How Is Entrepreneurship Defined?


In discussing entrepreneurship and writing articles on the subject, it seems logical to me – or sensible anyway – to begin the discussion by agreeing on exactly what the word or term means to us as participants in the discussion.

Entrepreneurship is the process of creating or seizing an opportunity, and pursuing it regardless of the resources currently in one’s control. According to Wikipedia entrepreneurship is defined as “the act of being an entrepreneur, which can be defined as ‘one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods’. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity”.
Dictionary.com defines entrepreneur as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk”.

These are rather abstract concepts for a person just beginning to consider whether s/he ought to start a business rather than take a job, or leave a secure job for a chance at greater self-fulfillment. Let us try to refine our understanding of entrepreneurship by asking some more specific questions.

Is everyone who runs a business an entrepreneur? Many would not consider the newspaper carrier, shoeshine person, and grass cutter entrepreneurs, though these are often the youthful pursuits of those with an entrepreneurial characteristics, if not aspirations. In fact, lawn manicurists today are managers of well-managed businesses.

Does it matter whether the endeavor is merely part-time? Whereas some part-time activities are basically hobbies, or undertaken to supplement income – similar to certain jobs and types of employment – some entrepreneurial ventures can be tested in the marketplace on a part-time basis.

The path to an entrepreneurial venture might begin by earning a salary in the business you expect to enter, while learning more about it, and waiting for the opportune time to go out on your own. This time can be used to develop a support network – professional and personal – and generate ideas to “bounce off” people whose opinions you respect.

At what scope does self-employment become a venture? The primary objective of many self-employed people is merely to employ themselves (and others if necessary) at a moderate to good rate of pay (or salary); some are even willing to eke out a living to do what they enjoy. This approach is often referred to as a “lifestyle” business, and is generally accompanied by little, if any, plan for growth.

These questions are intended, not to develop a precise definition of entrepreneurship, but to develop a better understanding of our attitude toward its many forms of expression. We may each answer these questions differently, yet we all answer them appropriately within our own frames of reference.

Entrepreneurship is more an attitude than a skill or a profession. Some of us may prefer employment in a corporate or public service field, but many would choose an entrepreneurial opportunity that “feels right.”

Would you consider a person who inherits a business an entrepreneur? From the point of inheritance on, it is their own money and financial security at risk. They could possibly sell the business, invest the proceeds in blue-chip stocks, and live off dividends. Some might consider managing a personal stock portfolio for a living as an entrepreneurial venture.

Would a person who inherited a small or marginal business, then took it to new dimensions be considered an entrepreneur? The inheritor could have tried merely to keep it going, or even to pace the business’ decline to just carry them to retirement. In a family-held business, long-term success is often a central goal.

Are franchise owners entrepreneurs? Many feel that, for those who have access to the large up-front investment, franchises are sure things. For many, operating a franchise is similar to investing in “blue chips,” a relatively sure thing with generally unexciting returns.

So whether you’re inclined to work in an atmosphere where you call your own shots, take your own risks and take your destiny into your own hands; Or you prefer the guaranteed salary, set hours and safe (free of risks) circumstances offered by a job, it is good to have a clear understanding of both kinds of work before pursuing either. And since most people have a relatively good understanding of a salaried job (or position as the case may be), I hope we’ve defined entrepreneurship in a way that is easy to understand.