Origin Of The Word Entrepreneur
‘Entrepreneur’ the word is derived from the French word entreprendre meaning ‘to undertake’ and English word enterprise.
‘An individual who starts a business in the hope of making a profit by taking the financial risk.’
In other words, we can say anybody taking the financial risk in the hope of making a profit from its business is an entrepreneur. Also, the size, location, or type of business does not matter. Till the time, an individual is taking the risk in anticipation of profit. Hence for someone to be called an entrepreneur, it should qualify the following three criteria.
- Should be involved in business
- Should have taken the financial risk
- There should be an anticipation of profit (not necessary to be making the profit)
Hence if anyone cannot meet all the three above mentioned criteria, then that person cannot be called an entrepreneur.
How To Pronounce Entrepreneur
It was interesting to see that Google has different pronunciation for different accents in English including the one in Indian English.
In Indian English entrepreneur is pronounced as awn·truh·pruh·nyow
Entrepreneur in American English is pronounced as aan·truh·pruh·noor
In British English entrepreneur is pronounced as on·truh·pruh·nuh
To listen to these pronunciations on google kindly click here or just type ‘how to pronounce entrepreneur’ in google search box.
History Of Entrepreneurship
Human beings indulge in some forms of enterprise since the beginning. First of all, in the primitive stage, for human beings, it was all about collecting food to survive. Due to evolution came the phase where people started bartering their goods. Furthermore, with the continuing evolution came the time when along with products, people began to exchange their services too.
Because of the evolution, came a stage when metal coins came into circulation. Thus people slowly began to move away from barter. With the introduction of paper currency, the barter system, as we know, was more or less laid to rest.
Change In Consumption Pattern
The introduction of coins and then paper currencies brought drastic changes in the way people started assessing their needs and wants. As a result of currency, people went beyond meeting only the necessities. Furthermore people who were able to accumulate money more than their essential requirements started to
- Spend on luxuries
- Save for the tough times
- Investing in business/service of their own
- Began lending to others
Hence, now along with spending on essential items, people were also spending on non-essential products. This additional spending resulted in new business opportunities at the local levels. As a result, businesses flourished at the local level. People started to go from one place to another in search of more business opportunities. With this movement of people arose new business opportunities in the form of servicing their needs. Consequently, to fulfill those needs, different services were born. Insurance and banking services are prime examples of how demand generates a business opportunity. Which turns into a vast industry over some time.
Demand And Supply Loop
Similarly like today, even in those days, businesses were fulfilling the needs of their time. Consequently they were also generating new demands. Hence unique demands gave rise to new business opportunities. As a result of achieving those new business opportunities, new requirements got developed. Therefore these new demands resulted in further new business opportunities.
In this way, a chain of demand and supply formed a loop, which continued to expand to date. Indeed this ever-widening circle is the reason why we see new products and services getting introduced.
Let us understand this with an example of a lodge.
A lodge has come up to fulfill the lodging needs of travelers. Undoubtedly, the lodge would at least need a bed, bedsheets, and blankets in every room. Moreover, to build a bed, a carpenter will get hired. The carpenter needs wood to make the bed. The wood supplier supplies the wood to the carpenter after purchasing the same from the woodcutter. The woodcutter, in turn, would need an axe and to make that axe an ironsmith is required, and in this way, the chain continues to expand.
The above example illustrates that to make a straightforward product like a bed, multiple demand-supply scenarios come into the picture. Therefore we can only imagine how many demand-supply scenarios come into play when hundreds of products and services get used.
This demand and supply loop is the reason that the economy of the world and the countries expand. In contrast, the economy shrinks when the reverse of the expansion i.e., the contraction in the economy, happens. Due to people reducing their consumption, the contraction occurs. For example, during a financial crisis or in the time of a health crisis like CoronaVirus, pandemic contraction in the economy happens.
