Difference Between Entrepreneur And Entrepreneurship With Examples
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?
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?
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
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
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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Entrepreneurship is one of the most important aspects of society, as it helps in developing products and services in the economy by turning a new concept. Entrepreneurs have a better understanding of the market forces in play, and they understand how to find an existing need in society and turn it into a profit-earning opportunity. Let's understand the importance of enterpreneurship in details. In this article, you will learn about entrepreneurship and its importance in society and the economy. Here, we shall discuss every important feature of entrepreneurship and how they benefit an economy as a whole. Then, we will discuss each of these major characteristics of entrepreneurship for better understanding. Hence, to find out more, read on through to the end of the article. What Is Entrepreneurship? According to a definition in 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.” One of the most important things of an entrepreneur is the capability to deal with risks. Entrepreneurs have the capability to risk their careers and financial security to build a venture. They even do not shy out from spending time and capital on something uncertain. Furthermore, entrepreneurs know how to make the best arrangement for necessary capital, resources, raw material, locations, and human resources. Furthermore, successful entrepreneurs also have the capability of making strong networks and focusing on sales and marketing techniques to make their ventures strong. What Is The Importance Of Entrepreneurship? If you want to understand the importance of entrepreneurship, you will need to understand what an entrepreneur does in society. The term entrepreneur comes from the French word ‘entreprendre’, which means ‘to undertake.’ An entrepreneur is an individual who undertakes or plans for every risk and responsibility that accompany new businesses that are created to make profits. The following are some of the major factors that make entrepreneurship important: 1. Creating Better Job Opportunities The major importance of entrepreneurship in the economy lies in job creation for the people. Entrepreneurs that start new businesses mostly have the opportunity to work for themselves while they provide support to other businesses and grow their own businesses accordingly. By starting new businesses, entrepreneurs earn profits for themselves and employ others in the business as well. This is how entrepreneurship helps in creating new job opportunities at all levels of society. 2. 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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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August, 08 2023