What Is an Entrepreneur?
- Originally Written By: Damir Wallener
- Revised By: John Allen
- Edited By: L. S. Wynn
- Last Modified Date: 29 May 2013
-
Copyright Protected:
2003-2013 Conjecture Corporation
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.
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.
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.
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.
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Discuss this Article
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anon336513
Post 83 |
entrepreneur is accepts risk when starting a new buisness venture |
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anon319122
Post 78 |
What is a lifestyle entrepreneur? |
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anon305988
Post 75 |
What is a social entrepreneur? |
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anon301951
Post 73 |
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! |
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anon293437
Post 71 |
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. |
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anon290619
Post 70 |
How does democracy affect entrepreneurship? |
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anon285560
Post 66 |
What is a social entrepreneur, and what's the difference between a social and a commercial entrepreneur? |
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anon262639
Post 62 |
Can you be an entrepreneur at a young age? |
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rentallease
Post 61 |
There are not enough entrepreneurs today. Everyone just wants to sit on their couches. |
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anon211307
Post 55 |
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. |
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anon191689
Post 54 |
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? |
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anon146604
Post 47 |
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. |
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anon140609
Post 45 |
Entrepreneurship is the way of creativity and innovation. |
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anon128126
Post 44 |
What is the International Society of Entrepreneurs' definition? |
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anon92179
Post 39 |
Entre from the French word "between" as in the organizer between capital and labour or between supplier and customer. |
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anon50977
Post 31 |
Is this plagiarism if i used it (copy/paste) for, let's say, coursework. Moderator's reply: Anytime you use sources that you copy, whether from wiseGEEK or not, that you do not attribute, you are committing plagiarism. Attribution means you must state in your work where you got the information or quote. This holds true for any material you use. If the words aren't yours, you must cite whose words they are. |
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anon45568
Post 29 |
what are the roles and responsibilities of an entrepreneur? |
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anon45145
Post 26 |
what is entrepreneurship? |
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anon43611
Post 22 |
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. |
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anon42680
Post 21 |
oh,okay now i know the meaning of entrepreneur! it is an individual who accepts financial risks and undertakes new financial ventures. |
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anon42297
Post 19 |
my friend is a very successful entrepreneur. perhaps you have heard of him. zachary abraham. |
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argon
Post 13 |
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!
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anon21764
Post 12 |
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 ‘philisophy’ 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 ? Anyways, this is my theory, and criticism is always welcome. More blogs on entrepreneurship coming soon ! BY manik Prasher |
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anon18603
Post 11 |
is an entrepreneur is a death wish in india? |
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anon14542
Post 9 |
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. |
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anon10328
Post 8 |
Is entrepreneurship in india a death wish ???? |
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anon5211
Post 7 |
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. |
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anon1708
Post 2 |
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. |
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anon288
Post 1 |
what is a entrepreneurship |