History of Entrepreneurship is an excerpt from my book Franchisee Notes
What Does It Mean To Be An Entrepreneur
What it means to be an entrepreneur is to be able to solve some problem or need of the customers. This problem or need could be
- Entirely new
- An existing one
Some centuries back when sea trade was the only way to trade, at that time, piracy at sea was a big issue. Many sailors lost their lives and their material to the pirates. Hence to support such sailors, the insurance industry was born. This insurance industry at that time is an example of finding solutions to a new kind of problem.
Today, we may have the most modern mobile handsets. These handsets would do many things to make our life easy. But the primary requirement from a mobile handset is to use it for communication. The need for communication is not new. It has been there for centuries, so what these handsets do is solve the existing problem of communication in a new way.
An entrepreneur identifies demand and comes out with a solution for it. To find the answer, the entrepreneurs make certain Investments. This investment is his risk. If people accept the solution only, then he will make a profit. Else he may lose the invested amount.
So we can sum up by saying that an entrepreneur can identify the demand and take a risk with investment in the hope of profit.
Seven Characteristics of Entrepreneurs Explained.
There is no substitute for hard work in this world. The same rule applies to entrepreneurship also. Every successful entrepreneur has slogged to be where they are, primarily in the initial period. There are many cases where an entrepreneur performed very well when they started or took over a lesser-known brand due to sheer hard work. At the same time, there are also cases where entrepreneurs had to shut down their business because they were not willing to put in the necessary effort. Entrepreneurship does not mean that there is no hard work, and success would come quickly & automatically. The following quote defines the relation between hard work and luck
The harder I work, the more luck I seem to have.Thomas Jefferson
Willingness to Learn
The individuals interested in becoming an entrepreneur should have the desire to learn. Before becoming an entrepreneur, an individual may not know how a particular industry functions. The willingness to learn goes a long way in mastering the rules of the game. From an individual’s perspective, too, desire to learn is a critical aspect of running a business effectively. Knowledge, coupled with awareness, empowers a person to make better decisions for running the franchise business smoothly and profitably.
Calculated Risk Taker
In the entrepreneurship world there are two kinds of risk-takers. Pure risk-takers who go by their gut feeling, and then others called calculated risk-takers. A calculated risk-taker is someone who
- Does ample research to accumulate the desired level of information.
- Keeps eyes and ears open for relevant information.
- Has the willingness to listen to other people’s opinions and ideas and asks the right question.
With this, a calculated risk taker covers the maximum basis possible before arriving at a decision. There can be a scenario where some information and details are unavailable at the time of making a decision. In that case, a person can use its instincts concerning only missing pieces of the puzzle and not for the entire judgment.
An entrepreneur is like the captain of a ship where everybody looks towards them for guidance and critical decision making. An entrepreneur who has better command over the business will have smooth sailing. But if an entrepreneur does not have a grip over their business and is not in control, then slowly, that business will start to wither away. Following are the other advantages for an entrepreneur having complete command over its business
- Discipline among the employees.
- Control over the operational expenses.
- Ability to serve consistent quality.
- Complete follow up of the laid down guidelines & procedures.
Ultimately these are the few things that enhance the performance of a franchise business.
A self-motivated entrepreneur does not look at external factors to get the motivation as it comes from within. In fact an entrepreneur gets motivated by any of the following reasons
- Self-motivated by birth.
- A dream to own that particular business.
- An Individual fancied being part of the particular industry and that specific business gave that opportunity.
- Is passionate about a product and always dreamt of doing business in it. With that particular business, a long-cherished dream gets fulfilled.
- An individual could feel that a particular entrepreneurship opportunity is its chance to prove to the world.
- A person could be making enough money, which is keeping the motivation level high.
There could be many other reasons for an entrepreneur to be self-driven. On the whole every entrepreneur must have one or the other reason to be self-motivated. In case there is no single reason, then at least one purpose or aim should be created to become self- motivated.
