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1260 Full Notes of Entrepreneurship
1260 Full Notes of Entrepreneurship
ENTREPRENEURSHIP
ORIGIN:-
The term ‘entrepreneur first of all appeared in the French Language. In
the early 16th century it was applied to a person engaged in military
expedition. To was extended to cover the construction and civil engineering
activities in the 17th century. It was the only in the 18th century that the word
was used to refer to economic activities. Richard Cantillon, a French banker
applied the word entrepreneur to mean a person who bears uncertainty and
risk ’
Introduction
Economic development essentially means a process of upward
change. It can be defined as a process of a upward change. It can be define
as a process whereby the real per capita income of the country increases
over a long period of time.
Concept
Entrepreneurship is the tendency of a person to organize the business of
his own and it run a profitably, using the quality of leadership, decisions
making and managerial caliber etc. The term entrepreneurship is often used
interchangeably with entrepreneurship. But conceptually they are different
ENTREPRENEUR
ENTREPRENEURSHIP
Refer to a person
Refer to a process
Creators
Creation
Organizer
Organization
Decision Maker
Decision making
Initiator
Initiative
CHARACTERISTICS OF ENTREPRENEURSHIP
11) Blessed with mental ability: this consist of overall intelligence .i.e.
IQ, creative thinking ability and analytical thinking ability and
analytical thinking ability.
ENTREPRENEURIAL
PERSONALITY
TASK
ENTREPRENEURIAL
ENVIRONMENT
2) According to motivation:
Man entrepreneur
Woman entrepreneur
Young entrepreneur
Old entrepreneur
Middle –aged entrepreneur
7) According to area
Urban entrepreneur
Rural entrepreneur
Notes By: Guljinder Randhawa 9
8) According to scale
A) ECONOMIC ORIGIN
B) SOCIO ORIGIN
TRIATS OF A GOOD
ENTREPRENEUR
The term ‘competence’ implies a person’s underlying characteristics leading
to his/ her superior performance. It is good combination of various qualities
and traits required to perform the job effectively. Entrepreneurs who possess
the necessary competencies succeeds while those deficient in these
competencies fail in their ventures.
Some people believe that entrepreneurs are born not made. In other
words, business family background is essential to success for entrepreneurs.
Other people believe that entrepreneurs are not made born. According to
Notes By: Guljinder Randhawa 12
some people, person which proper knowledge and skills acquired through
education and experience can become successful entrepreneur. In other
words resolve the controversy on what successful entrepreneurs, the
Entrepreneurship development Institute of India (EDI). Following are the
traits or good qualities of the entrepreneur:-
Initiation: given the demand of the situation, entrepreneur takes
initiation to start an industry .
Watching for opportunity and take necessary action.
Persistence: - he should go for extreme efforts to get rid of the
problem.
Information seeker:- ready to learn from his experience
Quality conscious: - Always put effort to excel better than the existing
standard of performance.
Commitment to work: - Accord upmost priority to accomplish the work.
Efficiency lover: - tries to do things at the faster pace incurring
minimum cost.
Proper planning: - frames realistic business plans and follow them
effectively.
Self confidence: - A strong believer in his strengths and weakness.
Assertiveness: - able to assert his issues.
Persuasion:- succeeds in persuading other to do what he wants
Efficient monitoring: - personally supervises the work to ensure that
the work is accomplished.
Concern of employees and take proper action to improve the welfare of
employees working in his enterprises.
Several other research studies have tried to identify the qualities and traits
of successful entrepreneurs. In the study of entrepreneurial development in
Madras city of India, J. Berna has stressed the following qualities of a good
entrepreneur.
He is an enterprising individual. He is energetic, hardworking,
resourceful, very alert to new opportunities, able enough to adopt to
the changing condition.
He is also interested in expanding the scale of his operation by way of
ploughing back his profit.
He welcome advanced technology.
