importance of entrepreneurship

The Importance Of Entrepreneurship In Economy

An entrepreneur is someone who comes up with a business idea, invests in the idea, takes up all the risks that are associated with the new idea, and enjoys most of the returns.

Entrepreneurship is important both for entrepreneurs and corporations because it has the capacity to improve living standards while creating wealth for entrepreneurs and other businesses.

In addition to that, innovations come about because of entrepreneurship, and this is seen in the improvement of products, which help in developing markets. The skills put in growing the market plays a vital role in improving the economy.

Difference between Entrepreneurs and Businessman

Most of the time, a businessperson and an entrepreneur are confused to mean the same thing. However, they have separate meanings and both have different goals.

  • Definition

A businessperson puts in more effort in securing a place for himself in the market, through his hard work and dedication, whereas an entrepreneur is involved in creating a market for his business.

  • Origin of Ideas

A businessperson modifies an idea or a product that is already in place and gets involved in already formed businesses such as retailing, whereas an entrepreneur invests his time and energy in coming up with his idea and starting from scratch as he builds his way up.

  • Risks are taken

A businessperson cannot afford to lose his money and become bankrupt, and that is why they have a management team that helps in calculating and managing the risks. An entrepreneur does not worry about losing his money as much as a business person does, because they do their work with passion and usually receive the best rewards.

  • Relationship with Employees

A businessperson hires employees, and leaves them with the task of making money for his business, whereas an entrepreneur sees his employees as his team, members and works closely with them to help them grow.

Importance Of Entrepreneurship

Entrepreneurship becomes important when the innovativeness of the entrepreneur can change the standards of living and improve the economy. Some of the reasons as to why entrepreneurship is important are;

  1. Creation of New Businesses

The number of new businesses in the market increases rapidly because someone has decided to put in the effort and has established an idea that is benefiting individuals and society.

When the number of new goods and services increases in the market, more employment opportunities are created and in turn, the economy benefits from this chain.

An entrepreneur creates benefits for both the highly valued jobs as well as the low paying jobs across the economy.

  1. Increases National Income

Innovations in the market help in generating wealth for the economy. Existing businesses have specific markets where operations take place, and the income is always the same.

However, when entrepreneurs come up with new ideas, there is an improvement in products, services, and technology, which help in wealth creation.

In addition to that, when there is an increase in employment, national income is increased, mainly in the form of tax revenue.

  1. A source of Social Change

There are some regions, especially the rural areas where technological advancement is not fully effective. For instance, assuming that a rural-based organization lacks a consistent flow of water, the employees will be forced to spare some time from work, and look for water.

This reduces productivity and output because too much time is being wasted in collecting water for use. When an entrepreneur comes up with an idea of building a water point and pumping the water to a specific company, employees will no longer be forced to waste time looking for water, and they will be more productive at work.

  1. Development of the Community

An entrepreneur can know someone’s potential just by listening to other link-minded individuals’ ideas. Entrepreneurs dedicate their time to nurturing ventures of such individuals and make investments in community projects.

This is because they believe that their investment is long term, therefore assuring them of a good return on their investment. In addition to that, this not only benefits the new entrepreneurs but also facilitates further development, which is beyond what they ventured in.

  1. Creation of Job Opportunities

Entrepreneurship helps in the creation of job opportunities by providing entry-level jobs for workers who have no skills.

This is important for job-seeking individuals because they will not worry about having high qualifications for a specific job, but will be willing to start from the lowest level as they gain more skills.

Large industries benefit from entrepreneurship because once workers have been trained and they have the experience, they are supplied to different industries.

  1. Innovation

When an entrepreneur works as a team with his employees, he is building them up to become independent and innovative on their own.

In addition to that, the employees can learn the tricks that the entrepreneur used in becoming successful and will adopt the most appropriate techniques.

Entrepreneurs nurture different innovative ideas to the economy while increasing the standards of living of the people.

  1. Improvement of living standards

When a household can increase its amount of consumption on different goods and services, the standard of living is improved.

This also depends on how available diversified products are in the market. An entrepreneur can come up with various kinds of products from their innovation.

Improved living standards mean that many people who are employed will have an increase in income, which is enough to provide comfort and sustain their families.

  1. Promotes Research and Development

Entrepreneurs come up with new ideas for improving goods and services. Then the goods and services have to be experimented to determine whether they are fit for human consumption, and how the public is reacting to the goods and services produced.

Money is then channeled into research and development by different institutions, and this promotes research and development activities in the economy.

