What is an Entrepreneur?

Contents in the Article

Entrepreneur- Concept & Characteristics

Concept of Entrepreneur

Different authors have evolved different concepts according to their view points. Notable among them are:

Adam Smith, the father of political economy regards an entrepreneur as an individual. He has defined an entrepreneur as “an individual who undertakes the formation of an organization for commercial purposes by recognizing potential demand of goods and services and thereby acts as an economic agent and transforms demands into supply.”

Jean Baptist Say, another French economist has defined an entrepreneur as, “One who combines the land of one, the labour of another and capital of yet another ad thus produces a product. By selling the product in the market entrepreneurs pay interest on capital, rent on land and wages to labourers and what remain is his/her profit.”

Say definers an entrepreneur like a farmer. However, it distinguishes a capitalist from an entrepreneur who, coordinates and organizes a business enterprise.

Joseph Schumpeter has defined an entrepreneur as, “A innovator who uses the process of innovation to attain the ‘status quo’ by combining resources and new methods of commerce.

Schumpeter laid emphasis on innovative trait or quality of as entrepreneur. Innovation may be of a new method of production of a new product itself or a ew source of raw materials or a new market.

According to Schumpeter an entrepreneur is a business leader and not merely a capitalist. He is a man of vision, initiative and risk taker. He discovers a business opportunity ad exploits it commercially. Until the middle of the 20th century an entrepreneur was basically regarded as an innovator. He combined the factors of production to initiate and accelerate the process of economic development.

Schumpeter has made a fine distinction between an inventor and an innovator. An inventor is one who discovers new methods and materials, whereas an innovator applies these new methods and materials to boost economic development.

“Entrepreneur is a person who pays a certain price for a product to resell it at an uncertain price then by making decision about obtaining and usual resources.” Richard Cantillon

“Entrepreneur is a specialized group of persons who bears risks and deals with uncertainty.” – F.M. Knight

“An agent who buys raw materials from other entrepreneur, hires and from land owners, personal attitudes from workmen capital goods from capitalist and sells the products that result from this co-operation or combination or these services for his account.” – Walras

Conclusion: If we analyse the above definitions we would find that it is easier to describe an entrepreneur rather than to define him. We should not confine an entrepreneur’s functions to big business organizations alone. There is enough evidence to suggest that sale business and medium scale enterprises have played a significant role in the economic and industrial development of their countries. However, the fact remains that an entrepreneur is a business leader who by his vision, initiative, risk taking and organizing abilities is instrumental in the economic development of a nation.

Characteristics of an Entrepreneur

An entrepreneur should have the following characteristics :-

  1. Innovativeness:

    Perhaps the most important characteristics of an entrepreneur is his innovativeness. An entrepreneur is innovative by nature. He always searches new ideas and opportunities. He tries to outshine others by taking initiative in doing new things i.e., exploring new products, new markets, new raw materials, new methods of production, etc.

  2. Taking initiative:

    An entrepreneur always takes initiative. He wanted others to follow him. In fact he wants to take advantage of the opportunity lest one else may grab the opportunity. He wants to lead them rather than to follow them. In fact a person will get the advantage of an opportunity if he takes the initiative. Momentum of early start provides an advantage which is enjoyed by only a few industries. For example, early staff of lock industry in Aligarh (in India) made it famous for locks. Similarly, establishment of scissors industry in Meerut made it famous for scissors etc.

  3. Goal-oriented:

    An entrepreneur has to be goal-oriented. He sets goal to achieve i.e. to earn a certain amount of profit by producing goods and services. He tries to achieve this goal.

  4. High achiever:

    An entrepreneur is not only goal-oriented, but also a high achiever. He always strive to set higher goals and achieve them despite all odds (problems). He is problem solver and a high achiever.

  5. Motivator:

    An entrepreneur has to get the work done through others. He has to create a spirit of team work and motivate people so that he gets their whole-hearted cooperation.

  6. Self-confidence:

    An entrepreneur should have self confidence for achieving his goals, otherwise how will he convince his colleagues to achieve the goals.

  7. Persistent problem solver:

    Problems solving is an ongoing process. When one problem is solved, the other will arise. The entrepreneur should not be discouraged by failures. Failures are bound to be there. He has to face them boldly. Try and try again is the guiding spirit. He should devise a new strategy to solve a problem based on his past experience and the feedback received from his colleagues or subordinates.

  8. Long term involvement:

    An entrepreneur remains involved in a project for a longer time period say, 5 to 7 years or even more. He should therefore, not anticipate wonders within a short time.

  9. Human Relations Ability:

    Last, but not the least, he must have capability to maintain good human relations and always to deal with his customers, employees, suppliers and creditors effectively. In the absence of such ability, his chances of success become doubtful.

Important links

Disclaimer: wandofknowledge.com is created only for the purpose of education and knowledge. For any queries, disclaimer is requested to kindly contact us. We assure you we will do our best. We do not support piracy. If in any way it violates the law or there is any problem, please mail us on wandofknowledge539@gmail.com

About the author

Wand of Knowledge Team

Leave a Comment

error: Content is protected !!