Entrepreneurship

• Author: Tim Barnet
• Pages: 258-259

Page 258

Entrepreneurship is the process of identifying opportunities, marshalling the resources needed to take advantage of the opportunities, and creating a new venture for the purposes of providing needed products/services to customers and achieving a profit. The word "entrepreneurship" is taken from the French word "entreprendre," which means "to undertake." A person who engages in entrepreneurship is called an entrepreneur. Entrepreneurship occurs all over the world, but it is a particular characteristic of free-market economies. Countries with the highest rates of entrepreneurship include the United States, Canada, Israel, Italy, and Great Britain.

Entrepreneurship involves considerable risk, as the failure rate for new ventures is very high. Thus, to be successful, an entrepreneur must be able to tolerate and even thrive under conditions of risk and uncertainty. Successful entrepreneurship also requires innovativeness and creativity, as well as self-confidence, high levels of energy, and a strong need for achievement. Interest in entrepreneurship is at an all-time high. Most colleges and universities offer courses or even entire programs of study in entrepreneurship.

The process of entrepreneurship is complex and requires the aspiring entrepreneur to make many decisions. It begins with recognizing an opportunity and applying innovativeness and creativity to exploit the opportunity. The entrepreneur must engage in strategic thinking and identify a competitive advantage that will set the small business apart and provide customers a unique reason to patronize the business.

The outcomes of this strategic thinking should be a business plan, which is a written statement that provides a comprehensive blueprint for the new venture. Although every business plan should reflect the unique characteristics of the entrepreneur and the proposed new business, there are common elements that exist in most business plans. Typically, the business plan includes some or all of the following components:

Executive Summary

Description of the Firm's Product/Service

Business Strategy

Forecasted Financial Statement

Loan or Investment Proposal

The executive summary provides a concise one to two page overview of the entire business plan. The description of the product or service should identify the key features and benefits of the product or service. The business strategy is the most detailed part of the business plan. Here, the plan...