Meaning and Definitions of Entrepreneur
An entrepreneur owns an idea, venture, or idea and is responsible for an essential responsibility for the risk and its outcome.
They blend labor, land, and capital to develop and sell new products or services.
According to International Labour Organisation (ILO), “Entrepreneurs are those people who have the ability to see and evaluate the business. opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success”.
In the words of McClelland, “An entrepreneur is someone who exercises some control over the means of production and produces more than what he can consume in order to sell (or exchange) it for individual (or household) income.”
As per Richard Cantillon, “An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at an uncertain price.”
Entrepreneurs are those who recognize the gap and capitalize on the same.
An entrepreneur can grasp such innovative concepts, develop them, and pursued its success with never-ending enthusiasm.
This is why they succeed in their business and are true entrepreneurs in a sense, and are people who have organized and developed successful companies.
However, you can’t call an entrepreneur an opportunist since it’s not just the self-interest that drives him but also the public’s need.
Characteristic of successful entrepreneur
|Instinctual Drive to succeed|
|The Locus of Control|
|Ability to Analyze Mind|
|Face the uncertainty of life|
|Ability to Mobilize resources|
|Acceptance of Change|
|Highly Motivated and Engaged|
1.) Instinctual Drive to succeed:
Entrepreneurs are driven to achieve success and expand their businesses. They can see the larger picture and are usually highly optimistic.
Entrepreneurs set enormous goals for themselves and remain determined to reach them, regardless of obstacles in their way.
Most entrepreneurs begin their business by themselves because they don’t like working for other people.
They would rather be their bosses and feel they are responsible for their own choices.
Entrepreneurs make decisions when they are uncertain and therefore are willing to take risks; however, they don’t take a gamble on the outcomes.
4.) The Locus of Control:
Entrepreneurs believe that they can manage the results of their venture by influencing their socio-economic surroundings rather than relying on luck.
They are convinced that they are in control of and can shape their future.
Once a person has determined to work towards a particular task and a specific goal and goal, he must become wholly absorbed in it.
He must personally resolve every problem that he confronts in the course of his job.
The majority of business owners who succeed weigh the advantages and disadvantages of their decision.
They are also more likely to make changes if the circumstances call for them. They are never reluctant to revisit their decision.
7) Ability to Analyze Mind:
Entrepreneurs are not affected by personal dislikes or likes. They can analyze the situation and take action.
They generally avoid emotions in their work or issues. They make decisions based on research instead of based on emotions.
8.) Face the uncertainty of life:
Successful entrepreneurs remain optimistic and view every challenging situation as an opportunity.
They approach any unexpected circumstances in a way that their work is completed rationally. Thus. They can win because of their unique knowledge and skills.
Entrepreneurs can work long hours and deal with various challenges while doing so.
As the chief in an organization or business, entrepreneurs face numerous challenges, and at the right time, they make the right choices that may result in physical and psychological stress.
Successful Entrepreneurs are innovators. They are constantly working to introduce new products, innovative production methods, establishing new markets, introducing new sources of supply, and restructuring the company.
11.) Ability to Mobilize resources:
Entrepreneurs need to mobilize all of the necessary inputs to produce the final product.
To create the effect, they need to mobilize 6″Ms,” i.e., Man Money, Material Machines, Market, and Method. Entrepreneurship is the result of filling in gaps and input completion.
Entrepreneurs need to be confident in their abilities to carry out the job efficiently and effectively.
They should make decisions independently in the face of risk and uncertainty and stick to the plan without hesitation, regardless of whether an initial failure occurs.
Entrepreneurs must be innovative to develop or create their own business or create their own unique and improved production method.
14) Acceptance of Change:
When something isn’t working for them, they can alter their approach.
Entrepreneurs are aware of how important it is to stay up-to-date with their field as the best way to be top of the line is to grow and adapt to the changing times.
They’re always up-to-date with the most recent technology or methods of service and are. willing to adapt whenever they discover an opportunity has arisen.
By nature Entrepreneurs who succeed thrive in the competition.
The only way to realize their targets and achieve their high standards is to be competitive with other successful businesses.
16.) Highly Motivated and Engaged:
Entrepreneurs are always on their feet, energetic, enthusiastic, and highly motivated.
They are driven by their desire to succeed and have a lot of self-motivation.
The expectations and high standards of many entrepreneurs require that they are highly motivated.
