What is entrepreneurship?

Your school festival has a 'Young Entrepreneurs Challenge', and you and your classmates set up a lemonade (nimbu pani) stall. Suddenly there are decisions everywhere: the budget for lemons and sugar, glasses to find, a price for each glass, and at the end, whether people liked it and whether you made a profit or a loss. You have just run a tiny business: planning, organising, and learning by doing.

That is entrepreneurship: the process by which a person, or a group, turns an idea into a business. Profit is what remains once every cost of making and selling has been paid.

Behind every great business there is an idea, a need someone noticed, or a wish to do something new. Entrepreneurs are curious people who see opportunities where others see problems: someone who builds drones to watch traffic, or makes jute bags to replace plastic. They work hard, out of passion, and they aim to create value for society, not only for themselves.

What does an entrepreneur do? (Fig. 6.2)

• spots a problem and is determined to solve it in a new way;
• combines the factors of production (land, labour, capital, technology);
• takes risks with money and time;
• makes the key decisions for the business;
• contributes to society through what they create.

A dead mouse and a fortune (a Jataka tale). A rich merchant told the king that even a dead mouse could start a fortune, for someone who worked hard and used their brain. A poor young man heard it and tried. He sold the dead mouse to a shopkeeper for two coins, to feed the shopkeeper's hungry cat. With the coins he bought fruit and water, which a tired flower picker was glad to swap for flowers, and those he sold in the city. Little by little his earnings grew: after a storm he gathered fallen branches and sold them as firewood; he traded grass to horse dealers; he opened a refreshment shop; and finally trading with foreign merchants. Rich at last, he gave half his fortune to the merchant out of gratitude, and used his wealth to help the city too.

The lesson: he spotted opportunities others ignored and worked smart, using each small gain to make the next.