The word Entrepreneur is derived from: This article is about the origin of entrepreneurship, derivation and its meaning. As we know, entrepreneurship and risk are closely related. The word entrepreneur is derived from the ability to take risks. In a business context, this risk is about investing time, resources and opportunity cost in creating value for the end user.
Table of Contents
The Word Entrepreneur is derived from Entreprende
The word entrepreneur is derived from the French word entreprendre. It means ‘to undertake’. Thus, an entrepreneur is a person who undertakes the risk. This risk refers to starting an enterprise or creating a business. In this example, an entrepreneur can be defined as a founder. Ultimately the origins of the word entreprende surround taking risks, creating business and generating value.
Origin and change in the meaning of the word Entrepreneur
From the 17th century, the meaning of the word entrepreneur has taken many changes. It is also reflective of the types of businesses that existed during that time. What used to be referred to for theatrical productions or managing has now changed to any small business. In essence, it has come back to the meaning of taking a risk, no matter what the domain is.
- During 17th century entrepreneur was used to refer to a manager or promoter of theatrical productions
- In 18th century, entrepreneur was an individual who took business risks for profit.
- 19th Century expressed entrepreneur as organisers and leaders of business
- 20th century onwards it is used to showcase innovation, creating something new in the market
As you can see, the origins of the word entrepreneur has changed over centuries to take on different meanings. But the basics of this definition remain the same – to undertake risks, create new business and bring something new in the market.
Who is an entrepreneur and what is entrepreneurship?
As we discussed in the article – what is a startup and its difference with small business, an entrepreneur can be a founder of either. The difference between the two is in their purpose. We build a startup for scale, expansion and growth. The pressure to grow, scale and return an exponential return is huge. As a small business you can afford to focus on value, staying small and providing great quality of service. You can do this in a startup too, but can’t afford to stay small or grow at an organic pace.
We can better elicit the differences between entrepreneur and entrepreneurship from the image below. The entrepreneur refers to an individual taking up an entrepreneurial venture or entrepreneurship. It has however become more accepted nowadays with more opportunities and the ease of creating new businesses. If you have an idea, that’s a great starting point and you are well ahead of becoming an entrepreneur. All you need to do is to work on a business plan to identify the revenue sources, growth plan and you’re in the process of becoming a small business if not a startup.
Entrepreneur Definition, What does it mean to be an entrepreneur
An entrepreneur is someone starting a business or a venture. The type of business can belong to any of the four types of entrepreneurs. Depending on the impact and area you want to operate, you can create the corresponding type of business. As long as you register a business and are actively trading – you can be qualified as an entrepreneur.
You can register a business as either – Sole Trader, Partnership or a limited company based on how you want to operate. The purpose of your business defines the type of entrepreneur you can become.
Meaning of Entrepreneurship
Entrepreneurship, as a profession, involves the work of an entrepreneur. In fact, there is not much distinction between business and entrepreneurship. Rather, a business can be seen as an evolved stage of the early entrepreneurial journey. It is interesting to note that entrepreneurship can take various forms. The most common types of startups are: small business entrepreneurship, scalable startup entrepreneurship, large company entrepreneurship, or even social entrepreneurship.
As a founder, I’d focus on the types of entrepreneurship to indicate the future strategy. If your cause is social, then it must become a part of your vision and culture. The same applies to your commercial growth strategy or innovation as well. It comes back to the purpose of your business idea and how you want to shape its feature. Entrepreneurship is a beautiful opportunity to change and create innovation. It must always focus on value addition and keep the customer in mind.
Types of Entrepreneur
We can find several types of entrepreneurs depending on the area of focus, main requirements from the business, its purpose, structure etc. Be careful about the type of business that you setup and ensure that it works well with the type of entrepreneurship you want to achieve. Based on that you can get some tax benefits that can help you grow quicker. In some cases it will also help with funding.
For instance, if you are looking for social entrepreneurship, setting up as a non profit will open up new opportunities etc as compared to a limited company. And a limited company on the other hand can open up opportunities to raise funding and allow equity partnerships etc.
The different types of entrepreneurs are
- Small Business Entrepreneurs
- Scalable Startup Entrepreneurs
- Social Entrepreneurs
- Corporate Entrepreneurs (Intrapreneurs)
- Lifestyle Entrepreneurs
- Serial Entrepreneurs
- Tech Entrepreneurs
- Franchise Entrepreneurs
Decide which type of entrepreneur you are to set yourself up for success – Four Types of Entrepreneurship for a Founder
How to become an entrepreneur
There are numerous ways to become an entreprenuer. But the one simple and surest way to become an entrepreneur is to start a business. Most people will often tell you to follow your passion. Sometimes, a passion doesn’t align with the commercial opporutnity. The other school of advice asks you to follow the money, look for the business and commercial opportunity to setup a business.
8 steps to become an entrepreneur
These 8 steps will cover the basics of becoming an entrepreneur
- Recognise what you care about: Most people call this passion, but this can also be an interest which goads you to learn more about the area
- Identify your strengths, unique value: It is all about the key proposition you bring to the table. Your investors, customers, founding team, etc everyone will ask about it
- Know your market: If you don’t have a strong market knowledge, find someone who has and partner with them. They can make or break your business
- Write your business plan: Start with a business model canvas, build the idea, customer mapping, pricing – everything that’s needed to write your business plan
- Find the money: There are numerous ways to raise money – find your channels and identify what gives you the best opportunity to succeed.
- Build, sell and iterate: Produce the product, sell – create MVPs, validate the market and idea, build the product and start selling. Don’t wait until you complete building to sell – there are numerous ways to get that customer interest.
- Network, meet people and help each other: It is all about the people – your internal team, external people who can help you and connect you to others.
- Learn, pivot and survive: This is the last but the most important steps to become an entrepreneur – it is a game of survival. If you are able to weather the challenges and survive, you have a great chance at success.
5 Common Challenges in Entrepreneurship
Entrepreneurship is fraught with challenges. It is good to be aware of these challenges before starting a business so that you are aware of what you are getting into.
The main themes of challenges you will find in entrepreneurship are:
- Funding: This is the number one reason why startups fail and the challenge you face to grow or even have a chance at making your business idea come to life
- Market: The market is harsh, there will be competition, challenges with suppliers, blockers for idea development, things taking more time than you thought – it is a harsh place where survival is the number one goal
- People: The right teams, people and network of investors, environment will make a difference and it is a common challenge in entrepreneurship to find and be in the right places
- Customers: It is hard to know the customer requirement, even if they tell you what you want – they might not always purchase your product for it.
- Product Market Fit: This isn’t easy – but to have the right product for the right clientele is a confusing and challenging environment to achieve success in.
References:
https://www.investopedia.com/ask/answers/08/origin-of-entrepreneur.asp
Entrepreneurship: https://en.wikipedia.org/wiki/Entrepreneurship