17.) Timing Management:
He/She must be able to adhere to the precise time when working on the job or undertaking. Any delay that is not attached to will endanger the whole project.
18.) Communicative Skills:
Entrepreneurs should possess excellent oratory abilities to influence others and convince them that their idea or product is a good idea.
Writing and oral communication is an essential requirement for any successful entrepreneurial.
The term “leadership” refers to the capacity to influence others through communication with the target of their own.
As a leader, he must attract a lot of followers, have respect for colleagues’ teamwork, a common goal, and clear direction.
20) Business Plan:
This allows the business owner to see the problem beforehand, and when and how to tackle the issue. A successful entrepreneur follows the principles of planning at every step.
Types of Entrepreneurs
Entrepreneurs in the business world are classified by type of business.
Utilization of professional skills and motivation, as well as growth and the stages of development.
The different types of Entrepreneurs are classified according to the following categories.
1) Based on Functional Characteristics
I) Innovative Entrepreneurs:
These entrepreneurs create new products or innovative production methods, or find new markets or revamp their organizations.
The entrepreneurs in this category are characterized by an intense collection of data for testing a new combination of elements.
They can be successful just when a specific amount of growth has been achieved, and they look at improving the previous.
II) Adoptive or Initiative Entrepreneur:
These entrepreneurs don’t innovate by stealing methods and techniques developed by others.
The entrepreneurs of this category are distinguished by their willingness to take on successful innovations of successful entrepreneurs.
These entrepreneurs are especially suited for countries with weak economies since adopting innovations saves money on trial and failure.
III) The Fabian Entrepreneur:
These entrepreneurs are incredibly cautious and skeptical in the process of experimenting with any new idea or change to their company.
They only make changes when there is a severe danger to the very existence of their business.
IV) Drone Entrepreneurs:
These entrepreneurs have an uncompromising conservatism and could even be prepared to take the loss of their business.
2) According to the Types of Business:
Entrepreneurs can be found in a variety of kinds of businesses. The types of jobs vary in size. such as:
I) Business Entrepreneur:
Business entrepreneurs are people who come up with an idea for a novel product or service and later create a company to bring their vision into reality.
II) Trading Entrepreneurs:
These focus on trading rather than manufacturing. Trading involves buying the final product from the manufacturer and then selling it off directly to the buyer or through an intermediary like a retailer.
III) Industrial Entrepreneur:
The industrial Entrepreneur is a manufacturer who determines the customers’ needs and then tailors their products or services to meet the requirements of the market.
IV) the Corporate Entrepreneur:
A corporate Entrepreneur shows his creativity when it comes to managing and organizing an enterprise of a corporation.
v) . Agricultural Entrepreneurs:
These entrepreneurs engage in such activities as growing and meeting crops, fertilizers, and other agricultural inputs.
vi) Retail Entrepreneurs:
They don’t do manufacturing. Retail stores serve pregnant women and private customers.
In India, retail entrepreneurs are scattered all over the entire country. For example, medical shops, vegetable stalls, fruit shops, etc.
VII) Service entrepreneurs:
They work in service and offer their services to customers—for example, beauty parlors, airlines, drycleaning, etc.
3) According to the Use of Technology:
Utilizing new technologies in different sectors of the economy is vital to business growth in the coming years.
In the modern world, entrepreneurs who make use of technology are at the forefront of the industry.
For example, Stephen Joe, Narayan Moorthy, etc. Therefore, these entrepreneurs operate with the application of technology as follows:
I) Technical Entrepreneur:
A technical entrepreneur is an entrepreneur of the “craftsman type.”
He creates new and better quality goods due to his skills. He is more concerned with production instead of marketing.
He is not particularly worried about generating sales by using different sales-promoting methods.
He exhibits his creative capabilities when it comes to manufacturing goods and delivering services.
The most significant strength of the technology entrepreneur has his ability to produce methods.
II) Non-Technical Entrepreneurs:
Non-technical entrepreneurs aren’t focused on the details of engineering the products in which they work.
They’re focused on the development of alternative distribution and marketing strategies to market their business.
III) Professional Entrepreneurs:
A skilled is interested in starting an enterprise but doesn’t want to manage or operate it after it has been established.
An experienced entrepreneur sells off the company and begins another business with the earnings.
