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What is Entrepreneurship? 10 Key Concepts in

Entrepreneurship
What is an Entrepreneurship?
In simplistic terms, entrepreneurship involves establishing and running a
business or multiple businesses, often taking financial risks to gain and grow
profits.
What is an Entrepreneur?
An entrepreneur establishes and invests in businesses, managing the
company and the uncertainties that come with it. But they also likely are the
primary financial beneficiary of the business. Establishing a business is often
referred to as entrepreneurial activity.
What Are the Concepts of Entrepreneurship?
Concept of entrepreneurship refers to the personal and professional qualities
entrepreneurs must possess to succeed in business entrepreneurship. These
qualities include mindset, skillset, and knowledge.
Entrepreneurship is not a single concept but a collection of combined
attributes to accomplish business success. Entrepreneurs can learn and
adopt these attributes through education and training or by developing
innate qualities independently based on best practices
10 Key Concepts in Entrepreneurship
1. Risk-taking Concept
Entrepreneurship is a risky venture because success is not guaranteed. Even
with a great idea, the best team, and a solid business plan, there’s always
the risk of failure.
Although the financial risk associated with starting the business is the most
obvious, security, compliance, and reputational risks are involved too.
Entrepreneurs have to weigh the odds of success against the potential
rewards. If the benefits outweigh the risks, the business idea is worth
implementing.

2. Organization Concept
Entrepreneurs need to be organized to succeed. Running a business entails
engaging in different tasks and projects that have to be monitored and
managed. There are endless meetings, emails, clients, suppliers, and other
tasks that entrepreneurs must handle daily in the workplace.
 To thrive in such a chaotic environment, entrepreneurs must possess
excellent organizational skills. And it should begin with keeping a clean
workspace. A messy desk or home office can make it almost impossible to
focus and do much work in record time.

3. Vision Concept
Vision is important for entrepreneurs because it helps them to understand
where they want to go with their business and what they want it to achieve.
A vision expresses the purpose of the business, its desired end state, the
target market, and why it exists.
It’s an aspirational business statement that sets the tone for everything that
happens in the business. It can take many forms, but typically it’s an idea for
a product or service that addresses a need or solves a problem in the
marketplace.
A potential business owner must learn to see opportunities others might
miss. This step must come first before they think of drafting a business plan
or marketing plan. If you don’t have a business vision yet, you can draw
inspiration from your personal experiences, successful entrepreneurs, and
even scientific research.
Regardless of how entrepreneurs source their inspiration, they must create a
vision that resonates with their personality and passion. The vision should be
realistic and achievable.

4. Creativity Concept
Creativity is one of the most important traits of successful entrepreneurs. It
helps them generate new ideas, develop innovative products, and provide
unconventional solutions to people’s problems.
Entrepreneurs can express business creativity in different forms. It might be
a new product or service, a unique marketing plan, or an improvement on an
existing business model. Whatever it is, the creative energy invested should
help the business to stand out from the competition and be memorable to its
customers.

5. Innovation Concept
Many people use the words creativity and innovation interchangeably but
these terms are not as identical as they seem. Innovation involves
translating an existing idea into a product or service, whereas creativity is
the ability to develop new ideas independently.
 Innovation is a must, whether you’re a business owner or someone still
looking for an idea to implement. When entrepreneurs develop unique
solutions, they capture the attention of their target market, increase brand
recognition, and build a loyal customer base.
True entrepreneurs know that business trends are quickly changing, and they
understand that they must adapt to stay relevant. To enhance innovation,
entrepreneurs must be curious and eager to learn.

6. Delegation Concept
Delegation helps businesses succeed by creating room for more autonomy,
allowing entrepreneurs to focus on the important parts of the business. It
also allows them to take some breaks and reduce the risk of burnout. If left
unchecked, stress can negatively impact productivity, health, and even
relationships.
To manage stress effectively, entrepreneurs must delegate tasks to their
teams. By delegating, entrepreneurs enable employees to take on more
responsibility and control in their roles, allowing them to become more
engaged and invested in their work.

