Entrepreneurship

Entrepreneurship - Types of Entrepreneurship

The activity of setting up a business or businesses, taking on financial

risks in the hope of profit

Who is the father of entrepreneurship? Joseph Alois Schumpeter is

regarded as the father of entrepreneurship. He introduced the concept
of entrepreneurship.

What are the key concepts of entrepreneurship? The 4 key concepts of

entrepreneurship are as follows:

1. Innovation
2. Risk taking
3. Vision
4. Organisation

What are entrepreneur traits? Some of the most important entrepreneurial traits are:

1. Passion
2. Risk taking ability
3. Persisting nature
4. Innovative
5. Leading from the front
6. Ethical in nature

Concept of Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise, along
with any of its uncertainties in order to make a profit. The most prominent example of entrepreneurship is
the starting of new businesses.
In economics, entrepreneurship connected with land, labour, natural resources and capital can generate a
profit. The entrepreneurial vision is defined by discovery and risk-taking and is an indispensable part of a
nation’s capacity to succeed in an ever-changing and more competitive global marketplace.

Meaning of Entrepreneur
The entrepreneur is defined as someone who has the ability and desire to establish, administer and
succeed in a startup venture along with risk entitled to it, to make profits. The best example of
entrepreneurship is the starting of a new business venture. The entrepreneurs are often known as a source
of new ideas or innovators, and bring new ideas in the market by replacing old with a new invention.
It can be classified into small or home business to multinational companies. In economics, the profit that
an entrepreneur makes is with a combination of land, natural resources, labor and capital.
In a nutshell, anyone who has the will and determination to start a new company and deals with all the
risks that go with it can become an Entrepreneur.
What are the 4 Types of Entrepreneurship?
It is classified into the following types:
Small Business Entrepreneurship-
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber, electrician,
etc. These people run or own their own business and hire family members or local employee. For them,
the profit would be able to feed their family and not making 100 million business or taking over an
industry. They fund their business by taking small business loans or loans from friends and family.
Scalable Startup Entrepreneurship-
This start-up entrepreneur starts a business knowing that their vision can change the world. They attract
investors who think and encourage people who think out of the box. The research focuses on a scalable
business and experimental models, so, they hire the best and the brightest employees. They require more
venture capital to fuel and back their project or business.
Large Company Entrepreneurship-
These huge companies have defined life-cycle. Most of these companies grow and sustain by offering
new and innovative products that revolve around their main products. The change in technology,
customer preferences, new competition, etc., build pressure for large companies to create an innovative
product and sell it to the new set of customers in the new market. To cope with the rapid technological
changes, the existing organisations either buy innovation enterprises or attempt to construct the product
internally.
Social Entrepreneurship-
This type of entrepreneurship focuses on producing product and services that resolve social needs and
problems. Their only motto and goal is to work for society and not make any profits.

Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make entrepreneurship
successful. A few of them are mentioned below:

 Ability to take a risk- Starting any new venture involves a considerable amount of failure risk.
Therefore, an entrepreneur needs to be courageous and able to evaluate and take risks, which is an
essential part of being an entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company and earn
profits out of it. Change can be the launching of a new product that is new to the market or a
process that does the same thing but in a more efficient and economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have a clear
vision of his new venture. However, to turn the idea into reality, a lot of resources and employees
are required. Here, leadership quality is paramount because leaders impart and guide their
employees towards the right path of success.
 Open-Minded- In a business, every circumstance can be an opportunity and used for the benefit
of a company. For example, Paytm recognised the gravity of demonetization and acknowledged
the need for online transactions would be more, so it utilised the situation and expanded
massively during this time.
  Flexible- An entrepreneur should be flexible and open to change according to the situation. To be
on the top, a businessperson should be equipped to embrace change in a product and service, as
and when needed.
 Know your Product-A company owner should know the product offerings and also be aware of
the latest trend in the market. It is essential to know if the available product or service meets the
demands of the current market, or whether it is time to tweak it a little. Being able to be
accountable and then alter as needed is a vital part of entrepreneurship.