An entrepreneur who is active and comes up with new concepts to develop new ideas for initiatives.
In India, they were referred to as managing agents. These are currently banned.
4) According to Growth:
If the creation of a new business has a higher chance of success, the entrepreneur is entering the market in a new and unexplored business area.
Customers’ approval for the product is a source of satisfying a psychological experience and huge profits.
The industrial units are classified as medium, high growth, or low growth industries and are, therefore:
I) growth entrepreneur:
These entrepreneurs have to choose a highly-growth industry. They choose an industry with substantial expansion projects.
II) Super-Growth Entrepreneur:
Super growth entrepreneurs include those that have demonstrated massive growth in performance in their business.
The growth performance is determined through the liquidity of funding, profitability, and the high level of capital gearing.
5) According to Area
I) The Urban Entrepreneur:
An urban entrepreneur is someone who lives in urban areas. Because of its location advantages, they establish businesses in urban regions.
In general, urban entrepreneurs are either corporate or industrial entrepreneurs.
II) Rural Entrepreneur:
The term “rural entrepreneur” refers to someone from a rural area. The typical rural entrepreneur is an agricultural or trading entrepreneur.
Because of the advantages of location in rural areas, they establish an enterprise in rural areas.
Government offers more financial assistance and other benefits to rural entrepreneurs to enable them to grow rural areas in addition to urban areas.
6) According to Gender and Age
i) Men Entrepreneur:
Generally, the new ventures are run and managed by male entrepreneurs. When a male starts and works the whole business, he is called a men entrepreneur.
ii) Women Entrepreneur:
When an enterprise is run and managed by women.
Women entrepreneurs have been on the Indian business scene for quite some time now and have achieved remarkable success.
Moreover, like any other entrepreneur, any first-generation woman entrepreneur has to compete against those already well-established.
7) According to Level of Motivation
i) Pure Entrepreneur:
He undertakes any economic endeavor for the sake of pure interest and personal satisfaction.
There is an urge in him to become an entrepreneur. For example, Dhirubhai Ambani, Jamshedji Tata.
ii) Induced Entrepreneur:
He is the one who is induced to start a business because he is attracted by the business policy of the Government and the concessions and assistance given by authorities.
Since liberalization and economic reforms in India, Government has relaxed many rules and regulations, which induced many people to become entrepreneurs.
8) According to the Capital Ownership
i) Private Entrepreneur:
When an individual or a group of individuals set up an enterprise, arrange finance, bear the risk and adopt the latest techniques in the business to earn profits, he or the group is called us private entrepreneurs/ entrepreneurs.
ii) State Entrepreneur:
As the name indicates, state entrepreneur means the trading or industrial venture was undertaken by the state or the Government itself.
iii) Joint Entrepreneur:
A joint entrepreneur means the combination of private entrepreneur and state entrepreneur who join hands.
9) According to the Entrepreneurial Activity:
Based on entrepreneurial activity, entrepreneurs are classified as novice, serial entrepreneur, and portfolio entrepreneurs.
i) Novice Entrepreneur:
A novice is someone who has started their first entrepreneurial venture. Not to be confused with an early starter,
a beginner can also be a 50-year-old with over 25 years of experience in the industry.
ii) Serial Entrepreneur:
A serial entrepreneur is devoted to one venture at a time but ultimately starts many. It is the process of creating that excites the starter.
Once the business is established, the serial entrepreneur may lose interest and think of selling and moving on.
iii) Portfolio Entrepreneur:
A portfolio entrepreneur starts and runs several businesses. It may be a strategy of spreading risk, or it may be that the entrepreneur is simultaneously excited by a variety of opportunities.
Also, the entrepreneur may see some synergies between the ventures.
Functions of entrepreneur
Entrepreneur performs all the necessary functions which are essential from the point of view of establishment and expansion of the enterprise.
a) Idea Generation:
The most significant function is performed by the business owner.
Idea generation is accomplished through perception, insight experiences, education or training, and exposure of the businessperson.
It entails explicitly choosing the right product and project. It is possible to generate ideas by an environmental scan and market research.
It is the responsibility of the business owners to generate the most ideas they can to aid in identifying the most profitable business opportunity that could later be taken up in a commercially viable business.
b.) The determination of objectives:
The next task for the business owner is to define and outline the company’s goals. These objectives must be clearly stated in simple phrases.
