Did you know the word entrepreneur actually translates to “one who takes an endeavour”? Entrepreneurs are the driving force of every nation’s economy and society. And this is why entrepreneurship businesses are very important for every country. Let us take a look at some of the benefits of entrepreneurship.
Benefits of Entrepreneurship
As we have seen previously, entrepreneurship is a very important form of business organization. Entrepreneurs are often considered the building blocks of an economy. They take risks to fulfil customer needs and expectations.
And so entrepreneurship is beneficial in many ways to the entrepreneur, the organization and the economy as a whole. Let us take a look at some of the benefits of entrepreneurship.
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1. The growth of Managerial Abilities
One of the biggest and most significant benefits of entrepreneurship is that it helps in the identification and development of managerial talent.
A successful entrepreneur has to learn a lot of skills to run his business. One such very important skill is the art of decision making.
So an entrepreneur weighs his options, analysis his choices and chooses the best alternative. This is the crux of decision making.
Along the way, an entrepreneur may even learn new managerial functions and techniques. This really helps in the overall development of managerial capabilities in an economy.
2. Creation of Businesses/Organisation
Entrepreneurship is essentially a business owned entirely by one person. And the majority of these businesses are actually single handly run by the entrepreneurs themselves. So they assemble and coordinate their factors of production. They create their organizations from the ground up. They even learn some managerial skills along the way.
3] Promotes Better Standard of Living
One very important factor of entrepreneurship is that they help fulfil all the customer needs and luxuries in society.
An entrepreneur will launch products and services to meet customer requirements, even if it is not a mainstream good/service. Even niche requirements are fulfilled by entrepreneurs.
So this results in a better standard of living for the members of the public. The boom we have seen in high tech electronics, personal shopping experiences, luxury cars, and other products are all a result of this rise in our standard of living thanks to the entrepreneurs.
4] Economic Development
Entrepreneurs play a very important role in the national economy of any country. They are the spark that ignites the flames of economic development in a country.
They not only invest their own capital but also attract capital from the market. Entrepreneurs make productive use of these savings, they mobilize them and turn them into a productive resource.
This pooled financial resource or capital is the basis of wealth creation in the economy. There is another of the benefits of entrepreneurship is that they also create jobs in the market. Again this contributes majorly to the economic development of a country.
Solved Question on Benefits of Entrepreneurship
Q: Optimization of capital is one of the benefits of entrepreneurship. True or False?
Ans: The above statement is True. Entrepreneurship usually gives a quick return on investment. They have a high capital output ratio than other forms of business organization. So they act as a stabilizing factor in the economy.