Joesph A. Schumpeter’s notion of entrepreneurship visualizes entrepreneurs as creators of new industries, precipitating major structural changes in the economy. Entrepreneurship is often seen as a highly individualistic activity that relies on the decision-making of one individual. However, like any other venture, entrepreneurship also requires team efforts to implement the entrepreneur’s vision. This little guide explains five key tips to help you navigate entrepreneurship successfully.
What is Entrepreneurship?
Entrepreneurship is driven by a person who usually focuses on implementing ideas to disrupt markets with new products or services. Entrepreneurs rely on innovation to bring change not only in the market but also in the economy and society. Entrepreneurship is the process of starting a new business that involves risks as well as opportunities, driving the business toward growth. It is the capability of managing a business venture with inherent risks and earning profits.
Theories that Best Explain Entrepreneurship
The concept of entrepreneurship is validated and underscored by some theories. These theories of entrepreneurship hold their true essence. Let’s have a look at some selective theories that best explain entrepreneurship.
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Need for Achievement Theory
Need for Achievement Theory by McClelland postulates that individuals perform the best when they are in high need of that achievement. Entrepreneurial behavior is driven by this urge to achieve something or exceed expectations. Entrepreneurship equals risk-taking and accepting challenges. The need for achievement theory reflects an individual’s desire to attain challenging goals, which underscores entrepreneurial behavior.
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Theory of Innovation
Schumpeter considered entrepreneurs as innovators who drive economic development by exploring innovation at its best. Schumpeter’s entrepreneur is an economic actor who continuously pushes boundaries to bring something new to the platter, facilitating entrepreneurship.
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Risk-Bearing Theory of Profit
This economic theory posits that the earned profits of entrepreneurs are the results of risk-taking. Developed by American economist Hawley, this theory highlights the element of risk-taking as an entrepreneurial nature that reflects on the entrepreneur’s profit. The path of entrepreneurship involves a chain of risky decisions that help earn economic as well as social profits.
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Institutional Theory
The core belief of institutional theory holds social forces as the shaper of entrepreneurial success rather than economic efficiency. This theory emphasizes that entrepreneurs should align their strategies with societal norms. This theory relates to regulatory, social, and cultural influences that ensure the legitimacy of organizations rather than focusing only on efficiency-seeking behavior. Entrepreneurship development in a society is directly related to regulations and policies, and entrepreneurs must abide by them to achieve success.
The underpinned theories of entrepreneurship shed light on different aspects of this notion and its elements. They clarify that entrepreneurship is driven by the need for achievement, risk-taking, innovation, and societal regulation. Now, by discussing its elements, we will have an in-depth understanding of entrepreneurship.
Elements of Entrepreneurship
Entrepreneurial activities are attributed to entrepreneurial elements. These entrepreneurship components reflect different entrepreneurial characteristics that ensure success and growth-
- Innovation: Innovation is the biggest driving force behind entrepreneurship. Entrepreneurs, as the key source of innovation, strive to exploit opportunities to deliver new products and services that address customer, economic, social, or environmental needs.
- Risk-taking: Entrepreneurs are called risk-takers. Taking risks and accepting challenges are major elements of entrepreneurship. Going beyond the notion of what’s possible, entrepreneurs make the best out of every challenge to earn profits and drive change.
- A Vision: Entrepreneurs must have a clear vision of what they want to achieve and how. No entrepreneurship can be successful without a vision. To bring a significant change, one must envision the change, and entrepreneurs must envision their objectives.
- Organizations: To fulfill their dreams, entrepreneurs must showcase exceptional organizational skills as they are in ultimate control. Managing employees and driving them toward a shared goal requires a lot of strategic thinking and organizational skills. With an impeccable organizational skill, entrepreneurs effectively manage finances, people, and resources to achieve their desired goals.
- Economic and Societal Impacts: Entrepreneurship differs from normal business ventures in terms of purposes. Bringing significant economic, societal, or environmental impacts is the main purpose of entrepreneurship. It rises beyond earning profits and strives to bring transformational development through innovative products or services.
5 Ways You Can Achieve Success in Entrepreneurship
Are you an aspiring entrepreneur seeking to find your way toward successful entrepreneurship? Here are the five best ways you can attain your desired goals-
1) Don’t Be Afraid to Take Risks
Success comes with challenges, and to overcome challenges, sometimes you need to take a leap of faith. Risk-taking is an integral part of entrepreneurship, and to succeed in it, you cannot always play safe. Entrepreneurs should always be ready to take risks and accept every challenge that comes their way. As you are to present new products or services, there is always a chance of failure. But that should not stop entrepreneurs from taking a chance.
2) Persistency is the Key
Entrepreneurs must have a high level of patience and tolerance to achieve desired results. By being persistent in their efforts, entrepreneurs should defeat all roadblocks to their entrepreneurial journey. They need to learn to embrace opportunities as much as failures to succeed.
3) Embrace Continuous Learning
To sustain growth, one must learn continuously. This goes the same for entrepreneurs. Through continuous learning, they must always expand the opportunities to empower themselves and exercise their knowledge in product or service delivery.
4) Innovation and Creativity
By keeping a creative and innovative mindset, entrepreneurs should always focus on bringing something new that addresses market needs. Innovation drives entrepreneurship, and entrepreneurs must have creative excellence to think out-of-the-box.
5) Be Flexible
Entrepreneurs should always be flexible and ready to embrace change for growth and success. By being flexible, they can easily adapt to changing business environment.
The journey to entrepreneurship is no less than a bumpy ride, and the road to success is not easy. Entrepreneurs have to face a lot of ups and downs, be it risks with finances or the failure of an idea initially; they must overcome all challenges. By keeping these five ways in mind, this bumpy ride can be eased, ensuring you have a smooth transition to the world of entrepreneurship.
