What Is Entrepreneurship: Types of Entrepreneurship and Functions (2)

Entrepreneur have vision and inspiration to create new ventures.

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What Is Entrepreneurship: Types of Entrepreneurship and Functions – Lesson 2

An entrepreneur is a person who starts a new venture, taking the initiative and risk associated with it and does so by creating something new to provide value to customers.

They have vision and inspiration to create new ventures, they identify new business opportunity and take advantages of it. They take risks and they are better informed and possess greater experience.

Types of Entrepreneurship

  • Innovative Entrepreneurship
  • Behavioral Entrepreneurship
  • Focus Group Entrepreneurship

What are the types of Entrepreneurship

Innovative Entrepreneurship

Innovative Entrepreneurship

The entrepreneurs try untried technology based on innovation. They introduce new products, employ new production methods, open new markets and exploit new sources f raw materials. They are aggressive in experimenting. Such entrepreneurs are found in developed economies. They need a certain level of development to keep going. They are creative that’s why they become an entrepreneur by innovation.

Imitative Entrepreneurship

The entrepreneurs imitate the successful innovations made by innovating entrepreneurs. They do not make the innovations themselves. They simply adopt and imitate the techniques and technology innovated by others. They operate with limited resources. Such entrepreneurs are found in developing economies and they prefer to imitate technology available in developed countries and also they become an entrepreneur by adoption.

Fabian Entrepreneurship

The entrepreneurs are cautious and the skeptic in experimenting with changes. Their operations are determined by custom, religion, tradition and past practices. They imitate innovation only when their survival is endangered. They believe in fate and follow the footsteps of the predecessor. Such entrepreneurs are found in the joint family business and they become an entrepreneur by inheritance.

Drone Entrepreneurship

The entrepreneurs refuse to innovate and they struggle to survive rather than to grow. They do not make changes in production techniques even if their profits decline. They are inert and traditional and stick with conventional ideas and products. They become an entrepreneur by convention.

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Forced Entrepreneurship

The entrepreneurs are the victim of circumstances. They are forced to become entrepreneurs to fashion their own economic livelihood. They start a new venture to create self-employment based on innovation.

 

Empire Builder Entrepreneurship

The entrepreneurs go on creating new ventures one after another. They maintain ownership over them. They do not get involved in day-to-day activities but keep strategic control. They build on the strength of existing venture to promote new ones and they innovate as well as imitate to build an empire.

Behavioral Entrepreneurship

Solo Operators

The entrepreneurs work alone but if they needed, they employ few employees. Many entrepreneurs begin as solo entrepreneurs. They carve a niche in the market place.

Active Partners

The entrepreneurs operate with partners. All partners participate actively in the operation of the business as a team.

Entrepreneur

Inventors

The entrepreneurs are interested in becoming entrepreneurs. They have the competence to invent new products and processes. They are aspiring entrepreneurs.

Challengers

Entrepreneurs like challenges. They start a new venture because of the challenge it presents after meeting one challenge, they look for a new challenge.

Buyers

The entrepreneurs like to buy out an on-going business and they do not like the risk of starting a new business.

Life Timers

The entrepreneurs take business as a part of their lifestyle. Their business depends on personal skills. Family entrepreneurs fall into this category. Their intention is to earn an income for themselves and their family. They run a small business.

Focus Group Entrepreneurship

Women Entrepreneurs

They are women in an independent business. Development of consciousness and desire for independence makes them entrepreneurs. In recent time, they are increasing in numbers worldwide.

Minority Entrepreneurs

They are minority races in business. Discrimination prompts them to start new business ventures. However, their growth is influenced by the level of education, experience, training, and access to capital and credit.

Also Read: Women-led Startup Raises Funds to Grow its Personalised Beauty & Wellness Marketplace in Indonesia

Immigrant Entrepreneurs

They are persons who go one country to another to start a business. They generally belong to a “deviant class” which has a good business sense. Most of them educated with very well trained, experienced and skill fulled.

Part-time Entrepreneurs

They work for a salary but also run an independent business on a part-time basis. Entrepreneurship is aimed at making extra money. And they are also called or known as “Moonlighting Entrepreneur”.

Home-based Entrepreneurs

They run the business from their homes. E-commerce has led to the growth of such entrepreneurs. So, Virtual entrepreneurs are growing at the present time.

Family Business Entrepreneurs

They are family members who operate and control business. They are widespread all over the country.

What is Entrepreneurial Venture

Corpreneurs

They are couples who work together as co-owners of a business. Both husband and wife work hard in their defined roles. They start a small scale business.

Intrapreneur

They are entrepreneurs from within the established corporations. They handle new ventures based on innovation, Such ventures are large scale and they are corporate entrepreneurs.

