Entrepreneurship has traditionally been defined as the process of designing, launching and running a new business, which typically begins as a small business, such as a startup company, offering a product, process or service for sale or hire, and the people who do so are called 'entrepreneurs'.
A startup company is an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing or offering an innovative product, process or service.
Small businesses are privately owned corporations, partnerships, or sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation.
A business, also known as an enterprise, company or a firm is an organizational entity involved in the provision of goods and services to consumers.
The 10 Myths of Entrepreneurship by HSGUniStGallen
It has been defined as the "...
What is Entrepreneurship by MIT OpenCourseWare
capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit."
Risk is the potential of gaining or losing something of value.
While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of businesses have to close, due to a "...
lack of funding, bad business decisions, an economic crisis -- or a combination of all of these" or due to lack of market demand.
In the 2000s, the definition of "entrepreneurship" has been expanded to explain how and why some individuals identify opportunities, evaluate them as viable, and then decide to exploit them, whereas others do not, and, in turn, how entrepreneurs use these opportunities to develop new products or services, launch new firms or even new industries and create wealth.
Traditionally, an entrepreneur has been defined as "a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk".
Rather than working as an employee, an entrepreneur runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale.
Employment is a relationship between two parties, usually based on a contract where work is paid for, where one party, which may be a corporation, for profit, not-for-profit organization, co-operative or other entity is the employer and the other is the employee.
The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes.
" Entrepreneurs tend to be good at perceiving new business opportunities and they often exhibit positive biases in their perception and a pro-risk-taking attitude that makes them more likely to exploit the opportunity.
Bias is an inclination or outlook to present or hold a partial perspective, often accompanied by a refusal to consider the possible merits of alternative points of view.
An entrepreneur is typically in control of a commercial undertaking, directing the factors of production–the human, financial and material resources–that are required to exploit a business opportunity.
In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, finished goods and services.
They act as the manager and oversee the launch and growth of an enterprise.
Entrepreneurship is the process by which an individual identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation.
The exploitation of entrepreneurial opportunities may include actions such as developing a business plan, hiring the human resources, acquiring financial and material resources, providing leadership, and being responsible for the venture's success or failure.
Leadership is both a research area and a practical skill encompassing the ability of an individual or organization to "lead" or guide other individuals, teams, or entire organizations.
Modern humans are the only extant members of Hominina clade, a branch of the taxonomical tribe Hominini belonging to the family of great apes.
A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them.
Economist Joseph Schumpeter stated that the role of the entrepreneur in the economy is "creative destruction"–launching innovations that simultaneously destroy old industries while ushering in new industries and approaches.
Creative destruction, sometimes known as Schumpeter's gale, is a concept in economics which since the 1950s has become most readily identified with the Austrian American economist Joseph Schumpeter who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle.
An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents in a given geographical location.
Joseph Alois Schumpeter was an Austrian-born American economist and political scientist.
For Schumpeter, the changes and "dynamic disequilibrium brought on by the innovating entrepreneur...
[are] the ‘norm’ of a healthy economy."
"Entrepreneurial spirit is characterized by innovation and risk-taking."
While entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary sector groups, charitable organizations and government.
For example, in the 2000s, the field of social entrepreneurship has been identified, in which entrepreneurs combine business activities with humanitarian, environmental or community goals.
Social entrepreneurship is the use of the techniques by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues.