An Introduction to Innovation & Entrepreneurship
The entrepreneurs of the world are often known as a source of new ideas, or innovators, and bring new ideas into the market.
What is an innovator?
Being innovative, or an innovator means doing things differently or doing things that have never been done before. An innovator is someone who has embraced this idea and creates environments in which employees are given the tools and resources to challenge the status quo, push boundaries and achieve growth. Alexander Graham Bell, Henry Ford, and Mark Zuckerberg are just three of the innovators who pioneered whole new technologies and industries. No one had thought the way they did before. In a nutshell, an innovator is someone who comes up with a new idea, and anyone who has the will and determination to start or manage a new company, and deal with all the risks that go with it can become an entrepreneur.
The successful entrepreneur is not born, but made! He/She continually strives to master the basic principles of business!
The best example of entrepreneurship is the starting of a new business venture. What is entrepreneurship? Formal school education pays little attention to entrepreneurship. Pupils are not given the opportunity to master business principles from a young age or to prepare themselves adequately for a career in the business world. So, in this post, the basics of Entrepreneurship will be addressed. The concept of entrepreneurship Entrepreneurship is the ability and readiness to develop, organise and run a business enterprise, along with any of its uncertainties in order to make a profit. The most prominent example of entrepreneurship is the starting of new businesses. What is the Meaning of Entrepreneur? The entrepreneur is defined as someone who has the ability and desire to establish, administer and succeed in a startup venture along with the risk associated with it, to make profits. An entrepreneur is a person who undertakes to search for business opportunities, bringing together various factors of production (people, capital, raw materials, technology) and managing them to achieve desired results (producing marketable goods and services) and sharing the profits.
What are the 4 Types of Entrepreneurship? Small Business Entrepreneurship A small business is an independent profit-oriented business unit that is personally managed by the owner, with very few full-time employees in its service and with a small influence or market share in the business world. These businesses include hairdressers, “mom and pop” type grocery stores, travel agents, consultants, carpenters, plumbers, electricians, etc. Additionally, small business entrepreneurship can include consultants and creative professionals, such as copywriters, marketers, or graphic designers who go into business for themselves. Small Business Entrepreneurs run or own their own business and hire family members or local employees. For them, the profit would be adequate to support their families, but not make millions in profits. They fund their business by taking small business loans or loans from friends and family. What distinguishes small business entrepreneurs from other kinds of entrepreneurs?
There are a few distinct characteristics:
Small business entrepreneurs focus initially on a single product, market, or locality.
The initial goal of small business entrepreneurs is to make a profit.
Most small businesses are either self-funded or funded through small business loans.
These are some of the greatest challenges small business entrepreneurs face:
Ensuring a steady cash flow without relying on third-party investments
Finding time for family and friends
Staying abreast of technology and market changes that affect the business
Devising a marketing strategy to attract the company’s target audience
Maintaining a solid reputation for their brand
Keeping an eye on the competition
Scalable Startup Entrepreneurship Scalable startups are less common than small businesses, even though they tend to attract a lot of media attention. These businesses begin on a very small scale, often as just an idea. This start-up entrepreneur starts a business knowing that their vision can change the world. They attract investors who think and encourage people who think out of the box. The research focuses on a scalable business and experimental models, so, they hire the best and the brightest employees. They require more venture capital to fuel and back their project or business. Key Characteristics of Scalable Startup Entrepreneurship There are a few characteristics that distinguish the scalable startup model from the small business model, as well as from other types of entrepreneurship.
Like small business entrepreneurs, scalable startup entrepreneurs start their companies on a modest scale. They have a vision for growth from the start.
Scalable startup entrepreneurs look not just to make profits but also to generate revenues they can invest back into the business.
The most common way to fund a scalable startup is through the pursuit of venture capital.
