Advantages And Disadvantages Of Entrepreneurship | What is Entrepreneurship?, Pros and Cons, Benefits and Drawbacks

Entrepreneurship Advantages and Disadvantages: Entrepreneurship is the ability to generate and implement new ideas to start a business. It requires an ability to judge and handle the possible risks for gaining a reward or success. Entrepreneurship can be challenging and exciting as it requires tireless efforts and innovative strategies to be applied to make the business ideas fruitful and profitable. Entrepreneurship requires leadership qualities to build a successful team towards the fulfillment of the vision. An entrepreneur must possess the open-minded and creative abilities to gather information and implement innovative ideas to take advantage of new opportunities and remain competitive.

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What is Entrepreneurship? Advantages and Disadvantages of Entrepreneurship

Entrepreneurship is led by the desire and ability to establish a new business to fulfill the aspirations, goals, and passion of an individual. An entrepreneur is his boss and there is no one to interfere with the decisions, the way of working, or how to approach situations. On one side this may be exciting but again this means one has to take responsibility for his own decisions and actions. So entrepreneurship requires the ability to take risks and find the means to overcome them. Starting your own business and earning money by application of innovative strategies and methods can be rewarding and motivating.

Advantages of Entrepreneurship

  • Autonomy: People enjoy more autonomy or freedom in entrepreneurship as they invest their time, money, and efforts into the business to make it successful. They are more involved and self-driven as there is no one to interfere or ask for explanations of their decisions.
  • Motivating: As entrepreneurs start making decisions and get successful results, they become more motivated and engaged to work hard to ensure success in their business.
  • Flexibility: Entrepreneurship allows working without a fixed routine time that helps to organize other works with better control and flexibility. This can improve mental and physical well-being.
  • Career orientation: Entrepreneurship allows someone to align his desire and passion into the work and incorporate his values and beliefs into the business. This can help him to move in a career path of his choice.
  • Develop skills: Entrepreneurship involves overcoming challenges that develop the growth mindset and professional abilities. It gives first-hand knowledge and experience that helps to develop leadership skills and managerial techniques.
  • Economic development: A successful venture gives a lot of scope to improve earnings by own efforts and involvement that is not possible in any jobs. There are various opportunities and ways that can be explored to gain a competitive advantage and profitability.
  • Meeting people: When a new business is started, there are possibilities to connect with people having exposure and experience in that particular field. Interaction with like-minded people helps to focus on the work more strategically and ambitiously.
  • New experiences: Entrepreneurship gives new experiences and challenges that are often unexpected. This helps to gain new lessons and develop problem-solving and decision-making abilities that are useful for the further growth of the business.
  • Building your own team: Entrepreneurs have the freedom to choose their team to work with, select their clients and partners. He has the sole decision-making power about the functioning of his company, its policies, and its culture.
  • Get full rewards: In an entrepreneurship journey, the success of a business is enjoyed by the entrepreneur with no one else to claim. One can enjoy the profit and re-invest it into the business towards further growth.

Disadvantages of Entrepreneurship

  • Uncertain income: Entrepreneurship doesn’t ensure a steady and certain income as in jobs. When in the job, there is a fixed monthly income but in entrepreneurship, the income flow is uncertain and not guaranteed especially in the early stage of a business venture.
  • Need to devote more time: As an entrepreneur, one needs to devote a lot of time to establishing the business without having the luxury of fixed working hours.
  • Risk of failure: The initial stages of the entrepreneur journey may be very challenging and there are risks that the business strategies may not work resulting in losses in business.
  • Create new customers: Customers often prefer established businesses for purchasing products and availing services. Some customers often rely on public reviews and personal references. As a startup business, it is difficult to build a customer base and takes time to develop brand awareness.
  • Financial instability: In the initial stages of entrepreneurship, there can be more outflow of money as an investment as compared to the return from business. As a self-employed person, it becomes a big challenge for financial security.
  • Greater competition: As an entrepreneur, it becomes difficult to compete with established businesses in the same field due to a lack of resources in terms of knowledge, experience, and customer support.
  • Lack of investors/partners: Some ventures require a lot of investment but it is difficult to find investors or partners to work with due to the absence of a history of financial success. Sometimes entrepreneurs start a business in debt and have to work very hard to recover in course of time.
  • More responsibilities: As an entrepreneur, one has to look after a lot of things related to business and take care of finances, legal issues, manpower, sales, customer support, and many other things to keep the company functioning systematically.

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Comparison Table for Advantages and Disadvantages of Entrepreneurship

Advantages Disadvantages
Entrepreneurs enjoy more freedom in their work as they invest their time, money, and efforts into the business to make it successful. In a job, there is fixed monthly income but in entrepreneurship, the income flow is uncertain and not guaranteed especially in the early stage of a business venture.
Entrepreneurship allows working without a fixed routine time that helps to organize other works and personal activities as per flexibility. The initial stages of the entrepreneur journey may be very challenging as there are risks that the business strategies may fail to result in losses.
Entrepreneurship involves taking challenges and overcoming them that gives first-hand knowledge and experience and helps to develop leadership skills. Customers often prefer established businesses, and often rely on public reviews and personal references. As a startup business, it is difficult to build a customer base and takes time to develop brand awareness.
A successful venture gives a lot of scope to improve earnings by own efforts and involvement that is not possible in any jobs. In the initial stages of entrepreneurship, there can be more outflow of money as compared to inflow as a return from business. As a self-employed, it becomes a big challenge for financial security.
The success of a business is enjoyed by the entrepreneur who can enjoy the profit and re-invest it into the business towards further growth. An entrepreneur has greater responsibilities to look after a lot of things related to business for keeping track of the day-to-day activities.

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FAQ’s on Advantages And Disadvantages Of Entrepreneurship

Question 1.

Why is entrepreneurship motivating?

Answer:

Entrepreneurship makes the initial phases challenging but the results are rewarding as it involves own time, money, and efforts to enjoy success and profitable outcomes.

Question 2.

What qualities should an entrepreneur possess?

Answer:

An entrepreneur must have risk-taking abilities, patience, open-mindedness, and an innovative approach.

Question 3.

What can be a major risk of entrepreneurship?

Answer:

There is a risk that the business doesn’t work and faces losses with a low return on investment.

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