What is an Entrepreneur?

Damir Wallener

An entrepreneur is an individual who accepts some sort of risk — usually financial — in the pursuit of new ventures. The word can apply to any person organizing a new project or opportunity, though it is most often used in a business context. A person in this role is often characterized as innovative, independent, optimistic, creative, and hard-working.

An entrepreneur accepts risk when starting a new business venture.
An entrepreneur accepts risk when starting a new business venture.

Creative Destruction

In some circles, entrepreneurs are described as "creative destructionists" of products and services. Although they may reinvigorate an existing industry by using new methods, whether of production, organization, or structure, they also work to tear down the existing companies and ways of doing business by developing entirely new products or services that make older variations obsolete or irrelevant. An example of this is the creation of the automobile, which slowly made most parts of the horse-drawn carriage industry obsolete.

Most entrepreneurs find that creative networking is an excellent way to reach out to both peers and potential customers.
Most entrepreneurs find that creative networking is an excellent way to reach out to both peers and potential customers.

Risk

Risk is perhaps the primary characteristic of entrepreneurship. This does not necessarily mean that the entrepreneur has an infinite tolerance for risk; instead, it means that the successful entrepreneur is able to determine how much risk is appropriate for a particular endeavor. He or she must accept enough risk to innovate and create, but not so much that the business or activity is not profitable.

Many entrepreneurs work outside of a traditional office environment.
Many entrepreneurs work outside of a traditional office environment.

Financial risk is the most common sort of risk entrepreneurs face. They often have to contribute their own money as well as that of other parties to a particular project. Failure may cost not only their own livelihood and savings, but that of other investors too. If the venture is successful, however, the financial rewards may be great.

Other types of risk exist as well. Entrepreneurs may face social risk if their innovations challenge societal norms, or they may face psychological risk as their hard work affects their or their families' peace of mind. Many find that the independence, notoriety, and feeling of contributing something valuable to society that often come with being an entrepreneur outweigh these dangers — though these rewards are seldom immediately apparent.

Other Characteristics

Additional characteristics of many entrepreneurs include spontaneous creativity and a willingness to make decisions in the absence of solid data. He or she may be driven by a need to create something new or build something tangible. As new enterprises have low success rates, a person in this role must also have considerable persistence. He or she may have the greatest chance of success by focusing on a market niche either too small or too new to have been dominated by established businesses.

Societal Value

Many societies value entrepreneurs and the entrepreneurial spirit. To encourage their activity, governments and other entities may arrange access to inexpensive capital, tax exemptions, and management advice. For example, many universities establish "business incubators" for entrepreneurs hoping to turn leading-edge research into marketable products. The invention of these new technologies can lead to the development of industries that provide jobs and revenue.

Entrepreneurship vs. Business Management

Entrepreneurship is not always the same as running a business, though the two may overlap significantly. Most entrepreneurs are highly independent, which can cause problems when their ventures succeed. In a small company, they are usually able to personally manage most aspects of the business, but this is often not possible once the company has grown beyond a certain size.

Management conflicts can arise when an entrepreneur does not recognize that running a stable company is different from running a growing company. The entrepreneur is usually seeking to innovate and take chances; the manager of a stable company, however, may have a different focus, such as building sales and establishing a brand. The problem is often resolved by the entrepreneur either leaving to start a new venture, being forced out by shareholders, or adjusting to a new set of priorities.

Innovation from Within

This is not to say that large businesses cannot innovate. An intrapreneur is an individual who acts like an entrepreneur but from inside the confines of a large organization or corporation. This person continues to invent and create, but with the focus of either updating an organization's methods or creating new offerings that the organization can promote and provide. The idea is that the company benefits from the creativity and forward-thinking that is characteristic of an entrepreneur, while the innovator gets the support and funding he or she needs to try new things.

Entrepreneurs explore new ventures in many areas.
Entrepreneurs explore new ventures in many areas.

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Discussion Comments

anon973414

The word entrepreneur has been used to describe many different kinds of people. Simply starting a business does not you make you an entrepreneur any more than buying a car makes you Mario Andretti.

As I learned it, an entrepreneur assumes an uninsurable risk, usually with their own money since banks are very hesitant to loan money without some insurance/collateral. You cannot buy "going belly up" insurance.

More often than not, an entrepreneur is not really working for the money, they are working because they love what they do. If you are doing what you love to do, it will show, as opposed to someone just working for a paycheck. Do what you love to do, you will seldom be bored and the money will come on its own.

People recognize passion.

anon944292

Can I become an entrepreneur even though I'm 13?

anon926054

What is the definition of an entrepreneur?

anon352681

What is a social entrepreneur?

anon336513

entrepreneur is accepts risk when starting a new business venture

anon319122

What is a lifestyle entrepreneur?

anon305988

What is a social entrepreneur?

anon301951

Being an entrepreneur sounds like a great career. I would like to understand more about being an entrepreneur so I can start my own business! Sounds like so much fun!

anon293437

I'm a 13 year old entrepreneur and I want to know how to stay on top of my game as far as being a young entrepreneur.

anon290619

How does democracy affect entrepreneurship?

anon285560

What is a social entrepreneur, and what's the difference between a social and a commercial entrepreneur?

anon262639

Can you be an entrepreneur at a young age?

rentallease

There are not enough entrepreneurs today. Everyone just wants to sit on their couches.

anon211307

an entrepreneur is a person who isn't afraid to take risks, knowing he might fail, but also knowing he might make the next microsoft.

anon191689

I have a different view about enterpreneurship this gives me a challenge to understand the thing I am doing now. Is it the same as an entrepreneur or what?

anon146604

Entrepreneurship, in my own understanding, is the ability of a person or group of person taking the risk to implement an idea, herein referred to as market niche, to provide service or products of any kind. This could be a new venture or an existing venture.

