Entrepreneurship

 The activity of setting up a business or businesses, taking on

financial risks in the hope of profit.
 Entrepreneurship is the process of designing, launching and
running a new business, which is often initially a small
business. The people who create these businesses are
called entrepreneurs.
 Entrepreneurship has been described as the "capacity and
willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit".
 Entrepreneurship is the act of being an entrepreneur, or "the
owner or manager of a business enterprise who, by risk and
initiative, attempts to make profits".

 In economics, entrepreneurship combined with land, labor,

natural resources and capital can produce profit.
Entrepreneurial spirit is characterized by innovation and
risk-taking, and is an essential part of a nation's ability to
succeed in an ever changing and increasingly competitive
global marketplace.

 The most obvious example of entrepreneurship is the

starting of new businesses.
  The exploitation of entrepreneurial opportunities may
include:[9]
i. Developing a business plan
ii. Hiring the human resources
iii. Acquiring financial and material resources
iv. Providing leadership
v. Being responsible for both the venture's success or
failure
vi. Risk aversion
 A person who sets up a business or businesses, taking on
financial risks in the hope of profit is called entrepreneur

businessjargons.com

Intrapreneurship

 Intrapreneurship is the act of behaving like

an entrepreneur while working within a large organization.
Intrapreneurship is known as the practice of a corporate
management style that integrates risk-taking and innovation
approaches, as well as the reward and motivational
techniques that are more traditionally thought of as being
the province of entrepreneurship.

 Pinchot (1984) defined intrapreneurs as "dreamers who do.

Those who take hands-on responsibility for creating
innovation of any kind, within a business".
 Types of Entrepreneurs
Entrepreneurs are classified into different types based on different
classifications as mentioned below:

Based on the Type of Business:

1. Trading Entrepreneur:
As the name itself suggests, the trading entrepreneur undertake the
trading activities. They procure the finished products from the
manufacturers and sell these to the customers directly or through a
retailer. These serve as the middlemen as wholesalers, dealers, and
retailers between the manufacturers and customers.

2. Manufacturing Entrepreneur:
The manufacturing entrepreneurs manufacture products. They
identify the needs of the customers and, then, explore the resources
and technology to be used to manufacture the products to satisfy the
customers’ needs. In other words, the manufacturing entrepreneurs
convert raw materials into finished products.

3. Agricultural Entrepreneur:
The entrepreneurs who undertake agricultural pursuits are called
agricultural entrepreneurs. They cover a wide spectrum of agricultural
activities like cultivation, marketing of agricultural produce, irrigation,
mechanization, and technology.
Based on the Use of Technology:

1. Technical Entrepreneur:
The entrepreneurs who establish and run science and technology-
based industries are called ‘technical entrepreneurs.’ Speaking
alternatively, these are the entrepreneurs who make use of science and
technology in their enterprises. Expectedly, they use new and
innovative methods of production in their enterprises.

2. Non-Technical Entrepreneur:
Based on the use of technology, the entrepreneurs who are not
technical entrepreneurs are non-technical entrepreneurs. The forte of
their enterprises is not science and technology. They are concerned
with the use of alternative and imitative methods of marketing and
distribution strategies to make their business survive and thrive in the
competitive market.
Based on Ownership:

1. Private Entrepreneur:
A private entrepreneur is one who as an individual sets up a business
enterprise. He / she it’s the sole owner of the enterprise and bears the
entire risk involved in it.

2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or
the Government, it is called ‘state entrepreneur.’

3. Joint Entrepreneurs:
When a private entrepreneur and the Government jointly run a
business enterprise, it is called ‘joint entrepreneurs.’

Based on Gender:

1. Men Entrepreneurs:
When business enterprises are owned, managed, and controlled by
men, these are called ‘men entrepreneurs.’

