Meaning and Concept of an Entrepreneur

The word "entrepreneur" comes from the French verb entreprendre, meaning "to undertake." In commerce, an entrepreneur is a person who identifies a business opportunity, organises the resources needed to exploit it, and undertakes the risk of running the resulting enterprise with the object of earning profit. For a student of AP Inter II year Commerce, the entrepreneur is best understood as the person who converts an idea into an actual, functioning business -- someone who sees a gap or a possibility that others have missed, and is willing to commit money, time, and effort to fill it, accepting that the venture may just as easily fail as succeed.

A working definition that the AP Board expects a student to be able to state is: an entrepreneur is an individual who conceives a business idea, mobilises land, labour, and capital to give it shape, bears the uncertainty of the outcome, and directs the enterprise towards achieving its objectives. Three ideas run through almost every definition of the term. First, innovation -- an entrepreneur does something new, or does an existing thing in a new way, rather than simply repeating what already exists. Second, risk-bearing -- an entrepreneur commits personal or borrowed capital to a venture whose outcome is never certain, and stands to gain the profit or absorb the loss personally. Third, organisation-building -- an entrepreneur is the one who actually assembles land, labour, capital, and enterprise into a working unit, rather than merely having an idea and stopping there.

It is useful, at this stage, to keep entrepreneur (the person) distinct from entrepreneurship (the process or activity that person carries out) -- a distinction the very next chapter of the BIEAP commerce syllabus develops further. An entrepreneur may operate a tiny one-person trading concern or found a large industrial house; the scale of the venture does not change the basic role -- identifying an opportunity, organising resources, bearing risk, and driving the enterprise forward.