An excellent financial acumen of an entrepreneur at least ensures that the business will not go into loss due to financial mismanagement.
An entrepreneur with sound commercial understanding usually bets on the winning horse. For the reason that these entrepreneurs can look through the numbers and assess if they make sense or not helps significantly in making the correct decision. For this reason seeing through the numbers is a great skill which, more often than not, helps in making the right business decision. Additionally an entrepreneur with sound financial acumen will be in control of the business through numbers. In that case an entrepreneur will account for every penny spent and every penny earned. Hence having substantial control over the financials of its business.
We know what all people can achieve in professional life if they are passionate about their work. Similarly, an individual who is passionate about a particular business has an excellent chance to succeed as passion provides the required focus, energy, and will to achieve. Definitely an entrepreneur, excited about the franchise business, is more likely to get positive results than an entrepreneur who is not. In all likelihood, an entrepreneur with passion will succeed where others may find it difficult to survive under similar circumstances.
Best 5 Reasons For Becoming an Entrepreneur
Apart from those few fortunate individuals who get a large inheritance and are interested only in enjoying it, everybody else has to work and earn a living in this world. As a rule people make their living by working for somebody else or by working for themselves. Indeed that’s the divide within the working world.
We always come across people who are working for somebody else but have the desire to start something of their own. Thus they want to be the master of their destiny. Alternatively do we come across the people who want to leave their own business and start working for somebody else? The answer is ‘No’ or very rarely.
The strong desire that people have to be the master of their destiny by becoming an entrepreneur has some excellent reasons behind it.
Reward and Recognition
Two words prominently associated with entrepreneurship are ‘risk’ and ‘reward.’ Moreover we have seen in the definition of the entrepreneur, that risk is an integral part of it. Importantly we also know that with risk comes the reward. This reward could be infinite (when calculated against the investment made) in successful entrepreneurship hence a strong motivation to become an entrepreneur.
When a society becomes aware of the name of a person, that recognition gives the feeling of being successful. Besides acceptance by a community in itself is a considerable reward in kind.
It should be noted that successful entrepreneurship just does not last for some years or decades, but they run for generations. On the whole family members of successful entrepreneurship enjoy a special status in society. Without a doubt we come across such examples across the countries.
In short reward in the form of profits and recognition within the community are the great reasons to become an entrepreneur.
The entrepreneur is his/her boss. Due to not reporting to anybody gives lots of freedom to plan the day and execute the things to do. Also being your boss comes with lots of responsibility. Undoubtedly people who are responsible, thrive, and enjoy working without a boss.
Moreover flexibility to choose working hours and not to stick to the 9 to 5 routine is very liberating and exhilarating.
Taking care of the present and future
Many people believe that they succeeded in life because their parents invested in their education. As a result, they could get a job. Subsequently they rose through the corporate hierarchy. However, with the changing times, the competition in the job market has become very stiff. Admittedly some parents feel apart providing education to their children; they also need to invest in a business. Thus that business initially could be run by them and later on could be managed by their children. Therefore, this arrangement gives their children the freedom to pursue an alternate career. If things go well, then they can take their career forward, else they can manage the business. Though this thought process is not yet mainstream, it has its fans
Some people have strong leadership skills and find it challenging to work under someone else. For them, entrepreneurship is the only way to achieve their long-term career goals.
Besides, there are creative people who find unusual solutions for the problems. Therefore these people think out of the box most of the time, and such people prefer to be entrepreneurs.
Moreover there are also people with unconventional ideas, and those ideas could see the light of the day only through entrepreneurship.
In most cases people with unique personalities cannot work for others for long. As a result they find their calling in starting their own enterprise.
No Other Option
Many people, due to their education or due to having unsatisfactory experience in the job, feel stagnant. Therefore these people feel that if they continue to work for someone else then they will struggle to even survive in their careers. Hence such people turn towards entrepreneurship as their last hope.
