In entrepreneurship, an entrepreneur in an advanced economy is an individual who introduces something new in the economy. So the characteristics of an entrepreneur are very impressive.
Key Characteristics of Entrepreneur
Following characteristics of an entrepreneur emerge from the study and analysis.:
1. An Individual or Group of Individuals
The entrepreneur is an individual or group of individuals, who starts, operates, manages and carries out innovative functions for any business.
The functions of the entrepreneur are performed by a group of many persons, and not by a single individual, due to industrial complexities and managerial challenges.
For example, in the establishment of joint-stock companies, and corporations, Risk is taken jointly by many persons who are responsible for enforcing innovations.
In developing countries, entrepreneurs may be seen in the form of partnerships, Companies, Industrial Houses, Investment Trust, Management Agents, etc.
2. Dynamic Agent
An entrepreneur is a dynamic agent because he makes the whole economy dynamic through business changes, bravely facing the obstacles in the way of changes and always ready to perform challenging tasks and by providing new directions to the society.
His task is creative destruction, meaning thereby there that he destructs old things for several new productions.
3. Opportunity Focused
The entrepreneurs are opportunity-focused because they search economic and business opportunities and exploit them and are always ready to earn profits.
The successful entrepreneurs regard the best use of available opportunities as their foremost duty. But, for it, they do not leave business ethics.
Actually entrepreneur is opportunity focused and not risk-focused.
4. Establishing New Business Enterprise
The main characteristics of an entrepreneur in the context of developing economy are to establish new enterprise (business) and operate it.
The entrepreneur not only initiates the economic activities of the enterprise but also establishes it.
Hence, the entrepreneur takes some essential initial activities, like submission of required proformas and documents with the application, obtaining of licenses, to obtain permission for the issue of share capital, to get the registration of the enterprise, etc.
5. Undertaking Risks and Uncertainties
An entrepreneur undertakes risks or uncertainties for establishing any business or enterprise for implementing innovative activities.
“Propensity of risk-taking is the real trait of the entrepreneur.”
A reward of the enterprise depends upon its success. If the enterprise is successful, then it will gain profits, otherwise losses.
The reality is that in the gestation period, the money is invested only by the entrepreneurs and the promoters.
Public investment starts only when the enterprise reaches the stage of making production or start the actual production.
6. Entrepreneur’s Function is Intellectual
The function of the entrepreneur is of mental and intellectual nature.
Hence, he is called an innovator and change introducer.
Today’s entrepreneur looks ready to adopt Research, and studies and process of changes. Even the function of the entrepreneur expects more practice.
The enterprise is neither science nor art it is a practice.
Hence, the entrepreneurial activities of the entrepreneur are increasing with gaining experience by him.
The volume of his entrepreneurial activities also refines his entrepreneurship.
7. Fiduciary Relations
Today is the age of Corporate culture, in which big companies and multinational companies are being established.
If an enterprise is established by an entrepreneur or entrepreneur in the form of a company, then fiduciary relations are established between the company and the entrepreneurs.
In such conditions, it becomes the responsibility of the entrepreneurs to present correct facts relating to production before the board of directors or members of the company.
Besides, he should also not earn direct and indirect profits for himself, and if it is earned, then it should be made known, unhesitatingly.
Thus, an entrepreneur should administrator the company, on the basis of the principle of Trusteeship.
8. Reward of Entrepreneur is Profit
The reward of the services rendered by the entrepreneur is in the form of profits. In reality, “profit is the reward of risk“.
The entrepreneur undertakes future uncertainties of trade cycles, establishing the new enterprise and innovative activities.
The reward of all these to him is in the form of profit.
However, if he fails in his activities, he may have to sustain losses also.
9. Developing Behaviour
One of the important characteristics of an entrepreneur is now, the developing behavior.
An entrepreneur refines himself with the amount of experience gained by him. With his entrepreneurial activities and he can increase his success also.
Hence, as the people go on gaining more experiences as an entrepreneur, they get more refined and get highest successes.
