Entrepreneurship

The ability to start, organize and run a business enterprise by overcoming all the hurdles and trying to maximize the profit is known as entrepreneurship. Starting a new venture is the best example of entrepreneurship. The concept of entrepreneurship was introduced by Joseph Alois Schumpeter.

As per economics, entrepreneurship is based on the profit earned with the help of land, labor, natural resources, and capital. It plays a huge role in the development of a country in this continuously changing world and competitive global market.

Who is an Entrepreneur?

A person who can establish, administer, and succeed in a new venture or start-up along with the possibility of loss, to make more and more profit, is called an entrepreneur. The entrepreneurs are known as the innovators who replace the old inventions with new ones for the comfort of society.

Characteristics of Entrepreneurship

The main aim of all the businesses is to earn huge profits and increase the value of the shareholders. Entrepreneurs hire skilled and professional human assets but not all of them are successful. There are certain characteristics that make entrepreneurship successful. Some of them are given below:

• Ability to Take a Risk
  There is always the possibility of having a loss in a new venture. So an entrepreneur must be ready to bear a considerable amount of failure risk. For this purpose, he/she needs enough courage and the ability to evaluate and take the risks, which is the most important quality of an entrepreneur.
• Innovation
  Innovation is one of the most demanding characteristics for successful entrepreneurship to adapt to the changing business environment. Entrepreneurs should be highly innovative to think of new and unique ideas, start a company, and make profits. This innovation or change can be related to the launch of a new product in the market or introducing a process that can do the same work more effectively and efficiently.
• Visionary and Leadership Quality
  An entrepreneur must have a clear vision of his/her start-up and ideas. Other than this, leadership skills are also highly required to guide the employees and bring harmony to the organization to achieve success.
• Open-minded
  An entrepreneur must have the ability to convert every circumstance into an opportunity and use it for the company's benefit. For this purpose, the entrepreneur must be open-minded. For example, the online transaction company Paytm recognized the gravity of demonetization and accept the market requirement of online transactions. To convert this opportunity into benefit, the company expanded its business at a huge level by massive advertisement and understanding the effect of the situation at the right time.
• Flexible
  An entrepreneur should have enough flexibility to adapt to the changing business environment and various situations. A business person should be always ready to make changes in the products and services whenever required as per the customers' tastes and preferences. Such an attitude helps in defeating the competitors and attracting a huge number of customers.
• Know Your Product
  For successful entrepreneurship, the owner of the company should have the proper knowledge about the product and services that the company is offering. The owner should also be aware of the latest trend and changes in the market to fulfill the consumers' demand.

Types of Entrepreneurship

There are four main types of entrepreneurship which include the following:

1. Small Business Entrepreneurship

It includes all the businesses which are run and operated on a small scale, for example, grocery store, carpenter, consultant, electrician, travel agent, plumber, hairdresser, etc. Small businesses are owned by individuals with the help of their family members or local employees. Their amount of profit is not so high and is enough to feed their family not to set up a large-scale business. These entrepreneurs invest in the business by taking small loans from banks, friends, or family.

2. Scalable Startup Entrepreneurship

This entrepreneurship is focused on bringing a positive and big change to the world. Their prime source of capital is those investors who promote the entrepreneurs with unique ideas and plans. Such entrepreneurship encourages scalable business and experimental models so the appointment of the best and most deserving employees can be done. This research-based model demands more venture capital to run the business.

3. Large Company Entrepreneurship

These companies are run and operated at a very large scale and have their branches in different places. They have a defined life-cycle. The main strategy of these companies is to grow and sustain in the market by offering new and innovative products to the customers. In most cases, these products are related to their main product. Large companies are always aware of changes in technology, customer preference, and taste, new competition, etc. These conditions create pressure on these companies to use an innovative idea not only to manufacture the products but also to sell them to add new customers and compete with other sellers. For this purpose, these companies either buy an innovation enterprise or try to manufacture the products internally.

4. Social Entrepreneurship

Social entrepreneurship is aimed at producing those products and services that help in solving the problems and issues of society and fulfilling social needs. These entrepreneurs are focused on serving society not on earning profits.

Importance of Entrepreneurship

Entrepreneurship is very important not only for individuals but also for the whole economy. It helps in increasing the GDP of a country and also improves the Human Development Index (HDI). It promotes technology and modernization in the country. Some of the vital roles played by entrepreneurship are as follows:

• Creation of Employment
  One of the major importance of entrepreneurship is the creation of job opportunities in the economy. It helps the un-experienced and fresher to get an entry-level job not only to improve their resume but also to get experience, training, and skills.
• Innovation
  Entrepreneurship supports innovative ideas and plans. It provides new product ventures, technology, services, market, etc. to the society which led to the development of a nation and increases the standard of living. The innovation saves time, money, and resources.
• Impact on Society
  The large and diversified employment opportunities led to the development of society. It supports the livelihood of the society with higher expenditure on education, health, and sanitization, fewer slums, reduced poverty, etc. In short, entrepreneurship takes a company towards a high quality of community life.
• Increase Standard of Living
  By providing employment opportunities and increasing income, entrepreneurship helps in improving the standard of living of a person. Here, the standard of living means, more consumption of goods and services by an individual or household for the betterment of life.
• Supports Research and Development
  Before launching a new product or service into the market, it is must to do proper research and testing to avoid any market uncertainty. For this purpose, the entrepreneur discharges finance to research institutions and universities which further helps in the promotion of research, general construction, and development in the economy of a country.

Barriers to Entrepreneurship

Every entrepreneur establishes a start-up with the aim of making profits and defeating its competitors. But it is not as easy as it seems. There are lots of issues, problems, or barriers that can arise and affect the smooth running of the business. Some of the major barriers to entrepreneurship are as follows:

• Environmental Barriers
  The environment has an impact on the entrepreneurs also. They can be related to the lack of resources or any other effect of nature. Various environmental barriers are as under:
  • Non-availability of raw materials
  • Shortage of skilled labors
  • Change in technology
  • Poor infrastructure
  • Natural Calamity
• Financial Constraints
  The availability of finance is one of the most common barriers that can affect entrepreneurship. Poor management, delay in decisions, ineffective & inefficient personnel, poor performance, etc. led to a delay in the source of finance.
• Personal Barriers
  There are some personal barriers that can leave negative impacts on entrepreneurship. These barriers are:
  • Lack of confidence
  • Lack of motivation
  • Lack of patience
  • Fear of failure
  • Inability to dream
• Society Barrier
  Sometimes society can also be a hurdle for entrepreneurship. These barriers are as follows:
  • Entrepreneurial behavior
  • Financial instability
  • Socio-cultural norms
• Political Barrier
  

  The political party and political conditions also play a major role in the economy and business of that area. The political barriers include:

  • Government's taxation policies
  • Government's interest in the economic development
  • Government's incentives and concessions