2. Women Entrepreneurs:
Women entrepreneurs are defined as the enterprises owned and
controlled by a woman or women having a minimum financial interest
of 51 per cent of the capital and giving at least 51 per cent of
employment generated in the enterprises to women.
Based on the Size of Enterprise:

1. Small-Scale Entrepreneur:
An entrepreneur who has made investment in plant and machinery up
to Rs 1.00 crore is called ‘small-scale entrepreneur.’

2. Medium-Scale Entrepreneur:
The entrepreneur who has made investment in plant and machinery
above Rs 1.00 crore but below Rs 5.00 crore is called ‘medium-scale
entrepreneur.’

3. Large-Scale entrepreneur:
The entrepreneur who has made investment in plant and machinery
more than Rs 5.00 crore is called ‘large-scale entrepreneur.’

Based on Clarence Danhof Classification:

1. Innovating Entrepreneurs:
Innovating entrepreneurs are one who introduce new goods,
inaugurate new method of production, discover new market and
reorganise the enterprise. It is important to note that such
entrepreneurs can work only when a certain level of development is
already achieved, and people look forward to change and
improvement.

2. Imitative Entrepreneurs:
These are characterised by readiness to adopt successful innovations
inaugurated by innovating entrepreneurs. Imitative entrepreneurs do
not innovate the changes themselves, they only imitate techniques and
technology innovated by others.

3. Fabian Entrepreneurs:
They are the second generation Entrepreneur and they are very skeptic
about taking a step unless and until they are definite, it would be a
loss, if not steps are not taken in time.

4. Drone Entrepreneurs:
These entrepreneurs are reluctant to change since they are very
conservative and do not want to make any changes in the
organization. They are happy with their present mode of business
and do not want to change even if they are suffering the losses.

Nature of Entrepreneurship:

1. Economic and dynamic activity:

Entrepreneurship is an economic activity because it involves the
creation and operation of an enterprise with a view to creating value or
wealth by ensuring optimum utilisation of scarce resources. Since this
value creation activity is performed continuously in the midst of
uncertain business environment, therefore, entrepreneurship is
regarded as a dynamic force.

2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas.
Entrepreneurship compels an individual to continuously evaluate the
existing modes of business operations so that more efficient and
effective systems can be evolved and adopted. In other words,
entrepreneurship is a continuous effort for synergy (optimization of
performance) in organizations.
3. Profit potential:
“Profit potential is the likely level of return or compensation to the
entrepreneur for taking on the risk of developing an idea into an actual
business venture.” Without profit potential, the efforts of
entrepreneurs would remain only an abstract and a theoretical leisure
activity.

4. Risk bearing:
The essence of entrepreneurship is the ‘willingness to assume risk’
arising out of the creation and implementation of new ideas. New
ideas are always tentative and their results may not be instantaneous
and positive.

Importance of Entrepreneurship:

1. Development of managerial capabilities:

Entrepreneurship helps in identifying and developing managerial
capabilities of entrepreneurs. An entrepreneur studies a problem,
identifies its alternatives, compares the alternatives in terms of cost
and benefits implications, and finally chooses the best alternative.

This exercise helps in sharpening the decision making skills of an

entrepreneur

2. Creation of organisations:
Entrepreneurship results into creation of organisations when
entrepreneurs assemble and coordinate physical, human and financial
resources and direct them towards achievement of objectives through
managerial skills.
3. Improving standards of living:
By creating productive organisations, entrepreneurship helps in
making a wide variety of goods and services available to the society
which results into higher standards of living for the people.

Possession of luxury cars, computers, mobile phones, rapid growth of

shopping malls, etc. are pointers to the rising living standards of
people, and all this is due to the efforts of entrepreneurs.

4. Means of economic development:

Entrepreneurship involves creation and use of innovative ideas,
maximisation of output from given resources, development of
managerial skills, etc., and all these factors are so essential for the
economic development of a country.

