Entrepreneur Definition PDF

The word entrepreneur is derived from the French word "Entreprendre" and the German word "Unternehmen", both mean "To undertake". For a long time, there was no equivalent for the term \`\`entrepreneur" in the English language. Three words were commonly used to connote the sense the French term carri...

The word entrepreneur is derived from the French word "Entreprendre" and the German word "Unternehmen", both mean "To undertake". For a long time, there was no equivalent for the term \`\`entrepreneur" in the English language. Three words were commonly used to connote the sense the French term carried: ad venture, undertaker and projector; these were used interchangeably and lacked the precision and characteristics of a scientific expression (Gopakumar, 1995). Hence the term "entrepreneur" did not have any prominence in the history of economic thought. The earliest attempt to invest the concept with some economic concept with some economic content could be traced to the works of the 18th century. The fact that entrepreneurship has a place in the world of economic dynamics and not in the world of economic statistics forces us ultimately to confront the most basic of questions: What is the function of economics? Is it to enable us to understand the foundations of economic life or to predict the course of events that have yet to happen? If it is the former, we must take economic life as it is, with its imperfections, its uncertainties, its risks. If it is the latter, we may confidently jettison certain real-life conditions from our models, but we would be foolish to ignore the costs of doing so. Ultimately the fate of entrepreneurship within the corpus of economic theory depends on the kind of choice economists make. Entrepreneurship. It is mostly discussed as the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychological and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence. Entrepreneurship has become a popular term in recent times and it is a source of innovation, job creation and economic growth, as such it is pivotal to attract the young and the educated to become entrepreneurs but only a smaller number of entrepreneurs can succeed in entrepreneurial business activities. Entrepreneurship is distinct, being a discipline by its own right. Croci (2016). Entrepreneurship is the symbol of business tenacity and achievement. It is a vital source of change in all facets of society However, there is intellectual disagreement whether entrepreneurs are born or made.Entrepreneurship is the act of innovation involving endowing existing resources with new wealth-producing capacity (Drucker, 1985). Kumar and Babu (2018) , entrepreneurship can prove as a one stop solution for addressing the major problems like unemployment and poverty. Every country, whether developed or developing, needs entrepreneurs. Whereas, a developing country needs entrepreneurs to initiate the process of development, the developed one needs entrepreneurship to sustain it. Entrepreneurs should be acclimating and take on themselves to upturns and downturns in the market. Entrepreneurs must be opportunists. But not every new small business is entrepreneurial or represents entrepreneurship. The husband and wife who open another delicatessen store or another Mexican restaurant in the American suburbs surely take a risk. But are they entrepreneurs? All they do is what has been done many times before. They gamble on the increasing popularity of eating out in their area, but create neither a new satisfaction nor new consumer demand. Seen under this perspective they are surely not entrepreneurs even though theirs is a new venture. For example, McDonald's, however, was entrepreneurship. It did not invent anything, to be sure. Its final product was what any decent American restaurant had produced years ago. But by applying management concepts and management techniques (asking, What is "value" to the customer?), standardizing the "product," designing process and tools, and by basing training on the analysis of the work to be done and then setting the standards it required, McDonald's both drastically upgraded the yield from resources, and created a new market and a new customer. This is entrepreneurship. argue that the study of entrepreneurship should be expanded to international markets to investigate the conditions and characteristics that encourage entrepreneurial activity in various countries and regions. It is reasonable to expect that entrepreneurs reflect the dominant values of his or her national culture and national culture has a definite effect on entrepreneurship. Based on economic efficiency theory: enterprise growth, utility produced, informed entrepreneurial decision making will lead to real economic development in the long run as illustrated in figure 1 below: Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-taking, creativity and/or innovation with sound management, within a new or an existing organization. (Commission of the European Communities, 2003). On the other hand, Entrepreneurship is an art (Chang et al, 2015)."Art entrepreneurship is a relatively new topic of research and the focus area is exploring the management process of entrepreneurship such as creativity and autonomy, capacity for adaptability, and creating artistic as well as economic and social value". There are many definitions of entrepreneurship, some of them are seeing entrepreneurship as a process of successful organization, and others define entrepreneurship as building mindset and skills.. Overall, to understand the definition of entrepreneurship is by exploring entrepreneurial skills to accept and perceive the process of entrepreneurship as part of business life and then grow. Entrepreneurship, according to Onuoha (2007), "is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities." If we look a little more closely at the definition of entrepreneurship. we can identify three characteristics of entrepreneurial activity: **1) Innovation.