The ability to start, organize and run a business enterprise by overcoming all the hurdles and trying to maximize the profit is known as entrepreneurship. Starting a new venture is the best example of entrepreneurship. The concept of entrepreneurship was introduced by Joseph Alois Schumpeter.
As per economics, entrepreneurship is based on the profit earned with the help of land, labor, natural resources, and capital. It plays a huge role in the development of a country in this continuously changing world and competitive global market.
Who is an Entrepreneur?
A person who can establish, administer, and succeed in a new venture or start-up along with the possibility of loss, to make more and more profit, is called an entrepreneur. The entrepreneurs are known as the innovators who replace the old inventions with new ones for the comfort of society.
Characteristics of Entrepreneurship
The main aim of all the businesses is to earn huge profits and increase the value of the shareholders. Entrepreneurs hire skilled and professional human assets but not all of them are successful. There are certain characteristics that make entrepreneurship successful. Some of them are given below:
Types of Entrepreneurship
There are four main types of entrepreneurship which include the following:
1. Small Business Entrepreneurship
It includes all the businesses which are run and operated on a small scale, for example, grocery store, carpenter, consultant, electrician, travel agent, plumber, hairdresser, etc. Small businesses are owned by individuals with the help of their family members or local employees. Their amount of profit is not so high and is enough to feed their family not to set up a large-scale business. These entrepreneurs invest in the business by taking small loans from banks, friends, or family.
2. Scalable Startup Entrepreneurship
This entrepreneurship is focused on bringing a positive and big change to the world. Their prime source of capital is those investors who promote the entrepreneurs with unique ideas and plans. Such entrepreneurship encourages scalable business and experimental models so the appointment of the best and most deserving employees can be done. This research-based model demands more venture capital to run the business.
3. Large Company Entrepreneurship
These companies are run and operated at a very large scale and have their branches in different places. They have a defined life-cycle. The main strategy of these companies is to grow and sustain in the market by offering new and innovative products to the customers. In most cases, these products are related to their main product. Large companies are always aware of changes in technology, customer preference, and taste, new competition, etc. These conditions create pressure on these companies to use an innovative idea not only to manufacture the products but also to sell them to add new customers and compete with other sellers. For this purpose, these companies either buy an innovation enterprise or try to manufacture the products internally.
4. Social Entrepreneurship
Social entrepreneurship is aimed at producing those products and services that help in solving the problems and issues of society and fulfilling social needs. These entrepreneurs are focused on serving society not on earning profits.
Importance of Entrepreneurship
Entrepreneurship is very important not only for individuals but also for the whole economy. It helps in increasing the GDP of a country and also improves the Human Development Index (HDI). It promotes technology and modernization in the country. Some of the vital roles played by entrepreneurship are as follows:
Barriers to Entrepreneurship
Every entrepreneur establishes a start-up with the aim of making profits and defeating its competitors. But it is not as easy as it seems. There are lots of issues, problems, or barriers that can arise and affect the smooth running of the business. Some of the major barriers to entrepreneurship are as follows:
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