An entrepreneur is an individual who undertakes the management and financial risk of an economic enterprise.
Entrepreneurs see opportunities where others don't. If someone complains, the entrepreneur may see a way of turning a complaint into a thriving business. Entrepreneurs seek opportunities by identifying a need and having the courage to act on it. Entrepreneurs are innovators. They take new ideas and bring them to market. After identifying a need, the entrepreneur weighs the risk of starting a business with the potential rewards. With conviction, the entrepreneur may quit a secure job to start a company. The entrepreneur must raise the capital (money) needed to begin the business. This may come from personal savings, a loan (which assuredly will put some personal assets at risk), or other investors. Next, the entrepreneur must assemble and manage a team to build and sell the good or service.
Economies depend upon entrepreneurs to generate the new jobs, goods, services, and technology that are essential for a healthy and growing economy. An entrepreneur is responsible for creating virtually every job in the private sector of our economy. The world’s largest companies such as Alphabet (Google), Apple, ExxonMobil, and others owe their beginnings to an entrepreneur or a small team of entrepreneurs. In contrast to the most prominent businesses, most entrepreneurs own very small businesses. The US Census reported that 98 percent of businesses in the US have less than 20 employees.
Most economists agree that small businesses play a vital role in an economy. In the US, somewhere between 32 percent and 65 percent of new jobs are created by small businesses. The Kaufman Foundation reported that 565,000 new businesses were formed in 2010. The vast majority of these started with less than ten employees. Most entrepreneurs own very small businesses, and some entrepreneurial ventures are also firmly rooted in a local economy. For example, a neighbor who recently was laid off and started a plumbing service qualifies as an entrepreneur. Size and success are not required to be an entrepreneur. What is required is seeing a need and having the courage to act on it by risking investments in time and money, expecting a favorable return on that investment.
Entrepreneurs – Their Vital Role in the Economy
Production Possibilities Frontier
Circular Flow Model – We Depend On Each Other
Changes In Supply – When Producer Costs Change