As per GEM India Report (2021-22), the total entrepreneurial activity rate increased from 5.3% in 2020 to 14.4% in 2021. The trend is expected to continue spreading its wings with the increasing number of smartphone users and higher Internet penetration in the country. From low-cost website builders to easily-available payment gateways to the rising use-case of bootstrapping, there have never been more resources for individuals who are willing to start their own business venture. Perhaps, that’s why there are more than 100 unicorn startups in the country.
All these dots connect to form a big picture based on a common term – entrepreneurship.
Entrepreneurship is not only about being self-employed or having great product ideas in mind. Like many of your peers, you might also want to become an entrepreneur. Whether you want to start an e-commerce business or have some other unique product idea in mind, it’s important to understand the concept of entrepreneurship in detail first.
In this complete guide to entrepreneurship, we will discuss what it means and the benefits you can avail of to becoming a successful entrepreneur.
What is entrepreneurship?
Entrepreneurship refers to the process of running a business by taking financial risks around a unique or unexplored business opportunity to generate profits. It can be broadly defined as finding and solving some of the most pressing problems and pain points for consumers in different niches through an innovative product or service.
In many cases, entrepreneurial projects have created new markets after realizing the gaps between existing problems and their corresponding solutions (if any).
With the rise of startups in the Indian ecosystem, entrepreneurship has become a major subject that focuses on studying how to find product ideas, how to validate them, and launch a business.
If this is what entrepreneurship means, you might want to know if you also fall into the category of entrepreneurs. Let’s find out.
Who is an entrepreneur?
An entrepreneur is one who creates a new and unique business around an innovative product idea while bearing most of the risks and then reaping the rewards.
Being an entrepreneur is not directly related to having a stake in a specific company but to driving initiatives, taking challenges, and inspiring a team. A lesser-known fact is that only startup founders are not entrepreneurs. Instead, different entrepreneurs start businesses of distinct shapes and sizes.
In short, anyone who has the courage and ambition to build an innovative business and work for himself is an entrepreneur.
You are an entrepreneur if you have the following traits in your personality:
- You enjoy flexibility and freedom
- You are innovative and inventive in nature
- You are goal-oriented
- You try to think creatively and make others do the same
- You are focused on solving problems
- You understand the basic business and finance principles
Ever wondered if there can be different types of entrepreneurs in this world? Yes, there are.
Seven types of entrepreneurs (check if you are one of them)
| Type | Description |
| The Independent | Includes the ones for whom starting a business means forging their own path and taking control of their financial future |
| The creative | Includes those who love to use their imaginations, skills, and hobbies to start a business |
| The freedom seeker | Includes entrepreneurs who want flexibility and freedom related to starting a business |
| The opportunist | Includes those who are committed to finding opportunities to fill a niche or be the first to offer something new |
| The digital nomad | Includes entrepreneurs who are motivated by the desire to work from home |
| The hustler | Includes individuals who are good at managing their day-to-day activities (job, home, etc.) and a side business to bring in more money |
| The legacy | These entrepreneurs want to start a business that can grow continually and is capable of standing the test of time. |
Pros and cons of entrepreneurship
As an aspiring entrepreneur, you may have the potential to gain tremendous fortune and fame after you start a business with less money. However, you should also know about the possible challenges and demerits of choosing the route to entrepreneurship.
Pros of entrepreneurship
- Entrepreneurship simply means a form of self-employment that gives you the flexibility to set your own schedule and work whenever and from wherever you want.
- It enables you to make a career out of your passion or hobby by finding and validating a related business idea.
- Since you will have complete control over your business as an entrepreneur, you can make the required decision quickly.
- Entrepreneurship helps solve problems creatively and pivot when needed without facing the common burden of bureaucracy found in mature companies.
- There is no such limit to the wealth you can make with a successful entrepreneurial business idea.
Cons of entrepreneurship
- In most cases, entrepreneurship means bootstrapping a business by putting your money on the line to launch a business idea. If it does not work out as expected, you will become responsible to repay outstanding debts.
- Whether it is about brainstorming new ideas or managing business operations, you need to be ready to work long and even hard to build a successful business.
- Being in the leadership position of your company can also result in personal stress.
- You cannot avoid competition in almost every business segment from both entrepreneurs like you and established firms.
- Your income may become unreliable on the path to building a business as you would want to invest the amount you earn back into the business to grow it further.
Let’s check if you have the required characteristics of entrepreneurship to start and grow your business.
What constitutes an entrepreneurial mindset?
Following the entrepreneurship route starts with bringing an entrepreneurial mindset to the business idea. It represents a set of skills, beliefs, and thought processes that you must possess to make your venture successful. The primary elements of this mindset include:
Elements of entrepreneurship mindset | Description |
| Curiosity | You should be curious to learn all that you can and open to new ideas even if they are contrarian. |
| Resiliency | You should be able to endure failure and pressure while also being willing to learn from such experiences. |
| Independence | You must have the risk-taking ability to plan your next move without hand-holding others. |
| Persuasiveness | As an aspiring entrepreneur, you should be able to sell your business ideas to both consumers and investors. |
| Helping attitude | You should focus on creating value by solving problems faced by those around you. |
Common requirements of entrepreneurship
- A business idea or concept to build a product, service, or some new technology
- Like-minded people to support your idea, be it as vendors, employees, or other stakeholders
- A well-defined process to procure, produce, and deliver what you want to sell
- Adequate funding to develop the idea into a full-fledged business
- A well-curated business plan
How to decide what kind of business you should start
Identifying an opportunity or need in a specific market and filling it with a useful product/service lies at the core of entrepreneurship. To better decide what kind of business you should start, consider:
- Your interests, hobbies, or passions
- Your personal and professional background
- The financial resources you can bank on
- Unfulfilled market needs or problems you can solve
- Your connections and network
- Existing competitors in the industry
Around 50% of new businesses fail in the first five years (Source). Instead of worrying about this statistic, you need to be committed, adaptable, and persistent to make your entrepreneurial journey a success.
| If you have plans to start an e-commerce business, you must read this complete business guide |
