Define the term entrepreneur: Points covered in this article are – Define the term entrepreneur, type of risks taken by them. Risks taken by an entrepreneur are broadly classified into financial, opportunity and societal risks. We explain each of these risks with a small discussion. Please do share your thoughts with fellow entrepreneurs to enrich this discussion.
Define the term Entrepreneur
The source of the term entrepreneur is from the French word Entreprende meaning to undertake risk. In other words, an entrepreneur is a business founder who takes on risks in the hope of a profit. These risks can vary from financial, opportunity and sometimes even environmental. These risks make way for enormous returns that define the purposes and motivators for an entrepreneur.
If you look into revolutionary businesses, they’ve had a simple start with an idea to solve a customer’s problem. With time, this entrepreneurship has grown into large businesses adding immense wealth to the economy and a customer.
Related: What are a startup and the difference between entrepreneurship and small business.
Types of risks taken by an entrepreneur
I’ve broadly classified the risks taken by an entrepreneur into 3 key sections – financial, environmental and opportunity risks.
Financial Risks
To define the term entrepreneur – financial risk is one of the most common synonyms we see in play. New businesses demand investment. Most often, even though entrepreneurship is well funded, the first few rounds will require your own investment. Looking back at my previous startup, although we raised about £1.5Mn, we had to shell some personal funds for initial product development. This helped us create an MVP – Minimum Viable Product that served as the proof of interest in our services.
Any entrepreneurship will involve funds and investment and as the business progresses, it demands personal investment in some shape or form.
Societal Risks
This might sound a bit strange, but I’d like to point out the pressures of society. Although entrepreneurship is theoretically well accepted, you will find some resistance in your peer group. It can be your parents, friends or society/environment that you are a part of.
I agree – they care about you and don’t want to see you suffer. But this will be a risk or a hurdle you’ll need to get through. People will ask you questions about what you’d do if it fails etc. If you’re not prepared, at least be comfortable with these uncomfortable questions because this is a risk you’ll encounter.
Opportunity Risks
This is probably the most important one. After my first stint at entrepreneurship, I effectively told myself that I’ve made myself unemployable. Although I used to treat this in a light-hearted manner, I lost on all skills and opportunities that I’d have developed in a 9-5 job. Although entrepreneurship demands different skills, these skills fall short of a typical job profile.
It doesn’t necessarily mean that you can shift back into a job.
Personally, I’ve been lucky enough to do that. But this will not use all your entrepreneurial skills. In a purely objective manner, you will still lose something in the process. The opportunity risk is both current and future in terms of your capabilities.
Summary: Define the term Entrepreneur
In summary, if someone asks me to define the term entrepreneur, I’ll use it synonymously with risks. These risks define what an entrepreneur stands for. However, please don’t be distracted by them. Entrepreneurship is a wonderful experience. It is a call for an idea to be born and groomed into a wonderful reality. Risks however are an inherent part of this journey. It is helpful to be aware of these risks to define the term entrepreneur before deciding to be a part of this community.
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