7. Persistence Concept
Persistence is one of the essential skills to becoming a successful
entrepreneur. Starting a company is not easy, especially when it involves
creating a new business model. There will always be setbacks along the way,
and it takes concrete determination to keep implementing a business idea
even when things aren’t going well. Entrepreneurs who give up too soon may
not see the benefits of their hard work.
According to Exploding Topics, 10% of businesses fail in the first year, and
between the second and fifth year, over 70% of them fail. This time is
insufficient for them to gain reasonable experience and network to thrive

8. Accountability Concept
Accountability is important to any entrepreneur because it shows investors
and employees that they are reliable and trustworthy. It also helps their
companies avoid lawsuits and bad publicity. Without accountability, an
entrepreneur may easily get distracted by other alluring projects or interests
with little to no value.
 This entrepreneurship concept also keeps business owners in touch with
stakeholders, team members, and customers, allowing them to receive real-
time feedback and implement course corrections when needed.
Accountability also means keeping an eye on employees. Entrepreneurs
need to monitor employees’ performance and keep track of their work to
avoid lawsuits from unsatisfied customers.

9. Result-Oriented Concept
Being result-oriented is a key attribute of successful entrepreneurs. A result-
oriented entrepreneur is more concerned with the end goal than the process.
In other words, they’re more concerned with getting there than with how
they get there.
This mindset is invaluable for any business owner because it means they’re
willing to take risks and be flexible when necessary. It also allows for a
creativity level that may not be possible when the entrepreneur focuses on
the process.

10. Growth Mindset Concept

Having a growth mindset means seeing failure as an opportunity to learn and
improve rather than a setback. Successful entrepreneurs understand that
success comes from hard work, dedication, and practice rather than natural
talent or token luck.
This understanding assures them they can always grow professionally if they
invest the right amount of effort.
People with a growth mindset believe they can grow their businesses through
positive, incremental actions. They understand that building a business takes
time and effort, but they also know that they can learn along the way.
Possessing a growth mindset can help entrepreneurs overcome barriers like
insufficient funding or expertise. It can also help them overcome anxiety
around risk-taking since failing isn’t an end but an opportunity to learn
something new.
What is an Example of Entrepreneurship?
Examples of entrepreneurship include small business ventures such as
restaurants and retail stores, where individuals have invested their own
capital and reap profits based on their businesses’ success. Several startups
like Facebook, Instagram, and Uber have demonstrated rapid growth
potential. These examples showcase the diverse range of entrepreneurship
from small businesses start-ups.
 Pros and Cons of Entrepreneurship
As discussed above, entrepreneurship is challenging, with many potential
pros and cons to be aware of. Some of the key things tao consider include:
Pros Cons

You may have a high workload, and being an

The flexibility to manage your
entrepreneur may require you to do many
workload and schedule.
different roles in the company.

You risk losing your money if things don’t

The potential profit you could earn.
work out.

It could be motivating and give you a

It could cause you high levels of stress.
sense of achievement.

You may not get a steady income for some

Opportunity to develop new skills.
time.

Key Points
If you want to become an entrepreneur, you have to possess specific traits
and qualities such as those mentioned in this article.
Start with a growth mindset. Acknowledge that although some people are
naturally endowed with entrepreneurship skills, most successful
entrepreneurs are ordinary people who learned their way to the top of their
industries.
You can take a self-assessment test or evaluate your past experiences to
discover your strengths and compatibility with entrepreneurship. To uncover
your weaknesses, think about the things you are uncomfortable doing and
feel insecure about.
You can also find out what your strengths and weaknesses are by talking to
the people closest to you — your friends and family.
Many entrepreneurs stumble along the way and make many mistakes, but
that’s okay. The best entrepreneurs learn from their mistakes and keep
moving forward. And that’s how they become more successful.

