Entrepreneurship is one of the four factors of production, - Land, Labour, Capital and Entrepreneurship.
Entrepreneurship is the tendency of a person to organize a business of his own and run it profitably using all qualities of leadership, decision-making and managerial caliber. Entrepreneurship involves not only the process that leads to the setting up of a new business, but also the expansion of an existing business.
Advantages of Entrepreneurship
Entrepreneurs aren't necessarily people who go into business because they like danger or risk taking. There are many Advantages to having their own business. For instance, many people have discovered that they don't have enough opportunities in their present professions as such, they solve their problem by starting businesses of their own. Below are some Advantages of Entrepreneurship:
Satisfaction
Many people start a business when they discover a service or product that can fill a need or want in society. That is true whether the business is a catering service for parties and weddings, a refuge for injured wild animals and birds, or a computer software company.
Transforming an idea into a successful business is very rewarding. Owners often think that the reward is well worth the time and effort they devote to their businesses. They like the feeling that they have built a business that solves a problem and it's successful.
Full Use of Skills
Many Entrepreneurs work for other businesses before they go off on their own. They accumulate expertise in their specialty, and they often also gain skills in management, planning and finances. At some point in their careers, they decide that they want to use those skills in businesses of their own.
Profit
If you work for someone else, you have the security of a regular paycheck. But the profit from the product you produce, whether it is a new hairdo or an automobile, goes to the company. Your salary is paid out of the money the company makes.
Many Entrepreneurs decide that they no longer want to work to make a profit for someone else. Even though they are fully responsible for the finances and bills of their own business, many business owners decide they want the full benefits of their own labors.
Disadvantages of Entrepreneurship
Being successful isn't easy. You don't just start a business and watch the profits roll in. Consider large businesses, there are officers - each has managers, assistant manager and so on. There are departments that are responsible for everything from ordering of raw materials to setting the work schedule for employees. The person who cleans the floor doesn't usually have the responsibility of packaging and distribution to customers. If you become an entrepreneur, you are likely to face the following:
Total Responsibility
An entrepreneur just starting out is charge of everything. That means that the company's success or failure depends on just one person - the owner. The owner must manage workers, manufacturing, and shipping where necessary, he or she has to find customers, sell the product, and be certain that the orders are net.
The owner of a restaurant for instance must acquire the license and permits to operate from government, handle advertising, order and so on. No matter what size the business is, the owner still takes all the responsibility. If the business grows, the owner may hire people to carry out some of these duties. Even then, the owner is the one who is ultimately responsible.
Financial Risks
One of the Disadvantages of embarking on entrepreneurship is the financial risk involved, as it takes money to set up a business and get a business going.
For instance, the owner has to obtain space for the business; furnish it with things like desks, filling cabinets and employ workers. While the business is struggling to get established, the owner has to pay bills and wages.
Long, Irregular Hours of Work
Being your own boss is a lot of work. Studies show that those who start their own business work more hours those who work for someone else. It isn't unusual for their schedules to extend to longer hours even on weekends.
