What is Entrepreneurship?

The word ‘entrepreneurship’ refers to the process of setting up a new venture and battling out all the risks with the motive of earning profit. It involves investment, an arrangement of resources such as labor, machinery, raw material, and proper management of those resources to manufacture products in the desired manner.

Everything is done with the aim of running the enterprise in the best possible way. New challenges are accepted which pave the way for the success of the enterprise.

Importance of Entrepreneurship

As you already know who an entrepreneur is and what entrepreneurship means, you should understand their importance. Entrepreneurs are looked upon as an asset to the economy of a country.

Not only that, but they are also bringing a sea change in the lives of people with their innovative products and services. They add value, bring happiness, and create jobs.

Just imagine, if there were no new businesses mushrooming around, where would people look for job openings?

Here are the top reasons why there is a need for entrepreneurs,

1. They set up new businesses and create jobs

Entrepreneurs set up new enterprises and that opens avenues for employment. This can have a trickle-down effect that is in favor of the economy of any country for that matter. As a section of the society flourishes, it passes it on to the other classes.

On similar lines, when one particular business sector gets benefitted, it is quite obvious that it would be advantageous for others as well. It can be undoubtedly said that the success of one entrepreneur can have a massive impact on the economy of any nation.

2. They contribute to the nation’s income

New ventures generate wealth and that directly has an impact on the nation’s income. With their off-beat products and services, entrepreneurs develop new markets which means the generation of new wealth.

A business owner who manages to earn really well from his business would undoubtedly pay more tax to the government which results in more revenue in the national treasury!

3. They bring social changes

It has been clearly witnessed that by providing unique products and services, most entrepreneurs are able to help people move away from obsolete methods.

They get to experience a better life with more freedom to make choices. There have been so many startups/businesses that have been able to meet the needs of most people and have made life easier for them.

All the innovation has definitely gone down well with people as they can now do things that are more important without having to worry about basic stuff. What was looked upon as luxury a while ago is now something you can’t live without.

The best example of this would be the smartphone! It has left an impressive impact on the entire human race!

4. Helps in the development of the community at large

The chances are high that an entrepreneur will support a venture rolled out by an individual who has the same mental wavelength. Apart from businesses, support is extended to community projects and charities.

It is not a hidden fact that big names like Bill Gates put their wealth to good use by supporting causes such as public health.

Types of Entrepreneurship

1. Small business entrepreneurship

Small businesses form a major chunk of businesses globally. In the US alone, 99.7% of them fall into this category. Though they don’t make huge profits, they are known to provide employment to more than half of the non-governmental workers.

Whatever they earn is just enough to help them support their family. Funding is usually from their kith and kin and small business loans.

The best examples of small business entrepreneurship would be running a grocery store, having a hairdressing salon, or offering services as an electrician, plumber, or carpenter.

2. Scalable Startup Entrepreneurship

This type of entrepreneurship has individuals who set up their company based on a vision that they believe can bring a lot of changes to the lives of people. These businesses are funded by venture capitalists and the entrepreneurs are keen on hiring employees with top-notch skills.

They usually find a business model that can be repeated and is scalable i.e. meant to grow. However, scalable startups are not that common and form only a fraction of all businesses. The reason is the high amount of risk involved.

Nevertheless, some have dared to explore it and managed to build their castles. The best examples of scalable startups are Facebook, Uber, and the like.

3. Large Company Entrepreneurship

This type of entrepreneurship is based on the concept of further growth of already well-established companies. This is done by accepting new ideas and providing products that are advanced variants of the existing core products of the company.

The need for new products arises due to changing customer preferences, advanced technology, and new competitors in the market. Large companies tend to achieve this by acquiring companies that are quite innovative or by partnering up with them.

Classic examples of large company entrepreneurship are giants like Google, Samsung, and Microsoft.

4. Social Entrepreneurship

Social entrepreneurship is a type of entrepreneurship that aims at serving the society. The entrepreneur is keen on developing products and services that resolve social problems and meets the needs of society.

The goal here is not to earn profits and become wealthy but to do something for the betterment of the world. Such organizations can be non-profit, profit, or hybrid.

Examples of social entrepreneurship include microfinance institutions, educational programs, providing banking services in underserved areas, and helping children orphaned by epidemic disease (source)

So, we have seen the importance of entrepreneurship and its different types. Let’s move on and see what is needed in terms of marketing elements to make a business reach new heights.

What is the difference between an Entrepreneur and Entrepreneurship?

A person who has a unique idea and works to shape it up in order to meet the requirements of the society at large is an entrepreneur.

Entrepreneurship, on the other hand, is a process of establishing an enterprise with the aim of earning profit. As already discussed above, it about facing risks and challenges and giving a tangible shape to one’s dreams.

There are plenty of individuals who have mustered up the courage to think out of the box and most of them have been able to taste success.

Some of the famous names are Bill Gates, Jeff Bezos, and Mark Zuckerberg. They have been literally able to carve a niche for themselves.

While an entrepreneur is an individual who makes an effort to convert an idea into reality, entrepreneurship is the process that helps shape up the idea.

An entrepreneur can be viewed as a person who develops the business idea and takes up the responsibility of working towards materializing the idea. He or she is capable enough of taking the initiative and the risk involved in the process.

Entrepreneurship is a process that involves developing a business plan, raising funds for it, and working towards achieving the desired end result.

The Bottom line

Entrepreneurship is important for the society and economy of any nation as it adds to creates jobs, adds to the country’s income and brings changes to the community. No matter at which scale the entrepreneur works, it does make a difference.