Economic Activity:Entrepreneurship is primarily an economic activity because it involves the creation and operation of an enterprise. It is basically concerned with the production and distribution of goods and services and optimally utilizes the resource towards productive use.
Entrepreneurship Involves Innovation:Entrepreneurship involves changing, revolutionizing, transforming, and introducing new approaches. Entrepreneurship is an innovative function as it involves doing things in a new and better way. Innovation may take several forms, such as a new product, a new source of raw material a new market, a new method of -production, not yet applied in a particular branch or, manufacturing etc. Drucker says, “Innovation is the specific instrument of entrepreneurship”. Entrepreneur is a change agent.
Goal-oriented Activity: The entrepreneur who creates and operates enterprises seeks to earn profits through satisfaction of needs of consumers; hence, entrepreneurship is a goal-oriented activity. Entrepreneurship emphasizes results, achievements and targets achieved. It is work done not imaginary plans or paper decisions. Hence entrepreneurship is a goal oriented activity.
Value Creation:Next, we find that the process of creating value is a characteristic in describing entrepreneurship. Through entrepreneurship, new products, services, transactions, approaches, resources, technologies, and markets are created that contribute some value to a community or marketplace. We can also see value created when, through entrepreneurship; resources are transformed into outputs such as products or services. During this transformation process, value is created because the entrepreneur is fashioning something worthwhile and useful. Drucker says, “Until entrepreneurial act, every plant is a seed and every mineral just another rock”.
Enterprise Creation:The next characteristic of entrepreneurship is enterprise creation. In order to pursue the perceived opportunities for innovation and to create value, there must be organized efforts and actions. Someone must take the initiative to do something – take action to get the entrepreneurial venture up and running. Entrepreneurship is a creative response to changes in the environment. It involves innovation or introduction of something new or improved. An entrepreneur is an agent to effect change.
A Function of Risk Bearing:Risk is an inherent and inseparable element of entrepreneurship. An entrepreneur works under uncertainties and he assumes the uncertainty of future. In the pursuit of profit, there is possibility of loss also.
Entrepreneurship Implies Growth:The next characteristic in entrepreneurship is growth. One major difference between entrepreneurial ventures and other small businesses is the emphasis on growth. Entrepreneurship is about growing a business and pursuing opportunities as they arise. It’s not about standing still or being content to stay in one market or with one product.
Managerial Skill and Leadership Function:Managerial skill and leadership are the most important facets of entrepreneurship. An entrepreneur must have the ability to lead and manage. He provides direction, create work culture, and build teamwork and cohesiveness among employees.
Organizing Function:It is the ability to bring together productive resources of society. Entrepreneur coordinates and control the efforts of all the persons engaged in his enterprises. He harnesses land, labour, capital and other resources of for the benefits of mankind. Therefore, an entrepreneur is called as an organization builder.
Another Characteristics of entrepreneurship is a recognition that entrepreneurship can take place in both profit and not-for-profit environments.Although we tend to assume that entrepreneurial activity is geared at making a profit (and we agree that much of it is), entrepreneurship also occurs in social service agencies, in community arts organizations, or in other types of not-for profit.