Entrepreneurship

Difference Between Entrepreneur And Entrepreneurship With Examples

entrepreneur and entrepreneurship

An entrepreneur is a person that decides and works accordingly to start a new business. On the other hand, the word entrepreneurship is used to describe the process that the entrepreneur follows to start a business, manage the business, and thereby achieve success with the business. In this article, we will learn in detail about the major differences between entrepreneur and entrepreneurship.

In the first section, we will discuss the terms entrepreneur and entrepreneurship. Then you will learn about the major differences between the terms. Finally, we will share with you the major myths associated with entrepreneur and entrepreneurship. Hence, to find out more about these interesting terms, read on through to the end of the article.

Who Is An Entrepreneur?

Who Is An Entrepreneur

According to Investopedia,

An entrepreneur is an individual who starts and runs a business with limited resources and planning and is responsible for all the risks and rewards of their business venture. The business idea usually encompasses a new product or service rather than an existing business model.”

With the help of these entrepreneurial ventures, entrepreneurs try to achieve high returns despite having high market uncertainty. One of the most notable aspects of an entrepreneur is that the individual is willing to take risks in regard to financial security and career. They spend their time and capital on something that is uncertain.

These individuals know how to arrange for raw materials, investments, necessary capital, manufacturing locations, office spaces, and human resources. They also know how to make optimum use of those resources to bring out the best outcome for business. Since the entrepreneur carries most of the risks associated with the business, therefore the entrepreneur enjoys the most amount of rewards at the time of success too.

Read More: What Are The Different Types Of Entrepreneurship? – Take A Look

What Is Entrepreneurship?

What Is Entrepreneurship

Entrepreneurship is the process that entrepreneurs take to build their businesses and achieve success while making a positive impact on society. They create and manage business ventures to get access to better finances. This process involves identifying the best opportunities in the market and bringing new ideas and innovations to provide market solutions.

According to GeekForGeeks.org,

This (Entrepreneurship) requires a unique blend of skills and qualities, such as innovation, risk-taking, creativity, and resilience. Successful entrepreneurs are known for their ability to adapt to changes in the market, take calculated risks, and persevere through challenges and setbacks.

Entrepreneurship includes creating an applicable business plan, raising capital for the business, bringing new ideas to create products and services, and actually creating those products with the help of resources. Apart from that, it also includes managing the resources and overseeing the operations of the business on a day-to-day basis.

According to Investopedia,

Entrepreneurial ventures generally impact economies and communities in a significant manner, which also results in a cascading effect on other sectors, like job creation. Small businesses are more limited in this perspective and remain confined to their own domain and group.”

Hence, you can understand how much entrepreneurship is important for society and the economy. This is because entrepreneurs, with their skills and competencies, help in creating more wealth for the economy, provides job opportunities, and create a culture of innovation. Although entrepreneurship typically relates to small business, it can still be applied to any organization.

Entrepreneur And Entrepreneurship: Major Differences

Entrepreneur And Entrepreneurship Major Differences

The following are the major differences between entrepreneur and entrepreneurship:

1. Meaning

An entrepreneur is a person, and entrepreneurs are a group of people who come up with an innovative idea. They try to then try to convert that idea into reality while bearing various risks. 

On the other hand, entrepreneurship is the activity through which entrepreneurs take steps, where the individuals start their businesses. There they offer products and services to a target market where there is demand, and in return, they earn profits.

2. Decisions

Entrepreneur makes major decisions about their business, and the decision is for the creation and growth of the business. On the other hand, entrepreneurship is the process of making such decisions throughout a business’ lifecycle. The decision-making process never ends while the business is there.

3. Representation

An entrepreneur is an innovator who has an idea and tries to give shape to it with the help of various resources available in society. On the other hand, entrepreneurship is the process of giving shape to the idea and the process through which the entrepreneur innovates.

4. Business

The entrepreneur sets up the business and turns a concept or an idea into a reality by understanding the needs of the market. On the other hand, entrepreneurship is the process through which the entrepreneur makes those decisions.

