The nature of entrepreneurship

 Creation Of Enterprise
Entrepreneurship is a process that refers to the creation and running of a new enterprise. It is an
activity under which a person called an entrepreneur starts a new venture using a new idea.
 Economic Activity
Entrepreneurship is an economic activity as it involves creating and running a new business
through optimum utilization of all combined resources. It ensures that all scarce resources are
efficiently used for deriving better returns in the form of profit. 
 Innovation And Creativity
It is the process of discovering new ideas and concepts and implementing them in business
ventures. Entrepreneurship involves bringing innovation in the market by introducing new
products or process that delivers better service.
 Risk Bearing
It is an activity which involves huge risk which every entrepreneur needs to undertake for
starting a venture. New ideas developed and implemented by the entrepreneur are uncertain
and may result in losses.
 Profit
Profit earning is the sole objective of an entrepreneur for undertaking risk. Entrepreneurs start a
new venture with a view to earning profits.
 Gap Filling
Entrepreneurship is a process of recognizing and filling the gap between customer needs and
available products or services. It focuses on removing the deficiencies from the currently
available products to fulfill the needs of customers.
 Organizing Function
It is an organizing function that brings together different factors of production like land, labor,
and capital. Entrepreneurship is concerned with coordinating and managing all resources
engaged within the enterprise.

Importance of Entrepreneurship

 Development Of Managerial Capabilities

Self -Contentment: Entrepreneurs have a high commitment towards their goals and they have the
caliber to take charge of the situation. It gives opportunity to an individual to contribute towards social
goods by his Innovative ways.

Financial benefits and secured life: There is immense probability of reaping financial towards through
better products. Entrepreneurial rewards may surpass the benefits of some of the best paid jobs.

Social acceptance and recognition: it gives prestige and status to the individual and inspire other
innovative minds to take initiatives.
  Creation Of Organizations

Entrepreneurship results into creation of organizations when entrepreneurs assemble and coordinate
physical, human and financial resources and direct them towards achievement of objectives through
managerial skills.

 Improving Standards Of Living

By creating productive organizations, entrepreneurship helps in making a wide variety of goods and
services available to the society which results into higher standards of living for the people. Possession
of Luxury cars, computers, mobile phone, rapid growth of shopping malls, etc. are pointers to the rising
living standards of people, and all this in due to the efforts of entrepreneurs.

 Means Of Economic Development:

Entrepreneurship involves creation and use of innovative ideas, maximization of output from given
resources, development of managerial skills, etc, and all these factors are very essential for the
economic development of a country. It achieves following:

Job Creation: Increased production activities require additional workforce at all levels of management
and for all different streams. Creation of job is a strong indicator of sustainable economic growth.

Self-reliant economy: Small businesses help individuals to grow financially independent. This in turn
lends to the development of a resurgent middle class and a self-reliant economy.

Export Promotion: Entrepreneurs can attempt to penetrate new markets and establish themselves as
global brands.

Definition of Entrepreneur

An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The process of setting up a business is known as
entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas,
goods, services, and business/or procedures.

Entrepreneurs versus Investors

1. An entrepreneur focuses on a new business idea, while an investor may focus on existing business
ideas.

2. The entrepreneur usually approaches an investor to finance the equity of his business, while an
investor approaches an entrepreneur, whom is potentially profitable, to invest money and earn income
from his or her investment.

3. An entrepreneur contributes idea and passion (but may also invest money), while an investor
primarily invests money on the business.
4. An entrepreneur is passionate and dedicated to his idea and would stick to it despite suffering some
losses or period of breakeven, while an investor is practical and reasonable to an idea and may leave it
when losses occur.

5. An entrepreneur is usually optimistic to his business, while an investor is more pessimistic and more
focused on the things that might go wrong in the business.

6. Entrepreneurs view more on the qualitative side of business, while investors view more on the
quantitative or financial side of the business.

7. An entrepreneur, when starting a business, expect many things (both quantitative and qualitative),
while an investor, when investing his or her money on a business, expects more on the ROI (return on
investment).

8. Entrepreneurs don’t necessarily focus on calculating the most approximate figure of return on a
business, while investors usually calculate the return of business and arrive at an approximated or
estimated figure.

9. Entrepreneurs could start entrepreneurship even without money, while money is a necessity for
investors to start investing.

10. Although they can be both owners of a business, an entrepreneur manages the business and knows
it more from its sales and operation to the feelings and behaviors of its employees and customers, while
an investor may only know the business based on the financial and quantitative reports of the business.

Role of Entrepreneurship

1. Initiating and leading business activities

Initiating and growing a business to its maturity is a traditional role for entrepreneurs. As societies
progress, people regularly develop new needs that an entrepreneur can satisfy with their business ideas.
This business idea can provide either services or products that would benefit the community.

Identifying a gap and planning how to address it helps entrepreneurs initiate new business ventures at
any opportunity. They must understand every aspect of the business, including making critical decisions,
setting a good example for employees and resolving conflicts.

2. Allocating employees' duties

From the onset of a business, an entrepreneur needs to allocate their employees' responsibilities
effectively. Hiring qualified and competent staff requires a great deal of care, especially for small
businesses. An entrepreneur is also responsible for organizing a business structure and environment
that helps each employee maximize their potential. The success of a business venture often relies on its
employees' contributions.
Therefore, defining your team's role and responsibilities is a vital entrepreneurial role to exercise for
maximum business productivity. Allocation of duties also minimizes team conflicts, maximizes
production and helps boost employee morale.

3. Forecasting business changes

Most businesses face some kind of uncertainty as they develop. An entrepreneur's role in this aspect is
to anticipate any challenges and address them as quickly as possible. Forecasting is important because it
helps the entrepreneur make decisions such as reducing or increasing stock for a product, procuring
updated software or making credit acquisition decisions.

4. Creating jobs

When an entrepreneur sets up or expands a business, they decide which employees they need to hire.
Entrepreneurs consider factors such as who oversees processes and who can fulfill administrative tasks.
Even when an entrepreneur does not directly employ staff to work in a physical location, they may still
need to consider people who can work as a service provider, a software salesperson or a programmer.

5. Identifying business opportunities

Entrepreneurs regularly seek out opportunities that can grow or boost sales for their business. They
identify which product to add and which market to expand to. An entrepreneur should listen to their
potential clients and find opportunities to develop tailored products that cater to their clients' needs.

By doing a little competitive analysis, an entrepreneur can find out what other businesses in the area are
doing and how they are succeeding. This process might include a physical survey or reading publications
about trends in a specific industry. Talking to customers also makes it easier to identify their frustrations
and experiences, which an entrepreneur can use to improve their business.

6. Creating and sharing wealth

Starting a business involves a network of activities. Whether an entrepreneur runs a small business
operator or an established company, many spend money from savings and gain capital from family,
friends or banks when they start out. Investors often look forward to investing in small but potentially
viable businesses, while lenders grow their own businesses by earning interest from capital extended to
entrepreneurs. The cycle of such fund mobilization can help the local economy build wealth.

7. Improving the standard of living

Economies are used to measure living standards. These living standards can improve through the
developments or services that an entrepreneur brings through their business.

Innovations that can reduce the cost of creating a product also reduces the product's price while
allowing the business to maintain the same profits, which allows customers' to spend less money. When
people save money by acquiring a product at a cheaper price, they can use the savings for other
purposes. This is an indication of an improved standard of living.
8. Taking up and reducing business risk

When entrepreneurs start a business, they spend time analyzing and researching to make sure their
ideas succeed. An entrepreneur's role is to eliminate the risk of business failure by taking measures to
reduce as much risk as possible.

Such measures include bringing competent and committed employees in the company, obtaining
insurance coverage for the most risk-prone segments of the business and getting more investors
motivated to grow the business.

9. Building strategic partnerships

An entrepreneur must create a business environment where partnerships can thrive, which helps their
business succeed. Generating and closing new business leads is an essential entrepreneurial skill. An
entrepreneur should maximize their marketing capacity, spend time talking to qualified potential
partners and regularly call every prospect. Creating strategic partnerships can help entrepreneurs make
better decisions for their company and even obtain more capital.

10. Digitalizing business operations

Because technology evolves so quickly, a business product or service can be rendered obsolete due to
new technology's entry. An entrepreneur is responsible for continuously updating the technology they
use in their business processes or activities. Entrepreneur roles regarding technology include:

 Researching the most recent methods of reducing production cost

 Disposing of equipment that is not improving profitability
 Organizing training for staff to help them familiarize themselves with the latest technological
programs in the market to improve efficiency
 Using the most popular and recent marketing medium to ensure you reach your target group