The Basic Concept of Entrepreneurship — Entrepreneurship involves establishing a business with the sole aim of generating income. It is the process of identifying a market need and finding ways to proffer solutions to those needs.
The Entrepreneurship concept is quite vast and can be quite tough to comprehend, especially for starters in the business world. In this article, we bring you an overview of the basic concept of entrepreneurship. We would also cover the benefits of entrepreneurship, the types of entrepreneurship, and the basic skills every entrepreneur should have.
What Is Entrepreneurship?
Entrepreneurship involves establishing and managing a business to make a profit. Broadly, entrepreneurship involves creating and extracting economic value. It involves taking the risks and responsibilities that come with starting, developing, and running a business. It is a great way of fostering innovations, job creation, and economic boosts.
Types of Entrepreneurship
Generally, entrepreneurship is categorized into four.
1. Small business entrepreneurship
Most of the entrepreneurship businesses you will see today are small businesses. Small business owners are unlike large-scale business owners; these people aren’t seeking significant profits; instead, they want to earn enough to sustain a decent living.
They usually hire their family members to help them run the business or local employees. The type of businesses they typically run includes grocery shops, hairdressers, plumbers, etc.
2. Large company entrepreneurship
Entrepreneurship considered a large company has a finite number of life cycles. The typical people that run this entrepreneurship are advanced professionals versatile with innovation sustenance. Most of them are among team C-level executives.
Large company entrepreneurship produces goods and services based on their buyer’s likes and demands. Small business entrepreneurs can also upgrade to this stage, especially when they experience tremendous growth or large companies acquire them. The perfect example of this entrepreneurship is Microsoft, Disney, and Google.
3. Scalable startup entrepreneurship
Scalable startup entrepreneurship refers to the process of establishing, growing, and developing a start-up with the aim or potential to expand the business at a rapid pace. This is usually done by leveraging technology.
4. Social entrepreneurship
Social entrepreneurs are business people that are not for profit; instead, they create their products to solve social issues. Their primary aim is to spread humanity. Most of these entrepreneurs open nonprofit organizations to achieve their goals.
The Basic Concept Of Entrepreneurship
Although you will deal with countless people daily, you will experience obstacles, fears, and many more. However, you will earn a high payoff. Mostly, outstanding entrepreneurs are well-versed in their interests and vision about what they want. They already have the skills to establish their businesses and also invest. Below are the basic concept of Entrepreneurship.
1. Interest and vision
The most important factor when it comes to starting a business is interest. Nobody can force you to start a business; you will earn based on your performance, not the time you spend on a business. As an entrepreneur, you must work on the area that interests you, not something someone asks you to do. If not, you will not maintain the ethics required to succeed and may fall.
Your interest will also be the force that will translate the company’s growth vision. Even if the daily activities interest you, it’s still not enough to achieve success unless you turn your interest into an image. The vision must be solid, and also the tool that will help you communicate with your investors and other clients.
2. Multiple skills areas
Even if you have enough interest and vision, it’s still not enough to get you the success you want if you lack entrepreneurship skills. As the CEO of your own company, even if you don’t have any employees, you must possess many skills. For example, if you want to start a business that sells food items, you must at least have a basic knowledge of food classes, nutrition, diet formulation, etc.
You must invest in your company not only financially but emotionally. The investment can be a tangible thing which includes your time, skills, and the reputation you bring to your company. Also, you could invest other valuables such as your money, working tools, etc. Note, if you can’t invest in your company, you shouldn’t expect anybody to invest in it. Afterall you are the leader, you will set an example for people to follow.
4. Delegation and organizations
Although most businesses begin as a single business, the concept of outstanding entrepreneurship is solid and fast growth. This indicates that where necessary, you will need to hire professional people to do some work and invest money in them. This is why you will need task delegation and organization. You must also pay attention to whatever is happening in your company and know the importance of hiring talented people.
