An entrepreneur is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks

and the outcome of a product.[note 1] The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to help launch a new venture or enterprise and accept full responsibility for the outcome. Jean-Baptiste Say, a French economist, is believed to have coined the word "entrepreneur" in the 19th century - he defined an entrepreneur as "one who undertakes an enterprise, especially a contractor, acting as intermediatory between capital and labour".[note 2] A broader definition by Say: "The entrepreneur shifts economic resources out of lower and into higher productivity and greater yield."[clarification
needed]

Contents
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1 Leadership attributes 2 Influences, personality traits, and characteristics 3 Types of entrepreneurs o 3.1 Social entrepreneur o 3.2 Serial entrepreneur o 3.3 Lifestyle entrepreneur 4 See also 5 Notes 6 References 7 Further reading 8 External links

[edit] Leadership attributes

The entrepreneur leads the firm or organization and also demonstrates leadership qualities by selecting managerial staff. Management skill and strong team building abilities are essential leadership attributes for successful entrepreneurs. Scholar Robert. B. Reich considers leadership, management ability, and team-building as essential qualities of an entrepreneur. This concept has its origins in the work of Richard Cantillon in his Essai sur la Nature du Commerce en (1755) and Jean-Baptiste Say [note 3] in his Treatise on Political Economy. Entrepreneurs emerge from the population on demand, and become leaders because they perceive opportunities available and are well-positioned to take advantage of them. An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. Joseph Schumpeter saw the entrepreneur as innovators and popularized the uses of the phrase creative destruction to describe his view of the role of entrepreneurs in changing business norms. Creative destruction encompasses changes entrepreneurial activity makes every time a new process, product or company enters the markets.

[edit] Influences, personality traits, and characteristics

The most significant influence on an individual's decision to become an entrepreneur is workplace peers and the social composition of the workplace. Entrepreneurs also often possess innate traits such as extroversion and a propensity for risk-taking.Nanda, R and Sorensen, J (2008) Workplace Peers and Entrepreneurship . According to Schumpeter, an entrepreneur characteristically innovates, introduces new technologies, increases efficiency, productivity, or generates new products or services. An entrepreneur acts as a catalyst for economic change and research indicates that entrepreneurs are highly creative individuals who imagine new solutions by generating opportunities for profit or reward. There is a complexity and lack of cohesion between research studies that explore the characteristics and personality traits of, and influences on, the entrepreneur. Most studies, however, agree that there are certain entrepreneurial traits and environmental influences that tend to be consistent. Although certain entrepreneurial traits are required, entrepreneurial behaviours are dynamic and influenced by environmental factors. Shane and VenKataraman (2000) argue the entrepreneur is solely concerned with opportunity recognition and exploitation; however, the opportunity that is recognised depends on the type of entrepreneur which Ucbasaran et al. (2001) argue there are many different types dependent on their business and personal circumstances. Psychological studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Perceived gender differences may be due more to gender stereotyping. There is a growing body of work that shows that entrepreneurial behavior is dependent on social and economic factors. For example, countries which have healthy and diversified labor markets or stronger safety nets show a more favorable ratio of opportunitydriven rather than necessity-driven women entrepreneurs. Empirical studies suggest that women entrepreneurs possess strong negotiating skills and consensus-forming abilities. New research regarding the qualities required for successful entrepreneurship is ongoing, with work from the Kauffman Foundation forming the statistical basis for much of it.

[edit] Types of entrepreneurs

[edit] 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.[1] 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 non profit 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.