Importance of Entrepreneurship:

 Creation of Employment- Entrepreneurship generates employment. It provides an entry-level

job, required for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market, technology
and quality of goods, etc., and increase the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and promotes
facilities like higher expenditure on education, better sanitation, fewer slums, a higher level of
homeownership. Therefore, entrepreneurship assists the organisation towards a more stable and
high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of living of a
person by increasing the income. The standard of living means, increase in the consumption of
various goods and services by a household for a particular period.
 Supports research and development- New products and services need to be researched and
tested before launching in the market. Therefore, an entrepreneur also dispenses finance for
research and development with research institutions and universities. This promotes research,
general construction, and development in the economy.

Entrepreneurship Management
Entrepreneurship is a process of creating an enterprise by taking a financial risk in order to get a
profit, whereas management is the art of getting things done through proper planning, organizing,
directing, and controlling.

Management vs Entrepreneurship relationship

The main feature that distinguishes these two words is the entrepreneur is the owner of the company
and bears both profit and loss, whereas, the management operates and runs the company with the
help of various administrative functions

Entrepreneurship Management is the most important part of management, especially for those
enthusiastic people who have an idea of a start-up. It is treated as one of the most important studies
because entrepreneurship is one of the top trending topics of the 21st Century.

Entrepreneurship Management
Further, the following is a brief introduction to the entrepreneurship and its definition, importance and
roles in today’s business world.

Entrepreneurial Ventures

The entrepreneurial ventures are such organizations that explore opportunities through having three
factors in hand, i.e. innovative skills, constant growth and profitability. These three factors are the
main goals of entrepreneurial ventures.

Small Businesses

The Small Businesses are such organizations that are owned, financed and operated independently.
The following are the main features of small businesses.

 Fewer employees under 100

 Rare or not engagement with innovative ideas and modern trends
 Comprise little impact on the industry
 May be remain small by default or choice

Importance of Entrepreneurship Management

There are three things stated below, that define why entrepreneurship management is important.

 Innovation is a process of experimenting, changing, transforming, and revolutionizing an

entrepreneurial activity.
 New Startups can contribute to reshaping the new firms through performing sufficient duties
with innovative practices that may result in growth as well as the profitability of the entire
firm.
 Job Creation is another aspect that states the importance of entrepreneurship. New startups
may require new staff, so the outcome will be much more beneficial for unemployed
applicants.

Entrepreneurial Process

The entrepreneurial process comprises the following major factors.

 Researching the Context: It covers society’s rules and regulations and the realities of new
economy that are associated with the work of entrepreneurship directly or indirectly.
 Identification of the opportunity and analyzing its advantages
 Starting the Venture: It covers researching the feasibility, planning, organizing, and launching
of the ventures.

Venture Management: It refers to managing process, growth and people.

What Do Entrepreneurs Do?

 At first, an entrepreneur gets busy in examining the potential for the venture and the issues
that are associated with the start-up.
  If the venture is completed and running smoothly, the next thing that takes the attention of
the entrepreneur is to manage it in a well-organized order.
 Eventually, the entrepreneur needs to plan and manage the growth of the venture.
 Preparation for Operating Small Business

The preparation for operating a small business requires enough concentration, time, and
commitment. The most important factor in operating a business is to have a business plan, which
should be effective and efficient enough to work appropriately. Regarding start-up, writing a business
plan can be very technical.

Writing a Business Plan

A Business Plan is an official document that is prepared or written by the owner or the entrepreneur.
It covers the vision of the owner, the nature of the business, the types of products or services,
competitor analysis and how the company differs from its competitors, the goals of the company,
strategies to achieve certain goals, production and marketing of the products, the management and
finally, the financial sources of the business.