** Entrepreneurship generally means offering a new product, applying a new technique or technology, opening a new market, or developing a new form of organization for the purpose of producing or enhancing a product. **2) Running a business.** A business, as we saw in Chapter 1 \"The Foundations of Business,\" combines resources to produce goods or services. Entrepreneurship means setting up a business to make a profit. **3) Risk taking.** The term risk means that the outcome of the entrepreneurial venture can't be known. Entrepreneurs, therefore, are always working under a certain degree of uncertainty, and they can't know the outcomes of many of the decisions that they have to make. Consequently, many of the steps they take are motivated mainly by their confidence in the innovation and in their understanding of the business environment in which they're operating. But Entrepreneurship as one of the eight key competences that all individuals should have in order to facilitate business creation and innovation and to have a successful professional life; the entrepreneur is seen not only as a person who is capable of taking risks and starting a business but also as an individual who uses his/her skills and characteristics in order to create value in a company. Entrepreneurship is seen as a profit-oriented idea which leads to new company creation, the fast growth of existing companies and gaining a competitive advantage. Entrepreneurship can be perceived as a way of thinking and acting through the personal interest of a given person. Conversely, Entrepreneurship, although it is commonly believed to be an important economic factor contributing to economic growth, is outside the mainstream of economics; therefore a comprehensive, homogeneous theory of entrepreneurship or even its definition do not exist \[e.g. Campbell 1992; Bygrave & Hofer 1991\]. Within the framework of the neoclassical theory of general equilibrium, an entrepreneur does not serve any other aim than a rational, decision-optimization manager. Only a rejection of many assumptions of the general equilibrium theory makes it possible to explain entrepreneurship because it is market disequilibrium which encourages setting up new businesses \[Dean, Meyer & DeCastro 1993\]. Entrepreneurship is indeed regarded as a state of disequilibrium \[Shane & Venkataraman 2000\]. Does this mean that they are completely opposite or do they have anything in common? Is it possible to achieve these two sets of goals simultaneously, to combine the profit and social orientation in one company? If yes, under what conditions? **Table(1): Key Differences Between Entrepreneur and Intrapreneur** ------------------------- --------------------------------------------- ---------------------------------------------------------- **Basis of comparison** **Entrepreneur** **Intrapreneurs** **Workplace position** Owner Employee **Vision** To bring something innovative in the market To increase the brand value of the company in the market **Dependency** Independent to make decisions Seek approval from their superiors **Risks** Bears all the failure and financial losses Taken by the owner of the company **Resources** Gather by them Given by company **Funds** Raised by them Provided by company **Benefits** Received by them Received by company **Working hours** Flexible as per convenience Scheduled by company **approach** Intuitive Restorative ------------------------- --------------------------------------------- ---------------------------------------------------------- **Source:** (Priyanka, 2022) **Table (2): Entrepreneurs, managers and capitalists** +-----------------+-----------------+-----------------+-----------------+ | | **ENTREPRENEUR* | **CAPITALIST** | **MANAGER** | | | * | | | +-----------------+-----------------+-----------------+-----------------+ | **CHARACTERIZED | Discovers and | Capital owner: | Administration | | ** | exploits | shareholders | and | | | opportunities | | | | **BY** | | Controlling | manages | | | A creator who | shareholder | resources | | | initiates and | | | | | motivates the | Passive | An | | | process of | shareholder | administrator | | | change | | | +-----------------+-----------------+-----------------+-----------------+ | **BEHAVIOUR** | Accepts risks | Aversion to | Aversion to | | | | risk taking | risk taking | | | Uses intuition, | | | | | is alert, | Assesses | "Rational" | | | | alternatives | decision- | | | explores new | | | | | business | Choice of | maker. Exploits | | | | venture | | | | Leadership, | | business | | | initiates | assets | | | | | | Creates and | | | new ways of | | maintains | | | acting | | | | | | | competitive | | | Identifies | | advantage | | | business | | | | | opportunities | | Creates trust | | | | | to enhance | | | Creation of new | | | | | Enterprise | | cooperation | | | | | | | | | | Supervision of | | | | | the | | | | | | | | | | administrative | | | | | process | +-----------------+-----------------+-----------------+-----------------+ **Source : (Cuervo, 2022)** **The Seniorpreneur** The senior entrepreneur is often referred to as the: seniorpreneur; latepreneur; third age entrepreneur; grey entrepreneur; late-career, second career or mature-aged entrepreneur. Two lines of argumentation explain the recent surge of interest in senior entrepreneurship(Maritz et al., 2015). One is the prediction that there will be more senior entrepreneurs as populations age. Both older people are \"drawn\" and \"pushed\" toward self-employment. The \"pull\" argumentation contends that mature individuals with the experience, know-how, and financial resources for entrepreneurship prefer self-employment as a late-career option, for instance because it offers a flexible alternative to organisational employment and an appealing work-life balance, or because it generates additional income during or for retirement that enables the individual to maintain their preferred lifestyle(Kautonen,2013).The \"push\" explanation, on the other hand, is predicated on the idea that older workers are being \"pushed\" out of the traditional labour market as a result of things like age-discriminatory hiring, promotion, and training policies as well as a dearth of appealing employment opportunities. (Platman, 2004). The promotion of entrepreneurship in older age groups is a potential policy option to extend the working lives of older people, minimise later-age unemployment, and boost older people\'s social inclusion, which is another reason why senior entrepreneurship is becoming more and more of a hot topic (Kautonen et al., 2008) and, in a lesser degree, increase the economy\'s capacity for innovation by utilising the human and social capital of older people through fresh, creative start-ups. (Botham and Graves, 2009). - **[Enterprise]**, An enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity) European Commission, 2020). - **[Copreneurship]** is a term used to describe a situation where the husband and wife manage the same company. Copreneurship is a branch of the family business(Aladejebi, 2020)**,** are a significant economic and social phenomenon. They can be major organisations or home-based businesses, generate enormous or small revenues, and have couples running them with high or low levels of education. These firms are common and represent a separate type of business(El Shoubaki et al., 2021). - **[Auto-Entrepreneur,]** status applies to natural persons who set up or already possess a sole proprietorship, for the purpose of exercising a commercial or artisanal activity or one of the professions (with the exception of certain activities), as a main or complementary activity, and whose sole proprietorship fulfils the conditions of the micro-enterprise fiscal category, and who opt for VAT exemption(INSEE, 2016). This status offers less demanding regulations for starting up the business, as well as a simplified method for calculating and paying social security contributions and income tax. According to the French Chamber of Commerce auto-entrepreneur is, firstly, the owner of a "solely owned enterprise"; secondly, someone who is independent; thirdly, someone who benefits from a special and simplified form of social security; finally, someone who can opt for a preferential tax regime but also the regime of unlimited liability (Arreola et al., 2017) - **[A Fabian entrepreneur],** in contrast to the typical risk-taker, is one who has \"a little to no interest in bringing innovation to the already existing business model. Until and unless there is a financial crisis and it is necessary to take the risk, he is the one who always chooses to play it safe and remain in the same position. Despite the fact that many renowned business gurus do not view him as a successful entrepreneur---and to many, someone like this isn\'t even an entrepreneur( Najaf , 2022). A Fabian entrepreneur will only integrate new technology into the way the business operates if they have a clear understanding of its potential long-term use. They never make decisions as rapidly as contemporary businesspeople do, instead waiting to see how things pan out for other people (sumit, 2022). The capacity to continuously come up with new product or service ideas, repurpose all available resources, and bring fresh insights from other sources is referred to as having an entrepreneurial mindset. The creation of new products or services, the gathering of resources, their production, and user delivery are all necessary (Lackéus & Williams, 2015; Lackéus, 2016). An entrepreneurial mindset is seen as a comprehensive perspective on coming up with new ideas, assessing opportunities and risks, or launching and operating a business. To maintain the competitiveness of economic organisations and the socioeconomic