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Concept of Entrepreneurship Class Notes 2

Entrepreneurship involves identifying business opportunities and organizing resources to exploit them. It promotes economic growth and reduces unemployment. The document defines entrepreneurs as pulled (motivated by role models) or pushed (forced into it due to circumstances). It also describes social entrepreneurs (who aim to help communities), serial entrepreneurs (who continuously start new businesses), and lifestyle entrepreneurs (who prioritize passion over profit).

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Rodrick Mumba
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84 views

Concept of Entrepreneurship Class Notes 2

Entrepreneurship involves identifying business opportunities and organizing resources to exploit them. It promotes economic growth and reduces unemployment. The document defines entrepreneurs as pulled (motivated by role models) or pushed (forced into it due to circumstances). It also describes social entrepreneurs (who aim to help communities), serial entrepreneurs (who continuously start new businesses), and lifestyle entrepreneurs (who prioritize passion over profit).

Uploaded by

Rodrick Mumba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CONCEPT OF ENTREPRENEURSHIP

Introduction

Entrepreneurship has assumed super importance for accelerating economic growth both
in developed and developing countries. It promotes capital formation and creates
wealth. It is hope and dreams of millions of individuals around the world. It reduces
unemployment and poverty and it’s a pathway to prosperity. Entrepreneurship is the
process of searching out opportunities in the market place and arranging resources
required to exploit these opportunities for long term gains. It may be distinguished as
ability to take risk independently to make utmost earnings in the market. It is a creative
and innovative skill and adapting response to environment of what is real.

What is Entrepreneurship?

Entrepreneurship has been defined by different people in different ways. Some of these
definitions are as follows:

a) Entrepreneurship is considered as the combination of an entrepreneur and an


enterprise. Organizing an enterprise is described as entrepreneurship (an
enterprise being defined as a unit of economic activities).
b) Entrepreneurship can be described as a creative and innovative response to the
environment. Such responses can take place in any field-business, industry,
agriculture, education etc. therefore it refers to a process of doing new things or
doing things that are already being done in a new way.
c) Entrepreneurship is the cycle of activities starting from the conception of the
investment opportunity to successfully transforming the activity into the viable
business reality.
d) Entrepreneurship is the art of creating or developing a business through
innovation, creativity, progressive imagination and risk taking initiatives.

Who is an Entrepreneur?

Some of these definitions are as follows:

a) Going by the definition of entrepreneurship in d) above, an entrepreneur is a


person who upon identifying a viable business opportunity uses innovation,
creativity, progressive imagination and risky taking initiative to start a new
business or develop an existing one.
b) Generally speaking, an entrepreneur is the owner of the business who
contributes the capital and bears the risk of uncertainties in business life.
c) In the present techno-economic context, an entrepreneur is one who:
 Scans the environment for business opportunities;
 Evaluates the business opportunities in the context of the personal
capabilities, strengths and weaknesses;
 Arranges for the capital and obtains the necessary licenses required to
start an enterprise;
 Acts as a guarantor for the financial institutions;
 Acquires or develops technical know-how;
 Starts and runs the unit.

TYPES OF ENTREPRENEURS

Entrepreneurs can be described in different ways. One way is to describe them as


Pulled and Pushed entrepreneurs.

PULLED ENTREPRENEURS

These are those that are attracted into business because of their role models or they
have associated themselves with successful entrepreneurs and attempt to emulate
them. They have a pressing desire to run their own businesses right from the start and
are generally more appreciated to start business. They have a higher success rate.

PUSHED ENTREPRENEURS

These are those that are forced to venture into business by circumstances beyond their
control. For example, retrenched, retired, declared redundant or dismissed. They are
forced to engage in business for purposes of survival and normally conduct through trial
and error. They usually have low success rate.

Entrepreneurs can also be categorized as social, serial or lifestyle entrepreneur.

SOCIAL ENTREPRENEUR

A social entrepreneur is motivated by a desire to help, improve and transform social,


environmental, educational and economic conditions. Key traits and characteristics of
highly effective social entrepreneurs include ambition and a lack of acceptance of the
status quo or accepting the world "as it is". The social entrepreneur is driven by an
emotional desire to address some of the big social and economic conditions in the
world, for example, poverty and educational deprivation, rather than by the desire for
profit. Social entrepreneurs seek to develop innovative solutions to global problems that
can be copied by others to enact change.
Social entrepreneurs act within a market aiming to create social value through the
improvement of goods and services offered to the community. Their main aim is to help
offer a better service improving the community as a whole and are predominately run
as nonprofit schemes. Zahra et al. (2009: 519) said that “social entrepreneurs make
significant and diverse contributions to their communities and societies, adopting
business models to offer creative solutions to complex and persistent social problems”.

SERIAL ENTREPRENEUR

A serial entrepreneur is one who continuously comes up with new ideas and starts new
businesses. In the media, the serial entrepreneur is represented as possessing a higher
propensity for risk, innovation and achievement. Serial entrepreneurs are more likely to
experience repeated entrepreneurial success. They are more likely to take risks and
recover from business failure.

LIFESTYLE ENTREPRENEUR

A lifestyle entrepreneur places passion before profit when launching a business in order
to combine personal interests and talent with the ability to earn a living. Many
entrepreneurs may be primarily motivated by the intention to make their business
profitable in order to sell to other shareholders. In contrast, a lifestyle entrepreneur
intentionally chooses a business model intended to develop and grow their business in
order to make a long-term, sustainable and viable living working in a field where they
have a particular interest, passion, talent, knowledge or high degree of expertise.

A lifestyle entrepreneur may decide to become self-employed in order to achieve


greater personal freedom, more family time and more time working on projects or
business goals that inspire them. A lifestyle entrepreneur may combine a hobby with a
profession or they may specifically decide not to expand their business in order to
remain in control of their venture.

Common goals held by the lifestyle entrepreneur include earning a living, doing
something that they love, earning a living in a way that facilitates self-employment,
achieving a good work-life balance and owning a business without shareholders. Many
lifestyle entrepreneurs are very dedicated to their business and may work within the
creative industries or tourism industry, where a passion before profit approach to
entrepreneurship often prevails.

While many entrepreneurs may launch their business with a clear exit strategy, a
lifestyle entrepreneur may deliberately and consciously choose to keep their venture
fully within their own control. Lifestyle entrepreneurship is becoming increasing popular
as technology provides small business owners with the digital platforms needed to
reach a large global market. Younger lifestyle entrepreneurs, typically those between 25
and 40 years old, are sometimes referred to as Treps.

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