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Entrepreneurship and Small Business Management

Notes is not creative and one who cannot make a decision on his own, cannot be rightly called as an
entrepreneur. And in the present competitive world, the latter is thrown out of the business by
the market forces over a period of time.
Despite its current prominence, entrepreneurship still remains a rather vague concept. According
to the dictionary the word “Entrepreneur” can be defined as “one who reorganizes and manages
only enterprise specially involving high risk”. If taken literally, this definition seems fine, but
it is quite incomplete. Researchers have shown that entrepreneurs are not necessarily high risk-
takers. However, a clever entrepreneur performs to reduce risk and increase the likelihood of
success. The definition nowhere mentions anything about opportunities or resources allocated
to achieve the success. The only point mentioned in the definition is regarding high risk, which
might not even be necessary to be successful.

1.1 Meaning of Entrepreneurship

The word ‘entrepreneur’ immediately conjures up images of business tycoons like L.N. Mittal or
Bill Gates. While these rich, famous and successful individuals can be inspirational for some,
most of us would find it difficult to associate our own lives, personalities or abilities with them.
But the fact is that virtually everybody is entrepreneurial in some part of his or her lives.
Entrepreneurial in terms of self-development (an athlete constantly practicing to improve his/
her performance and stamina), in terms of self-decision making (a man deciding not to marry
and devoting the rest of his life in the service of God), in terms of creativity (a housewife using
waste material for making a piece of art), risk-taking (a teenage boy trying bungee jumping).
Hence, anyone who exhibits the characteristics of self-development, creativity, self-decision
making and risk-taking can be rightly called as a person with entrepreneurial traits. When these
traits are exhibited by a person running a business he can rightly be called an entrepreneur. The
reverse is also true – a businessman who does not take risks, or does not aim for self-development,
is not creative and one who cannot make a decision on his own, cannot be rightly called as an
entrepreneur. And in the present competitive world, the latter is thrown out of the business by
the market forces over a period of time.

Task Consider an entrepreneur you know personally. What was the most
significant reason for his or her following an independent business career?
If you don’t already know the reason, discuss it with that person.

Entrepreneurship is the process of creating something new, with value, by devoting the necessary
time and effort, assuming the accompanying financial, psychic, and social risks, and receiving
the resulting rewards of monetary and personal satisfaction and independence.
Entrepreneurship is often viewed as a function, which involves the exploitation of opportunities,
which exist within a market. Such exploitation is most commonly associated with the direction
and/or combination of productive inputs. Entrepreneurs usually are considered to bear risk
while pursuing opportunities, and often are associated with creative and innovative actions. In
addition, entrepreneurs undertake a managerial role in their activities, but routine management
of an ongoing operation is not considered to be entrepreneurship. In this sense, entrepreneurial
activity is fleeting. An individual may perform an entrepreneurial function in creating an
organization, but later is relegated to the role of managing it without performing an
entrepreneurial role. In this sense, many small-business owners would not be considered to be
entrepreneurs. Finally, individuals within organizations (i.e. non-founders) can be classified as
entrepreneurs since they pursue the exploitation of opportunities.

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