Myths About Entrepreneur And Entrepreneurship

Myths About Entrepreneur And Entrepreneurship

The following are the major myths about entrepreneurs and entrepreneurship:

  • Entrepreneurs Take Unnecessary Risks: This is not true. Although entrepreneurs take a lot of risks, those are calculated, and the risks involve a lot of planning and dealings.
  • Entrepreneurs Start Businesses With A Big Invention: Not all entrepreneurs are inventors, and not all businesses are breakthroughs. Most of them identify the opportunities in the market, deliver the right solution, and earn profit in return. 
  • Entrepreneurs Get Success Only After Significant Experiences: This is not true, as most entrepreneurs are young and inexperienced individuals who work day and night to turn their idea into reality.
  • Entrepreneurs Do A Lot Of Research Before Taking The First Step: This factor is partially true as most new businesses start on a new concept, and those entrepreneurs have little to no research capability in those cases.
  • Entrepreneurs Need To Have Enough Capital: Capital is necessary, but some ventures do not need a significant amount of capital, especially with the advent of services that are provided through the Internet.

Read More: Business Entrepreneurship  – What Should You Know Before You Start A Business In 2023?

Wrapping Up

There is no proper definition of an entrepreneur, and hence it is not easy to define entrepreneurship. No theories or models can define entrepreneurship. In simple words, it is the way through which an entrepreneur identifies suitable business opportunities and works towards tuning those opportunities to fruitful outcomes.

Another major attribute of an entrepreneur is that the individual knows how to take risks and strategize accordingly for the success of the business. What is your own definition of entrepreneur and entrepreneurship? Share your idea with us in the comments section below.

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Soumava Goswami

Inspired by The Social Network, Soumava loves to find ways to make small businesses successful – he spends most of his time analyzing case studies of successful small businesses. With 5+ years of experience in flourishing with a small MarTech company, he knows countless tricks that work in favor of small businesses. His keen interest in finance is what fuels his passion for giving the best advice for small business operations. He loves to invest his time familiarizing himself with the latest business trends and brainstorming ways to apply them. From handling customer feedback to making the right business decisions, you’ll find all the answers with him!

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Social Entrepreneurship

What Is Social Entrepreneurship? – Steps To Become A Successful Social Entrepreneur

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However, this motive of the entrepreneurs does not prevent them from impacting society positively. As Adam Smith, the 18th-century Scottish Economist and Philosopher, rightly puts it in his book The Wealth of Nations - “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.” Here, according to Smith, when an individual pursues his own best interest, he would be guided to make decisions that benefit others. This is the major philosophy and mindset that works behind social entrepreneurship. Any social entrepreneurship can operate in different ways, including profit, non-profit, hybrid business, and others. As a social entrepreneur, you can prefer the funding and structure of your business, depending on your goal, as well as your business model. 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Know Your Market Inside Out We have already discussed that a social entrepreneur tries to solve a problem that is prevalent in society and, at the same time, makes a profit. To do that, you will have to know your market, the exact problems, and areas of concern so that you come up with useful solutions. 3. Get Some Advice From An Expert Getting a mentor as you run your startup is beneficial. Apart from that, you must also consider taking a course about social entrepreneurship from a reputed institute. Furthermore, you can also interview someone who is already making a social change with his/her business. 4. Have A Clear Goal In Your Mind For The Social Cause Your social mission will help you run your business despite various odds that come your way. Apart from that, investors will also ask you questions about it, and you will need to be obvious about your goals. You might also face questions from journalists as well. 5. 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How To Become An Entrepreneur? – Steps To Follow

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Most Common Mistakes First-Time Entrepreneurs Make

