Broadly speaking, entrepreneurship refers to a person working for himself or herself. And because this definition paints a picture of a selfish man, thus, the narrower concepts were developed, highlighting certain characteristics of entrepreneurship. So let us revisit the definition of entrepreneurs and entrepreneurship.
An entrepreneur is a person who undertakes a venture with some profit potential and involving a considerable amount of risk and therefore, entrepreneurship is the venture undertaken by the entrepreneur. The most obvious example of entrepreneurship is the starting of a new business.
Entrepreneurship can be of varying degrees and is not necessarily alike. It can be categorized into various subcategories, starting with small and home businesses to multidimensional industries that were started from the ground level.
Ideally speaking, anyone who has the capacity to start a venture and undertake risks can become an entrepreneur. But not all entrepreneurs are successful. There are certain characteristics of entrepreneurship that make for a successful venture. So let us talk a little about these traits that an entrepreneur must possess in order to be successful.
Characteristics of Entrepreneurship
While there can be as many characteristics of entrepreneurship as there are people in this world with opinions, there are some characteristics that are considered indispensable or necessary in an entrepreneur. These are listed here as follows.
Ability to take Risks
This is the first and foremost trait of entrepreneurship. Starting any business involves a considerable amount of risk of failure. Therefore, the courage and capacity to take the said risk are essential for an entrepreneur.
Understand the Nature of Business Risk here in detail.
In a world, where almost everything has been done, innovation is a priceless gift to have. Innovation basically means generating a new idea with which you can start a business and achieve a substantial amount of profits. Innovation can be in the form of a product, i.e., launching a product that no one is selling in the market. It can also be in the form of process, i.e., doing the same work in a more efficient and economical way.
An easy example of product innovation could be the launching of touch screen cell phones when the world was still using a keypad on cell phones.
Process innovation can be seen in capital-intensive industries that have to replace manual labour with machines, therefore, increasing their production and reducing their costs.
Another type of innovation can be the one concerned with usage. For examples, cell phones are now used for various functions such as viewing, creating and editing various files and documents, thus, eliminating the need for computers to a large extent.
Every entrepreneur needs to be a visionary. Without a vision for the future of his venture, he or she would just be working aimlessly without reaching any point of success.
An entrepreneur has a vision. However, it takes a lot of resources to turn that vision into reality. One of these resources are the people that the entrepreneur hires to perform various functions like production, supplying, accounting, etc.
A single person cannot perform all the tasks and therefore it is important to bring some more people to do it. This also makes leadership very important as a leader provides the required direction to the efforts of the employees. Without proper leadership, everyone would be working independently without achieving the desired results.
A good entrepreneur realizes that every situation can be a business opportunity. Thus can be utilized for the benefit of the organization. For example, Paytm realized the significance of demonetization and recognized that the need for online transactions was more than ever during this time and so it utilized and grew massively during this period.
Confident and Well Informed
An entrepreneur needs to be confident about his ideas and skills. This confidence also inspires the confidence of the people working for him as well as the other stakeholders involved in his business.
Learn more about Stakeholders and their Information Requirement
This confidence comes from being well informed about the industry and environment. Various legal and political policies enhance business and trade opportunities, while some hinder them. Having knowledge about these can really help an entrepreneur make the right decision at the right time.
Solved Question for You
Q: Are the characteristics of entrepreneurship inherent or can they be learned?
Answer: It is often debated that some entrepreneurial qualities like leadership and confidence are inherent. Many believe that these can be learned over time with learning, practice, and application in real world situations.
The most practical example of this could be that no one is born a leader or confident. They become so over time. This is due to their family and social surroundings. It can also be because of the situations that they have been exposed to in their respective lives.