lifestyle of the population through the creation of value and jobs, it is crucial to cultivate an entrepreneurial mindset(Asenge, et al. 2018). There are two different types of mindset: a fixed mindset and a growth mindset : People who have a fixed mindset consider their skills and capabilities to be fixed characteristics. They live their lives with the intention of always appearing intelligent because they think that intelligence and talent alone are sufficient for success. They take seriously any constructive criticism of their abilities, and they frequently blame others\' achievement on chance. Because they don\'t want to face challenges, fail, or come off as stupid, people with fixed mindsets will tell themselves they aren\'t good at anything. On the other side, those with a growth mindset think that they can improve their skills with commitment, effort, and hard work. They believe that intelligence and talent are only the foundation for success over the long term. People that have a growth mindset are motivated to improve their skills through ongoing education, practise, and training(Neck & Murray. 2017). Figure(5): Growth and fixed Mindset source: (Neck & Murray. 2017). we believe the most accurate meaning of an entrepreneurial mindset is the ability to quickly sense, take action, and get organized under uncertain conditions.6 This also includes the ability to persevere, accept and learn from failure, and get comfortable with a certain level of discomfort. A humanistic perspective on entrepreneurship is supported by the entrepreneurial mindset theory, which affirms the capacity of regular people to think critically and creatively, both individually and collectively, in order to overcome obstacles, find solutions to issues, and improve their surroundings. While not everyone wants to start a business, according to the entrepreneurial mindset theory, we are all born with an inherent proclivity to be innovative and entrepreneurial. This means that we all have an innate desire to solve problems, be involved in meaningful work, have control over our daily lives, and see our efforts result in a meaningful and prosperous life(Ruhe. 2021). Additionally, the Entrepreneurial Mindset Theory asserts that developing these innate tendencies is essential for economic prosperity and improved psychological wellbeing, as well as for adapting and thriving in a world that is changing quickly. **[Entrepreneurship Process]** **Identify an opportunity** Seeing an opportunity where others see disorder, conflict, and confusion is the essence of entrepreneurship. The first stage in creating and managing a profitable business venture is identifying an opportunity. Where others perceive barriers and impossibilities, entrepreneurs spot opportunity. Finding opportunities at the proper time is crucial since it delivers \"first movers advantage\" and puts a business ahead of those that take longer to catch up. Better earnings and quicker economies of scale are two benefits of being the first to market, in addition to product identity and increased market reputation. Entrepreneurs seek challenges even when their businesses are operating smoothly because they are inventive and receptive to new ideas. Similar to Kushagra Bajaj of Bajaj\'s Hindustan, who returned from the United States in 2000 with a master\'s degree in management, he discovered a significant potential in India\'s sugar sector. The demand for sugar is growing, and 100 of the country\'s 553 sugar mills have been declared sick. He seized the chance presented by this issue and elevated Bajaj Hindustan to the top of the Indian sugar industry in 2005. **Opportunity identification/recognition process:** **Preparation:** Preparation is the first stage where entrepreneurs brings past experiences to the opportunity recognition process. As per literature 50 to 90 percent of start-up ideas emerge from a person's previous work experience. 2**. Incubation:** At this various idea might emerge. In this process an entrepreneur is contemplating an idea or a problem. Entrepreneurs consider various options and possibilities through unconventional style. They rely on their intuition for finding ways to the solutions. **3. Insight:** Insight refers to the "eureka" moment. At this point the answer or the solution strikes suddenly or spontaneously. The problem is solved at this stage or the idea becomes available. In this process three different types of insights may occur: i\. Experience of spontaneous identification of business opportunity. Prior research suggests that entrepreneurs often have the experience of being immediately confident that an idea will work ii\. An occasion when a person gets the idea to solve the problem. iii\. A moment when an idea becomes available to you via your social network. Entrepreneurs with a wider network of social contacts will identify more ideas and recognize more opportunities than entrepreneurs with fewer contacts **4. Evaluation:** In this process feasibility analysis is conducted to evaluate the viability of the idea. Insights are assessed for the viability of the concept. **5. Elaboration:** Assuming that a business idea is viable, entrepreneur start working on detailing of those ideas. They can begin business planning and venture creation process. Various plans and programs can be decided to execute the business idea.  **IDENTIFICATION OF BUSINESS OPPORTUNITIES** A good entrepreneur has the quality and skill to select feasible and rewarding opportunity for the establishment of a new venture. His foresight, vision and attitude help him to choose best business opportunity from the available opportunities. Before setting up a new venture an entrepreneur must collect information through various channels like Internet, financial institutions, commercial organisations, friends etc. Business opportunities must be identified very carefully, through different steps. The following are the major steps involved in identification of a business opportunities: 1\. Conception of an idea: When a person or group of persons think about establishing a business. there are several sources to get the product idea. Supply and demand ratio of a product and demands for new product should be analysed. Export-Import (EXIM) Policy of government, Trade Fairs and Trade Journals also suggests the business ideas. Social and economic status of people and changes in consumption nationally and internationally also require the attention of entrepreneurs. 2\. Identifying a Business Opportunity: Opportunity of business may be defined as an attractive and profitable project idea which an entrepreneur is seeking for and accepts such idea as a basis for his investment decision. Two major characteristics of a business opportunity must be highlighted. \(a) Gap between demand and supply i.e., good market scope. \(b) An attractive, acceptable and reliable return on Investment. **[Idea Generation ]** TECHNIQUES OF IDEA GENERATION Idea generation is described as the process of creating, developing an abstract concrete or visual ideas and anyone can participate in generating new ideas. Let us learn the techniques of idea generation. 1) Brainstorming: Brainstorming is a creative problem-solving technique and also an informal approach to business ideas generation. It encourages people to come up with thoughts and ideas that can, at first, seem a bit crazy. The sustainable sincere crazy idea into real business o crafted into original, creative spark even more ideas. The o with as many ideas as sessions, there is no criticism successful results, brainstorming experts. 2\) Brain Writing: Brain writing i everyone in a group activity. It brainstorming, which is verbal spontaneously, brain writing to generate ideas. Brain writing people (usually six) are require forms or cards which are circular duration. 3\) Focus Groups: Focus groups and have been widely used fo moderator to conduct an in-dep of 8-14 recruited participants. 4\) Mind mapping: Mind maps a ideas effectively by association which is used to translate what picture. effort is required for the conversion of opportunities. Some of these ideas can be solutions to a problem, while others can objective of brainstorming is to come up and therefore, during brainstorming, rewards or judgements. For more ng should be conducted with the help of is an idea-generating method that involves t is a kind of written brainstorming. Unlike l and where the ideas are being generated ends to give more time to the participants ng is silent technique where the group of ed to write minimum three ideas on special related to each participant for a pre-specified have been used for a variety of purposes or idea generation. The group usually consists In focus group, the role of moderator is providing direction and leading the group h ideas for new product development. For ed by a car manufacturer to discuss about existing model of its cars. \] **[Market Research]** Research always starts with a question to which we seek an answer using scientific methods. We define the question as a ‗Problem Research is often described as an active, diligent, and systematic process of inquiry aimed at discovering, interpreting and revising facts. Market research is the process of gathering information about customers and the market as a whole to determine a product or service's viability. Market research includes interviews, surveys, focus groups, and industry data analyses. The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors' offerings. There are two types of research you can conduct: primary and secondary. Primary research requires collecting data to learn about your specific customers or target market segment. It's useful for creating buyer personas, segmenting your market, and improving your product to cater to customers' needs. Secondary research is conducted using data you didn't collect yourself. Industry reports, public databases, and other companies' proprietary data can be used to gain insights into your target market segment and industry **Why Is Market Research Important for Entrepreneurs?