  1. Incorporation of Outsiders

There is a group of people who feel economically or politically left out in society. They feel as though they do not have a place in society.

Entrepreneurship is the most effective way of bringing back such individuals to the economy and help in developing a well-balanced community, where both genders play equal roles, which benefit them individually, and the community as a whole.

  1. A source of Inspiration

Entrepreneurship is a source of inspiration for many people. Individuals who aspire to be entrepreneurs find their inspiration from knowing more about entrepreneurship.

Through innovation and dedication, an entrepreneur inspires others to be just like them. They handle things differently as compared to the normal businesspersons and are always willing to take a huge risk to implement their ideas. While many people are struggling with their problems, entrepreneurs work on solving those problems.

Benefits of Entrepreneurship

Becoming an entrepreneur has various benefits and some of the benefits that are associated with entrepreneurship include the following;

  • Flexibility

Entrepreneurship provides flexibility in that one does not need to have a fixed schedule of going to work on a daily basis without improving themselves.

As an entrepreneur, you have the choice of creating your routine and choose whether you want to work in the morning or the afternoon, and not stick to the normal 8-to-5 routine.

In addition to that, you have time to take care of yourself, workout while also developing your company. Having a normal routine can be boring and this is the main reason why people quit their jobs.

They do not find satisfaction in what they are doing. Therefore, as an entrepreneur, you have lots of time to arrange your schedule the way you want.

  • Growth and Development

When you start your own company, you are forced to come up with ideas that will develop and grow your company. You constantly want to improve the skills that you have and there is always room to learn more.

After determining the best practice for your company, you can now apply it to your business. This encourages growth both individually and professionally.

  • Meeting like-minded people

When you are an entrepreneur, you have higher chances of meeting people with the same mindset as yours in different forums.

The people you spend most of your time with, determine who you are, and most of the time, you will find people with the same character traits sitting together.

For instance, when an entrepreneurial forum is held, all entrepreneurs will have the chance to meet new people, and learn the skills, techniques, and methodologies that the other person has used to become successful.

  • You have the power to choose your employees

This is different from businesses because, for businesses, a job vacancy is filled with the most qualified candidate. There are people who are good with bookwork and others are good with fieldwork.

You will find that the qualified individual can only work in the office to provide the required results, but has minimal time in improving himself or herself.

With entrepreneurship, entrepreneurs have the power to choose whom to work with, regardless of the education level. This is because there is some hidden potential in everyone, and it might not necessarily be related to schoolwork.

  • Brings up leaders

It is evident that a successful individual who put in hard work and his efforts are building up his company is self-disciplined, optimistic, passionate and dedicated to his work. Self-discipline results in many positive aspects, the main being success.

Every successful person practices self-discipline and does not need to be forced to accomplish any task. Entrepreneurship transforms an individual into a responsible person both personally and professionally.

FAQ and Conclusion

Just like any other form of venture, there are many Frequently Asked Questions that the public wants to know about. Some of the frequently asked questions about entrepreneurship include the following;

1. How can one start a business if he or she has not experienced it?

Starting a business does not require an individual to be too serious about the venture. If you have been a service provider in the past, then you can continue with your service provision, but the only difference is that you can think of doing that as a business owner. In addition to that, you can also get help from other successful business owners

2. How can I start up a business with inadequate capital?

Many people worry about where they will get capital for startups. First, you need to ensure that your idea is great and can offer great profits.

Secondly, do research and confirm whether there is a market for your product. The fact that you do not have the capital to start up your business does not mean that you give up. There are various ways of raising capital, such as angel investors, and sourcing for funds from family and friends.

3. What makes an entrepreneur successful?

Well, success does not happen overnight. It takes time, patience, self-discipline, and hard work for an individual to become successful.

Most investors are successful because they are risk-takers and always take on huge risks. A risk-averse person is not successful in most cases because he or she avoids any risk that comes his or her way.

The theory has it that the higher the risk, the higher the returns, and this is what successful entrepreneurs follow.

4. What are the benefits of starting your own business?

Starting your business gives a sense of independence to an individual and you can plan how to do your things without being coerced. Starting small, especially if you are a student, guarantee you are a secure future when you do everything the way it should be done, and consult with other successful entrepreneurs.

Wrapping Up

In conclusion, successful entrepreneurs are risk-takers and self-disciplined individuals who do not procrastinate. Procrastination is one thing that robs people their success because they will spend more time thinking about what to do, and not doing it.

Entrepreneurship is important to both an individual and the economy because it improved the living standards of the community while increasing national income, creating job opportunities, and expanding the research and development sectors in an economy.

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