Why Entrepreneurship Is Important to

the Economy
Entrepreneurship is often cited as a major engine of economic growth,
particularly in the United States. The actual picture is more complicated,
however. Here's what leading scholars have to say about the importance of
entrepreneurship around the world.

Key Takeaways
 Entrepreneurship can fuel economic growth under the right conditions
and when people become entrepreneurs for the right reasons.
 It's not a magic bullet for growth, however, particularly in less-
developed economies.
 Social entrepreneurship can attempt to deliver both profits and societal
good although often with mixed results.
 The level of economic development of a country can affect whether
entrepreneurship will lead to greater economic growth there.
How Entrepreneurs Fuel Economic Growth
Innovation and entrepreneurship undeniably contribute to economic growth,
making them a particular area of interest for economists and policymakers
worldwide. Some scholars say that the growth created by entrepreneurship
can be exaggerated, however.
Growth from entrepreneurial activity doesn't occur evenly across an
economy. Studies of economic growth have pointed toward an apparent
paradox in which the growth in productivity overall in the U.S. has been only
modest, despite the pervasiveness of entrepreneurship, innovation, and
innovation ideology. According to studies by the National Bureau of Economic
Research (NBER), this is because innovation affects industries very
differently, having a large impact on some sectors of the economy but little
impact on others.4
The link between entrepreneurship and improving societal welfare is
generally positive but it's also complicated. It's influenced by factors such as
regional population, entrepreneurship density, and the specific industry in
which the entrepreneurial activity is taking place, according to the scholarly
literature.5
Some studies have suggested that economic growth may be correlated to an
increase in overall inequality in certain circumstances. Scholars say that in
the U.S. income inequality and economic growth have been linked since the
1970s
"Necessity" vs. "Opportunity" Entrepreneurs
One interesting way to look at entrepreneurship is to divide it into two broad
categories. "Necessity entrepreneurship" is the launching of a business by
people who lack other opportunities. "Opportunity entrepreneurship" is the
 creation of an enterprise in response to a new or previously overlooked
opportunity.
In countries where entrepreneurial activity is largely in the form of necessity
entrepreneurship, it can be a signal that the economy isn't creating enough
jobs or wage opportunities for workers. Scholars say that it may be
connected to slow economic growth or lagging economic development
overall.8

Where Entrepreneurship Aids Growth—and Where

It Doesn't
The level of economic development of a country can also affect whether
entrepreneurship will lead to greater economic growth there.
Driven by the decline in manufacturing and the shift toward service
businesses, industrialized market economies in later stages of economic
development in the 20th century were able to benefit greatly from
entrepreneurship, as economist and management professor Zoltan Acs has
noted.
These countries included the United States and parts of Western Europe,
such as Germany and Sweden. They saw a rise in entrepreneurship
beginning in the 1970s which reversed the previous trends in their
economies when workers favored high-paying jobs with big companies over
self-employment.
Social Entrepreneurship and Economic Progress
With concerns over sustainability, inequality, and other issues gaining
attention, some entrepreneurs have become more interested in the social
consequences of their economic activity.12 The rise of social awareness
among certain entrepreneurs has led to many attempts to use the principles
of entrepreneurship to create a more just and sustainable world.
Social entrepreneurship has been around as a concept since the 1950s and
has become increasingly common. It describes a category of
entrepreneurship that can attempt to both make a profit and solve societal
problems in some cases. It differs from the typical nonprofit model when it
pursues both of these ends simultaneously
What's the Difference Between a Small Business Owner and an
Entrepreneur?
Small businesses generally focus on existing products and services while
entrepreneurs look to introduce new ones. Small business owners can be
entrepreneurial in their own way, however and entrepreneurs may end up as
small business owners if their idea catches on.
 The Bottom Line
The relationship between entrepreneurship and economic
growth is complicated and can vary from one country to
another based on their level of economic development.
Entrepreneurs can accelerate growth in highly developed
economies. They may have less of a positive effect in less
developed ones.
Some entrepreneurial efforts, often referred to as social
entrepreneurship, hold out the promise of new
innovations that will address problems such as climate
change and structural racism, possibly while making a
profit at the same time

The importance and role of an

entrepreneur
An entrepreneur is an individual who sets up and grows a business. They
combine different factors of production (such as – land, labour and capital) to
try and create a new profitable business venture. Entrepreneurs are
themselves an important ‘factor of production’ and an essential aspect of a
functioning free market economy.