Besides, further necessary details are also included in the business plan. A Business Plan is written
or prepared for the following purposes:

 To think the real aspects of the business and the aspects that are indirectly associated
 To get financing
 For measuring the progress
 For establishing credibility with others

Aside from all aspects, the plan should also provide a comparison of the abilities of the entrepreneur
with the criteria for the production and marketing of a certain product or service. Further, the
following terms lay in relation to entrepreneurship.

What is Change?

Commonly, change is known as an increment or decrement in the current level of anything, whereas
in the business world, organizational change is termed as an alteration of any sort in structure,
technology or people. Change is in the nerves of the organization by default and cannot be either
eliminated or moved. Rather than removing or eliminating change, one should look for key issues
related to change management.

Forces for Change

The gap for change is created by two forces, i.e. internal forces and external forces.

Internal Forces

The primary origin of the internal forces is from the internal operations of an organization or from the
effect created by external changes.

 Changes in the workforce

 Change in Strategy
  Change in attitude of employees
 New Equipment

External Forces

External forces come from several sources.

 Technology
 The Marketplace
 Government Rules and Regulations
 Economic Changes
 Labor Markets

Stimulating Innovation

For the sake of organizational success and effective entrepreneurship management, innovation is
the most important factor across the marketplace. Sometimes, individual term creativity and
innovation as a similar factor, whereas it is not completely true and even there is a great difference
between them.

 Creativity: – It is an ability to mix multiple ideas in an exceptional way or producing strange

relations between effective ideas.
 Innovation: – It is a process of transforming a creative idea into a product, service or a set of
operations that meets the modern trends.

Stages of entrepreneurship
What is the Process of Entrepreneurship?

The process of entrepreneurship is complex and there are many challenges that entrepreneurs face.
Here, we will discuss the steps of entrepreneurship in order to start a business and the process of
entrepreneurship.

The stages of the entrepreneurship process are like a roller coaster. It starts with a new idea, which is
always exciting and rewarding. And when the idea takes off, you might feel extremely happy and
excited. However, the long-term experience ends up being very different from what you expected it to
be.

After starting the business, you have to put in a lot of hard work and effort to make it successful. You
need to find your target audience, create marketing strategies for your product and establish
connections with influencers in your niche. In addition to these tasks, you also need to keep up with the
business’s cash flow by managing expenses and selling enough products for survival & profits.

The steps of the entrepreneurship process can be divided into four stages: planning, idea generation,
preparing for the next step, and finally executing the plan.
Steps of the Entrepreneurship Process:

1. Idea generation

Idea generation is one of the key skills of a successful business and an important process of
entrepreneurship. It assists in building new ideas and choosing the best one among them.

It is not just about brainstorming and writing down everything that comes to mind. Idea generation
requires some skills to be able to come up with quality ideas at scale. It also requires intelligence to be
able to choose the right idea and move forward that will lead to a profitable venture.

Whether you’re a seasoned entrepreneur or just starting out, generating ideas for your business is an
essential part of the journey. The idea generation process starts with understanding what you do best
and then identifying the gaps in your current business model.

Many entrepreneurs think that idea generation is a natural trait and they can't use anything to speed up
the process. This is not true as there are many tools and tricks that can help to make idea generation
easier. As an entrepreneur, you should know how to leverage these tools and make efficient use of
them.

There are different types of idea generation in the entrepreneurial process, This includes brainstorming
within a group, alone, or through inspiration and observation.

i. Group brainstorming

This is where you can get help in coming up with new ideas by getting input from other people in the
group. It's best if this is done as a team exercise and not by yourself. This type of idea generation is more
effective when there is an agreed-upon criterion and objective to achieve.

ii. Solo brainstorming

When you're working on your own, it's important to be open to new ideas and impulses that come up
during the entrepreneurship processes (you might not get those in a group setting). You need to have
the patience for going through multiple ideas before finding one that really resonates with you.

iii. Creating Ideas from day-to-day activities: Entrepreneurs often go through day-to-day activities and
think about the ideas that they could come up with for their businesses. They might be focused on
brainstorming, networking, or searching for solutions to problems they face in their businesses or
personal life.

iv. Idea generation in creative fields: In creative fields like advertising, graphic design, and web design,
idea generation can lead to fresh new concepts that can be used to create new products or content for
clients.

