Entrepreneurship is when a person takes a risk to start a company based on a unique product or service. These businesses develop into larger and more stable firms, creating jobs in the process, and often lead to growth in related industries. Nurturing entrepreneurship is important to economic and social development. There are a variety of different types of entrepreneurs. Opportunistic entrepreneurs seek high profits, capturing market share from established companies with a new and improved product. Innovators are rare individuals that come up with an original idea, and then build an entire company around it.
Business creation is the process of starting a company and formalizing all the steps involved in the form of a document known as a business plan. This is a vital step in the life of any company, and it involves researching the potential market, setting up financial forecasts and choosing the legal form for the new enterprise. The goal of this research is to determine if the project is viable and to create a plan for its success.
It is generally thought that downturns are good times for entrepreneurs to start a business because competition might be weak and input costs cheap, but this view does not always hold up. The surge in new business applications during the COVID-19 pandemic was probably driven by panicked people looking to make some money quickly, rather than a rational response to economic conditions.