For example, today an experienced and Competent doctor prefers to establish his own private clinic or Nursing Home in place of being in service.
That’s why, in India also, the number of private clinics and nursing homes in all parts of the country are steadily growing.
10. Wider Scope
The scope of the entrepreneur has become quite wide.
These days, the need for the entrepreneur is not restricted only to the economic field, rather their need is being equally realized in non-economic fields also.
Although the enterprise or courage has taken birth in the economic field, in no way, it is restricted to it alone.
Besides activities maintaining the survival of human life, it is related to all types of activities.
11. Professionalists and Practice-Oriented
According to the old notions, “Entrepreneurs are born not made.” But, now this notion is true to an end.
People accept that business is science and art, both, and business knowledge may be transferred and hence entrepreneurs may also be developed.
Hence, in the modern age, The entrepreneurs are developing in forms of professional classes.
The entrepreneurs have a practical approach towards life, because they establish, manage and direct the business Enterprises, on the basis of practicability.
They give importance only to such principles which have practical significance.
12. Belief in High Achievements
An important characteristic of an entrepreneur is that they believe in high achievements, because:
- They always believe in hard work and firm determination.
- They work for a long time.
- They intend to achieve something impossible.
- They establish work culture in the society, like doing work by themselves, and expect hard work from their employees also.
- They aspire to make their distinct identification in society, different from other persons.
- They like to get business and social recognition also, along with profits, as a reward for their efforts.
Commenting upon the aforesaid characteristics of an entrepreneur, “The entrepreneurs are dedicated to their goals and do not feel satisfied in life without high achievements.”
13. Freedom Lover
An Entrepreneur likes to lead-free life, it means he likes to do some independent business, in place of getting an appointment somewhere.
That is why, if the persons with enterprising nature have to enter into service in some organization due to some reasons, they soon quit the service and start their own independent business.
Thus, it may be said that due to free nature, the entrepreneurs have no inclination towards having any employment.
14. Preoccupied with the Task and Work for Job Satisfaction
After determining his objectives and goals, the entrepreneur gets fully occupied in achieving them. He has a sense of dedication, commitment, and concentration towards his goals.
Besides, for the entrepreneurs, their work in itself is an important source of their goals and satisfaction.
Although they also wish to get the physical reward, with self-satisfaction and social reputation, that is of secondary importance for them.
15. An Institution
The entrepreneur in himself is an institution because several organizations get established, due to his activities.
In the modern age, many Institutions are functioning as entrepreneurs, to develop entrepreneurship, particularly in developing countries.
The government itself provides a contribution in the Industrial development of the nation, by itself becoming an entrepreneur.
In India, the government has assumed an important role in the establishment of various public sector undertakings or Enterprises.
16. Entrepreneur is an Independent Means of Production
The entrepreneur is also an important and independent means of production, like land, labour, capital, organization, raw materials, management, machinery, and implement, etc. because:
- Only the entrepreneur makes the production and distribution process possible in the economy.
- If the entrepreneur does not start the enterprise, neither demand for various sources of production will be created nor it will be possible to fulfill the demand of the consumers, and
- Only the entrepreneur makes use of all scientific methods related to his business and its management.
The entrepreneur as an important part of production and distribution process.
In other words, an entrepreneur is a source to provide leadership to the business and industries.
17. Functions of Entrepreneurs as Manager
In small and tiny businesses Enterprises, the entrepreneur functions As a manager entrepreneur, because these are managed and operated by the entrepreneurs themselves.
18. Entrepreneur is different from Capitalist and Manager
The entrepreneur is different from the capitalist and manager, due to various reasons.
The main function of the Entrepreneur is to take risks, whereas the function of the capitalist is to make capital available.
The Entrepreneur earns the profit in return for his service and risks, whereas the capitalist gets interested in capital invested by him.
Besides, the income (profit) of the entrepreneur is quite uncertain, whereas the income (interest) of the capitalist is certain. Hence, the entrepreneur is different from capitalist and manager.
Thus, now you know the most important characteristics of an entrepreneur.