An entrepreneur is a person who creates a new business and assumes most of the risks while taking home the majority of the profits. Entrepreneurship is the process of establishing a firm. The entrepreneur is commonly regarded as an innovator, someone who provides fresh concepts, goods, services, and procedures.
Entrepreneurship is the process by which individuals create new opportunities and develop new products, services, and businesses. Entrepreneurs are key contributors to any economy since they employ their talents and initiative to anticipate demands and bring innovative ideas to market. Profits, celebrity, and future expansion possibilities await those who succeed in taking on the risks of establishing a startup. Those who fail suffer losses as well as fewer market presence for those involved.
How Entrepreneurship Works?
- Entrepreneurship is an economic resource that falls under the category of production and which economists distinguish as essential.
- The other three resources are land/natural resources, labor, and capital.
- Entrepreneurial activities typically include preparing a business plan, recruiting personnel, obtaining supplies and financing, and administering the company.
Based on the Type of Business
Entrepreneurs are classified into a number of categories based on the criteria listed below:
The trading entrepreneur is the person who engages in trade activities. They buy the completed items from manufacturers and sell them to consumers directly or via a shop. These function as intermediaries between producers and customers as wholesalers, dealers, and retailers.
Manufacturers are the businesses that create things. They understand the demands of their clients and then research materials and technology to produce goods that will satisfy those requirements. In other words, manufacturing entrepreneurs convert raw resources into finished items.
Agricultural entrepreneurs are people who operate farms. They work in a variety of agricultural sectors such as farming, food marketing, irrigation, mechanization, and technology.
Based on the Use of Technology:
Technical entrepreneurs are people who create and manage science and technology-based firms. In other words, they are the entrepreneurs who utilize science and technology in their businesses. Naturally, in order to do so, they employ cutting-edge technologies in their enterprises.
Non-technical entrepreneurs are those who do not use technology in their business. The forte of these companies is marketing and distribution methods other than science and technology. They are preoccupied with the usage of alternative and imitation marketing and distribution techniques to ensure the success of their firm in a competitive market.
Based on Ownership:
A private entrepreneur is someone who creates a firm on his or her own. He or she is the only owner of the company and assumes all of the risks associated with it.
When a business or industrial project is done by the State or the Government, it is referred to as a ‘state entrepreneur.’
It’s called “joint entrepreneurs” when a private firm and the state work together to run a company.
Based on Gender:
When businesses are owned, run, and controlled by men, they are known as ‘men entrepreneurs.’
The term “women entrepreneurs” refers to firms run by a woman or women in which at least 51 percent of the capital is controlled and at least 51 percent of employment created by those firms goes to women.
Based on the Size of Enterprise:
A small-scale entrepreneur is a businessperson who has invested up to Rs 1 crore in plants and machinery.
A medium-scale entrepreneur is one who has invested more than Rs 1 crore in plant and equipment but less than Rs 5 crore.
A large-scale entrepreneur is a business owner who has invested more than Rs 5 crore in plants and equipment.
Based on Clarence Danhof Classification:
Entrepreneurs were divided into two types: those who are early in their careers and those who had been there a long time.
Entrepreneurial progress was compared to an automobile engine’s performance, where better engines have more power but require greater maintenance.
Based on this, he classified entrepreneurs into four types:
These are discussed in seriatim:
Innovating entrepreneurs are people who bring new items to the market, develop new manufacturing methods, identify new markets, and restructure businesses. It’s vital to note that these individuals can only function in an environment where a certain degree of growth has already been achieved; otherwise, they wouldn’t be able to inspire others.
These are people who are quick to adopt innovative new ideas created by inventive entrepreneurs. Entrepreneurs who imitate others do not develop the changes; rather, they merely copy others’ methods and technologies. Such entrepreneurs are ideal for underdeveloped areas seeking to replicate successful combinations of factors of production that have been introduced in developed regions.
The typical entrepreneur is more willing to experiment with new ideas and enter new markets than Fabian entrepreneurs, who are known for their extreme caution and doubt. They copy only when it becomes absolutely clear that failure to do so will result in a loss of the firm’s position in the industry.
These are associated with a refusal to embrace opportunities to alter production formulae even at the prospect of reduced earnings compared to other producers. Such business owners may lose money, but they will not make improvements in their existing manufacturing processes.
Following are some more types of entrepreneurs listed by some other behavioural scientists:
The term “solopreneur” refers to individuals who operate on their own and, if necessary, employ only one person. Most of the entrepreneurs in the beginning start their businesses similarly.
Active partners are those businesspeople who start or continue a firm as a joint venture. It is critical that all of them actively contribute to the company’s operations. ‘Partners’ refers to individuals who only provide funds to the company but do not participate in its operation.
Some entrepreneurs, on the other hand, find new goods to sell. They have a fundamental interest in research and creative endeavors.
The ones that plunge into a business because of the difficulties it presents are known as “Venture Entrepreneurs.” They continue to seek for new challenges after one issue is addressed.
These are the individuals who don’t want to take any risks. As a result, they prefer to acquire an existing business rather than establish one from scratch.
Entrepreneurs in this group are people who see their work as an important component of their lives. Typically, family businesses and enterprises that rely primarily on personal skill fall into this category/classification.