Generating new ideas is important both for starting a new business or making changes to an existing
organizational structure. It forms an integral part of the complete process of entrepreneurship.
2. Planning

Planning is an essential skill that every entrepreneur must master if they want to run their business
successfully.

A business plan can make the difference between success and failure. It helps businesses in their growth
and also provides insight on what to do in the future when things don't go as planned. It is a roadmap
for a company's future and an important aspect of the process of entrepreneurship.

We've all heard stories of businesses who failed because they didn't have a plan, or of companies that
were launched just one day after getting funding. Business plans should be created with care,
thoughtfulness, and thorough research.

Planning is essential to the success of any business. All small and medium-sized enterprises (SMEs) need
a way to plan their businesses in order to make effective decisions so that they can have a successful
run.

Planning helps an entrepreneur with decision-making and strategizing at various points in time before
launching a business. Entrepreneurs are always on the lookout for new opportunities, risks, and threats
for their businesses. With planning, entrepreneurs can make sure that their profits or losses do not
cause major financial damage or put them out of business.

Many entrepreneurs find it difficult to plan effectively because they don't always have the necessary
skillsets - Often data science skillsets are needed for effective planning but many entrepreneurs lack this
type of skill set, they can always hire an expert or take help from a mentor.

An entrepreneur’s plan is typically composed of four critical parts: an executive summary, an

introduction to the company, a description of competitive advantages, potential markets, and a financial
model. In addition to a business plan, some entrepreneurs also make use of a personal development
plan, which is used to outline goals and milestones that the individual has set in order to reach his or her
personal goals and dreams. A successful personal development plan can help bring success into
everyday life.

There are different types of business plans.

 The first one is the traditional business plan which is a high-level, comprehensive plan that
includes all the information that an investor or potential investor would need to know before
they invest in the company.
 The second type of plan is a company's market-entry strategy which focuses on how to enter a
specific market and compete against competitors in that particular niche.
  The third type of business plan is referred to as the pre-revenue business plan, which looks at
how a company will make profits once it gets established and its revenue levels grow.

Moreover, there are different plans for the size and type of business.

i) Business Plan for Startups - This type is especially for entrepreneurs who have just started their
company or those with no track record in their industry. It provides a summary of the startup’s concepts
and strategy as well as its target market.

ii) Business Plan for Venture Funding - This type includes key financial data about your venture before
you even start your business.

Business plans are a vital part of the process of entrepreneurship. They help entrepreneurs and
investors to evaluate the idea of starting a business, their potentials, and risks.

3. Preparing for Growth

One of the most important factors in a successful business is an innovation which is a key element in the
process of entrepreneurship. Companies that are able to adapt to change and create new products or
services have a competitive advantage over those that don’t. Innovative companies have a competitive
advantage and there are multiple ways that a company can grow.

i. The first is through an increase in revenue by attracting more customers, which may come from
increasing sales or from new customers coming into the company.

ii. Another way is by growing its workforce, which can happen through hiring new employees or
increasing employee productivity and output with new technology.

iii. There is also growth in the market share where a company has a larger share of their industry
compared to others and thus attracts more customers with their products or services.

iv. Organic growth can be achieved by adding new products or services that create demand among your
customers and leads you to profit. You can achieve this through good product development or
marketing strategies.

V. Acquisition is a quick way to grow through mergers which help in diversifying the business or making
a better market penetration strategy for existing ones. Acquisitions also help in understanding the
market better for future expansion and profitability.

The growth of a business depends on its ability to provide value to its customers. As a business grows, it
will eventually find itself in a place where it needs to hire more employees. However, hiring for its staff
is not the only way that a company can grow. It can also grow by hiring freelancers who are experts in
their fields and have experience in the company's industry.