Scalable startup entrepreneurs face several unique challenges:
Attracting investors and raising venture capital
Recruiting talented managers and employees without negatively affecting cash flow or incurring debt
Ensuring the business plan is flexible enough to adapt to changing markets and new technologies
Planning and executing an infrastructure for the business that has minimal costs to launch, yet be capable of growing without distorting the core business
Realising aggressive growth targets to meet investor expectations and attract future funding
The team the entrepreneur rounds up to get the business off the ground and implement its growth strategy has to possess all the essential skills, but more importantly, the members must share the founder’s vision for the company. Large Company Entrepreneurship
Sometimes, entrepreneurs work inside of a larger, well-established company. Imagine for a minute that you work at a large furniture manufacturing company. Through careful market research, you realise that there is a high demand for outdoor furniture and that your company has many of the processes in place to branch into this type of production. You go to your boss and ask for the funding to launch a brand-new outdoor furniture division, and you are approved. This is an example of what the large company entrepreneurship model might look like in practice. These companies grow by offering new and innovative products that revolve around their main products. The change in technology, customer preferences, new competition, etc., build pressure for large companies to create an innovative product and sell it to the new set of customers in the new market. To cope with the rapid technological changes the existing organisations either purchase innovation enterprises or attempt to construct the product internally. Social Entrepreneurship The final model to consider is social entrepreneurship, which seeks innovative solutions to community-based problems. Social entrepreneurs are willing to take on the risk and effort to create positive changes in society through their initiatives. In other words, a social entrepreneur launches an organisation that is predominantly about enacting positive social change, not solely generating profits. The social change in question may apply to environmental conservation or charitable activity in an under-served community. This type of entrepreneurship focuses on producing products and services that resolve social needs and problems. Their only motto and goal are to work for society and not make any profits. Characteristics of Entrepreneurship: Not all entrepreneurs are successful! There are definite characteristics that make entrepreneurs successful. A few of them are mentioned below: Courageous Starting any new venture involves a considerable amount of risk. An entrepreneur must be courageous, and be able to evaluate and take calculated risks. Original They should be highly innovative to generate new ideas, start a company and earn profits out of it. Change can be the launching of a new product that is new to the market or a process that does the same thing but in a more efficient and economical way. Leader To be successful, the entrepreneur should have a clear vision of his new venture. However, to turn the idea into reality, a lot of resources and employees are required. Here, leadership quality is paramount because leaders impart and guide their employees towards the right path of success. Open-Minded In a business, every circumstance can be an opportunity and used for the benefit of a company. For example, Paytm recognised the gravity of demonetisation and acknowledged the need for online transactions would be more, so it utilised the situation and expanded massively during this time. Flexible An entrepreneur should be flexible and open to change according to the situation. To be on the top, a businessperson should be equipped to embrace change in a product and service, as and when needed. Knowledgeable A company owner should know the product offerings and also be aware of the latest trend in the market. It is essential to know if the available product or service meets the demands of the current market, or whether it is time to tweak it a little. Being able to be accountable and then alter as needed is a vital part of entrepreneurship. Importance of Entrepreneurship:
Entrepreneurship generates employment.
It is the hub of innovation that provides new product ventures, market, technology and quality of goods, etc., and increase the standard of living of people.
A society becomes greater if the employment base is large and diversified. It brings about changes in society and promotes facilities like higher expenditure on education, better sanitation, a higher level of homeownership, etc. Entrepreneurship assists society with regards to a more stable and high quality of community life.
New products and services need to be researched and tested before launching in the market. This promotes research, general construction, and development in the economy.
An entrepreneur also dispenses finance for research and development with research institutions and universities.
Becoming an Entrepreneur
While there is no one “right” way to become an entrepreneur, the general approach usually looks something like this:
Develop an idea for a unique or sought-after business.
Learn about, and gain experience in a range of business roles, including handling budgets and forecasts, finance and accounting, management, and marketing.
Create a business plan and find a source of funding.
Hire talented employees and managers with the skills needed to develop, test, execute, support, and maintain the company’s products.
Market your products and services.
Build long-term relationships with clients.
Once the company is established, look for ways to improve cash flow by expanding into new areas and product lines.
As the company grows, the founder’s role is likely to include both long-term strategic planning and short-term strategic management and financial decisions.
Comprehension Check
What is innovation?
What is an entrepreneur?
How many types of entrepreneurs are there?
What are they?
What are the characteristics of entrepreneurship?
Why is entrepreneurship important?