Entrepreneur, Entrepreneurship and Enterprise

The word 'entrepreneur' comes from the French verb entreprendre, meaning 'to undertake'. In everyday usage the words entrepreneur, entrepreneurship and enterprise are often used loosely as if they mean the same thing, but in the study of business they refer to three distinct ideas that are nevertheless closely connected — one is a person, one is a process, and one is the outcome of that process.

An Entrepreneur is a person who identifies a business opportunity, takes on the risk of starting a venture to exploit that opportunity, brings together the necessary resources — capital, labour, materials and machinery — and organises them into a functioning business, in the hope of earning a profit. The entrepreneur is the driving individual: the one who conceives the idea, commits personal savings or borrowed capital, and bears the uncertainty of whether the venture will succeed or fail.

Entrepreneurship is the process, the set of activities and the bundle of skills that the entrepreneur applies in creating and running that venture. It covers everything from spotting an opportunity and assessing its feasibility, to planning, organising resources, taking calculated risks, innovating, and continuously adapting the business as conditions change. Entrepreneurship is therefore not a one-time act but an ongoing capability — the same entrepreneur keeps 'doing' entrepreneurship as the business grows, diversifies or overcomes new challenges.

An Enterprise is the actual business unit or organisation that results from the entrepreneur practising entrepreneurship — the shop, factory, firm or company that now exists, employs people, produces goods or services, and deals with customers and suppliers. The enterprise is the concrete, tangible outcome; the entrepreneur and entrepreneurship are what brought it into being and what keep it running.

A simple way to remember the relationship: the Entrepreneur (person) practises Entrepreneurship (process) to build and run an Enterprise (business unit). Without an entrepreneur there is no one to start the process; without entrepreneurship as a process there is no method by which an idea becomes a working business; and without the resulting enterprise, entrepreneurship would have nothing concrete to show for itself.