** Before launching your venture, it's wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product. Performing market research can also help you determine a pricing strategy by gauging customers' willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers. When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you've taken the time to iterate on and improve it signal that your startup could be a worthwhile investment. **The Marketing Research Process** The Marketing Research Process involves a number of inter-related activities which have bearing on each other. Once the need for Marketing Research has been established, broadly it involves the steps as depicted in Figure below: **Define the research problem** The first step in Marketing is to define the research problem. A problem well defined is half-solved. If a problem is poorly defined, a good research design cannot be developed. The decision problem faced by the organisation must be translated into a market research problem in the form of questions. These questions must define the information that is required to make the decision and how this information can be obtained. This way, the decision problem gets translated into a research problem. In order to define the problem more precisely, a n exploratory research can be carried out. Survey of secondary data, pilot studies or experience surveys are some of the popular methods. **[Identify data types and sources]Gather Resources** **Resources can be considered under four categories:** 1\. Financial 2\. Operating 3\. Human 4\. Knowledge **Financial resources** Finance is the life blood of any organization. They are required to start, run and expand the business. Financial resources can be gathered from o Personal savings o Family & Friends o Retained Capital o Commercial Partnerships o Banks o Venture Capital o Government Institutions o Non-Governmental Organizations o Floating Public Issues All the above sources have their own merits & demerits and entrepreneurs weigh each on of them to finally decide which source of finance would be most suitable for the business enterprises. **Operating Resources** The Operating resources are of two Types- Tangible and Intangible. The Tangible Operating Resources include a\) Machineries b\) Raw Material c\) Land & Building d\) Office Equipments etc. The tangible resources involve heavy investments. Hence entrepreneur needs to decide whether he wants to buy, rent or hire-purchase them. Depending on the available with the entrepreneur this decision is taken. The intangible resources are the ones that we cannot see or touch. They include: a\) Companies Image b\) Operating Procedures c\) Transportation d\) Management The intangible resources decide the fate of the company. **3. Human Resource Management** The human resource is the only living & vibrating part of the organization. They are the most important resource to the organization. Over the years the importance of HR has risen. This is due to rising competition, privatization & globalization. Organizations are realizing that it is only the HR that can provide the cutting edge over others. The decisions in relation to HR include a\) Whether to employ permanent or temporary/ casual employees b\) What should be the number & type of Manpower in the organization c\) What should be the procedure for Recruitment & Selection to have the best of the resources available in the market d\) What should be the system for training the employees e\) How should the compensation system be designed f\) What method of performance appraisal be used by the organization g\) What should be the rewards system h\) How could healthy IR be mentained between employee & employer i\) What should be the reward system j\) What method of grievance procedure be adapted **Information Resources** With the advent of information superhighway reliance on information resource has increased multifold. Both the employee and customers are well aware about wide ranges of choices available to them. Organization have to work hard to run an efficient MIS (Management of Information Systems) in order to have active information about customers, markets, external environment and even employees. The information resource needs to be connected with each other in such a way that employees, customers and managers are networked on the real-time basis. This would not only provide the information at the earliest but would also speed up the actions based on the information. **Design data collection forms** Once it has been decided to obtain primary data, the mode of collection needs to be decided. Two methods are available for data collection: 1\. Observational methods 2\. Survey methods Observational methods: As the name itself suggests, the data are collected through observation. An observer observes and records the data faithfully and accurately. This may be suitable in case of some studies but is not useful to observe attitudes, opinions, motivations and other intangible states of mind. Also in this method, the data collected is non-reactive, as it does not involve the respondent. Surveys: It is one of the most common methods of collecting data for primary marketing research. Surveys can be: Personal: The information is sought through personal interviews. A questionnaire is prepared and administered to the respondent during the interview. This is a detailed method of collecting information.  Telephonic: This is suitable if limited information is sought in a fixed time frame.  Mail: Here, the questionnaire is sent out in mail and the response is sought. Timely response cannot be sought in this method as there is no control over the survey. All the people to whom the mail was sent may not respond.