Qualifications (Characteristics) of Entrepreneur

Entrepreneurs practice entrepreneurship. Entrepreneurship traits are possessed by entrepreneurs. There is no general agreement about the traits of entrepreneurs. The common traits that make entrepreneurs successful and indicate their personal characteristics.

Achievement Orientation

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Entrepreneurs have a strong need for achievement. This need serves as the prime motivator for them. It drives them towards the accomplishment of challenging tasks. It makes them creative and it provides them the desire to succeed. Money is not their obsession. It is only an indicator of accomplishment. They see and act on new opportunities.

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Hard Working

Entrepreneurs are motivated to consistently work hard by devoting the necessary time and efforts. They work hard endlessly with persistence and perseverance. They possess a high level of energy enthusiasm and diligence. They take initiative and they are action-oriented. They get things done anyhow and they purse excellence by performing better than others ever.

Desire for Responsibility

Entrepreneurs feel personally responsible for the results. They like to influence results by controlling resources. They re totally committed to their ventures. They respond positively to challenges. They are assertive and always ready to accept responsibility with enthusiasm. They have a passion for business.

Optimistic

Entrepreneurs are highly optimistic. They focus on the future. They effectively deal with problems, mistakes, and failures. They remain optimistic about future and self-confident. They believe that success depends on their own efforts. They have confidence in their ability to succeed because they are very ambitious. They have a determination.

Independence

Entrepreneurs like independence in work and they like to be their own boss. They set their own routine because they do not like to be pigeonholed. They are independent-minded. They are job giver and not a job seeker.

Foresight

Entrepreneurs have a good foresight about likely changes in the future business environment. They anticipate future opportunities and take timely actions. They can anticipate changes in markets, consumers preferences, and technology. They plan a strategy for future growth. They are visionaries with versatile knowledge and experience. They are a long-term perspective.

Preference for Risk

Entrepreneurs are risk-takers. They have the willingness to take moderate to high risk. The risk-taking is guided by information analysis and experience. They possess self-confidence for achieving their goals. They have a high tolerance for ambiguity and take calculated risks to achieve goals.

Importance of Entrepreneurship

Innovative

Entrepreneurs are continuously involved in innovation because they are very creative. They produce products on suiting the changing needs of the customers. They also establish research and development facilities to innovate. They are creative free thinkers and possess technical knowledge and experience. They are agents of changes.

Flexibility

Entrepreneurs are able to adapt to the changing demands of customers, market and environments. They emphasize external environmental factors. They are flexible in their operations and activities. The desire for immediate feedback about performance helps them to become flexible. They are responsive to suggestions as well as criticism. They plan for contingencies.

Good Manager and Leader

Entrepreneurs are a good manger. They make decisions to solve problems. They bring together all the resources like materials, money, machines, manpower – needed to produce products. They prepare a business plan and get along well with others. They create networks of relationships that effectively manage time and stress.

Entrepreneurs are also leaders

They motivate and influence people. They communicate effectively. They take initiative according to the demands for the situations. They have open minds to move forward. They trust people because they are credible in word and deed. They have integrity.

Functions of an Entrepreneur

Entrepreneurs perform the functions of entrepreneurship. They are creative individuals. They have vision and inspiration. They grow by creating new ventures. They recognize new business opportunities and take advantages of it. That’s why they take risks because they are better informed and possess greater experience.

They feel comfortable with change because they are free thinkers and change agents at the end entrepreneurs are achievement-oriented individual driven to seek new challenges and accomplishment but challenges are unknown.

Also Read: What exactly is an entrepreneur and how do you become one today? 

An entrepreneur is a very visionary individual who takes risks by starting a new venture through assembling and coordinating various resources for the new sake of uncertain rewards.

Entrepreneurs perform several functions to carry out their activities. The main important functions are here, Let’s make discuss one-by-one:

  • Planning
  • Organizing
  • Mobilizing Resources
  • Relationship Management
  • Control

Planning

Planning is predetermining for future. It set targets to convert a new idea into reality. Through planning, entrepreneurs carry out the following functions:

  1. Setting Goals: Goals are set for the new venture. They can be in terms of growth, profit, leadership, and services. They are set for long-term.
  2. Developing Business Plan: Business plan is developed for the new venture. This consists of activities related to production, marketing, and finance. Contingency plans are developed to cope with risks.
  3. Entrepreneurial Planning: This planning has a high element of risk and uncertainty. It involves a variety of decisions that commit resources and need actions.

