Concept of Entrepreneur

An entrepreneur is a person who sets up a business or an enterprise. An entrepreneur perceives a

need and then brings together the manpower, materials and capital required to meet that need.
He is one who has the capability of risk-bearing, initiative and skill for innovation. He looks for
high achievements. Entrepreneurs search for change, respond to it and exploit it as an
opportunity. He is a creative thinker, an individual who combines in himself the role of innovator
and risk-bearer. In the similar words, entrepreneur is a person who perceives an idea of
establishing a new business enterprise and then brings together manpower, land, materials,
equipments and arranges necessary capital needed for the business.
The word “entrepreneur” is derived from the French word 'Entrependre' which means
'undertaking the risk of enterprise'. In the early 16 th century, this word was first used by
Frenchman 'Richard Cantillon' who organized and led military expeditions were referred to as
‘entrepreneurs’. He had termed entrepreneur as a person who pays price for re-selling of product.
Later on, entrepreneur was considered as a coordinator who combined all means of production
and managed them.
Different experts have been defining term 'entrepreneur' differently. Some of the definitions
given by experts are as follows:
According to McClelland (1961) "Entrepreneur is one who likes to take reasonable risk, and who has high degree of
need for achievement motivation."
According to Casson Mark, "The definition of the entrepreneur is one of the most crucial and difficult aspects of the
theory. In principle, the entrepreneur could be a planner in a socialist economy, or even a priest or king in a
traditional society. In practice, entrepreneur is closely identified with private enterprise in a market economy."
According to Michael Palner, "The word entrepreneur carries a deluge of definitional and operational ambiguity.
The entrepreneurial function has been identified with “uncertainty bearing”, “co-ordination of production resources”,
“introduction of innovations” and the “provision of capital”.” All definitions are ex post facto: “a person is defined as
an entrepreneur because of something he has done, in terms of function."
According to Richard Cantillon, "The agent who buys means of production at certain prices in order to combine them
into a product that he is going to sell at prices that are uncertain at the moment at which he commits himself to his costs."
According to David Holt, "An entrepreneur is a person who starts a new venture, taking the initiative and risk
associated with it, and does so by creating something new to provide value to the customers."
According to J.B. Say, "The entrepreneur is a person who shifts economics resources out of an area of lower
productivity into an area of higher productivity and greater yield."

From the above definitions, following points can be highlighted:

 An entrepreneur is the individual who bears uncertainty and take risk.
 The spirit of enterprise makes one an entrepreneur.
 Entrepreneur in the sense of organizer combines the various factors of production.
 An entrepreneur is an economic leader who possesses the ability to recognize opportunities
for the successful introduction of a new product, new source of supply, new techniques of
production etc.
 An entrepreneur is a person who recognizes a viable idea for a business product or service
and carries it out. Any person (any age) who starts and operates a business is an entrepreneur.
Exhibit 1.1: Characteristics of Entrepreneurs
Small - Scale Entrepreneurs Large-Scale Entrepreneurs
2 FUNDAMENTALS OF ENTREPRENEURSHIP `

Youngman Middle aged Professionals

Ambitious Professional Specialists
Intelligent Shareholders contribute venture Capital
Energetic Energetic
Minimum education Net-workers
Hard-working Ability to get along with people
Confident Tolerant
Passionate Risk Takers
Dedicated Large Asset Controlled
Practical Engaged in Diversified Activities
Goal-oriented Diversified products
Adaptable Easy access to institutional finance
Aggressive Well connected with Politics Bureaucrats
Innovative Trend setters
Well-mannered Demand creators
Disciplined Corporate Philosophy
Flexible Drive to go ahead
Courageous Self-confident
Skillful Innovative
Creative Adaptable
Progressive Progressive
Patient Pragmatic
Dreamer Visionaries
Intuitive Singleness of Purpose
Imaginative Educated
Achiever A strong need to achieve
Sensitive Loyal
Perceptive Pleasing personality
Facilitator Strategist
Opportunist Compassionate
Dictator People Manager

Source: Desai. V. (2006). Small-Scale Industries and Entrepreneurship

 A person who owns and runs a business.
 Entrepreneurs are the persons who initiate, organize, manage and control the affair of a
business unit that combine the factors of production to supply goods and services.
 An entrepreneur is a person who irrespective of his size and mode of operation tries to
develop and operate his own production, processing or business units.

 Entrepreneur is an innovator, a risk taker, a resources assembler, an organization builder and

so on.