The 10 Most Common Mistakes First-Time Entrepreneurs Make

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Disregarding this pivotal phase may culminate in the creation of products or services devoid of demand, inevitably resulting in downfall. Thus, before embarking on a novel enterprise, dedicating ample time to exhaustive market research becomes imperative to enlighten and steer entrepreneurs' decisions and approaches. 2. Failing To Develop A Solid Business Plan A solid business plan operates as an entrepreneur's navigational aid, charting the company's objectives, tactics, financial forecasts, and plausible hurdles. The omission of constructing a comprehensive business plan can usher in a dearth of guidance and hinder securing financial backing from investors or financial institutions. A meticulously crafted business plan not only shepherds the entrepreneur but also elucidates the venture's feasibility to stakeholders, underscoring its credibility and potential for success. 3. Underestimating Financial Management An often underestimated yet paramount facet of entrepreneurship revolves around astute financial management. Many fledgling entrepreneurs underestimate the significance of closely scrutinizing their financial landscape, leading to extravagant spending, resource mismanagement, and even the specter of bankruptcy. Relying excessively on credit or loans devoid of a concrete repayment blueprint can prove catastrophic, particularly when confronted with unanticipated spikes in prime rates. Establishing a resilient financial management framework, consistently tracking cash inflows and outflows, and adeptly navigating the ebb and flow of economic dynamics become not just advisable but imperative for sustainable success. 4. Overlooking The Importance Of Marketing In the realm of entrepreneurial pursuits, the paramount role of effective marketing often stands as the linchpin, even for the most revolutionary products or services. An oversight frequently committed by neophyte entrepreneurs involves nurturing the misconception that a remarkable offering possesses an innate selling prowess. Nevertheless, bereft of a meticulously devised marketing strategy, the potential consumer base might remain oblivious to the existence of such an innovation. Allocating resources to marketing endeavors, whether manifested through social media engagement, judicious content creation, or strategic advertising campaigns, emerges as the lifeblood for ensnaring initial attention and fostering enduring patronage. 5. Neglecting Legal And Regulatory Matters A cornerstone of entrepreneurial stewardship resides in skillfully traversing the intricate terrain of legal and regulatory obligations. Oversight in matters such as business registration, securing requisite licenses, or adhering to industry-specific statutes can usher in a cascade of repercussions: fines, litigations, or, in dire instances, the shuttering of the enterprise. Seeking counsel from legal experts stands paramount, ensuring conformity and erecting a bulwark against potential legal entanglements. 6. Trying To Do Everything Alone Within the labyrinthine odyssey of entrepreneurship, the temptation to shoulder the entire burden alone looms large. Yet, embarking on this path solo beckons burnout and lackluster outcomes. The art of delegation and astute outsourcing assumes centrality. Discerning one's strengths and frailties and orchestrating a team or a network of adept professionals for their diverse proficiencies not only alleviates the burdensome workload but also injects a medley of viewpoints, enriching the decision-making tapestry. 7. Ignoring Customer Feedback Feedback from customers is a goldmine of insights for entrepreneurs. New business owners might assume they know what's best for their customers without actually seeking their input. However, customer preferences and needs often evolve, and it's essential to adapt the product or service accordingly. Regularly engaging with customers and actively seeking their feedback can lead to innovation and increased customer satisfaction. 8. Scaling Too Quickly The allure of rapid growth and expansion can be tempting, but scaling too quickly can spell disaster for a new venture. Premature expansion can strain resources, lead to quality control issues, and create an unsustainable business model. It's crucial to establish a strong foundation, refine processes, and ensure a consistent customer experience before considering significant growth. 9. Disregarding The Competition While entrepreneurs should be passionate about their ideas, they should also be aware of their competitors. Disregarding the competitive landscape can blindside businesses to emerging trends, market shifts, and innovative strategies. Studying competitors can provide valuable insights into what works and what doesn't, helping entrepreneurs refine their offerings and stay ahead in the market. 10. Losing Sight Of The Long-Term Vision Amid the daily challenges of running a business, losing sight of the long-term vision is easy. First-time entrepreneurs might get caught up in short-term gains or setbacks, losing focus on the bigger picture. It's important to revisit and evaluate the original goals of the business regularly. This ensures that decisions align with the overall vision and prevents the business from drifting off course. Conclusion Embarking on an entrepreneurial journey is a bold step with its share of trials and triumphs. By being aware of these common mistakes, first-time entrepreneurs can navigate the challenges more effectively and increase their chances of building a successful and sustainable business. Conducting thorough market research, developing a comprehensive business plan, mastering financial management, prioritizing marketing efforts, and maintaining legal compliance are just some of the key steps to laying a strong foundation for entrepreneurship. Learning from the experiences of others and staying committed to continuous improvement can turn these mistakes into valuable lessons that contribute to long-term success. Remember, entrepreneurship is a marathon, not a sprint. By avoiding these pitfalls and approaching challenges with resilience and adaptability, first-time entrepreneurs can chart a course toward realizing their dreams and making a lasting impact in the business world. Additionals: How Did Jason Capital Become A Millionaire At The Young Age Of 24? Top 6 Best Book Of Business That Every Entrepreneur Should Read In 2022 The Top 15 Books For Entrepreneurs That You Must Read In 2022

risk in entrepreneurship

Risk In Entrepreneurship : What Risks Do An Entrepreneur Face?