Organizing

Organizing establishes a structure for the new venture. Through organizing, entrepreneurs carry out the following functions:

  1. Grouping of Tasks: Tasks required to achieve goals are defined. They are grouped into positions. Authority and responsibility of each position are established.
  2. Coordination: Mechanisms are established to achieve harmony of efforts. Coordination is key to entrepreneurial success.

So Direct involvement of entrepreneur is pronounced in organizing functions.

Mobilizing Resources

Entrepreneurs determine the resources required for the new venture. They mobilize the needed resources. Resources can be:

  1. Financial Resources: They can be existing resources of the entrepreneur. They can be also mobilized from finished from friends, relatives, banks and other sources.
  2. Human Resources: Entrepreneurs acquire the needed human resources to fill-up the positions provided in the organization structure.
  3. Technology Resources: Entrepreneurs deal with new technologies. They establish production facilities and procure machinery and equipment. They develop information system needed to transform new ideas into useful products. The upgraded technology to keep up with technological.

Relationship Management

Entrepreneurs manage a variety of relationship. They can be:

  1.  Exchange relationship: They are related to the procurement of inputs and marketing of outputs. These relationships are mainly concerned with suppliers and customers. They are business-oriented.
  2. Professional Relationship: Entrepreneurs manage professional relationship within the venture. This is essential to motivate employees for higher productivity. They provide leadership and tackle labor problems. Such relationships are with employees, bankers, insurance companies, accountants, lawyers, consultants.
  3. Government Relationship: Entrepreneurs manage the relationship with government and regulatory agencies to get licenses, facilities, financing, and tax concessions. Dealing with public bureaucracy is an important function of entrepreneurs.
  4. Social Relationship: Membership in clubs, professional associations and relations with the local community are used to manage a social relationship.

Control

Control is the measurement and correction of performance to achieve the goals of the new venture. It is based on feedback. It can be:

  1. Financial Control: Entrepreneurs ensure proper allocation and utilization of financial resources. This is needed to control costs and minimize wastage.
  2. Production Control: Entrepreneurs achieve a proper combination of inputs for production. Quality control is ensured. Efficiency is improved.
  3. Management Control: Entrepreneurs ensure management control in the venture. They make key decisions themselves to solve problems.

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The distinction between Entrepreneur and Intrapreneur

Intrapreneur refers to corporate entrepreneur. It is a person within the large organization who handles new ventures based on creativity and innovation. He emerges from within an existing organization structure.

Big urbanization s possess financial resources, skills, and marketing systems to successfully commercialize innovations. Strategic Business Units (SBU) are generally established to promote the entrepreneurial spirit in the organization. Teamwork approach is used.

Intrapreneurs require an appropriate set of skills. They should be creative, visionary and flexible. They must be able to work within the existing corporate structure and climate. Top management commitment to intrapreneurship is a must.

Entrepreneur

Intrapreneur

1. Dependency

Independent, his own boss with direct involvement.

Works for others, dependent on the corporate owner, Hierarchy of bosses.

2. Fund Raising

Raises necessary funds himself.

The corporation provides funds.

3. Risk

Takes risks fully. Risks own money.

The corporation provides funds.

4. Motive

Independence, self-satisfaction and uncertain monetary reward.

Independence and advancement incorporation with a fixed salary.

5. Operation

Operates from outside the existing organization.

Operates from within the existing organization.

6. Time Orientation

5 to 10 years for growth of the business, tendency to move from venture to venture.

Corporate timetable followed.

7. Mind-set

Values new insights and real-world experiences. The problem provides opportunities.

Values past performance and qualification. Problems provide threats.

 

Distinction Between Entrepreneur and Owner Manager

Points of Difference

Entrepreneur

Owner Manager

1. Motive and Reward

Independence and achievement, uncertain monetary rewards.

Leadership and power, corporate rewards.

2. Venture

Creates a new venture, Focus on future vision, Perceives opportunity.

Works in the existing organization, Focus on present realities.

3. Status

Owner of the enterprise, Not concerned about status.

A servant in the enterprise, concerned about status.

4. Risks

Bears all risks himself.

Does not bear risks himself.

5. Innovative and change

Innovates to meet changing customer demands, change agent

Translates ideas into practice maintains the status quo.

6. Commitment of Resources

Multi-stage commitment.

Single-stage commitment.

7. Emphasis

Emphasis on external environment.

Single-stage commitment.

8. Authority

Direct involvement centralized.

Delegates and supervise, hierarchical.

9. Qualifications

Creativity, farsightedness, technical knowledge and experience.

Knowledge of management theory and practical experience.

 

We will discuss more and more about entrepreneurship in the next article …… 

Conclusion:

An entrepreneur is a visionary individual who takes risks by starting something new through assembling and coordinating various resources for the sake of uncertain rewards.

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