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DIFFERENT CHARACTERISTICS OF ENTREPRENEURSHIP AND WAGE EMPLOYMENT
Entrepreneurship is about starting and managing a business while handling any risks that come with it, to
make a profit. An entrepreneur takes these risks to earn money from their business.
To better understand entrepreneurship, we need to know what profit and risk mean:
Profit: It is the money you make from your business after covering all your costs and expenses. For
example, if you start a lemonade stand and spend `100 on lemons and sugar, but you earn `300 from
selling lemonade, your profit would be `200.
Risk: It refers to the uncertainty or chance that you might lose money or face other problems. For example,
imagine you start a home-based online craft store and invest `200 in materials to create handmade
jewellery. There’s a risk that your website might have technical issues or that people might not find your
store online, which could lead to fewer sales and a potential loss of money.
Entrepreneurship involves dealing with such risks, but successful entrepreneurs are willing to take these
calculated risks. They carefully plan and make smart decisions to manage potential problems. Even if they
encounter challenges or setbacks, they learn from their experiences and keep working towards their goals
until they succeed.
Characteristics of Entrepreneurship
Some of the distinguishing characteristics of entrepreneurship are explained below:
Ability to Take Risks: Entrepreneurs are willing to take calculated risks to achieve their goals. They
understand that starting and running a business involves uncertainty and potential challenges.
Hard Work and Discipline: Successful entrepreneurs are known for their dedication and strong work
ethic. They consistently put in effort and stay focused on their business tasks.
Adaptability and Flexibility: Entrepreneurs can change their plans and strategies when needed. They are
open to new ideas and can adjust to meet customer needs and improve their business.
Knowledge of Products and Market Demand: Entrepreneurs have a good understanding of their
products or services and know what customers want. They keep up with market trends and demands to
make sure their offerings are relevant.
Financial Literacy and Money Management: Entrepreneurs are skilled at handling finances. They know
how to budget, plan, and manage money to keep their business running smoothly and profitably.
Effective Planning and Execution: Entrepreneurs are good at creating detailed plans and following
through with them. They set clear goals and work systematically to achieve them.
Common Reasons for Business Failures
Have you ever seen a shop or business close suddenly in your neighbourhood? It might be helpful to think
about why it happened:
Quality of Goods or Services: Did the business offer products or services that were of poor quality? If
customers were unhappy with what they received, they might have stopped buying from that business.
Market Demand: Was the business selling things that people in the area didn’t need or want? If the
products or services were not in demand, the business might not have made enough sales.
Opportunity: Did the business owner miss a chance to make improvements or take advantage of a good
opportunity? Not spotting the right opportunities can lead to failure.
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