Entrepreneurship

What Is an Entrepreneur?

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate needs and bringing good new ideas to market. Entrepreneurship that proves to be successful in taking on the risks of creating a startup is rewarded with profits, fame, and continued growth opportunities. Entrepreneurship that fails results in losses and less prevalence in the markets for those involved.

How Entrepreneurship Works

Entrepreneurship is one of the resources economists categorize as integral to production, the other three being land/natural resources, labor, and capital. An entrepreneur combines the first three of these to manufacture goods or provide services. They typically create a business plan, hire labor, acquire resources and financing, and provide leadership and management for the business.

Entrepreneurs commonly face many obstacles when building their companies. The three that many of them cite as the most challenging are as follows:

Overcoming bureaucracy

Hiring talent

Obtaining financing

Entrepreneurship is the process by which individuals or a group of individuals (entrepreneurs) exploit a commercial opportunity, either by bringing a new product or process to the market, or by substantially improving an existing good, service, or method of production. This process is generally organized through a new organization (a start-up company), but may also occur in an established small business that undergoes a significant change in product or strategy (see below on growth).

In sum, entrepreneurship is the process of starting and developing a company, with the aim of delivering something new or improved to the market, or by organizing the means of production in a superior way.  This process is principally organized through the formation of a start-up company, is managed by entrepreneurs, often under considerable personal and financial risk, and is temporary in duration, as a phase in a business’s lifecycle.  A key distinction between start-ups and other small or young businesses is an aspiration (realized or not) to substantially grow.  As companies mature out of the start-up phase, they evolve into sustainable businesses, are acquired or sold to public investors, or decay and may eventually shut down, as new companies start-up and take their place.