Meaning and Definition of Entrepreneur

An entrepreneur is a person who conceives an idea for a new product or service, organises the resources needed to turn that idea into a working enterprise, and then runs it while carrying the risk of loss in the hope of earning profit. The word comes from the French entreprendre, meaning 'to undertake' — an entrepreneur is literally one who undertakes a venture.

Three ideas sit at the heart of the term. First, the entrepreneur innovates — he or she spots an opportunity that others have missed, whether a new product, a cheaper method of production, a new market, or a new source of supply. Second, the entrepreneur organises — bringing together the factors of production (land, labour, capital and knowledge) and coordinating them into a productive unit. Third, the entrepreneur bears risk and uncertainty — because the outcome of a new venture can never be known in advance, it is the entrepreneur who accepts the possibility of loss.

It helps to separate three closely related terms:

A useful working definition: an entrepreneur is an innovative person who sets up an enterprise by identifying a business opportunity, marshalling the resources to exploit it, and bearing the risk and uncertainty involved, with the aim of earning profit and creating value. The commerce syllabus draws on the same well-established principles of business economics and management that underlie the study of enterprise everywhere.