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What is entrepreneurship?
Sometimes a person is frustrated with his or her current job and doesnt see any better career
prospects on the horizon. Sometimes a person realises that his or her job is in jeopardy. Some
people are actually repulsed by the idea of working for someone else. They object to a system
where reward is often based on seniority rather than accomplishment, or where they have to
conform to a corporate culture. Other people decide to become entrepreneurs because they are
disillusioned by the bureaucracy or politics involved in getting ahead in an established business or
profession.
Those who are attracted to entrepreneurship by the advantages of starting their own thing.
These include:
o Entrepreneurs are their own bosses. They make the decisions. They choose whom to do
business with and what work they will do. They decide what hours to work, as well as what
to pay and whether to take vacations.
o Entrepreneurship offers a greater possibility of achieving significant financial rewards than
working for someone else.
o It provides the ability to be involved in the whole lifecycle of the business, from concept to
design and creation, from sales to business operations and customer response.
o It offers the prestige of being the person in charge.
o It gives an individual the opportunity to build equity, which can be kept, sold, or passed on
to the next generation.
o Entrepreneurship creates an opportunity for a person to make a contribution. Most new
entrepreneurs help the local economy. A fewthrough their innovationscontribute to
society as a whole.
One example is entrepreneur Steve Jobs, who co-founded Apple in 1976, and the subsequent
revolution in desktop computers.
However, it is important to note that to every single advantage there is a matching disadvantage
which should be carefully analysed. Here is an example of the most common pros and cons to
entrepreneurship:
SALARY
Advantage Disadvantage
Often people do not feel fully compensated Becoming an entrepreneur means you have to
for the work they do. Becoming an leave behind the security of being paid each
entrepreneur means you can reap the month.
benefits of all your hard work.
FLEXIBILITY
Advantage Disadvantage
Having control over your work schedule Although entrepreneurs benefit from a flexible
means that you can choose when to take schedule they often have to work very long
time off and work the schedule that suits you hours particularly in the start-up phase.
best. Furthermore entrepreneurs work schedules
are never predictable and they must deal with
emergencies that may occur at any time.
DECISIONS
Advantage Disadvantage
Entrepreneurs are able to make all of the Being responsible for all decisions can be quite
decisions relating to their company stressful and handling such responsibility can
themselves; they have complete control. be difficult.
This allows for a huge degree of
independence and a chance to shape ones
own career.
EXCITEMENT
Advantage Disadvantage
Becoming an entrepreneur is a very exciting There is also great risk attached to
time, from the idea and start-up to the entrepreneurship. The success or failure of the
development and realisation of the product business rests with the entrepreneur.
or service.
After comparing the advantages and disadvantages, you will have to decide if you can realistically
handle the responsibility of running your own business. Being an entrepreneur is a huge
responsibility with many risks attached. In business decisions should be carefully considered.
Risk assessment (giving thoughtful consideration to potential costs and benefits) and the collection
of relevant information are key to successful decision making.
Nothing splendid has ever been achieved except by those who dared believe that something inside
them was superior to circumstance.
Part 3: Historic background
One of the first entrepreneurs was Marco Polo. He had ideas of
trading with Asia in the 13th century and was sure of how he could
get there and the materials he could trade. His expeditions were
financed by venture capitalists in Venice with an assurance that he
would share his profits with them. These loose associations
continued to flourish in Europe and other parts of the world where
people with money were willing to back ideas and new schemes
when they were convinced that there was some pecuniary
advantage in the end.
Entrepreneurship first took off when production levels exceeded
local consumption and people were left with surpluses of the things
they produced, whether in the form of agricultural produce, dairy products, livestock and quite a
few manufactured items.
This initially led to a barter system that allowed people exchanged things to satisfy their own
requirements. This further led to the development of the market place where people gathered to
barter or sell their excess production in order to profit themselves. This came about with the
realization that they could not wait indefinitely for a coincidence of wants before they could barter
their own products. Government agencies stepped into the act in the 17th century and made
capital available to people to finance production ventures. The risk involved in such ventures was
the sole responsibility of the entrepreneur and they had to make a fixed payment to the
government, irrespective of any profit they made from the venture. Governments considered this
as a source of revenue.
The concept of entrepreneurship was first established in the 1700s. There are many concepts and
theories about its genesis. However, based on its key features, there were three basic ideas that
explain the appearance of entrepreneurial activity.
o The first focuses on the individual, in other words, entrepreneurial action is conceived as a
human attribute, such as the willingness to face uncertainty, accepting risks, the need for
achievement, which differentiate entrepreneurs from the rest of society.
o The second fundamental idea emphasizes economic and environmental factors that
motivate and enable entrepreneurial activity, such as the dimension of markets, the
dynamic of technological changes, the structure of the market or merely the industrial
dynamic.
o The third factor is linked to the functioning of institutions, culture and societal values. This
approach is not exclusive given that entrepreneurial activity is also a human activity and
does not spontaneously occur solely due to the economic environment or technological,
normative or demographic changes.
The present development of entrepreneurship started after the Second World War in the 1950s
when nations were looking to build up their economies from the ravages of the war. People had
new ideas for business or jobs as individuals and started in small ways with limited capital to form
businesses which went on to challenge the well established companies.
In the 20th century, economist Joseph Schumpeter (1883-1950) focused on how the
entrepreneurs drive for innovation and improvement creates upheaval and change. Schumpeter
viewed entrepreneurship as a force of creative destruction. The entrepreneur carries out new
combinations, thereby helping render old industries obsolete. Established ways of doing business
are destroyed by the creation of new and better ways to do them. Business expert Peter
Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who actually
searches for change, responds to it, and exploits change as an opportunity.