Entrepreneurship is the capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses. In economics, entrepreneurship combined with land, labor, natural resources and capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk-taking, and is an essential part of a nation's ability to succeed in an ever changing and increasingly competitive global marketplace.
In recent years, "entrepreneurship" has
been extended from its origins in business to include social and political
activity. Entrepreneurship within an existing firm or large organization has
been referred to as intrapreneurship and may include corporate ventures
where large entities spin off subsidiary organizations. Entrepreneurs are
leaders willing to take risk and exercise initiative, taking advantage of
market opportunities by planning, organizing, and employing resources, often by
innovating new or improving existing products. More recently, the term
entrepreneurship has been extended to include a specific mindset
Entrepreneurial activities differ substantially
depending on the type of organization and creativity involved. Entrepreneurship
ranges in scale from solo, part-time projects to large-scale undertakings that
create many jobs. Many "high value" entrepreneurial ventures seek venture
capital or angel funding (seed money)
in order to raise capital for building the business.Many
organizations exist to support would-be entrepreneurs, including specialized
government agencies, business incubators, science
parks, and some NGOs.
What is an entrepreneur
Cantillon defined the term as a person who pays a
certain price for a product and resells it at an uncertain price: "making
decisions about obtaining and using the resources while consequently admitting
the risk of enterprise." The word first appeared in the French dictionary
entitled "Dictionnaire Universel de Commerce" compiled by Jacques des
Bruslons and published in 1723.
Successful entrepreneurs have the ability to lead
a business in a positive direction by proper planning, to adapt to changing
environments and understand their own strengths and weakness.
Predictors of entrepreneurial success
Factors
that may predict entrepreneurial success include the following
Market
- Business-to-business (B2B) model, not business-to-consumer (B2C)
- High growth market
- Target customer's missed by others
Industry
- Growing industry
- High technology impact on the industry
- Low capital intensity
- Small average incumbent firm size
Team
- Large, diverse venture team, not individual entrepreneurs
- Graduate degrees
- Management experience
- Work experience in the start-up industry
- Employed full-time prior to new venture, as opposed to unemployed
- Prior successful entrepreneurial experience
- Full-time involvement in the new venture
- Motivated by high profits, not independence
- Number and diversity of individual's social ties
Company
- Written business plan
- Activity focused on a single product or service
- Competition based on a dimension other than price
- Early, frequent and intense marketing
- Tight financial controls
- Corporation, not sole proprietorship
Status
- Wealth
- Dominant Race, Ethnicity, or Gender in a Socially Stratified Culture
Predictors of entrepreneurial failure
- Low Business Acumen, failing to add value in consumers’ lives.
- Jack of all Trade, doing what everyone is doing and not doing what one can do the best.
- Short-sightedness, failing to create long lasting solutions for today’s vices.
- Extravagance, satisfying unnecessary wants and misuse of resources at hand.
- Insecurity, not building an efficient team.