Importance of entrepreneurs
 Free market evolution. Entrepreneurs are important in a free market
because they help the market respond to changing prices and consumer
preferences. For example, with the rise in the use of the internet, an
entrepreneur may see the potential to set up a new home delivery service
which uses an app for consumers to buy. Without entrepreneurs, product
markets would become static and be slow to changes in new technology and
trends
Efficiency improvements. A successful entrepreneur may take revenue
from an established business. This can cause ‘creative destruction’ A phrase
used to describe changes in the economy – which in the short-term could
lead to firms going out of business and/or job losses. However, this potential
for creative destruction also creates an incentive for an established business
to adapt and increase their own efficiency. For example, in response to Uber
taxi services, it created an incentive for established taxi-firms to develop
their own apps.
Dynamic efficiency. Entrepreneurs can make radical changes and introduce
new technologies which significantly move on an industry. For example,
Henry Ford’s novel use of assembly lines enabled a drastic cut in the average
cost of producing a motor car. His efficiency savings forced other carmakers
to follow suit.
New markets. Entrepreneurs can often ‘redefine the rules’ of an established
industry. For example, in the 1990s, if you wanted to rent a room, you would
scour newspaper ads and have to make a decision based on 40 words of
text. However, the new service “Spareroom.co.uk” means you can easily
scan through different possibilities and have an opportunity to get to know
your potential flatmate before you move in. This has created a new market
and new service that increases the efficiency of finding a compatible person
to live with.
  A similar new product is ‘Room for help.’ Where people can rent a room
in return for providing a service such as cleaning/babysitting It was
created by Ms Rolando after she came across an advert whilst looking
for a room to rent. It is an example of how entrepreneurs often set up a
business in response to their individual need.
New Gig economy. The new technological economy offers increased
opportunities for entrepreneurs. Low start-up costs give entrepreneurs the
potential to find new niche markets to develop. Many of the current large
technological firms are relatively young and started as small start-ups – often
in someone’s room or garage.
New values. An entrepreneur is not just about price and profit. An
entrepreneur may be motivated to enter an industry to offer a more ethical
product or provide a service to a community. For example, Anita Roddick set
up Body Shop at a time when many cosmetics were tested on animals. Her
new set up eschewed animal testing. It proved a successful business
strategy and it soon became the industry standard. In other situations,
entrepreneurs may take a risk and provide a community service such as a
volunteer led railway – offering steam trains for tourists and locals.
The entrepreneur can sell his new business for more than the costs of inputs
or continued to grow and develop the business.
Motives of entrepreneurs
 Profit. Profit is the biggest incentive. If the business is successful, the
entrepreneur can pay themselves a large dividend or sell the product
 Income. Unemployed may feel self-employment is the best
opportunity to gain an income.
 Overcome a particular need. Sometimes, entrepreneurs set up a
business to deal with a missing market. For example, Louis Braille was
completely blind – this led him to invent the braille system to
communicate and read.
 Non-financial motives. Mixed up with profit motive may be other
objectives
 Ethical stance. An entrepreneur may wish to do a different type
of business, e.g. an organic farm which doesn’t harm the
environment.
 Independence. An entrepreneur may also be motivated by non-
financial factors, such as independence to work for themselves
or to choose the hours and not have to listen to another boss.
 Social entrepreneurship. Entrepreneurs don’t always act alone.
They may form partnerships with other entrepreneurs to create a
stronger business or develop a social enterprise which aims at
serving the community.