Having a growth plan is a key process of entrepreneurship and can go a long way in fulfilling your dream
of an independent startup.
4. Executing the plan

Executing the plan as an entrepreneur is the key to completing the process of entrepreneurship. It's
important to have a plan that one can easily execute and follow through. Here's how you can do this.

In order to execute the plan, you need a clear understanding of what is your goal and why it matters.
This will help you keep your focus on what’s important in your business and not get distracted by
irrelevant things. To make sure that these questions are answered, try asking yourself: "What is my
goal?" "Why does this matter?" "What is my reward for reaching this outcome?" By doing this, you
ensure that you are always moving forward with your goals and working towards achieving them.

In order to create a plan and execute it efficiently, keep in mind what will happen in the best-case
scenario and worst-case scenario. In order to execute their plan, entrepreneurs need good marketing
skills on their team. They need people who can generate content that is compelling and relevant to their
target audience.

Entrepreneurship and business plan execution are both complex processes. Entrepreneurship does not
require specific skillsets, but it does require a lot of determination and an idea that can be executed.

With the current iterations of the business plan and its execution, the process of entrepreneurship is
more time-consuming than ever before. Business plans are being offered at a high price by consultants
and experts who have never been present in the company’s day-to-day operations or who have no
direct interest in it.

In order to successfully execute a business plan, we should take into account what resources are needed
for the execution of various tasks, assign tasks accordingly, manage resources efficiently, identify weak
spots in the plan and prioritize accordingly. To execute a business plan, start with the end in mind. It is
important to know what you want to achieve in the long term and have an idea of how you will get
there.

Many successful entrepreneurs do not follow a step-by-step process when executing their business
plans. They are creative and rely more on their gut feelings and instincts than on numbers or
spreadsheets.

Executing a plan involves: understanding your brand, understanding your target market, understanding
your competition, setting realistic goals for yourself, setting realistic targets for yourself, and what
resources you need. There are different methods of execution that business plans can take. Some of
these include:
 The traditional approach which is taking a
linear approach to the execution
 The decision tree approach helps
managers and stakeholders understand
how a given decision will impact the plan
and its overall outcome
 Through an in-depth analysis of the
problem, planning, budgeting, and
prioritizing the resources needed for each
step in order to execute it effectively.

Conclusion

The process of entrepreneurship is not easy.

It is long and difficult with many ups and
downs that require a lot of patience and hard
work. It is a natural, continuous experiment
that takes place in a professional
environment.

The process of entrepreneurship starts with

some entrepreneurs being dissatisfied with
the status quo and making changes through
innovation, which then results in
opportunities for others to do the same.
While there are many steps in the
entrepreneurship process, here we focused on the important steps that a person must go through and
how they can be overcome hurdles.

The process of entrepreneurship starts with the idea of an entrepreneur. After coming up with an idea,
they will plan out their business strategy before moving forward with their idea. The next step is to
come up with a product or service before creating or finding a market for it. This process leads to the
creation of a business plan which is used in order to secure funding for their project. Once funding has
been secured and the product has been created, setting up marketing tactics and building distribution
channels for their product can be done in order to gain traction and sales. The last step is creating brand
awareness for their business through marketing campaigns.

As we globalize, the process of entrepreneurship has become more universal than ever before. The
entrepreneurship process stages and steps are the same everywhere in terms of how they manifest
themselves - it just depends on what you do differently and innovates. The process of entrepreneurship
can be difficult and time-consuming. At the same time, it can also be very rewarding for those who are
willing to work hard for their goals. In order to do this successfully, one needs to have a plan - which
includes identifying their strengths and weaknesses as well as understanding their competitors’ strategy.
The process of entrepreneurship is difficult that needs patience, perseverance, and resilience. It will be
worth it in the end though as you are creating your own business and changing the world with your
original idea. In order to ensure success, an entrepreneur needs to identify his/her strengths and
weaknesses, build a plan based on the data from that analysis and execute it. This process is not easy,
but it goes a long way in helping a startup succeed