5. A Creation of job opportunities

Entrepreneurship firms contributed a large share of new jobs. It
provides entry-level jobs so necessary fur training or gaining
experience for unskilled workers.The small enterprises arc the only
sector that generates large portion of total employment every year.
Moreover, entrepreneurial ventures prepare and supply experienced
labor to the large industrie

Entrepreneurial Skills
 Optimism: Are you an optimistic thinker? Optimism is truly an asset, and it
will help get you through the tough times that many entrepreneurs
experience as they find a business model that works for them.

 Vision: Can you easily see where things can be improved? Can you quickly
grasp the "big picture," and explain this to others? And can you create a
compelling vision of the future, and then inspire other people to engage
with that vision?

 Initiative: Do you have initiative , and instinctively start problem-solving or

business improvement projects?
 Desire for Control: Do you enjoy being in charge and making decisions?
Are you motivated to lead others?

 Drive and Persistence: Are you self-motivated and energetic? And are you
prepared to work hard, for a very long time, to realize your goals?

 Risk Tolerance: Are you able to take risks, and make decisions when facts
are uncertain?

 Resilience: Are you resilient , so that you can pick yourself up when things
don't go as planned? And do you learn and grow from your mistakes and
failures? (If you avoid taking action because you're afraid of failing, our
article on Overcoming Fear of Failure can help you face your fears and
move forward.)

 Leadership and Motivation: Can you lead and motivate others to follow you
and deliver your vision? And are you able to delegate work to others? As a
successful entrepreneur, you'll have to depend on others to get beyond a
very early stage in your business – there's just too much to do all on your
own!

 Communication Skills: Are you competent with all types of communication ?

You need to be able to communicate well to sell your vision of the future to
investors, potential clients, team members, and more.
 Listening: Do you hear what others are telling you? Your ability to listen can
make or break you as an entrepreneur. Make sure that you're skilled
at active listening and empathetic listening.

 Personal Relations: Are you emotionally intelligent ? The higher your EI, the
easier it will be for you to work with others. The good news is that you can
improve your emotional intelligence!

 Negotiation: Are you a good negotiator ? Not only do you need to negotiate
keen prices, you also need to be able to resolve differences between
people in a positive, mutually beneficial way.

 Ethics: Do you deal with people based on respect, integrity , fairness, and
truthfulness? Can you lead ethically ? You'll find it hard to build a happy,
committed team if you deal with people – staff, customers or suppliers – in
a shabby way

 Creative Thinking: Are you able to see situations from a variety of

perspectives and come up with original ideas? (There are many creativity
tools that will help you do this.)

 Problem Solving: How good are you at coming up with sound solutions to
the problems you're facing? Tools such as Cause & Effect Analysis , the 5
Whys Technique, and CATWOE are just some of the problem-solving
tools that you'll need to be familiar with.

 Recognizing Opportunities: Do you recognize opportunities when they

present themselves? Can you spot a trend ? And are you able to create a
plan to take advantage of the opportunities you identify?

Personality Traits All Entrepreneurs Must

Have
1. Passion

Entrepreneurs aren’t in it for the money. While that may be an added bonus, the
true benefit is doing what they love. Building a business takes a lot of time and
effort. It means putting in longer hours and doing extra work. If you don’t love
what you do, you're not going to want to do what it takes to achieve success.

Entrepreneurs aren’t afraid of hard work because they are so focused on their
dream and their vision. They don’t give up when a challenge arises. They stick
with their passion and see it through. As Steve Jobs once said, according to
the Smithsonian Institution, “I'm convinced that about half of what separates the
successful entrepreneurs from the non-successful ones is pure perseverance.”

2. Motivation

Entrepreneurs are dedicated to their work. They aren’t reliant on a manager or

colleague to push them toward their goals or to get their work done. Their drive
comes from within and allows them to motivate others in turn.

In his book, “Leaders Eat Last: Why Some Teams Pull Together and Others
Don’t,” motivational speaker Simon Sinek writes, “If your actions inspire others
to dream more, learn more, do more and become more, you are a leader.”