5. Risk and rewards
The entire concept of entrepreneurship is created based on risks and rewards. You can measure your risk depending on the amount of money, time, and effort you invest into the business; the risk level is often associated with the reward you will get. For example, you can hire and use other people’s business plans and earn a considerable income. Still, if you take the risk of drafting your business plan with the assumption that things will go according to your plans if things go wrong, you will lose everything, but if something goes right, you will earn a massive profit.
Benefits of Entrepreneurship
Entrepreneurship has long been recognized as an essential part of every country’s economy. It offers many benefits, including
1. Creating job opportunities for people
The biggest reason many people choose entrepreneurship is that they couldn’t find a better job. While creating their business, entrepreneurs are also creating opportunities for other people, especially if it’s a large-scale business they open. Following the COVID-19 pandemic happened in 2020, a lot of people decided to adopt entrepreneurship.
2. Increasing competition and boosting productivity
Most entrepreneurs enter the industry with a mindset of challenging existing businesses. This encourages the existing companies to tighten their belts, increase their productivity, efficiency, and value, and decrease their costs. This competition benefits the economy because businesses will look for ways to improve their products and services. Most new business owners are ambitious and innovative, this will push the old players to enhance their productivity and performance.
3. Creation of new business and market
Every day, entrepreneurs think of ways to develop goods and services to earn more money. Moreover, with how things are changing globally, it’s giving them more ideas of the kind of business they can start, the ones that are trending and will bring them profit. In a saturated market, entrepreneurs will seek to introduce new products, and this will have a positive impact on the economy. Entrepreneurs can create new industries that will become the future growth engine in a country.
4. Adding national income
You might think your positivity won’t have much impact on the community. Still, the truth is, as an entrepreneur, your company will add national income because the products you develop lead to new wealth and new industries. Increasing earnings in a country mean increased spending, and the money that circulates has an incredible impact on a country.
5. Introducing new technology
Some rich people seek help from entrepreneurs to assist them with creative ideas so they can generate income. The driving force for entrepreneurs’ success is innovative ideas, and they are directly contributing to the economy. As an entrepreneur, you have higher chances of introducing new technologies that would contribute positively to the advancement of society.
Skills Every Entrepreneur Should Have
Establishing a business is easy, but growing it to reach a certain stage requires you to have some set of skills, including;
1. Leadership skill
You must have leadership skills that will allow you to communicate with your clients and investors effectively. This skill includes the ability to listen and respect everyone and take advantage of opportunities to learn and grow.
2. Interpersonal communication skills
You must understand that interpersonal communication is essential because it will help increase sales, and employee morale, solve conflicts, etc.
3. Organizational behavior
One of the vital parts of most new businesses is technology. However, you must have the skills to manage people through the different essential approaches.
4. Business Strategy
You must have adequate knowledge of the business industry, markets, and customer preferences. You must be passionate and decisive and be constantly ready to make changes where necessary to maintain your company properly part.
5. Collaboration and business management
As an entrepreneur, you must understand how important being a good team member is and learn how to be a good team leader. You should already know how to create a meaningful relationship with your investors, stakeholders, and every other person in your company.
Entrepreneurship is one of the popular aspects that once you venture into, you will earn a considerable income. It offers many benefits, including increased wealth, productivity, and more. As an entrepreneur, you are helping yourself and the entire community because your business could also be the source of income for many people; you will be introducing new technology, developing new businesses and markets, adding national income, and many more.
Frequently Asked Questions
Can anyone become an entrepreneur?
Yes, anyone can become an entrepreneur. It requires a combination of skills, resources, and knowledge of entrepreneurship to be successful.
What factors can affect the success of entrepreneur?
Some factors that can mitigate against the success of an entrepreneur include competition, market demand, lack of funds, etc.
Byjus.com – what is entrepreneurship?
Cfe.Umich.edu – Four types of entrepreneurship
Small business.chron.com – Good characteristics of an entrepreneur
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