Once in your lifetime, you come across this thought in your mind, “Should I just quit my job and start my own business?”
Starting a business seems alluring to many individuals although there’s no guarantee of it being successful. So, if launching your own business is so challenging and unpredictable, why is it being adopted in such a high rate? To answer that, first, we have to know what entrepreneurship really is and the advantages and disadvantages of pursuing entrepreneurship.
Table of Contents
- What is Entrepreneurship?
- How It All Started?
- 21st century
- Pros of Entrepreneurship
- Cons of Entrepreneurship
What is Entrepreneurship?
Entrepreneurship is the process of designing, launching and running a new business. It is the process of creating a company and bearing any risks that come along with it, with the view of making a profit sooner or later.
Entrepreneurship involves the process of discovering new ideas, methods, techniques and implementing it in business. It is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation.
Entrepreneurship includes many sacrifices and challenges. It can be very rewarding, both financially and personally but at the same time, a headache too.
How It All Started?
The concept of entrepreneurship has been in our modern society for thousands of years and in ` history of economic study the word “entrepreneurship” has been overused, and in some cases underused.
The study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Irish-French economist Richard Cantillon, which was foundational to classical economics.
Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price, “making decisions about obtaining and using the resources while consequently admitting the risk of enterprise”.
Dating back to the time of the medieval guilds in Germany, a craftsperson required special permission to operate as an entrepreneur, the small proof of competence, which restricted training of apprentices to craftspeople who held a master certificate.
In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. Schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability.
Despite Schumpeter’s early 20th-century contributions, the traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks.
In the 2000s, entrepreneurship extended from its origins in for-profit businesses to include social entrepreneurship, in which business goals are sought alongside social, environmental or humanitarian goals and even the concept of the political entrepreneur. In recent years, entrepreneurship has been claimed as a major driver of economic growth.
Entrepreneurship has changed dramatically in the 21st century, but the core reasons for entrepreneurship remains the same. Everywhere in the world, entrepreneurs are arising to address demand by providing supply. They are seen innovating and inventing new technologies to solve problems that nobody had ever thought of solving before.
These foundational structures of entrepreneurship aren’t going to change anytime soon. For that reason, entrepreneurship will continue to have a special place in society and will continue to be found at the forefront of innovation.
Pros of Entrepreneurship
1. Create Job for Others
Entrepreneurs create employment opportunities not only for themselves but for others as well. It’s tough to land a job, but entrepreneurs make it easier. Entrepreneurship is a key driver of our economy. It plays a vital role in achieving the goal of economic development.
2. Being Your Own Boss
Entrepreneurship means being able to choose the work that you’re going to be doing. You get to use your strengths in such a way that you believe is best and fit for the job. You have the flexibility to use your skills in any way you want and not have to worry about sticking to the schedule. There is nothing that exists that can confine you unless you allow it. The cubicle walls don’t have to exist.
Entrepreneurship can be very rewarding, both financially and personally. People choose to become entrepreneurs for a variety of reasons, one of them being the opportunity to build a legacy.
Once you start your own business and it becomes successful, it has the potential to generate wealth that can be passed on to one’s children and grandchildren. The feeling of passing financial security to your children, so that they won’t have to struggle as you did is definitely one of the best things about entrepreneurship.
4. Making a Difference
We have seen a lot of entrepreneurs actually making a difference by providing new innovations and new ideas that directly benefit society. Innovations such as a vending machine for pads to wristbands that can read your mind. Some examples of influential entrepreneurs are Bill Gates, Steve Jobs, Sara Blakely, Oprah Winfrey etc.
5. Unlimited Financial Prospects
If the business manages to reach its full potential then the financial pay-off is significantly higher for entrepreneurs. If an idea really takes off, it’s not a crazy concept that an entrepreneur might find themselves on the north side of a million dollars and in some cases, they might make more money than they could have ever imagined.
6. Emotionally Uplifting
The feeling of success is almost always worth all the struggles and disappointments throughout the entrepreneurship journey. To see your business taking off is one of the most fulfilling things a person could experience in life. It makes everything worth it at the end, all the hard work, commitment, sleepless nights, EVERYTHING.
Cons of Entrepreneurship
1. Risk of Failure
The other side of the coin is that entrepreneurs bear the chance of failure. While founders enjoy the best upside in an attempt, they are also the ones who have the foremost to lose. An entrepreneur invests time into a business, which may prove valuable in terms of cost.
But the truth is that a lot of businesses fail, and there is no guarantee that when a business closes down the entrepreneur will recoup the worth of the time and capital they have invested in their business.
An employee may lose the source of their paycheck, but the entrepreneur might lose his or her entire investment which is typically the majority of their life savings.
2. Uncertain and Irregular Income
Business opportunities can speed up and they can slow down. Many first-time entrepreneurs make the error of coming up with their income on the good times rather than the bad times.
There’s no such thing as a daily paycheck in entrepreneurship. There’s only the income that you’re able to make today. That’s why numerous entrepreneurs put in long hours and days. The sole guaranteed chance that they have is right now.
3. Unlimited Working Hours
-There are no off-days when it comes to entrepreneurship. If you are working, then you’ve always got to bring your A-game to the table. If you have friends or family wanting to hang out often, you’ll have to learn how to balance and/or sacrifice some of that time too since time is something entrepreneurs don’t have enough of – this is harder said than done.
4. Results are Often Hard to Achieve
Entrepreneurship is not an easy task, it takes a lot to even think about starting a business and being successful. You have been ready to fail a lot of times. If you don’t have an internal drive that can push you forward every day and inspire others to follow your lead, then entrepreneurship is definitely not for you.
You have to be able to handle everything that comes in your way, both the good and the bad. Take an example of Jack Ma, he failed so many times to reach the position that he’s in today. You have to ask yourself this question everyday “Do I really have what it takes?” You have to be sure that you’re in it for a long haul no matter what and be patient at the same time.
Entrepreneurship can put you on a rollercoaster of emotions every day. It is an exciting world where your imagination is free to run wild. There will be days when you need to drag yourself out of bed.
The stress levels are so high when you are scratching and clawing for a successful opportunity with everything that you’ve got. You will be responsible for seemingly endless decisions ranging from hiring and firing a product design, purchasing commercial insurance to recruiting employees, everything. An entrepreneur’s work is never done.
6. A Lot to Lose
There is a high chance of things not going the way you plan it. Loss of money, time, and relationships are some things that will always be at risk. You should be willing to put everything on the line and take a leap of faith in the name of just an idea.
Entrepreneurship comes with its share of ups and downs. It can be very exciting but also can be very demanding. The idea of running your own business can be very different from reality.
From late nights to lonely weekends, being an entrepreneur is not without its challenges. But after all, is said and done, going through sacrifices can live up to a prosperous future and make every struggle and disappointment worth it in the end.