If you understand Hindi, then you can watch my video on the advantages of becoming an entrepreneur. To watch click here
Different Types of Entrepreneurs Defined and Explained
Self-employed are the people who work for themselves. For this reason these people are the face of their business. The typical example of self-employed are doctors, Chartered-Accountants, architects, interior designers, consultants, and others.
People involved in the trading business are trading entrepreneurs. Overall, these people trade in different goods. In most cases, traders source products from one place and sell it in another, including their outlet. Undoubtedly wholesalers and distributors are excellent examples of trading entrepreneurs.
Industrial entrepreneurs are those people who run industries. These entrepreneurs are of three types depending on the size of their industry. First is large scale industries. Second is medium scale industries. And third is small scale industries. Some of the examples for industrial entrepreneurs are Ratan Tata and Lakshmi Mittal.
People involved in agriculture-related enterprises are known as agricultural entrepreneurs. An obvious example of a farming entrepreneur is a farmer.
People involved in retailing of various products from an outlet are called retail entrepreneurs. They get classified into two segments. Firstly, as branded retailers and secondly as unbranded retailers. Examples of unbranded retailers are our neighborhood mum and pop stores. In contrast, examples of branded retailers are D Mart Big Bazaar Walmart and other such retailers.
Businesses which provide service to their customers are service entrepreneurs. Service entrepreneurship is a vast field. Which includes software development on the one hand and serving food on another. In addition there are service providers who provide us with financial solutions like banks.
Social entrepreneurs are those who run an enterprise by helping people in solving their social needs. An example of it will be a microfinance company.
Inventor entrepreneurs invent new products and sell those products. A famous example of an entrepreneur inventor is Thomas Edison. He started a company called General Electrics in short GE. Admittedly this company, today is a multi billion-dollar conglomerate.
Some entrepreneurs invest money in various investment options like stocks, bonds, coupons, and help other people by investing on their behalf. An example of such an investor entrepreneur is Warren Buffett.
Alternatively some entrepreneurs invest in a startup as seed capital or venture capital. Such people are also investor entrepreneurs. Masayoshi Son of Softbank is a good example.
Entreprise Life Cycle
Like humans, an entrepreneur also passes through the various stages of entrepreneurship called enterprise life cycle, and they are
This is the stage when the entrepreneur starts taking the baby steps. As it happens with new enterprises, there is a lot of hard work and little reward. Besides new customers do not come easily, and there is much effort in acquiring them. Moreover the overall growth rate is lower than the industry growth rate.
In this stage, the entrepreneur gets the result for the efforts put. Sales start picking up, and the brand finds acceptance among the customers. Apart from this the enterprise enjoys the growth rate, which is higher than the industry average.
In this stage, the entrepreneur and its enterprise have touched the peak. Not only the enterprise gets recognized among the customers but also achieves the maximum market share. On the whole the overall growth rate is similar to the industry growth rate.
It is the law of nature that whatever goes up has to come down. Similarly, the entrepreneur who has seen success also faces a decline in sales. Additionally the market share also shrinks due to internal and external forces. At this stage, the rate of growth of the enterprise is less than the industry growth rate, or it could be in negative also.
Top 10 Most Successful Entrepreneurs
This list is of the entrepreneurs who touched people’s life or brought a change in their life. This list is not in any order, and it only shows that the diversity in businesses which brought the change. Hence we can say that every entrepreneur can bring the change in its own way.
Henry Ford is an American industrialist and founder of the Ford motor company. With his model T car Henry Ford revolutionizing the American automobile industry.
Model T was the most affordable car of its time. When most of the cars were expensive and the source of amusement, model-T was the car that most Americans could afford. In a short time, model-T became the largest selling car model, and it remained there for a long time.
Henry Ford also gets credits with bringing moving assembly lines into the production of cars, which increased production, thus reducing the cost of production.
Singer, the founder of ‘Singer sewing machine,’ was an American inventor Businessman and actor. He became famous for becoming the first American to create a multinational company.
