Explain Innovation and Risk Bearing.
Innovation is one of the basic element of entrepreneurship. A person is said to be an entrepreneur if he brings in something new and different in his venture or project. When one does something different from what others do, it is called innovation. Now-a-days, entrepreneurs constantly think about something new and unique in order to fulfill the needs of people. Sometimes, entrepreneurs may not be the inventors of new methods of production or products but they have the ability to foresee the result of using such an invention for business.
A business can be made successful by an entrepreneurs only with the help of innovation. It is not necessary that innovation has to be something big or dramatic. It can be something simple or small. Some profitable innovations could be a colorful packaging, a simple adjustment to something old, giving a service, without charging anything extra “while selling a product and selling a product in packets of various weights.
Entrepreneur has to open the windows of his thinking and think of some other types of innovations, if similar things are performed by lots of producers and sellers. Some innovations give birth to other innovations. One should possess knowledge as well as imagination for innovative thinking Imagination power and creative thinking are the two skills which an entrepreneur must possess. For example: now-a-days, one can get fruit juice in small tetra packs instead of bottles. It is because the person can carry it off easily and throw it away after drinking the juice. Such a change is called an innovation.
Risk Bearing is another element – of entrepreneurship. Every entrepreneur has to bear the risk of the business. He should have the courage to take the risk rather than avoid it. A new business always involve risk because one invests money to get profits in the future. It is quite risky to try out something new It could be possible that anew project may not bring expected returns and may run into losses.
A business fails due to many reasons like increasing competition, shortage of raw material supply, a change in customer preferences or sudden unexpected calamities. He should be bold and courageous to assume the risks. Reward of risk is sometimes profit. That is why in order to get reward, he should be prepared to take risks. An entrepreneur can succeed if he persists, when he fails in one venture or project. This particular element should be present in entrepreneurs so that the business runs smoothly, effectively and efficiently.