The entrepreneurs must be informed about the following factors:
I) the nature and purpose of the business, and the second) the type of business. This is a sign that the company is classified as a manufacturing company,
a service-oriented business, or a trading enterprise to carry out the business in line with the objectives set by the owner.
Fundraising is an additional important task of a business owner. The entire activities of a company are dependent on the financial condition and effective management.
It is the job of the entrepreneur to seek funds both internally and externally. In this respect, it is essential to be aware of the various sources of funds and the requirements for raising funds.
They must have a complete understanding of the various government-sponsored schemes like the PM’s Rozgar Yojana (PMRY), Swarnajayanti Gram Swarojgar Yojana (SGSY), Rural Employment Generation Programme (REGP), and so on.
They receive government support through seeds capital, fixed capital, and working capital to run their business.
They must be aware of financial aid offered by various financial institutions and banks.
d.) Purchase of raw materials:
The other important job for entrepreneurs is to acquire raw materials.
The entrepreneur must identify inexpensive and reliable sources of raw materials.
This will allow him to cut production costs and compete with the best.
e) Procurement of Machinery:
The second task of entrepreneurs is to acquire the machines and equipment needed to establish the manufacturing and service facility.
When purchasing the appliances, it is essential to provide the following information:
i) The details of technology,
ii) Installed capacity of the machines,
iii) Names of the manufacturers and suppliers,
iv) Whether the machines are indigenously made or foreign-made,
v) After-sales service facilities, and
vi) Warranty period of the machinery. All these details are to be minutely observed by the entrepreneurs.
f) Market Research:
The following important function of the entrepreneur is market research and product analysis.
Market research is the systematic collection of data regarding the product which the entrepreneur wants to manufacture.
An entrepreneur has to undertake market research persistently to know the details of the intending product, i.e., the demand for the product, the supply, the price, the size of the target market, etc. while starting an enterprise.
Determination of ownership rights is essential on the part of the entrepreneur to acquire legal title to assets.
g) Determination of Form of Enterprise:
The function of an entrepreneur in determining the form of enterprise is also essential.
The entrepreneur has to decide the form of enterprise based upon the nature of the product, the volume of investment, nature of activities, types of product, quality of product, quality of human resources, etc.
The dominant forms of ownership organizations are sole proprietorship, partnership, joint-stock company, and cooperative society.
h) Recruitment of Manpower:
The entrepreneur has to perform the following activities while undertaking these functions:
i) Estimating the human resources need of the organization.
ii) Laying-down of the selection procedure.
iii) Devising scheme of compensation. iv) Laying down the rules of training and development.
The identified project is to be implemented in a time-bound manner.
i) Implementation of Project:
The entrepreneur has to work on the implementation schedule or the project’s action plan.
All the activities from the conception stage to the commissioning stage are to be accomplished by him following the implementation schedule to avoid cost and time over-run and competition.
Thus, the implementation of the project is an essential function of the entrepreneur.
Benefits of being an Entrepreneur
Here are the top advantages of being an entrepreneur:
1.) Being in Control: The most remarkable thing about being an Entrepreneur is that they are entirely in control of their own life.
He does not need to be accountable to anyone. He is free to take a break anytime he feels that the need to.
He has the power to determine what will happen to his business. Most importantly, no one can fire him.
2.) Better relations with other People: As entrepreneurs are extremely busy, they’ll not have time for other people.
This is why the entrepreneur will not be comfortable with people. He will only be in contact with people of his caliber, and this kind of friendship will last for the rest of his life.
3.) Self-confidence: As entrepreneurs trust themselves more than anyone else, it opens the potential in them.
In conjunction with the immense effort required to complete the job of getting a business in operation and thriving, entrepreneurs are assured of success.
Success breeds successes, which then instills confidence in him.
4.) Returning to society: Giving back to the Society: It’s truly an honor to be given a chance to contribute to the community.
Entrepreneurs create wealth and employment opportunities for people. In this way, the lives of many are impacted and transformed for good.
In giving back to the community, entrepreneurs feel an element of meaning and purpose in their existence that others who are merely accumulating wealth cannot experience.
5) Flexibility: Entrepreneurs can choose to work anytime they wish and for as long as they like to accomplish their business goals in a corporate or in a typical business environment.
The rules regarding the time to work and the speed at which you work are typically established by the company, not by the employee.