His company had a presence not just in North America but in South America nut in Europe as well. Isaac Singer’s most significant contribution was reducing the cost of sewing machines to one-tenth of the then prevailing price. This reduction in cost made sewing machines affordable among the masses, which resulted in high sales for many years.
Isaac Singer also started the franchise system to sell his sewing machines. However, this distribution model was not successful with the perspective of Isaac Singer. Neverthless, it gave entrepreneurs a new way to reach out to their customers.
The complete name of Ray Kroc was Raymond Albert Kroc . He was a food tycoon and the face of McDonald’s for many years.
Ray Kroc was the salesman of Milkshake mixers when he met the McDonald’s brothers in the early 1950s. He liked what he saw in the kitchen of McDonald’s brothers. Ray Kroc realised it was an excellent opportunity to take this quick-service model to the national level. Later on, he signed an agreement with McDonald’s brothers for the same.
In 1961 he bought out the share of McDonald brothers in the company, and himself became the owner. Becoming the owner gave Ray Kroc lots of flexibility in running and expanding the McDonald’s brand. To begin with he took the McDonald’s brand to different parts of America. Similarly Ray Kroc also made it an international brand through the franchising route. As a result, today McDonald’s is the best-known brand in the Fast Food industry across the world, and this is due to Ray Kroc and franchising.
Steve Jobs is the co-founder of Apple Inc, Pixar, and NeXT. Jobs gets credit with revolutionizing personal computing through his Macintosh model of computers in the 1980s.
The story of Jobs getting pushed out of Apple Inc, the company which he founded and his coming back to save it from bankruptcy, is the story of legends.
In a most noteworthy act after his return to Apple, Steve Jobs took the company to a very different level all together. He introduced the MacBook, iPods, iPhone, and iPad, which brought drastic changes in consumer behavior. Steve Jobs gets credit for bringing craftsmanship in technological products.
Larry Page is the co-founder of Google, alphabet Inc and Page Rank. Google, which started as a search engine, added Google News, Gmail, Google Map, and Google Chrome in its bouquet.
Google is identified with its search engine, Gmail, and Android operating system for mobile handsets. Today Android is the most popular operating system for mobile handsets across the world.
Likewise Google also owns the popular video-sharing platform called YouTube. Google became a public listed company in 2004, which made Larry Page a billionaire at the young age of 30. Larry Page deserves the credit for changing the way we search over the internet, use email services, and for bringing technology in our hand through Android operating systems.
Elon Musk is a technology entrepreneur and philanthropist. First of all he is the founder of the company SpaceX and The Boring Company. Also the co-founder of Nuralink, Open AI, and the electric car company Tesla Inc.
SpaceX as a company deals in space transportation and aerospace manufacturing. Therefore unlike the other companies in this field, SpaceX is a private company. The goal of the company is to reduce the cost of space transportation drastically from the current levels.
To begin with Tesla Inc was an electric car company that later entered into the clean energy business. It is the best selling plug-in electric vehicle in the world in 2019 with the sale of approximately 300,000 units. Above all Tesla is in the process to launch self -driven cars.
Elon Musk deserves the credit for making electric cars cool again.
Jeff Bezos is the founder of Amazon, which he founded in 1994. Amazon started as an online book store, which today is a one-stop-shop for millions of products.
Jeff Bezos is one of the biggest disruptors of our time. Amazon is in e-commerce, artificial intelligence, cloud computing, online streaming, and self-publishing. By being the world’s largest online marketplace, Amazon has the power to influence the economy of the country where it is present.
The most noteworthy thing about Amazon is that it is the largest internet company by revenue and Jeff Bezos is the richest man on the earth. Through Amazon, Jeff Bezos has revolutionized the way people shop and entrepreneurs sell. Shopping world will never be the same again
Walt Disney’s complete name was Walter Elias Disney. He is the founder of The Walt Disney Company and Disneyland. Walt Disney Company, through its subsidiaries, owns brands like Marvel, Pixar, ESPN, National Geographic, 20th-century studios, and many other production houses.