He well visualize the likely changes and ready to adapt them
FACILITATING FACTORS
BARRIERS
2 Entrepreneurial training
Lack of market knowledge
3 Market Contacts
Lack of seed capital
4 Family business
Lack of business knowledge
5 Availability of capital
Social stigma
9 supplier assistance
Political instability
other
institutions
MEANING OF MOTIVATION
Motivation implies an inner state that cause a person to act toward the
attainment of goals. It is an inspirational process of steering an individual’s
inner drive and action toward goals. It causes a chain reaction. Motivation
can be both positive and negative. Positive occurs when a person is inspired
Notes By: Guljinder Randhawa 20
to act for earning some rewards and benefits. On the other hand negative
motivation arises from fear or failure or frustration. It causes a person to
seek protection.
FACTORS OF MOTIVATION
Several studies have been undertaken to identify the factor that motivate
people to sart their enterprises. P.N .Sharma has identified nine motivating
factors which are as under.
1. Internal Factors
Educational Background
Occupational Experience
Desire to work.
Desire to branch out manufacturing.
Family background.
2. External Factors
Assistance from government.
Assistance from financial institution.
Availability of technology/ raw material
Other factors demand of a particular product, utilization of excess
money earned from contractual estate business, started
manufacturing to facilitate trading distribution system, government
policies and many other factors.
ENTREPRENEURIAL AMBITION
Another study on entrepreneurial motivation by M Chandra sekhar and M
Gandhara Rao have classified the factors behind entrepreneurial growth
into 3 categories. And Ambition of Entrepreneur is one of them
Main Ambitions of Entrepreneur are
He argue that people with high need for achievement possess the
following attributes:
Prefer personal responsibility for decision.
Are moderate risk taker.
Possess interest in concrete knowledge of the result of decisions.
ESTABLISHMENT OF ENTREPRENEURIAL
SYSTEMS
An entrepreneur, after making appraisal of the resources at his
command, perceives a business opportunity for producing and marketing a
product or services. After establishing an enterprises an entrepreneur is
Notes By: Guljinder Randhawa 25
required to look after the operation of this enterprises over a period of time.
An entrepreneur is expected to undertaken the following steps in his pursuit
of setting up an enterprise
All the above stated function is important but the function regarding
finance, manpower and marketing, demands more attention of
entrepreneur.
B. Management and control: SSI is normally a one man show and even in
case of partnership the activities are mainly carried out by the active
partner and the rest are generally sleeping partners
C. Gestation period: Gestation period is that period after which teething
problem are over and return on investment starts.
D. Area of operation. The area of operation of SSI generally localized
catering to the local or regional demand. The overall resources at the
disposal of a SSI are limited and as result of this, it is forced to confirm
its activity to the local level.
E. Technology: SSI are fairly labour intensive with comparatively smaller
capital investment than the large unit.
E) Other Problem
Technological changes
Land and building
Infrastructural facilities
Faculty planning
License system
Managerial inadequacies
Analysis of business environment
Machinery and other equipment
Lack of technological upgradation
F. Designing financing scheme: After deciding about the location the next
important consideration is financing. An entrepreneur is to properly
assess his financial requirement and take necessary steps for raising
the requisite financial resources. An entrepreneur can depend on
various sources for financing his enterprises and these are:
Own funds.
Borrowing from the friends and relatives.
Loan from the commercial banks for the working capital.
Term loans from the financial institution and state Finance
Corporation.
There are many hurdles in financing small scale units and risk involved is
more because of the following factors
Limited managerial expertise.
More vulnerability to business environmental pressure
Insufficient collateral to comply with the term and conditions of
lending institution.
9. Registration: The next step is to get the unit registered with the
department of industries on provisional basis. The provisional
registration can be issued to the entrepreneur to:
Apply for shed in industrial estate.
Apply for corporation , municipal or other local authorities fpr
permission to construct the shed for establishing the unit.
Apply for power connection.
Apply to SSIS for procuring machinery on hire purchases basis.
Obtain sales tax, excise registration etc.
Apply for telephone connection.
Import license for capital good/ raw material.