How Much Do You Really Know About Entrepreneurship?

Entrepreneurship: Definition, Perspectives, Elements, History, and Relationship with Small Business

• Entrepreneurship involves the creation or extraction of economic value, viewed as change that entails risk beyond what is normally encountered in starting a business.

• An entrepreneur creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards, and is commonly seen as an innovator and the source of new ideas, goods, services, and business procedures.

• Entrepreneurship includes designing, launching, and running a new business, often similar to a small business, and the capacity and willingness to develop, organize, and manage a business venture along with any of its risks to make a profit.

• A significant proportion of start-up businesses have to close due to lack of funding, bad business decisions, government policies, an economic crisis, lack of market demand, or a combination of all of these.

• Entrepreneurship describes activities on the part of both established firms and new businesses, and accommodates different schools of thought, including the functionalistic approach that focuses on what the entrepreneur does and what traits an entrepreneur has, and the processual approach that immerses in the interplay between agency and context.

• Entrepreneurship is an act of being an entrepreneur, who acts as a manager and oversees the launch and growth of an enterprise, and the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation.

• Entrepreneurs create something new and unique, change or transmute value, and regardless of the firm size, big or small, it can take part in entrepreneurship opportunities.

• The exploitation of entrepreneurial opportunities may include the development of a new product, service, or process, the opening of a new market, the acquisition of a new source of supply of raw materials or components, and the creation of a new organization or industry.

• Entrepreneurship may operate within an entrepreneurship ecosystem that often includes support organizations, such as government agencies, business incubators, science parks, and non-governmental organizations.

• In the 2000s, entrepreneurship was extended to include social entrepreneurship, political entrepreneurship, and intrapreneurship, and entrepreneurial activities differ substantially depending on the type of organization and creativity involved.

• Entrepreneurship has been claimed as a major driver of economic growth in both the United States and Western Europe, and many organizations exist to support would-be entrepreneurs.

• The term "entrepreneur" is often used interchangeably with "small business owner," although entrepreneurship involves the creation of something new and unique, while small business ownership involves the operation of an existing business.

• Small business owners may or may not be entrepreneurs, depending on whether they are creating something new and unique or operating an existing business.Types of Entrepreneurship and Entrepreneurial Behaviors

• The term "entrepreneurship" is often used interchangeably with "small business," but not all small businesses are entrepreneurial ventures.

• Successful entrepreneurs offer innovative products or services and aim to scale up their businesses.

• Historians rank Henry Ford, Bill Gates, John D. Rockefeller, Andrew Carnegie, and Thomas Edison as the top American business leaders.

• Cultural entrepreneurship refers to creative industry activities and sectors and can be divided into three types: "cultural personalities," "tycoons," and "collective enterprises."

• Ethnic entrepreneurship involves self-employed business owners who belong to racial or ethnic minority groups in the United States and Europe.

• Religious entrepreneurship refers to the use of entrepreneurship to pursue religious ends or how religion impacts entrepreneurial pursuits.

• Feminist entrepreneurs apply feminist values and approaches through entrepreneurship to improve the quality of life and well-being of girls and women.

• Project-based entrepreneurs are individuals who repeatedly assemble or create temporary organizations, such as sound recording, film production, and software development companies.

• Social entrepreneurship uses start-up companies and other entrepreneurs to develop, fund, and implement solutions to social, cultural, or environmental issues.

• Biosphere entrepreneurship generates value for the biosphere and ecosystem services.

• Entrepreneurs are commonly seen as innovators and risk-takers who are willing to put their careers and financial security on the line for an idea.

• The ability to work closely with and take advice from early investors and partners (coachability) is considered a critical factor in entrepreneurial success.

• Strategies that entrepreneurs may use include designing individual/opportunity nexus, opportunity perception and biases, and resource leveraging.Entrepreneurs are often overconfident and exhibit an illusion of control when opening or expanding businesses or new products/services. Fauchart and Gruber have classified entrepreneurs into three main types: Darwinians, communitarians, and missionaries. Effective communication is vital for entrepreneurs both within their firm and with external partners and investors to launch and grow a venture and enable it to survive. Entrepreneurial leaders should be charismatic to communicate a vision effectively to their team and stakeholders. There is a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves. The psychological propensities for male and female entrepreneurs are more similar than different. Strategic entrepreneurship is concerned with growth, creating value for customers and subsequently creating wealth for owners. An entrepreneur typically has a mindset that seeks out potential opportunities during uncertain times. Michelacci and Schivardi believe that there is a direct relationship between education and success. Entrepreneurial resources can be divided into two fundamental categories: tangible and intangible resources. "Entrepreneurial Enhancement" refers to the progressive improvement of cognitive, affective, and conative skills in potential entrepreneurs or existing ones using appropriate neurotechnologies.Bootstrapping: Methods, Financing, and Predictors of Success

• Entrepreneurs often "bootstrap-finance" their start-up rather than seeking external investors from the start.

• Obtaining equity financing requires the entrepreneur to provide ownership shares to the investors.

• Bootstrapping sees it as "a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors".

• The majority of businesses require less than $10,000 to launch, which means that personal savings are most often used to start.

• Bootstrapping entrepreneurs often incur personal credit-card debt.

• Bootstrapping methods include personal savings, credit cards, borrowing from friends and family, factoring, and microloans.

• Private equity options include angel investors, venture capital, and private placement of securities.

• Debt options open to entrepreneurs include bank loans, lines of credit, and microloans.

• Grant options open to entrepreneurs include government grants and research grants.

• Studies fall into two camps: the first camp finds that taxes help and the second argues that taxes hurt entrepreneurship.

• Factors that may predict entrepreneurial success include prior experience, passion, adaptability, and resilience.

• A strong social network, access to resources, and a supportive environment are also predictors of success.