Who Is an Entrepreneur? What is Entrepreneurship?
Whenever we think of the terms entrepreneur and entrepreneurship, various manifestations are conjured in mind. The most common concept is an energetic individual or a set of enthusiastic souls coming together to start a new company with big dreams and an intense passion for reaching the sky.
The word entrepreneur has originated from the 13th-century French verb’ entreprendre. ‘Entreprendre means to do something or to undertake an endeavor. By the 16th century, it became the noun “entrepreneur,” meaning a person who starts a business project or launches a company.
An individual who attempts to take the risk of launching a new business venture is an entrepreneur. The aim of creating a new firm and not working with existing ones is to make a fortune for themselves. Entrepreneurship is establishing a company that aggregates labor and capital to produce services or goods for profit mainly.
An innovative product or a compelling idea is the key to becoming a successful entrepreneur. To enter the market and claim a share requires a certain level of innovation, bringing something more valuable and unique to the table. It needs much commitment and hard work, way more than working as an employee in someone’s company to start a new business. It requires a lot of dedication to evolve from an entrepreneur and become a prominent businessman.
Entrepreneurship Vs. New Business
People have started using entrepreneurship and new business as synonymous in recent years, but that’s not the case. Although both of them means setting up a new business venture, the basic ideology of both of them is pretty different.
A businessperson can be an entrepreneur without being a new business founder. While both an entrepreneur and a new business founder commence a new business idea, the significant difference is in the business project itself. Entrepreneurship is a commercial, profit-based business idea, so while a new business is clever and modular.
Entrepreneurship, by definition, has always had financial intentions, to begin with, while new businesses are more creative and innovative, and money-making is not the only or primary goal. Entrepreneurship refers to all new businesses, big or small, including self-employment. On the other hand, new business refers to new visionary ventures that intend to grow large beyond the solo founder. In general, entrepreneurs are happy with a small business as long as it’s making profits as per their goals. New business founders yearn to make their business idea grow bigger and better.
Entrepreneurs and New business founders contribute significantly to change the world with their commitment, brilliance, and passion with generous help from governments and investors.
Significance of Small Entrepreneurs
Like Unicorns, the new businesses that have accumulated billion dollar valuations like Amazon have taken center stage in the news, and entrepreneurship is equally enticing and glamorous.
Not every new business will become Facebook, and not every new business founder will be the next Mark Zuckerberg. Still, every small entrepreneur with a reasonable idea and substantial funding is of great importance in many developing countries. Like it’s said, every penny counts; every small entrepreneur contributes to the economic growth and development just like the Biggies, Uber, Facebook, and Google.
Nearly all developing countries are now focusing on extending all possible help to the small entrepreneurs in every field, in addition to merely launching programs and tweaking policies for the advantage of only big businesses.
Help with Creating Employment Opportunities
The importance of small entrepreneurs is pronounced in developing countries where their business skills keep their lives going. They create employment opportunities and help the government in eradicating poverty and unemployment to a large extent. They contribute to the country’s exports and help keep a healthy balance between imports and exports overall. In short, small entrepreneurs are as significant as the big names that change the world’s face.
Small entrepreneurs stimulate a substantial cash flow in a developing country. Every small entrepreneur, from the newspaper delivery vendors to the milkmen to the neighborhood grocers to the vegetable vendors to the courier companies, plays a vital role in strengthening the economy, offering employment opportunities to jot just skilled but unskilled individuals. Good examples of small businesses are service agencies that manage everything from electrical to plumbing repairs and those specializing in logistics and transportation.
Help Large Enterprises
Small entrepreneurs contribute to developing economies by bringing innovation and growth to the community in which their business is established. Small entrepreneurship tends to attract talent that might not fulfill the criterion of Biggies yet can implement new solutions for existing ideas. Large enterprises often benefit from small entrepreneurship within the local community by outsourcing various business functions to small businesses for completion.
Adaptable to Changing Economic Climates
Small entrepreneurs generally have a customer-oriented approach, and they fully understand the needs of the community. Their businesses possess the potential to respond and quickly adapt to changing economic climates. People may give up on more prominent brands amid an economic crisis, but they may remain loyal to their favorite small entrepreneurship. This loyalty enables small entrepreneurship to stay afloat during tough times and continue to strengthen local economies. Since a small entrepreneur has limited capital on a stake compared to a prominent businessperson, they have less losses in times of economic crisis.
Substantial Tax Contributions
When consumers promote small entrepreneurs, they are giving money back to their community. Thriving local entrepreneurship may generate high revenue levels, meaning it will pay higher taxes, including local property taxes. These taxes are then used for public safety and welfare like the police, fire, and schools. Small entrepreneurship also impacts economic growth by improving sales tax collection.
Potential to Grow
Small entrepreneurs of today have the potential to grow into large corporations one day. Like Nike and Ben and Jerry’s, they started as small entrepreneurs and grew into significant players in the international marketplace. How can we forget tech Giants, Microsoft, and Amazon? They started as a small business and grew into a world changer within years. A small business idea has the potential to change the world someday. That’s why promoting small businesses that grow into large businesses eventually benefits not just the community and the country but the entire world maybe.
When small entrepreneurs become industry leaders, they remain in the community where they first established their business. Having a headquarter of a large corporation in a community further helps in providing better employment opportunities and stimulating the economy. With so many success stories around, developing countries are focusing on facilitating small entrepreneurs to contribute to the betterment of not just their community but to the country and maybe the entire world.
Supportive Governmental Policies
Small entrepreneurs need supportive governmental policies to thrive. Many developing countries have started to tailor their policies to offer governmental support and assistance to Small and Medium Enterprises to encourage more entrepreneurs to come forward with better business ideas.
Gone are the days when an economy could survive and flourish without the contribution of small entrepreneurs. Industry leaders may become a threat to the economy as they can create a monopoly and exploit the policies for their benefits instead of the betterment of the community and the country. Empowering small entrepreneurs brings a sense of balance to the equation. Developing countries across the globe offer free of interest or low-interest business loans to small entrepreneurs to offer much-needed support to establish and run their businesses. While it is justified that the governmental machinery and investors should indulge the big entrepreneurs, it is also imperative for them to incubate the small entrepreneurs with due diligence.
All these governmental policies require strict checks and balances to ensure that the support reaches where it is intended to reach and not get lost somewhere in between. Small entrepreneurs might not require millions in funding as most of them lack financing on a day-to-day, weekly, or monthly basis, but they should closely monitor their revenue. The rate of return should be carefully observed so that it doesn’t become a resource drain rather than an economic support system.
Developing countries must show commitment in not just words but with supportive policies to help small entrepreneurs thrive. They must make financing options easily accessible to every small entrepreneur. Governments must partner with private banks and investors to offer subsidies to offset their costs. The entire system should work together to ensure fast clearances and approvals of loan applications. Systems must encourage small entrepreneurs to use the latest technology to scale up and eventually become big corporations.
Above all, small entrepreneurs, who don’t have connections, must be protected from any harassment. They should get facilitated to access platforms where they can flaunt their ideas. In conclusion, developing countries should have both micro and macro enablers of growth, and small entrepreneurs are vital in this case.