ENTREPRENEURSHIP

The word entrepreneur is derived from the French entreprendre, meaning “to undertake.” According to
Histrich and Peter (1998), entrepreneurship is the dynamic process of creating incremental wealth. The
wealth is created by individuals who assume major risks in terms of equity, time, and career commitment
or provide value for some product or service. It is 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, personal satisfaction and independence.

Entrepreneurship is the act of being an entrepreneur. An entrepreneur uses his/her business acumen to
undertake innovations and finance to produce economic goods. This may result in new organizations or
may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious
form of entrepreneurship is that of starting new businesses (referred as a startup company). In recent years
however, the term has been extended to include social and political forms of entrepreneurial activity often
referred to as social entrepreneurship.

Entrepreneurs are the pioneers of today’s business success. Their sense of opportunity, their drive to
innovate, and their capacity for accomplishment have become the standard by which free enterprise is
now measured. Today, an entrepreneur is an innovator or developer who recognizes and seizes
opportunities; converts those opportunities into workable or marketable ideas; adds value through time,
effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and
realizes the rewards from the efforts.

The meaning and definition of an entrepreneur varies with discipline. For example, an economist sees
entrepreneurs as those who bring resources, labour, materials, and other assets into unusual combinations
that make their value greater than before, and also those who introduce changes, innovations, and a new
order to generate profit. A psychologist defines entrepreneurs at the behavioral term of achievement. To a
psychologist, entrepreneurs are individuals who are driven to seek challenges and accomplishments.

Although each of these definitions views entrepreneurs from a slightly different perspective, they all
contain similar notions, such as:

 Newness

 Wealth

 Organizing

 Creating

 Risk taking

Entrepreneurs are catalysts for economic change who use purposeful searching, careful planning and
sound judgment when carrying out the entrepreneurial process.
Importance of Entrepreneurship:

Entrepreneurship is important in today’s world. It is a catalyst for economic change and growth. The role
of entrepreneurship in economic development involves more than just increasing per capita output and
income. It involves initiating and constituting change in the structure of business and society. This change
is accompanied by growth and increased output. One theory of economic growth depicts innovation as the
key for economic growth in developing new products or services for the market. Innovative activities also
stimulate investment interest in the new ventures being created. Thus, entrepreneurship through its
process of innovation creates new investment of new ventures, which result in economic development. As
more ventures are being created, new jobs will be produced, thus reducing the unemployment rate.

Entrepreneurship, through its creativity and innovation process produces new products and services to
fulfill human needs. It provides specific products or services needed by customers. In producing goods
and services, they will find better ways to utilize resources, and reduce waste. For that, society will get
better goods and services at a cheaper price.

Entrepreneurship helps to improve the lives of millions of people through the new products and services
they bring to the market. Moreover, entrepreneurs are also extremely generous in donating substantial
portions of their wealth to eminently worthy causes. Therefore, entrepreneurs are individuals who create
wealth, as well as promote wealth distribution.

Myths Regarding Entrepreneurship:

There are many myths about entrepreneurship. These myths arise because of the lack of research on
entrepreneurship. Kuratko and Hodgetts (2004) have discussed ten myths of entrepreneurship as follows:

Myth 1

Entrepreneurs are doers, not thinkers

Although entrepreneurs tend to be toward action, they are also thinkers. They are actually often very
methodical people who plan their m

/.oves carefully. They also have other alternatives set if their plan fails. This shows that entrepreneurs are
both thinkers and doers.

Myth 2

Entrepreneurs are born, not made

Some entrepreneurs and non-entrepreneurs say that the characteristics of entrepreneurs cannot be taught
or learned. Entrepreneurial characteristics are innate traits and one must be born with it to become
entrepreneurs. However, research has proven that entrepreneurship can be taught and studied.
Entrepreneurship has models, processes, and case studies that allow the topic to be learned.
Myth 3

Entrepreneurs are always inventors

Although many inventors are also entrepreneurs, numerous successful entrepreneurs are not inventors.
For example, Ray Kroc did not invent the fast-food franchise, but his innovative ideas made McDonald’s
the largest fast-food enterprise in the world. Successful entrepreneurs use creative and innovative ideas in
their ventures and these characteristics can be learned.

Myth 4

Entrepreneurs are academic and social misfits

This belief arises because some business owners started their successful enterprise only after dropping out
of school or quitting a job. Historically, educational and social organizations did not recognize
entrepreneurs. Today, the entrepreneur is no longer considered a misfit. They are now viewed as
professionals.

Myth 5

Entrepreneurs must fit the “Profile”

Many books and articles have presented checklists of characteristics of the successful entrepreneur. These
lists were neither validated nor complete; they were based on case studies and on research findings among
achievement-oriented people. Today, we realize that a standard entrepreneurial profile is hard to compile.
Many successful entrepreneurs today did not have all the profile of the successful entrepreneur when they
started their venture.

Myth 6

All entrepreneurs need is money

It is true that venture needs capital to survive; it is also true that a large number of business failures occur
because of a lack of adequate financing. To entrepreneurs, money is a resource but not an end in itself.

Myth 7

All entrepreneurs need is luck

To be at “the right place at the right time” is always an advantage. However, “luck happens when
preparation meets opportunity”. What are important and needed for the entrepreneur to seize an
opportunity are planning, preparation, determination, desire, knowledge and innovativeness.
 The Role of the Entrepreneur
New business ventures started by entrepreneurs can be based on a totally new idea or a new way of
offering a service. They can also be a new location for an existing business idea or an attempt to adapt a
good or service in ways that no one else has tried before.

Entrepreneurs have:

 Had an idea for a new business

 Invested some of their own savings and capital
 Accepted the responsibility of managing the business ° accepted the possible risks of failure.

Characteristics of Successful Entrepreneurs

The personal qualities and skills needed to make a success of a new business venture include:

Innovation:

The entrepreneur may not be an ‘inventor’ in the traditional sense, but they must be able to carve a new
niche in the market, attract consumers in innovative ways and present their business as being ‘different’
from others in the same market.

This requires original ideas and an ability to do things differently - this is the skill of innovation.

Commitment and Self-Motivation:

It is never an easy option to set up and run your own business. It is hard work and may take up many
hours of each day. A willingness to work hard, keen ambition to succeed, energy and focus are all
essential qualities of a successful entrepreneur.

Multi-Skilled:

An entrepreneur will have to make the product (or provide the service), promote it, sell it and count the
money. These different business tasks require a person who has many different qualities, such as being
keen to learn technical skills, able to get on with people and good at handling money and keeping
accounting records.

Leadership Skills:

The entrepreneur will have to lead by example and must have a personality that encourages people in the
business to follow him/her and be motivated by him/her.

Self-Confidence and an Ability to ‘Bounce Back’:

Many business start-ups fail, yet this would not discourage a true entrepreneur who would have such self-
belief in themselves and their business idea that he or she would ‘bounce back’ from any setbacks.

Risk Taking:

Entrepreneurs must be willing to take risks in order to see results. Often the risk they take is by investing
their own savings in the new business.

Entrepreneurship VS Wage Employment

Wage Employment

 Work for Others

 Follow Instructions

 Routine Job

 Earning is fixed, never negative

 Does not create wealth

Entrepreneurship

 Own Boss

 Make own plans

 Creative activity

 Can be negative sometimes, generally surplus

 Creates Wealth, contributes to GDP

Businessman and Entrepreneurship

Businessman – A person who gets into business for making money.

Entrepreneur – A person who gets into business for solving problems, creating value and changing the
way things work.

Businessman or business person Entrepreneur

Starts a business from his own unique idea or

1. Starts a business from an existing idea or concept
concept

2. Has many business rivals His business rival is himself

3. Focuses on competition Focuses on cooperation

4. Is always busy on his business “busyness” Is only busy in preparing his new enterprise

5. Don’t have enough time for his family and Have a lot of time for his family and personal
personal life life

6. His business gives him a living He gives life to his business

7. Traditional Innovative and revolutionary

8. Stays safe Risk taker and accountable

9. Worried Excited

People (i.e., employee, customer, public)

10. Profit oriented
oriented

11. Has an active income or profit Has a passive income or profit

12. Hire people to increase business productivity Hire people to give them productivity

13. A market player A market leader

14. Has not yet achieved financial freedom Has achieved financial freedom

15. Only gives importance to a part of the business Gives importance to the business world as a
world (atomistic) whole (holistic)

From the comparisons above, we can learn that entrepreneurship is not an easy feat compare to merely
doing business. We can also realize that an entrepreneur is a business person who has evolved into a more
complete person – one that is not simply a business person but a real human being. Being a businessman
is good. Being profit oriented, market player, business competitor, traditional, busy and active income
earner is not bad since all business owners have been on those stages. Even the successful entrepreneurs,
before they succeed, have been into that. It is just that they have taken the right move to evolve into a
better and even the best businessmen that they can be.

Entrepreneurial Education:
Hansemark (1998) states that traditional education is marked as only a transformation of knowledge and
abilities, while entrepreneurship education, in contrast, is held up as the model for changing attitudes and
motives. Entrepreneurship and entrepreneurship education, beside evident advantages, like promoting
business start-ups, has also a wider market potential. Two of the more important prerequisites for success,
in starting a new business, are the desire or the ability to do so. Entrepreneurial attitudes are not only
required in the course of a classic entrepreneurial career, but they are also clearly in high demand
independent employment relationships. Entrepreneurship education seeks to propose people, especially
young people, to be responsible, as well as enterprising individuals who became entrepreneurs or
entrepreneurial thinkers who contribute to economic development and sustainable communities.

The Consortium for Entrepreneurship Education (2008) states that entrepreneurship education is not just
about teaching someone to run a business. It is also about encouraging creative thinking and promoting a
strong sense of self-worth and empowerment. Through entrepreneurship education, students learn how to
create business, but they also learn a lot more. The core knowledge created via entrepreneurship
education includes:

 The ability to recognize opportunities in one’s life.

 The ability to pursue opportunities, by generating new ideas and found the needed recourses.

 The ability to create and operate a new fi rm.

 The ability to think in a creative and critical manner.

So, beside knowledge and skills in business, entrepreneurship education is mainly about the development
of certain beliefs, values and attitudes, with the aim to get students to really consider entrepreneurship as
an attractive and valid alternative to paid employment or unemployment.