Risk in entrepreneurship is unavoidable and is actually an essential part of it. Every successful entrepreneur is a risk-taker and knows how to deal with risks at the right time. This makes entrepreneurs naturally risk-takers as they calculate the risks with the right vision for taking the business forward. However, at the personal level as well, entrepreneurs take the risk of leaving their jobs for business. In this article, you will generally learn about what are the major types of risks that are present in entrepreneurship. However, apart from that, we will also share with you what risk means in the context of entrepreneurship and what its importance is to the entrepreneur. Hence, to learn more about risk in entrepreneurship read on through to the end of the article. What Is A Risk In The Context Of Entrepreneurship? An entrepreneur’s life is full of risk. Actually, it starts when the individual decides to build a business from the ground up. In the first instance, the word “risk” basically represents a situation of unpredictability and chaos. However, in the context of entrepreneurship, this word has a different meaning. According to Hubspot.com, “Risk-taking in entrepreneurship is the process of identifying, evaluating, mitigating, and trying out potential opportunities and strategies that may help you build or grow your business but could also lead to personal or professional loss.” Risk in entrepreneurship is always calculated, and an entrepreneur needs to measure the risk with proper planning and assessment to keep the business on track. When it comes to entrepreneurship, you will need to understand here that entrepreneurs do not have a guaranteed monthly income and no guarantee of success. Apart from that, they also risk their work-life balance as they do not have enough time to spend with their families and close ones. Hence, each day is a challenge for these entrepreneurs. Read More: How To Become An Entrepreneur? – Steps To Follow Importance Of Risk In Entrepreneurship According to FirstRepublic.com, “Successful entrepreneurs tend to be willing to take chances, as pursuing a new business venture often involves taking calculated risks based on extensive research. Such research takes a great deal of time and energy but allows potential business owners to better understand several types of entrepreneurial risks.” Being an entrepreneur is in itself a risk. Despite having a dream of running a business, most people never become an entrepreneur just because they do not want to risk losing their job. In addition to that, 70% of startups fail within the first year itself, as they fail to take risks at the right time or are unable to deal with the risks in front of them. Because of the significant risks involved, entrepreneurs can strategize as per the method of their work. This might be a method that no one took advantage of. If the entrepreneur is successful in this new method, then it will be a discovery of a new strategy. This is how the entrepreneur creates a niche for the business, and hence the business works without any competitors for some time. The main thing about entrepreneurs is that they are not afraid of trying new things. However, they can do that since they look at problems differently, as they see them as opportunities to cash in on. They have a knack for exploring those unexplored avenues. Risk In Entrepreneurship - Major Risks For Entrepreneurs The following are the major types of risks in entrepreneurship: 1. Financial Risk According to Investopedia, “Any new business should have a financial plan within the overall business plan showing income projections, how much cash will be required to break even, and the expected return for investors in the first five-year timeframe.” Hence, the entrepreneur needs to put the finances properly into the business. For this to happen, proper planning and risk assessment is required. Failure to plan properly can lead to bankruptcy and losing all finances. Therefore, you must hire a lawyer in your company with complete knowledge of chapter 13 bankruptcy and other related fields. 2. Strategic Risk If the business is planned properly, it will attract investors surely. However, a strategy might get outdated as the world is becoming more fast-paced and dynamic. With market changes and changing business environments, a strategy can be proved wrong pretty quickly. The company might thus fail to reach its targets. 3. Technological Risk With the constant change of technological forces and with emerging new technologies, there are several risks for the entrepreneur on this front. Some of these technologies are called “paradigm shifts” or “disruptive” technologies. To stay relevant in business and to cater to changing demands, entrepreneurs need to invest heavily in new tech systems and processes. 4. Market Risk The market is unpredictable and always poses a risk for the entrepreneur. A certain product that is popular now can get outdated after a few months. This becomes more once a competitor launches a similar item at a lower price. Hence, analyzing and researching the market is important for the entrepreneur. 5. Risk Of Competition Talking about competition in the market, having full awareness of the strengths and weaknesses of the competitors is extremely important for the entrepreneur. Furthermore, if you have come up with a new idea or innovation, you must protect that with patents too. 6. Risks Of Reputation To stay in the market for the long run, a business needs to protect its reputation at all costs. This is especially true for new businesses, where they need to fight judgments and preconceived notions in the market as well. 7. Economic, Political, And Environmental Risks These are unavoidable problems, and hence entrepreneurs need to be fully prepared in this regard with the right insurance. Read More: What Is Indemnity Insurance ? And Its Different Types – Let’s Discover Way Forward Any risk in entrepreneurship is important, and it is important for entrepreneurs to improve their risk-taking capability. If you want to become successful with your entrepreneurial venture, you will need to have a strong risk-assessment framework. This will allow you to identify your risks better and come up with the best mitigation methods of the same. The best way to start is to take small risks and build a culture in the business where smart risk-taking is praised. Do you have any better recommendations on how to handle risk in entrepreneurship? Share your views with us in the comments section below. 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