What is meant by entrepreneur: Definition, Types & Financial Role

Key Insights
 

1. Entrepreneurs tackle problems in various fields, from running a bakery to developing a tech app. They work hard and take smart risks.
    
2. They create jobs, pay taxes, and build things we need, making the whole country's economy stronger.
    
3. Starting a business is challenging, with obstacles such as high costs and intense competition. Still, sticking with it can bring both success and valuable lessons.

An entrepreneur is an individual who establishes a company to meet a need or address a problem. To grow their business, they innovate, take risks, and work diligently.

Example: Salman, A Cybersecurity Entrepreneur

Salman is the CEO of a business-to-business (B2B) organisation that offers cybersecurity services to other companies. He gets paid by his clients to keep their data safe from hackers.

• Business Idea: Many companies face cyber threats, so Salman offers security solutions.
   
• Investment: He started with ₹5,00,000 to buy software and hire experts.
   
• Earnings: Now, he charges ₹50,000 per client monthly and has 20 clients.
   
• Growth: His company makes ₹10,00,000 every month.

Table:
 

This table highlights the key details of a successful B2B cybersecurity startup, showcasing its strong financial performance and client base.
 

With solid revenue and a growing client portfolio, this business demonstrates the high demand and profitability of cybersecurity services in the B2B sector.

Salman's business was successful because of his hard work and intelligent planning.

Bonus Tip: Start small, seek microloans or investors, and focus on ideas that require a low initial investment, such as services or digital products.

Types of Entrepreneurs

An entrepreneur is a person who opens a company in order to address an issue. Depending on their goals and plans, various entrepreneurs work in different ways.

Here are four typical business types with some examples from real life:

1. Small Business Entrepreneur

• Starts a local business with limited resources.
• Focuses on earning daily profits.
• Example: Rahul - Owner of a Neighbourhood Bakery
  • Invested ₹3,00,000 to open a small bakery.
  • Sells cakes, cookies, and bread.
  • Earns around ₹50,000 per month.

2. Scalable Startup Entrepreneur

• Builds a business that can grow fast (usually tech-based).
• Seeks investors to expand quickly.
• Example: Pooja - Founder of a Food Delivery App
  • Started with ₹10,00,000 investment.
  • Expanded to 5 cities in 2 years.
  • Now earns ₹25,00,000 per month.

3. Social Entrepreneur

• Start a business to help society, not just for profit.
• Example: Arun - Runs a Cheap Sanitary Pad Business
  • Sells affordable pads in rural areas at ₹50 per pack.
  • Helps women stay healthy.
  • Earns ₹2,00,000 monthly but reinvests in awareness programs.

4. Innovative Entrepreneur

• Creates new products or services using unique ideas.
• Example: Neha - Invented Water-Saving Showerheads
  • Spent ₹15,00,000 on research.
  • Sells each showerhead for ₹2,500.
  • Makes ₹8,00,000 per month.

Table:

This table showcases four distinct entrepreneurial paths, each with unique goals, investment needs, and financial outcomes.
 

Whether driven by profit, scale, social impact, or innovation, entrepreneurship offers diverse opportunities to create value and achieve success.

Thankfully, each type of entrepreneur operates differently; they all take calculated risks to achieve success.

Bonus Tip: High startup costs, hiring talent, competition, cash flow issues, and adapting to digital markets are common hurdles.

Financial Role of an Entrepreneur in the Economy

An entrepreneur starts companies that improve economic growth. They contribute to the nation's growth, create jobs, and pay taxes, which pushes our economy.

Example: Adani Group

This data highlights Adani's significant role in job creation, infrastructure development, and economic growth across India.
 

• Creates Jobs: With salaries that vary between ₹25,000 to ₹5,00,000 per month, Adani directly employs over 2,30,000 people. 
   
• Builds Infrastructure: Manages ₹10,000,000 crore worth of ports, airports, and power plants to support trade and the supply of electricity.
   
• Pays Taxes: Contributes ₹5,000+ crore yearly in taxes, funding government projects.
   
• Supports Small Businesses: Works with 50,000+ small suppliers, buying goods worth ₹20,000 crore annually.
   
• Boosts Exports: Through ports like Mundra, it helps India export goods worth ₹3,00,000 crore per year.

Through employment, infrastructure, taxes, and supply chains, Adani plays a vital role in strengthening India's economy and global trade.

This table summarizes Adani's multifaceted economic contributions, from job creation and infrastructure to supporting small businesses and boosting exports.
 

Adani's large-scale investments and operations play a key role in driving India's economic growth, infrastructure development, and global trade.

Adani's companies improve the Indian economy by generating income, employment, and improved infrastructure.

Challenges Faced by an Entrepreneur

Building a business presents a number of challenges for an entrepreneur. You can overcome these difficulties, but you have to put in determination, financial matters, and a lot of hard work.

Example: Mukesh

Mukesh had ambitious goals when he launched a desi (Indian) clothing company, but he faced actual difficulties:

1. High Initial Costs

• Needed ₹50,00,000 to start (fabrics, workers, shop rent).
• The bank loan came with 12% interest, making repayment tough.
   

2. Finding Skilled Workers

• Paid tailors ₹25,000 per month, but many left for better jobs.
• Training new workers costs ₹2,00,000 extra.
   

3. Competition from Big Brands

• Competed with brands like FabIndia & Manyavar.
• Had to sell at lower prices (kurta at ₹800 vs. ₹1,500 by big brands), reducing profits.
   

4. Late Customer Payments

• Shops took 60-90 days to pay after sales.
• At one point, ₹15,00,000 was stuck, affecting cash flow.
   

5. Online Shift Struggles

• During COVID, I had to start selling online.
• Spent ₹5,00,000 on website & ads but got fewer orders than expected.

This table outlines the key challenges faced by a business, from startup costs and competition to cash flow and digital transition struggles.
 

Despite financial hurdles like high debt, low margins, and delayed payments, adapting to market demands remains critical for long-term survival and growth.

Mukesh overcame these issues by finding dedicated workers, reducing expenses, and slowly building trust. 

Conclusion 

Entrepreneurship comes with its share of challenges and rewards. Take Mukesh, for example, who launched his own clothing line. He began with a dream, but soon faced real problems like high expenses, not enough staff, and tough competition. At one point, he struggled to keep his business running because he owed ₹15,00,000 in overdue payments.

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Still, Mukesh did not give up. He focused on training loyal employees, cutting costs, and gradually building trust with his clients. Today, his brand brings in ₹2 crore each year. Like Mukesh, all entrepreneurs face tough times, whether it is money problems, competition, or surprises along the way.

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FAQs

Can anyone become an entrepreneur?

Yes, if you're willing to work hard, learn from mistakes, and handle risks. You don’t need a degree, just passion and persistence.

What if my business fails?

Failure teaches valuable lessons. Many successful entrepreneurs failed first, learn, adjusted, and tried again with better planning.

How do I find customers for my new business?

Start locally, use social media, offer samples/discounts, and ask for referrals. Good service brings repeat customers.

Should I quit my job to start a business?

Not immediately. Test your idea part-time first. When your business earns steady income, consider going full-time.

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