Entrepreneur and Entrepreneurship

The word ‘entrepreneur’ brings to our mind the images of very famous business tycoons like Tata, Birla, and Ambani. How they are different from others? The only answer is their entrepreneurship skills.

It is not that only a big business person requires entrepreneurship skills. Even to start our own small business, we require entrepreneurship skills to make the business successful and achieve financial gain.

Entrepreneur

“An entrepreneur is a person who takes the risk of setting up his business venture for perceived rewards. He is a person who initiates the idea, formulates a plan, organizes resources, and puts the plan into action to achieve his/ her goal”.

Entrepreneurship

Entrepreneurship is the process of planning, organizing, operating, and assuming the risk of a business venture. Entrepreneurship is a process involving various actions to be undertaken to establish an enterprise. Innovation and risk-bearing are regarded as the two basic elements involved in entrepreneurship. Individuals performing these functions are entrepreneurs and their enterprising ability and skill are known as ‘entrepreneurship’.

Enterprise

An enterprise is a business organization that is formed, which provides goods and services, creates jobs and contributes to national income, exports, and overall economic development.

Need for Self-Employment

The main need for Self Employment in any country is for economic development. Economic growth depends on the rate of innovation in the economic field, which in turn depends on the number and quality of entrepreneurs in society. Thus, self-employment is an agent of progress in the society.

Self Employment is needed for:

economic growth
new ideas, imagination, and vision for the enterprise.
solutions to meet the challenge of changing environment and technology.
opportunities for future growth and development by reducing costs increases its profits.
the maximum employment opportunities.
Good living standard through good quality products and services at the lowest possible cost

Advantages of Entrepreneurship/Self-Employment

Every successful entrepreneur brings about benefits not only for himself/ herself but for the region or country as a whole. The benefits that can be derived from entrepreneurial activities are as follows:

Enormous personal financial gain
More job satisfaction and flexibility
Development of more industries, especially in rural areas or regions; Income generation and increased economic growth
Encouragement of the processing of local materials into finished goods for domestic consumption as well as for export
Freedom from the dependency on the jobs offered by others, to give employment to others
Entrepreneurship is motivated by the drive to meet the personal, emotional, or financial needs of the individual.

Function of entrepreneur

The various functions performed by entrepreneurs are:

An entrepreneur begins into existence a business unit and therefore he acts as a promoter.
Entrepreneur arranges the various factors of production and finance for the business.
The entrepreneur sets up the desired organization and prepares plans and policies for its smooth functioning.
Entrepreneur co-ordinates the other factors of production. Coordination involves the selection of the right type of factors, employment of each factor in the right quantity, use of the best technical devices, division of labor, reduction of water, etc.
The entrepreneur takes risks. He assumes all possible risk of business that emerges due to the possibility of changes in the taste of consumers, modern techniques of production, and new inventions.
The entrepreneur can undertake any type of the following categories of innovation:

Introduction of the new good or new quality of good.
Introduction of the new method of production.
The conquest of new sources of supply of raw materials.
The carrying out of a new organization of any industry.

SI.No	Points	Entrepreneur	Manager
01	Motive	The main motive of an entrepreneur is to start a venture for his personal gratification.	The main motive of a manager is to render services in an enterprise already set by someone else.
02	Status	Owner	Servant
03	Risk	Assumes risk and uncertainty.	The manager does not bear any risk involved in the enterprise.
04	Rewards	Profits, which are highly uncertain and not fixed.	Salary which is certain and fixed.
05	Innovation	The entrepreneur himself thinks about what and how to produce goods to meet the changing needs of the customers. Hence he acts as an innovator/change agent.	A manager simply executes a plan prepared by the entrepreneur.
06	Qualification	An entrepreneur needs to possess qualities and qualifications like high achievement motive, originality in thinking, foresight, riskbearing ability, etc.	A manager needs to possess distinct qualifications in terms of sound knowledge of management theory and practice.

Qualities of a good entrepreneur

The following are the qualities of a good entrepreneur:

Initiative

acting out of choice rather than compulsion, taking the lead rather than waiting for others to start.

Sees and Acts on Opportunities

A mindset where one is trained to look for business opportunities from everyday experiences.

Persistence

A ‘never say die’ attitude, not giving up easily, striving Information seeking continuously until success is achieved.

Role of entrepreneur in economic growth

Entrepreneurship is the dynamic need of developing nations and sustains the process of economic development in the following ways:

1 Capital Formation

2 Generation of employment

3 Improvement in per capita income

4 Reduces the concentration of wealth

5 Balanced regional development

6 Resource mobilization

7 Improvement in standard of living

8 National self-reliance

Distinction between entrepreneur and manager

Often the two terms namely entrepreneur and manager are considered synonyms. However, they two have a different meaning. The major points of distinction between the two are:

Knowing

Knowing who knows, consulting experts, reading relevant material, and an overall openness to ideas and information.

Concern for High Quality of Work

Attention to detail and observance of established standards and norms.

Commitment to Work

Taking personal pains to complete a task as scheduled.

Efficiency Orientation

Concern for the conservation of time, money, and effort.

Systematic Planning

Breaking up the complex whole into parts, close examination of the parts, and inferring about the whole; e.g. simultaneously attending to production, marketing, and financial aspects (parts) of the overall business strategy (the whole).

Problem-solving

Observing the symptoms, diagnosing, and curing.

Self-confidence

Not being afraid of the risks associated with business and relying on one’s capabilities to successfully manage these.

Assertiveness

Conveying emphatically one’s vision and convincing others of its value.

Persuasion

elicits the support of others in the venture.

Use of Influence Strategies

Providing leadership.

Monitoring

Ensuring the progress of the venture as planned.

Concern for Employee Welfare

Believing in employee well-being as the key to competitiveness and success and initiating programs for employee welfare.