Are you confused between entrepreneurs, entrepreneurship, and enterprise? Keep reading as we share the differences between the three in this extensive guide.
We are living in an era where startup businesses are flourishing and being labeled as an ‘entrepreneur’ is not a rare sight. However, people often get confused between entrepreneur and entrepreneurship — all credit to their lack of information. Here’s something you need to know before we begin this post: not all entrepreneurs are entrepreneurial and leading successful entrepreneurial ventures doesn’t make one an entrepreneur.
Entrepreneur (Person) + Entrepreneurship (Process) = Enterprise (Outcome)
We will dive deeper into the statement and figure out the major and minor differences between ‘entrepreneur’ and ‘entrepreneurship.’ In this guide, we will discuss the associated definitions, scope, and fundamental differences that will help you identify the strong overlaps between the two terms. However, by the end of the post, you’ll realize that they are not quite the same. Let’s cut to the chase and get into the content, shall we?
Who is an entrepreneur (person)?
The term ‘entrepreneur’ has a ton of definitions on the internet and in educational textbooks. So, we are skipping the definition because this is not a management examination. Instead, we will focus on understanding what the term precisely means. Therefore, let’s escape what’s there in the books and jump into the real world of business.
Entrepreneurs are people that have profit on their minds. They have a mindset to earn money by trading, selling, providing services, helping society solve problems, or inventing technologies. Entrepreneurs intend to earn profit by doing business. This is the appropriate time to bring in Peter F. Drucker, one of the most popular economists of all time.
Peter F. Drucker says:
“Entrepreneur is any person who always searches for change, responds to it, and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service.”
What are the different types of entrepreneurs?
There are several different types of entrepreneurs. The variation depends entirely on the type of business they possess. Here is a list of the types of entrepreneurs and the basis of the distinction.
|Type of Business||Use of Technology||According to Motivation||According to the stages of development||According to Gender||Others|
|Business entrepreneurs||Technical entrepreneurs||Pure entrepreneurs||First-gen entrepreneurs||Male entrepreneurs||Innovating entrepreneurs|
|Trading entrepreneurs||Non-technical entrepreneurs||Induced entrepreneurs||Modern entrepreneurs||Female entrepreneurs||Initiative entrepreneurs|
|Industrial entrepreneurs||Professional entrepreneurs||Motivated entrepreneurs||Classical entrepreneurs|
|Corporate entrepreneurs||Spontaneous entrepreneurs|
What are the different skills of an entrepreneur?
In this section, we will discuss the different skills required to become a successful entrepreneur. We highly recommend you check for these skills before starting any business because they will help you overcome the massive challenges in any entrepreneurial journey. Let’s discuss them in detail.
Successful entrepreneurs are those that stay true to their ‘why.’ In other words, they are self-motivated and always have a reason to start an enterprise. Since entrepreneurship comes with significant challenges, entrepreneurs have to find the fire from within as external motivation hardly helps overcome the challenges.
Entrepreneurs put ethics and morals on a pedestal because they believe in creating businesses that can sustain in the long term. They put customers at the forefront of all innovations and strive to solve their day-to-day problems. Such a mindset expedites the growth of any emerging entrepreneur.
We all have ideas for new businesses. But entrepreneurs are known for executing their ideas. They don’t just sit on them. Entrepreneurs quickly get into action and begin evaluating the market and proposition for the business idea in order to turn it into reality. An experienced entrepreneur
Entrepreneurs spend a lot of time explaining things to their team, investors, and other stakeholders. Therefore, they should have excellent communication skills. Lack of communication skills can become a barrier to conveying messages and instructions efficiently, which can impact a company’s motivation and productivity.
Entrepreneurs, when starting a business, have to cater to several operations and departments critical to the business’s success. While setting up an enterprise requires enormous care and attention, the real game begins when you launch the company. Entrepreneurs need to place every minute to ensure they contribute efficiently to the company’s operations and performance.
Entrepreneurs need to have confidence in their abilities to start a business from scratch. The self-confidence generally comes from their experience in handling business-related technicalities and cultivating a positive mindset toward facing entrepreneurial challenges. Proper and in-depth market research also fuels the self-confidence required to launch a new company.
