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What is Entrepreneurship | Types, Features, Importance

In this article, we will know what is Entrepreneurship and its types, features and importance. Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise with any of its uncertainties to make a profit. The most prominent example of entrepreneurship is the starting of new businesses. In economics, entrepreneurship involving land, labour, natural resources and capital can generate profits.

What is Entrepreneurship | Types, Features, Importance

What is Entrepreneurship

Entrepreneur is defined as someone who has the ability and desire to establish, administer and succeed a startup venture, along with the risk it deserves, to make a profit. The best example of Entrepreneurship is starting a new business venture. Entrepreneurs are often referred to as the source of new ideas or innovators, and bring new ideas to market by replacing the old one with a new invention.

It can be classified into small or home business for multinational companies. In economics, the profit that an entrepreneur makes comes from the combination of land, natural resources, labor and capital. In short, anyone who has the will and determination to start a new company and who deals with all the risks that go along with it can become an entrepreneur.

Types of Entrepreneurship

It is classified into the following types:

1. Social Entrepreneurship

This type of entrepreneurship focuses on producing products and services that solve social needs and problems. Their only motive and goal is to work for the society and not to make any profit.

2. Scalable Startup Entrepreneurship

This Startup Entrepreneurship starts a business knowing that their vision can change the world. They attract investors who think and encourage out-of-the-box thinking. The research focuses on a scalable business and experimental model, therefore, they hire the best and brightest employees. They need more venture capital to promote and support their project or business.

3. Small Business Entrepreneurship

These professions are a hairdresser, grocery store, travel agent, consultant, plumber, electrician, etc. These people run their own business or own their own business and hire family members or local employees. For them, profit would be able to feed their family and not make a business of 100 million or take over an industry. They fund their business by taking small business loans or loans from friends and family.

4. Big Company Entrepreneurship

These giant companies have defined life-cycles. Most of these companies grow and survive by offering new and innovative products that revolve around their core products. Changes in technology, customer preferences, new competition, etc., create pressure for large companies to create an innovative product and sell to a new set of customers in a new market. To cope with rapid technological changes, existing organizations either buy innovation ventures or attempt to manufacture products internally.

Features of Entrepreneurship

There are certain features that make entrepreneurship successful. Some of them are mentioned below:

1. Risk appetite

Starting any new venture involves a significant amount of failure risk. Therefore, an entrepreneur must be courageous and able to evaluate and take risks, which is an essential part of being an entrepreneur.

2. Visionary and leadership quality

To be successful, the entrepreneur must have a clear vision about his new venture. However, to turn the idea into reality, a lot of resources and staff are required. Here, the quality of leadership is paramount as leaders lead and guide their employees on the right path to success.

3. Open minded

In a business, every circumstance can be an opportunity and can be used to the advantage of the company. For example, Paytm recognized the gravity of demonetisation and acknowledged that the need for online transactions would be high, so it took advantage of the situation and expanded extensively in the meantime.

4. Flexible

An entrepreneur should be flexible and open to change as per the situation. To stay on top, a businessman must be equipped to accept changes to a product and service, as and when required.

5. Know your product

A company owner must know the product offering and should also be aware of the latest trend in the market. It is essential to know whether the available product or service meets the demands of the current market, or whether it is time to change it up a bit. Being accountable and then being able to make changes as needed is an important part of entrepreneurship.

Importance of Entrepreneurship

1. Supports research and development

New products and services need to be researched and tested before they are launched in the market. Therefore, an entrepreneur also distributes finance for research and development with research institutes and universities. It promotes research, general manufacturing and development in the economy.

2. Innovation

It is the center of innovation which provides new product enterprise, market, technology and quality of goods etc., and raises people’s standard of living.

3. Employment generation

Entrepreneurship creates jobs. It provides an entry-level job for unskilled workers required to gain experience and training.

4. Impact on Society and Community Development

If the employment base is large and diverse, the society becomes large. It brings change in the society and promotes facilities like higher expenditure on education, better sanitation, less slum-dwellings, higher level of homeownership. Therefore, entrepreneurship helps the organization towards a more stable and higher quality of community life.

5. Increase in standard of living

Entrepreneurship helps in improving the standard of living of an individual by increasing the income. The standard of living means the increase in the consumption of various goods and services by a family for a particular period.

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