[edit] Serial entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and starts new businesses.[2] In the media, the serial entrepreneur is represented as possessing a higher propensity for risk, innovation and achievement.[3] Serial entrepreneurs are more likely to experience repeated entrepreneurial success. They are more likely to take risks and recover from business failure.[4]

[edit] 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 shareholders.[examples needed] 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. [5] 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.[further explanation needed] Many lifestyle entrepreneurs are very dedicated to their business and may work within the creative industries or tourism industry,[6] 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.[7] Younger lifestyle entrepreneurs, typically those between 25 and 40 years old, are sometimes referred to as Treps. [8]

[edit] See also

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Entrepreneurship education Erasmus for Young Entrepreneurs Factors of production Infopreneur Operational risk Venture capital

[edit] Notes
1. ^ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 6. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDb SolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4. 2. ^ Guide to Management Ideas and Gurus, Tim Hindle, The Economist, page 77, 3. ^ See William J. Baumol, Robert E. Litan & Carl J. Schramm. Good capitalism, bad capitalism, and the economics of growth and prosperity 3 (2007), citing generally Peter F. Drucker. Innovation and entrepreneurship (1985) (attributing coining and defining of entrepreneur to Jean-Baptiste Say, a treatise on political economy (1834)); but see Robert H. Brockhaus, Sr., The Psychology of the Entrepreneur, in Encyclopedia of Entrepreneurship 40 (Calvin A. Kent, et al. eds. 1982), citing J. S. Mill, Principles of political economy with some of their applications to social philosophy (1848). Note that, despite Baumol et al.'s citation, the Drucker book was published in 1986.

[edit] References
1. ^ Harvard Business Publishing Presents: An interview with John Elkington - Key Traits of Social Entrepreneurs.. 2. ^ Business dictionary definition 3. ^ Serial Entrepreneur Quotes 4. ^ Wall Street Journal Online 5. ^ Wadhwa, Vivek. "Is entrepreneurship just about the exit?". http://techcrunch.com/2010/06/12/is-entrepreneurship-just-about-the-exit/. Retrieved 12 June 2010. 6. ^ Peters, M, Frehse, J, Buhalis, D, The importance of lifestyle entrepreneurship: A conceptual study of the tourism industry, PASOS Vol. 7, No. 2 p393-405, 2009 7. ^ Rural Entrepreneurs, Case Studies. "Ecommerce as a business strategy: lessons learned from rural and small town businesses". http://www.ruraleship.org/site/images/research/cp/cs/cs7.pdf. Retrieved 12 June 2010. 8. ^ Goodman, Vivian. "TREPS: The Young Titans of the New Economy". http://www.wksu.org/news/features/familyseries/treps_transcript.html. Retrieved 17 February

Concept of Entrepreneur, Entrepreneurship and Enterprise

Posted Date: 11 Nov 2009 Author: Bhakti Savla

Resource Type: Articles/Knowledge Sharing Member Level: Gold

Category: General

Rating:

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The concept of Entrepreneurship is comparatively new and dynamic. What is Entrepreneurship? "Entrepreneurship can be described as a creative and innovative response to the environment. Such responses can take place in any field of social endeavour business, agriculture, education, social work and the like. Doing new things or doing things that are already being done in a new way is, therefore, a simple definition of entrepreneurship. In this book, however, we shall concentrate on business entrepreneurship. " It would also be advisable to understand the individual qualities of an Entrepreneur this would help us understand the concept better. The following eleven qualities/ attributes are considered to be some of the important ones for a successful entrepreneur on the basis of the research and experience of Behavioral Science Center, Delhi and various other institutions involved in selection of candidates for entrepreneurial development programs conducted by them: a]High level of motivation, b]Moderate Risk-taker c]Self-confident with positive self concept, d]Excellent Leadership qualities e]Good Business acumen f]Managerial competence g]Problem solving attitude h]Flexibility and adaptability i]Realistic approach to planning j]Independence of thought and action k]Ability to perceive opportunities and threats Entrepreneurs are quick to see possibilities for achievement. They are not blinded, as mangers in large, sedate organizations often are, by the in-grown culture in which they are embedded.As we are aware, the new ideas for new products and services often originate in unexpected places. Entrepreneurs are the first one to embark on these innovative ideas. There are several examples such as follows:

1.Credit cards were not invented by banks 2.Instant photography was not started by a large camera manufacturer 3.Large office equipment manufacturer did not create the Xerographic office-copying machine. Entrepreneurs are the people who see the need gap and hence capitalize on the same. An entrepreneur grabs such novel ideas, developed it and pursued its success doggedly with unflagging spirit. Therefore, these people are successful in their venture and are entrepreneurs in the true sense of the word. Thus, entrepreneurs are self-starters and doers who have organize and build successful enterprises.On the other hand we can not call an entrepreneur an opportunist because it is not only the selfish interest that drives him but he is also meets the need of the people.

Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1] According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers." [2] And in recent years has been documented by scholars such as David Audretsch to be a major driver of economic growth in both the United States and Western Europe. Entrepreneurial activities are substantially different depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in order to raise capital to build the business. Angel investors generally seek annualized returns of 20-30% and more, as well as extensive involvement in the business.[3] Many kinds of organizations now exist to support would-be entrepreneurs including specialized government agencies, business incubators, science parks, and some NGOs. In more recent times, the term entrepreneurship has been extended to include elements not related necessarily to business formation activity such as conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship have emerged.

The entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries, but was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics in the last 40 years. In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. In Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation.[4] Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. An alternate description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the construction of a drinking straw. For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horsedrawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept of the entrepreneur being the agent of x-efficiency. Different scholars have described entrepreneurs as, among other things, bearing risk. For Schumpeter, the entrepreneur did not bear risk: the capitalist did.

Some notable persons and their works in entrepreneurship history.

For Frank H. Knight [5] (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. Knight classified three types of uncertainty.
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Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls). Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls). True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other colored balls).

The acts of entrepreneurship are often associated with true uncertainty, particularly when it involves bringing something really novel to the world, whose market never exists. However, even if a market already exists, there is no guarantee that a market exists for a particular new player in the cola category. The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American Economic Association.[6] The entrepreneur is widely regarded as an integral player in the business culture of American life, and particularly as an engine for job creation and economic growth. Robert Sobel published The Entrepreneurs: Explorations Within the American Business Tradition in 1974. Zoltan Acs and David Audretsch have produced an edited volume surveying Entrepreneurship as an academic field of research,[7] and more than a hundred scholars around the world track entrepreneurial activity, policy and social influences as part of the Global Entrepreneurship Monitor (GEM)[8] and its associated reports. Though Entrepreneurs are thought to have many of the same character traits as leaders,[clarification needed] , involve particular psychological dispositions, or operate in purely business spheres of life, recent European theorising on the subject has suggested that, come the era of neo-liberalism and 'big society' politics that promote conceptualising humans as economic agents per se, normal, everyday people usually marginalised from the term 'entrepreneur' are too involved in the very same kind of processes that 'big business', proper entrepreneurs are involved with. Entrepreneurs, and entrepreneurship, as such, might be enacted by anybody, encountering as they do economic uncertainty on an everyday basis.

Contents
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1 Concept of Entrepreneurship 2 Promotion of Entrepreneurship

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3 Financial Bootstrapping 4 Traditional Financing 5 See also 6 References 7 Further reading 8 External links

[edit] Concept of Entrepreneurship

It has assumed super importance for accelerating economic growth both in developed and developing countries. It promotes capital formation and creates wealth in country. It is hope and dreams of millions of individuals around the world. It reduces unemployment and poverty and it is a pathway to prosper. 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 is the process of planning, organising, opportunities and assuming. Thus it is a risk of business enterprise. It may be distinguished as an 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.

[edit] Promotion of Entrepreneurship

Given entrepreneurship's potential to support economic growth, it is the policy goal of many governments to develop a culture of entrepreneurial thinking. This can be done in a number of ways: by integrating entrepreneurship into education systems, legislating to encourage risktaking, and national campaigns. An example of the latter is the United Kingdom's Enterprise Week, which launched in 2004. Outside of the political world, research has been conducted on the presence of entrepreneurial theories in doctoral economics programs. Dan Johansson, fellow at the Ratio Institute in Sweden, finds such content to be sparse. He fears this will dilute doctoral programs and fail to train young economists to analyze problems in a relevant way.[9] Many of these initiatives have been brought together under the umbrella of Global Entrepreneurship Week, a worldwide celebration and promotion of youth entrepreneurship, which started in 2008.
What is meant by entrepreneurship? The concept of entrepreneurship was first established in the 1700s, and the meaning has evolved ever since. Many simply equate it with starting one's own business. Most economists believe it is more than that. To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur's role as an innovator who markets his innovation. Still other economists say that entrepreneurs develop new goods or processes that the