Entrepreneurs know how to communicate their dream and inspire others to join
them on their journey to achieving it.

3. Optimism

When you’re just starting out, it can seem like getting your business off the
ground will never happen. But entrepreneurs don’t think like that. They are
optimistic about the future and are always looking ahead.

In his essay “Thoughts on Various Subjects,” Jonathan Swift wrote, “Vision is

the art of seeing things invisible.” Entrepreneurs have a vision they share with
others. Their team understands why they do what they do, what the goal is and
what their role is on the path to success.
To be a successful entrepreneur, you must be goal-oriented. But it’s not enough
to just set goals. You must make a plan and do everything you can to reach
those goals. Everything you do must have a purpose.

4. Creativity

Entrepreneurs don’t think the same way as everyone else. They see the world
differently and think outside the box. Businesses are built on big ideas, and
those big ideas need to come from a place of creativity, from a way of thinking
that differs from everyone else’s thinking.

In “Conversations with Maya Angelou,” Jeffrey M. Elliot quoted Maya Angelou

as saying, “You can’t use up creativity. The more you use, the more you have.”

Entrepreneurs are always looking for new ways of doing things and how they
can make them better. They aren’t satisfied with the status quo. By being
creative, they come up with ideas that change the world.

5. Risk-Takers

Risk taking is par for the course when you’re starting a new business. But taking
risks shouldn’t scare you. It’s necessary to achieve your goals, and successful
entrepreneurs understand this.

In his book “The Four-Hour Workweek” entrepreneur and author Tim

Ferriss writes, “What we fear doing most is usually what we most need to do.”

If you’re afraid to take the leap, you’ll never get anywhere. Staying complacent
will never allow you to achieve greatness. Entrepreneurs don’t let uncertainty
and potential failure stop them from doing what needs to be done. Instead,
entrepreneurs look at challenges and risks as opportunities, not as problems.

As businessman Robert Kiyosaki wrote on Twitter, “Everyone can tell you the
risk. An entrepreneur can see the reward.

Achievement Motivation:
Features:
a. It is lateral personal disposition to strive for a particular goal.

b. It’s person’s deep and driving desire to do something important to

attain the feelings of personal accomplishment.

c. It is personal disposition to achieve something difficult and bigger.

Characteristics
a. They like to undertake risks for personal accomplishment.

b. They have high level of perseverance to attain their goal. They do

not give up even failure after failure. But, they try again and again till
the goal is not achieved. They follow the apt proverb: ‘Fall seven times,
stand up eighth.’

c. They show courage and fortitude to keep on moving toward their

goal instead of adversities.

d. Entrepreneurs with high level of achievement motivation tend to be

more creative and innovative.
Significance

a. It is an essential ingredient and hallmark of entrepreneurship

development leading to industrial and economic development.

b. This serves the major sources of the entrepreneurial supply.

c. This is a psychological construct that keeps entrepreneurs activated

towards their goals.

d. Being inner drive, it is significant for the people for all walks of life
be entrepreneurs, managers, leaders, social workers and so on.

e. This also serves as one of the effective inventions for organizational

development and, in turn, national development.

Accounting:
Accounting is the systematic and comprehensive recording of financial
transactions pertaining to a business. Accounting also refers to the
process of summarizing, analyzing and reporting these transactions to
oversight agencies, regulators and tax collection entities.
Labour law
Labour law (US spelling: labor law, sometimes incorrectly conflated
with employment law) is the area of law most commonly relating to the
relationship between trade unions, employers and the government.

Necessity and Importance of Labour Law:

(1) Improves industrial relation i.e. employee-employer relations and

minimizes industrial disputes.

(2) Prospects workers form exploitation by the employers or

management

(3) Helps workers in getting fair wages

(4) Minimizes labour unrest

(5) Reduces conflicts and strikes etc.