Walt Disney is famous for his cartoon characters like Mickey Mouse, Donald Duck, Pluto, Goofy, and many other characters. He also brought characters like Cinderella, Snow White, Pinocchio to the silver screen. Likewise, Walt Disney converted children’s books like Mrs. Poppins and Jungle book into movies. Walt Disney has won 22 Oscar Awards, which is a record in itself.
Walt Disney gets the credit for touching the childhood of most people through his cartoons and movies.
Dhirubhai Ambani is the founder of Reliance Industries. Reliance is a conglomerate with interests in sectors like petrochemical, telecommunication, retail, education, power, and a few others.
Dhirubhai started his entrepreneurial journey in the 1960s initially by dealing with polyester fabrics and then started making it. In the 1970s, the company entered into the fabric business with the brand name Vimal. In the 1980s, the company began with the petrochemical segment, and in the 1990s, the company entered into the telecom sector.
The entry of Reliance into the telecom sector revolutionized it by introducing call charges at one paisa per second and a very economical handset. As a result of low handset cost and call charges, the entry barrier for common masses got reduced like never before. Consequently, it transformed the telecom sector in India forever.
His successor and son Mukesh Ambani used a similar strategy when he launched his telecom company Reliance Jio. He brought down the internet data charges to such a low level that it made India the country with the lowest data charges in the world.
Muhammad Yunus is an economist, banker, and social entrepreneur. Through his Grameen Bank, Yunus pioneered the concept of microfinance and microcredit, without taking the collateral.
Grameen Bank provided a credit facility to the entrepreneurs from the weakest section of the society who could never be a part of the formal banking channel. The total number of borrowers stands at 7.06 million, with 97% of them being women. The recovery rate is little over 98% and 100% of the loans get financed from bank deposits.
Top 10 Entrepreneur Quotes for Motivation and Inspiration
Motivational quotes give motivation and inspiration to people in their endeavors. Sometimes what people do or intend to do, requires an additional effort from their side. It is the motivational quotes that help in such a time. Similarly, there are times when people feel low, or they are unable to focus. Certainly, motivational quotes could do the trick.
Sometimes it is the one motivational quote that does the trick, or at times multiple quotes help in getting the desired result, and it does not matter. What matters is how people ensure that they keep moving ahead in their endeavor.
“ All I ask you is that today you do the best work of your life.“Steve Jobs
“I have not failed. I’ve just found 10,000 ways that won’t work.”Thomas Edison
“Remember why you started.”Unknown
“Don’t worry about being successful but work toward being significant, and the success will naturally follow.”Oprah Winfrey
“All our dreams can come true if we have the courage to pursue them.”Walt Disney:
“One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.”Jeff Bezos
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”Warren Buffett
“A failure is an option here. If things are not failing, you are not innovating enough.”Elon Musk
“The best way to predict the future is to create it.”Peter Drucker
“Winners never quit, and quitters never win.”Vince Lombardi:
“As long as you’re going to be thinking anyway, think big.”Donald Trump:
An entrepreneur takes the risk to make the profit. Without doubt they are a significant force to bring a change in society. As a result of social entrepreneurship, helping society could also be an excellent entrepreneurial opportunity. Apart other qualities an entrepreneur requires patience and persistence to succeed. To conclude, every entrepreneur should have a quote(s) for motivation and inspiration during its entrepreneurial journey.
In this blog, we understood who is an entrepreneur along with history of entrepreneurship. Furthermore we went through characteristics and meaning of the word entrepreneur. Additionally in this blog we read about reasons for becoming an entrepreneur and understood the enterprise life cycle. Finally we read about ten successful entrepreneurs and the quotations for motivate and inspiration.
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