Entrepreneurship
The line "Never be limited by other people's limited imaginations" by Dr. Mae Jemison is enough to inspire the young generation to do something new on their own. This statement promotes entrepreneurship. Entrepreneurship enables entrepreneurs to walk and operate beyond the traditional thinking that might see limitations. Who thought humans would fly in the sky? But the Wright Brothers made the impossible possible. There are a lot of names who saw the problems in different ways and brought solutions that changed the lifestyle of people. From the ground to space the things we are using, are the results of hard work, dedication, persistence, and imagination by entrepreneurs. Throughout this article, we are learning about entrepreneurship and its fundamentals.
What is Entrepreneurship?
Entrepreneurship is the process of changing ideas into commercial opportunities and creating value. Broadly, it is the process of developing or designing opportunities, launching ideas, and running a new business. The new businesses are typically called startups. Jeffry Timmons and Stephen Spinelli suggest that "entrepreneurship is a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced for value creation and capture." The word entrepreneurship is highly involved with risk and uncertainty. Because it enables the entrepreneur to go beyond people's imagination which is full of uncertainty and ambiguity. For example, Elon Musk has faced several criticisms regarding his ventures SpaceX and Tesla. Because most of the people saw his ideas or pursuits as impractical. But he proved them wrong and revolutionized space travel and the electric vehicle industry.
Who is Entrepreneur?
In simple words, entrepreneurs who practice entrepreneurship. Formally, an Entrepreneur is an individual who thinks, reasons and acts to convert ideas into commercial opportunities and to create value. An entrepreneur's mission is to find economic opportunities, convert them into valuable products and services, and have their worth recognized in the marketplace. Entrepreneurs are the primary engine of commercial change in the global economy.
Types of Entrepreneurship
Four major types of entrepreneurship are small business entrepreneurship, scalable startup entrepreneurship, large company entrepreneurship, and social entrepreneurship.
Small Business Entrepreneurship: When entrepreneurs are involved with starting and running small-scale businesses with limited investment, is called small business entrepreneurship. The small businesses are with local shops. Service providers, and restaurants. This kind of business may have low potential to grow at a large scale, but it aims to be self-sustaining and profitable.
Scalable Startup Entrepreneurship: When entrepreneurs are involved with starting and running a business model that can grow rapidly and scale significantly, is called scalable startup entrepreneurship. Entrepreneurs often seek venture capital funding to scale their businesses and aim for large market penetration and high returns.
Large Company Entrepreneurship: This kind of entrepreneurship practice involves with established company. There entrepreneurs are encouraged to focus on innovation and new business development to adapt to changing markets and other external factors. This type of entrepreneurship is often known as intrapreneurship.
Social Entrepreneurship: This kind of entrepreneurship focuses on society's betterment over profit. Entrepreneurs have the focus to develop solutions to social cultural, and environmental issues to reduce the negative impact and improve society's financial stability.
Entrepreneurial Process
The entrepreneurial process encompasses developing opportunities, gathering resources, and managing and building operations, all to create value. Having an idea is not enough for entrepreneurs to become successful with it. Entrepreneurs need to go through these three phases properly.
Develop Opportunities: The entrepreneurs are required to examine the feasibility of the generated idea, screen it as a possible venture opportunity, analyze the similar or related competitive environment, develop a sound business model, and prepare an influencing and convincing business plan.
Gathering Resources: The entrepreneurs are required to gather the intellectual property, physical assets, human resources, and financial sources to move from opportunity to entrepreneurial venture.
Managing and Building Operations: After all these steps, their imperative duty is to implement and operate the day-to-day business operations with an effective business model. An effective business model must generate revenues to cover operating costs in the foreseeable future.
Sources of Entrepreneurial Opportunities
Entrepreneurial opportunities are ideas that have the potential to create value through new, repackaged, or repositioned products, markets, processes, or services. There are four major sources of entrepreneurial opportunities such as societal trends or changes, demographic trends or changes, technological trends or changes, and Crises and "Bubbles."
Societal Trends or Changes: Many entrepreneurial endeavors are commercial reflections of broader societal changes. In 1982, John Naisbitt identified several major megatrends shaping U.S. society and the world. For example, the baby boom generation, population dividend, information-oriented society, etc. Societal, economic, and legal changes may occur within pervasive trends. For example, clothing styles, food behavior, travel and leisure, housing, etc.
Demographic Changes: Demographic changes refer to any change in the population. For example, in terms of average age, dependency ratios, life expectancy, family structures, birth rates, etc. Aging of the so-called baby boom generation (79m in the US from 1946-64 after World War II); public school systems from kindergarten through high school (the 1950s-1960s); infrastructure; aging boomers, wealthy generations, earning and consumption power, etc. are the major generation waves in the United States documented by Harry Dent. Entrepreneurs with the ability to understand demographic shifts, and see the resulting new business opportunities, will write their own success stories.
Technological Trends or Changes: Technological changes or trends have revolutionized the business world. These trends and changes have created a lot of entrepreneurial opportunities for the entrepreneurs. These opportunities enable them to introduce new products, services, and processes that meet the emerging needs and preferences of customers and the market. The 4 Industrial Revolutions reflect how technological changes or trends enhance the entrepreneurial opportunities for entrepreneurs and people. Internet, computer chips, and other technologies are the revolutionary inventions of science that created limitless entrepreneurial opportunities.
Crises and Bubbles: Local, national, and international crises and bubbles have left lessons for the people to learn from it. And that is a big opportunity for entrepreneurs to bring new solutions to the market. The 9/11 terrorist attack on the United States and the 2007–2009 financial crisis are examples of asset and financial "bubbles." These financial crises might lead to Economic downturns and financial collapses, and result in the failure of some businesses, impact on market competition, and create gaps in the market. These periods often spur innovation as entrepreneurs seek to solve new problems and meet changing consumer needs.
Importance of Entrepreneurship
Economic Growth: Entrepreneurship enhances the country's economic development by creating jobs, driving innovation, and stimulating economic activity.
Innovation and Progress: The main motive of entrepreneurship is to innovate new products, services, and other things. It enables entrepreneurs to push the boundaries of technology and business practices.
Competition and Diversity: Entrepreneurship encourages competition in the industry or market. This competition led to better products and services with lower prices and the highest utility for the consumer.
Community and Social Impact: Entrepreneurship not only contributes to the economy but also has a significant impact on community and society through social entrepreneurship and corporate social responsibility. Social entrepreneurship focuses on identifying societal issues and challenges and developing a solution to overcome them.
In essence, entrepreneurship is the dynamic process of creating wealth and value by leveraging innovation and taking calculated risks. It plays a crucial role in driving economic development, technological progress, and social change.