(6) Ensures job security for workers

(7) Promotes welcome environment conditions in the industrial

system

(8) Fixes rest pauses and work hours etc.

(9) Provides compensation to workers, who are victims of accidents

Role of central government and state government
in promoting entrepreneurship

Government plays a very important role in developing entrepreneurship.

Government develop industries in rural and backward areas by giving
various facilities with the objective of balances regional development.The
government set programmes to help entrepreneurs in the field of
technique, finance, market and entrepreneurial development so that they
help to accelerate and adopt the changes in industrial development. Various
institutions were set up by the central and state governments in order to
fulfill this objective.

1. Provide infrastructure especially for those

entrepreneurs who are working in remote areas. It is
the role of the Government to put up good
infrastructure for well accessibility of these industries
and vice versa.
2. Predictable taxation. Entrepreneurs should be well
acquainted with what kind and how much taxation is
levied on their goods and not to get a shock of their
lives.
3. It is the role of the Government to provide resources
and funds for the middle class entrepreneurs. Startup
capital and skills to enable them tun their business
swiftly is the role of the Government.
 4. It is also the role of the Government to levy heavy taxes
on imports. This is a sure way of creating local market
for the locally produced goods.

Industrial sickness
 Industrial sickness is defined all over the world as "an industrial
company (being a company registered for not less than five years)
which has, at the end of any financial year, accumulated losses equal
to, or exceeding, its entire net worth and has also suffered cash losses
in such financial year and the financial year immediately preceding
such financial year"

 Industrial sickness specially in small-scale Industry has been always a

demerit for the Indian economy, because more and more industries
like – cotton, Jute, Sugar, Textiles small steel and engineering
industries are being affected by this sickness problem.

 Industrial sickness is an umbrella term applied to various things

associated with industry that make people ill and cause them to miss
work. The solutions needs to be tailored to the specific industry, and
only in that way real effect can be made on improving
the health and productivity of the industrial workforce.
Remedial measures to overcome
Sickness
1. Identifying sickness at initial stage
Sickness in Small Scale Industries are not a sudden phenomenon but it
is a gradual process taking 5 to 7 years eroding the health of a unit
beyond cure. Therefore, the identification and detection of the sickness
at incipient stage is the first and foremost measure to detect and reduce
industrial sickness. Sickness must be identified at initial stage.

2. Financial assistance
Lending agencies need to relax their lengthy process and other norms
for extending credit to the SSIs. To combat the incidence of sickness
financial institutions should grant credit without delay to SSI sector.

3. Improving Infrastructure
Infrastructure facilities can be improved by setting up industrial
estates. Common testing centres etc., infrastructural problems can be
solved by improving the roadways, waterways, establishing
telecommunication systems

4. Technology Up-gradation
Funds may be provided by the financial institutions for adoption of
advanced technology. Similarly, some sort of training may be provided
for use of the latest technology to overcome technological problems.
Technological up-gradation can help to overcome technological
obsolescence.
5. Marketing assistance
Marketing assistance may be provided to entrepreneurs for marketing
the goods produced by them. Government must help to market the
goods. Government and Non-Government Organizations (N.G.Os) can
come forward for marketing the goods produced by the SSI sector. The
problem of poor marketing of the products can be solved by coordinated
efforts of entrepreneurs and promotional agencies.

6. Liquidation
It is better to wind up the business when there is no possibility to revive
the unit.

7. Government Interventions
Interventions must be made by the government to prevent sickness.
Periodic review of financial statements can help to identify and prevent
sickness at initial stage.

8. Training
A proper environment must be created where an entrepreneur will be
educated and will have a proper knowledge, skill and experience about
internal and external environment of business to compete with large-
scale industries and multinational companies.

9. Rehabilitation
Potentially viable sick units should be dealt well for the purpose of
rehabilitation. Rehabilitation is a remedy considered for industrial
units, which have already become sick and for the units that are on the
verge of collapse.