What is Entrepreneurship?

An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The process of setting up a business is known as entrepreneurship.
The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and
business/or procedures.
Entrepreneurs play a key role in any economy, using the skills and initiative necessary to anticipate
needs and bringing good new ideas to market. Entrepreneurship that proves to be successful in
taking on the risks of creating a startup is rewarded with profits, fame, and continued growth
opportunities. Entrepreneurship that fails results in losses and less prevalence in the markets for
those involved.

 A person who undertakes the risk of starting a new business venture is called an
entrepreneur.
 An entrepreneur creates a firm to realize their idea, known as entrepreneurship, which
aggregates capital and labor in order to produce goods or services for profit.
 Entrepreneurship is highly risky but also can be highly rewarding, as it serves to generate
economic wealth, growth, and innovation.
 Ensuring funding is key for entrepreneurs: Financing resources include SBA loans and crowd
funding.
 The way entrepreneurs file and pay taxes will depend on how the business is set up in terms
of structure.

Entrepreneurship and Managemententrepreneur

Management talks about the span of organizational studies. Simply speaking, management
explains about each aspect of the organization which discusses the organization and
coordinates the activities in order to achieve a destined set of objectives. Harold Koontz, the
great scholar highlighted management as the art which talks about how to achieve the things
done from people. He also pointed out the importance of formal groups in this process.

Thus, the management discusses the overall organizational function which is to achieve the
desired objectives. This also tells that the interconnection between the management and
entrepreneurship is actually a set because the entrepreneurship proceeds to management
level. In general, entrepreneurship features about the business creation whose management
is required to target the objectives of an entrepreneurial venture.

Entrepreneurship and its Scope

The scope of entrepreneurship is far reaching.

• Entrepreneurship moves even beyond from the closed system of an enterprise.

• Entrepreneurship in its capacity stimulate the economy which enables societal
change not only for fulfilling a need but also to generate revenue for the
entrepreneur, entrepreneurship thus provides jobs for the society and this develops
communities.

• Entrepreneurship instigates a lot more than mere creation of business.

• Entrepreneurship promotes the new business and provides opportunities to improve

the new business sectors.
 Need of Entrepreneurship

The need of entrepreneurship is detailed down in the following section:

1. Passion, Perseverance & Persistence Passion is a strong and uncontrollable emotion which
is based into something that is higher to achieve than what the person is carrying within
himself. Perseverance is a mature emotion which comes through experiences gathered and
analysed. While persistence is the sail that will row the boat of an entrepreneur through the
toughest of climate.

2. Big Dreamer Dreaming big further strengthens an entrepreneur with his ability to dream
and see the wide picture. This is actually the very first step which sets the path to self-
discovery.

3. Learning Learning is never to stop irrespective of age and thus arming oneself with
education does play a vital role in forming leadership qualities when needed.

4. Good Listener The ability to contribute will only come once we have abundance in
ourselves, and this comes by absorbing the words by others. The ability to truly listen to the
customers and employees is actually what makes a difference. This very skill leads a
successful venture.

5. Financing Partner Choosing a financing partner who understands the business needs is very
much essential. This is as critical as choosing the business which the entrepreneur wants to
pursue. Also, a business loan from a right lender will for sure play a pivotal role in realizing
the dreams of becoming a successful entrepreneur.

McClelland's Acquired Needs Theory

Each person tends to develop certain motivational drives as a result of his cognitive
pattern and the environment in which he lives. David McClelland gave a model of
motivation which is based on three types of needs, namely, achievement, power and affi
liati on. They are as foll ows:
(i)Need for achievement (n-Ach): a drive to excel, advance and grow;

(ii) Need for power (n-Pow): A drive to influencing others and sit uations;

(iii) Need for affiliation (n-Aft) : A drive for friendly and close interpersonal relation shi ps.

McClelland also suggests that these three needs may simultaneously be acting on an
individual. But, in case of an entrepreneur , the high need for achievement is found
dominating one. In his view, the people with high need for achievement are characterised
by the following :
(i) They set moderate , realistic and attainable goals for them.

(ii) Prefer to situations in which they can find solutions for solving personal responsibility.

(iii) Theyneed concrete feedback on how well they are doing.

(iv) They have need for achievement for attaining personal accomplishment .
(v) They look for challenging t asks.

Entrepreneurial motivation may be defined as a set of motives such as high need to

achieve, moderate need for power and low affiliation motive which induce people to set
up and run their own enterprises . Apart from these, entrepreneurs have other behavioural
dimensions such as, tolerance for ambiguity, problem solving, creativity, etc.