market demands and are not currently being supplied. In the 20th century, economist Joseph Compete (1883-1950) focused on how the entrepreneur's drive for innovation and improvement creates upheaval and change. Compete viewed entrepreneurship as a force of "creative destruction." The entrepreneur carries out "new combinations," thereby helping render old industries obsolete. Established ways of doing business are destroyed by the creation of new and better ways to do them. Business expert Peter Drunker (1909-2005) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity. A quick look at changes in communications from typewriters to personal computers to the Internet illustrates these ideas. Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies. In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. Therefore, government support for entrepreneurship is a crucial strategy for economic development. As the Business and Industry Advisory Committee to the Organization for Economic Cooperation and Development (OE CD) said in 2003, "Policies to foster entrepreneurship are essential to job creation and economic growth." Government officials can provide incentives that encourage entrepreneurs to risk attempting new ventures. Among these are laws to enforce property rights and to encourage a competitive market system. The culture of a community also may influence how much entrepreneurship there is within it. Different levels of entrepreneurship may stem from cultural differences that make entrepreneurship more or less rewarding personally. A community that accords the highest status to those at the top of hierarchical organizations or those with professional expertise may discourage entrepreneurship. A culture or policy that accords high status to the "self-made" individual is more likely to encourage entrepreneurship. This overview is the first in a series of one-page essays about the fundamental elements of entrepreneurship. Each paper combines the thinking of mainstream economic theorists with examples of practices that are common to entrepreneurship in many countries. The series attempts to answer: Why and how do people become entrepreneurs? Why is entrepreneurship beneficial to an economy? How can governments encourage

Types
Idealist

The idealist entrepreneur is the most common type of entrepreneur shown above. He/She likes innovation and enjoys working on something new or creative or something personally meaningful.

Optimizers
The optimizer entrepreneur comes in a close second and is content with the personal satisfaction of simply being a business owner. I think everyone would have some sort of satisfaction being a business owner but if thats what mostly feels important then I guess you fall here.

Hard Workers
The hard workers entrepreneur category includes persons who enjoy putting in long hours to build a larger more profitable business. They like the challenge it presents and of course reap the most rewards if the business turns out to be a multi-million dollar enterprise. Hard work comes with all businesses but as we now see not everyone works hard for the business to grow as this group of entrepreneurs does.

Jugglers
The juggler entrepreneur likes the concept that the business gives them a chance to handle everything themselves. They are usually people with lots of energy and exist on the pressure of meeting deadlines, paying bills and of course making payroll. Who doesnt like pressure? J Last minute deadlines are lovely! Im sure a lot of you have ended up in a situation where the deadline is approaching quickly. Maybe youre a juggler

Sustainers
The sustainers entrepreneur category consists of people who like the thought of balancing work and a personal life. Most often they do not wish the business to grow too large where it will cut into their personal life too much. These guys just need enough to survive. No big hopes and dreams of a multinational corporation or interviews on The Big Idea J So there you have it five categories of entrepreneurs. Ive been trying to figure out which category best describes me, but I think I have attributes of the first four types. I love creativity and innovation so am I an idealist? I think everyone would feel satisfaction as a business owner, a natural sense of pride would always come with entrepreneurship.

I definitely would love to see any business venture I undertake grow as large as it possibly can so then Im a hard worker? Yet I work well under pressure Id say I thrive on it a bit so then Im a juggler. I guess I am hybrid entrepreneur. What type of Entrepreneur are you? So thats it, if you likes this post please subscribe to my rss feed.