The process of entrepreneurship involves not only risk taking but also requires leadership traits, which will be a combination of strategies and character as an entrepreneur. Taking decisive strategies and executive them will separate a successful entrepreneur from an unsuccessful one, it is here that the utilization of character will be most required, the ability to persevere in the renewal and implementation of new and better strategies to turn a bad step to a great movement.

anon140609

Entrepreneurship is the way of creativity and innovation.

anon128126

What is the International Society of Entrepreneurs' definition?

anon92179

Entre from the French word "between" as in the organizer between capital and labor or between supplier and customer.

anon50977

Is this plagiarism if i used it (copy/paste) for, let's say, coursework.

anon45568

what are the roles and responsibilities of an entrepreneur?

anon45145

what is entrepreneurship?

anon43611

first i didn't know what entrepreneurship was, but i know it is all about risk bearing. creativity involved in it. It prepares you to be a better entrepreneur of tomorrow.

anon42680

oh,okay now i know the meaning of entrepreneur! it is an individual who accepts financial risks and undertakes new financial ventures.

anon42297

my friend is a very successful entrepreneur. perhaps you have heard of him. zachary abraham.

argon

Brilliant article about the entrepreneur. I am an entrepreneur based in Manila (although I am english) and about 30% of all employment in the country is due to entrepreneurs.

Without the small business man and entrepreneurs the economy would be severely affected worldwide and every time we do business we contribute to society.

I recommend everyone to take the step to starting their own small business and a road to fun, freedom and sometimes crazy panic!

anon21764

Its been almost 2 months since I took my first step in my dream to become a successful entrepreneur. I knew it was coming, I knew I had to take the step at some time, but it just got catalyzed thanks to the same dream shared by two friends of mine from college. Everything is steady now, and I will keep everyone updated about our venture from time to time.

This is my theory for future of entrepreneurship in India. ( Yes, now I have changed my specialization from writing on ‘philosophy’ to ‘entrepreneurship’. Or actually, now its both ! ) I think with increase in job opportunities in India, more and more people will be inclined to take the path of becoming an entrepreneur .Kind of paradox, isn’t it ?

Let me explain … First of All, the main ingredient for becoming an entrepreneur is your risk-taking ability. It all comes down to how ready are you to take a risk - calculated risk or not.Your every step and decision in your entrepreneurial life will be associated with risk, which will have an impact not only on yourself, but many other people that are associated with your venture.

So, my theory is, when people have more job opportunities, and when they see that situation is not going to be that bad in future, in terms of getting a job, people ( I mean students and population under 30 ) will be ready to take risk and opt for becoming an entrepreneur. I mean at least those who wanted to do this from a long time, or who wanted to take a bit of risk, might start doing it now. Because they know that even if the venture fails or if they don’t succeed, they still have the safer option of doing a job in future.

When people don’t have jobs, they start feeling insecure. There is tremendous pressure, specially on students from lower and upper middle-class families, to get a job and sustain the family.Hence people stop taking risks. They start looking for alternatives, like doing post-graduation, just so that they can get a job after doing post-grad. They feel more pressurized to take up a job.

The other day, I met one senior from our college, who is about to start his MBA this June 2007 .After talking to him for sometime, he expressed his ambition to start a venture, but as he got into a good college, he postponed his step, and might do it after doing MBA.

Recently, more and more IIM-A ad IIM-B students are opting for starting their own venture. Many of the students are not even sitting for campus placements. They know that this is the time to take the step. They are sure that even if it doesn’t work, the job situation in India is getting better, and will improve for some years down the lane.

Everyone have their own reasons to take the step. Some have a burning passion to do it, some want to just try it, and others do it for necessity. But I feel this is the right time to take the step. So why not take the risk, won’t it be worth trying ?

Anyway, this is my theory, and criticism is always welcome. More blogs on entrepreneurship coming soon !

BY manik Prasher

anon18603

is an entrepreneur is a death wish in india?

anon14542

OK... you're right about the mother theresa thing... but there is a huge difference between personal gain for ego/pride/tangible things, and personal gain for internal/spiritual growth or a higher purpose.

anon10328

Is entrepreneurship in india a death wish ????

anon5211

Mother Theresa didn't do what she did for money, she did it partly because she thought she would get some sort of reward in the after life for being a good person. Everyone does what they do for selfish reasons and she was no different, whether its for money, a pat on the back or just to feel good about yourself.

anon1708

This article seems to state that being an entrepreneur is all about receiving some sort of financial gain.

What about the likes of Mother Theresa? Is she considered to be an entrepreneur. I do think so and she did it for the compassion and commitment she holds not for any monetary reward.

anon288

what is a entrepreneurship

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