes.

2. Systematic Activity:

Entrepreneurship is not a mysterious gift or charm that occurs by chance! It is a systematic, step-by-step, and deliberate activity. Certain temperament, skills, knowledge and competency requirements can be acquired, learned, and developed through formal educational and vocational training as well as observation and work experience. Such an understanding of the entrepreneurial process is critical for dispelling the myth that entrepreneurs are born rather than made.

3. Lawful and Purposeful Activity:

The goal of entrepreneurship is to conduct legal business. It is important to remember this because one may attempt to justify illegal activities as entrepreneurship on the grounds that, just as entrepreneurship involves risk, so do illegal businesses. The goal of entrepreneurship is to create value for personal and social gain.

4. Innovation:

It entails coming up with new ideas and implementing them in business. The entrepreneur is constantly evaluating current business models and identifying new methods and techniques for running the business more efficiently and effectively. From the perspective of the company, innovation can either save money or increase revenue. It is more than welcome if it does both. Even if it accomplishes nothing, it is still welcomed because innovation must become a habit. Entrepreneurship is creative because it involves the creation of value. 

Entrepreneurs produce goods and services that meet the needs and desires of society by combining various factors of production. Every entrepreneurial act generates income and wealth. Entrepreneurship is also creative in the sense that it involves product innovation, discovery of new markets and sources of input supply, technological breakthroughs, and introduction of newer organisational forms for doing things better, cheaper, faster, and, in the current context, in the least harmful way to the ecology/environment.

5. Organisation of Production:

Production, which entails the creation of form, place, time, and personal utility, generally requires the combined use of various production factors such as land, labour, capital, and technology. In response to a perceived business opportunity, the entrepreneur mobilises these resources into a productive enterprise or firm. It should be noted that the entrepreneur may not have any of these resources as he might only have the ‘idea’ that he promotes among the resource providers. In a well-developed financial system, he only needs to persuade the funding institutions, and with the capital arranged, he can enter into contracts for the supply of equipment, materials, utilities (such as water and electricity), and technology.

The knowledge about the availability and location of resources, as well as the best way to combine them, is at the core of production organisation. To raise these in the best interests of the business, an entrepreneur must have negotiation skills.

6. Risk Taker:

The essence of entrepreneurship is “willingness to assume risk,” without which one cannot succeed. It happens as a result of the generation and implementation of new ideas. Although such ideas are frequently speculative, the outcome may or may not be positive and immediate.

It is widely assumed that Entrepreneurs take high risks. Yes, individuals who choose a career in entrepreneurship take a greater risk than those who choose a career in employment or the practice of a profession because there is no “guaranteed” payoff. For example, when a person quits a job to start his business, he tries to calculate whether he will be able to earn the same income level or not. To an outsider, the risk of leaving a well-established and promising career appears to be “high,” but for an entrepreneur, it is a calculated risk. They are so confident in their abilities that they can convert 50% of their chances into 100% success.


Last Updated : 30 Jan, 2024
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