Finance is the department in any company that drives from the simplest of processes to the biggest innovation endeavors. Managing the company’s finances is a skill entrepreneurs must develop to trigger growth and generate profits. The idea is to develop critical finance management skills to keep the company from a financial crisis.
Lastly, entrepreneurs should develop problem-solving skills to overcome problems objectively. Problem-solving helps them employ a strategic approach to solving major and minor challenges in different departments of the company.
What is entrepreneurship (process)?
Entrepreneurs indulge in entrepreneurship. That’s the simplest of the definitions you may use. However, entrepreneurship isn’t simple. It’s a complicated process entrepreneurs perform to establish an enterprise. In other words, if entrepreneurship is the ‘art,’ entrepreneur is the ‘artist.’
Jokes apart, entrepreneurship involves managing an enterprise to create value for the consumers through appropriate risk, finance, and resource management — leveraging market opportunities to generate maximum returns for the enterprise.
‘Entrepreneur’ and ‘entrepreneurship’ are like two sides of the same coin. An entrepreneur can be anyone with a set of skills. When the skill is put to use to create value in the form of an enterprise, the process turns into entrepreneurship. In other words,
|If Entrepreneur is a/an||Then Entrepreneurship will be|
What are the major characteristics of entrepreneurship?
Successful entrepreneurship is a combination of several things done well together. We can shortlist the common characteristics of entrepreneurship to help you better understand the work that goes into building businesses. Let’s get started!
Entrepreneurship is a process of moving from one challenge to another (without losing enthusiasm?). It involves creating an environment where the members of the organization look forward to meeting the challenges head-on and creating an environment suitable for innovation and creativity. Such a mindset helps convert challenges into profitable business opportunities.
Decision-making is core to entrepreneurship because it helps the organization or enterprise determine a course of action. Most of the time, an entrepreneur will face situations where multiple alternative solutions are presented. Each solution will have its pros and cons, risks, and other vulnerabilities. Making the right decision after research and consideration often results in successful entrepreneurship.
Entrepreneurship is risky, especially in an industry that changes incessantly. Therefore, risk-taking is a major characteristic of entrepreneurship. Risk-taking generally implies taking decisions that have chances of failure. If things go well, the company generates massive positive results. The downside is that if the decision fails and scathes the company, the entrepreneur has to take all the blame.
Another key characteristic of entrepreneurship is building an organization. It means that a company should have the right hierarchy and due process. There should be departments led by competent professionals that can help build up the organization. A proper structure enables efficient delegation of tasks and allows the company to become much more efficient and productive.
Successful entrepreneurship is based on the efficiency and productivity of the people involved in the venture. Thus, managing their skills and capacities becomes a priority for a high-performance company. Training is central to business success today as the industries are evolving quickly. Therefore, a lot of effort goes into planning and organizing training sessions to improve the ‘skill-inventory’ of the company as a whole.
As mentioned earlier, industries evolve overnight due to the advent of new technologies and changing consumer demands. Therefore, research and innovation become an integral part of entrepreneurship. This common characteristic of entrepreneurship helps entrepreneurs find new and better ways of doing things.
Lastly, successful entrepreneurship considers the resources currently available and strives for effective resource management across an organization. Resources help companies run their business operations efficiently. Therefore, entrepreneurs have to go out of their way to ensure the company is resourceful and the resources are managed in a way to attain the set business goals.
What is an enterprise (outcome)?
When entrepreneurs indulge in entrepreneurship, they create an enterprise. An enterprise is nothing but a company or business that helps entrepreneurs bring their ideas to reality. It is a business entity that brings like-minded and equally passionate people together to serve the common vision of producing value for the market and generating profits out of it.
We hope this extensive guide helped you understand the differences between an entrepreneur, entrepreneurship, and an enterprise. To conclude the post, in a nutshell, entrepreneurs are essentially people that work toward building unique products and services. They are accustomed to discovering solutions to major problems in society.
At the same time, they make a reasonable profit out of facilitating society. Entrepreneurship, on the other hand, is the process through which entrepreneurs successfully produce and serve the products and services. All the effort helps entrepreneurs build enterprises that allow them to run the process efficiently. Did you find this post helpful? Let us know in the comments. Also, don’t forget to check out other informative posts on the blog!