The Concept of Entrepreneur in My Life

What is meant by entrepreneurship? The concept of entrepreneurship was first established in

the 1700s, and the meaning has evolved ever since. Many simply defined it with starting
one’s own business. Most economists believe it is more than that. Entrepreneurship plays a
significant role in setting up businesses while building and scaling it to generate a profit, as
well as in the growth and accomplishment of regions and nations. The process of
entrepreneurial actions begins at the nexus of lucrative opportunity and an enterprising
individual. Entrepreneurial opportunities can be emphasized as “those situations in which
new goods, services, raw materials, and organizing methods can be introduced and sold at
greater than their cost of production.” For instance, by introducing an existing technological
product used in one market to create a new market as well as creating both a new
product/service and a new market alternatively. To be highlighted an entrepreneurship
opportunity represents something new. Moving to the next phase of entrepreneurship requires
action from an enterprising individual or a group of enterprising individuals to recognize,
evaluate and exploit all the possible opportunities. Entrepreneurial action can be defined as
“an action through the creation of new products/processes and/or the entry into new markets,
which may occur through a newly created organization or within an established
organization.” Therefore, to be an entrepreneur is to act on the possibility that one
has identified an opportunity worth pursuing. It involves entrepreneurial thinking which is
“an individuals’ mental process of overcoming ignorance to decide whether a signal
represents an opportunity for someone and/or reducing doubt as to whether an opportunity for
someone is also an opportunity for them specifically, and/or processing feedback from action
steps taken.”
Entrepreneur often make decisions in highly uncertain environments where the stakes are
high, time pressures are immense, and there is considerable emotional investment. The nature
of an entrepreneur’s decision-making environment consists of (1) think structurally, (2)
engage in bricolage, (3) effectuate, and (4) cognitively adapt. In making connections between
a new product (or new service, new business model, or new technology) and a new target
where it can be introduced is aided by the superficial and structural similarities. Superficial
similarities exist when the basic elements of the technology resemble the basic elements of
the market. In contrast, structural similarities exist when the underlying mechanisms of the
technology resembles the underlying mechanisms of the market. Entrepreneurs often lack
resources. By bricolage, it means that some entrepreneurs make “do by applying
combinations of the resources at hand to new problems and opportunities.” This involves
taking existing resources and reframing them to be used in a new way. Next, Professor Saras
Sarasvathy (from Darden, University of Virginia) has found that entrepreneurs do not always
think through a problem in a way that starts with a desired outcome and focuses on the means
to generate that outcome which is referred to as a causal process. Alternatively, entrepreneurs
sometimes use a n effectuation process which means they take what they have and select
among possible outcomes. While cognitive adaptability describes the extent to which
entrepreneurs are dynamic, flexible, self-regulating, and engaged in the process of generating
multiple decision frameworks focused on sensing and processing changes in their
environments and then acting on them.
a) 3 type of income (active, passive and portfolio income)

There are three broad types of income can be generated consisting of active income, passive
income and portfolio income.
Factors of production are called as goods or services, which contribute in producing
something. It is classified by economists as land, labour, capital and entrepreneurship.
The factors of production are rewarded for their contribution to the production of goods and
services. The reward for land is rent, for labor it is wages, for capital it is interest and the
reward for entrepreneurship is called profit. • Determination of factor prices is different from
the determination of product pricing which is based on the demand and supply of products. •
The reason is that unlike products, factors of production have a derived demand and also joint
demand as they contribute in a combined way in the production of goods or services