Entrepreneurship Development Programme (EDP) is a programme which helps

in developing the entrepreneurial abilities. The skills that are required to run a
business successfully is developed among the people through this programme.
Sometimes, people may have skills but it requires polishing and incubation. This
programme is perfect for them. This programme consists of a structured training
process to develop an individual as an entrepreneur. It helps the person to acquire
skills and necessary capabilities to play the role of an entrepreneur effectively. As
per National Institute of Small Industry Extension Training, Hyderabad, an EDP is
an effort of converting a person to an entrepreneur by passing him through a
thoroughly structured training. An entrepreneur is required to respond
appropriately to the market and he/she is also required to understand the business
needs. The skills needed are varied and they need to be taken care in the best
possible way. EDP is not just a training programme but it is a complete process to
make the possible transformation of an individual into an entrepreneur. This
programme also guides the individuals on how to start the business and effective
ways to sustain it successfully.
Objectives of EDP
The objective of this programme is to motivate an individual to choose the
entrepreneurship as a career and to prepare the person to exploit the market
opportunities for own business successfully. These objectives can be set both in
the short-term and long-term basis.

• Short-term objectives: These objectives can be achieved immediately.In the

short-term, the individuals are trained to be an entrepreneur and made
competent enough to scan existing market situation and environment. The
person, who would be the future entrepreneur, should first set the goal as an
entrepreneur. The information related to the existing rules and regulations
is essentia at this stage.
• Long-term objectives: The ultimate objective is that the trained individuals
successfully establish their own business and they should be equipped
with all the required skills to run their business
smoothly.

The overall objectives of EDP are mainly to help in rapid industrialisation by

supplying skilled entrepreneurs. At the same time, it also industrialises
underdeveloped areas. The performance of small and medium scale industries are
expected to improve by this and therefore providing a huge scope of employment
generation in these sectors. This programme primarily aims at providing self-
employment to the young generation.
An Entrepreneurship Development Programme primarily plays four roles to help
an individual to become an entrepreneur. They are:

• Stimulatory Role: It aims at influencing people in large number to be the

entrepreneur. This includes:
1. developing managerial, technical, financial, and marketing skill
2. inculcating personality traits
3. promotes and reforms entrepreneurial behaviour and values
4. identifying potential entrepreneur applying scientific methods
5. motivational training and building proper attitude
6. strengthening the motive of a person and giving recognition
7. the valuable know-how of the local products and the processes help in
selection of products, preparation of project reports

• Supportive Role: It helps in the following ways:

1. registration of the business
2. procurement of fund
3. arrangement of and, power, water, shed etc.
4. support in purchase of right kind of machinery and equipment
5. supply of raw materials and common facilities
6. Providing tax relief, subsidy etc.
7. guidance in product marketing
8. support for management consultancy
• Sustaining Role: It aims at providing an effective safeguard to businesses to
sustain against the cut-throat market competition. This includes:
1. help in modernisation, expansion, and diversification
2. additional financing for further development
3. deferring interest payment
4. creating new marketing processes
5. helping access to improved services and facility centres

• Socio-economic Role: It aims at upgrading the socio-economic status of the

public and includes:
1. identifying entrepreneurial qualities in practicality
2. creating employment opportunities in micro, small, and medium industries on
an immediate basis
3. arresting concentration of industries by supporting regional
development in a balanced manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise
BASIS FOR COMPARISON
ENTREPRENEUR INTRAPRENEUR

Meaning Entrepreneur refers to a lntrapreneur refers to an

person who set up his employee of the organization
own business with a who is in charge of
new idea or concept. undertaking innovations in
product, service, process
etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided

by the company.

Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the Taken by the company.

entrepreneur himself.

Works for Creating a leading Change and renew

position in the the existing
market. organizational system
and culture.
Meaning of Entrepreneurial Motivation:
Nature of Motivation
Meaning:

Let us first understand the meaning of the term 'motivation,' in general. This will help us
understand and explain the meaning of the term 'entrepreneurial motivation'. The word
motivation originally comes from the Latin word mover, which means "to motive".

The term motivation has been derived from the English word 'motive'. Motive is an inner state
of our mind that moves or activates or directs our behaviours towards our goals. Motives are
expressions of a person's goals or needs. They give direction to human behaviour to achieve
goals or fulfill needs. Motive is always internal to us and is externalized via behaviour.

Let us give some definitions on motivation:

According to Fred Luthans, "Motivation is a process that starts with a physiological or

psychological deficiency or need that activates behaviour or a drive that is aimed at a goal or
incentive."

Stephen P. Robbins (2010) defines motivation as "the willingness to exert high levels of effort
toward organizational goals, conditioned by the effort and ability to satisfy some individual
need."

In the opinion of Gray and Starke, "Motivation is the result of processes, internal or external to
the individual that arouses enthusiasm and persistence to pursue a certain course of action."
Based on above definitions, now motivation may be defined as one's willingness to exert high le
Accordingly, the entrepreneurial motivation may be defined as the process that activates and
motivates the entrepreneur to exert higher level of efforts for the achievement of his/her
entrepreneurial goals. In other words, the entrepreneurial motivation refers to the forces or drive
within an entrepreneur that affect the direction, intensity, and persistence of his / her voluntary
behaviour as entrepreneur. So to say, a motivational entrepreneur will be willing to exert a
particular level of effort (intensity), for a certain period of time (persistence) toward a particular
goal (direction).

The need for and significance of entrepreneurial motivation in running an enterprise can best be
appreciated as: "While an organization is like a vehicle, entrepreneurships as driving and the
entrepreneurial motivation as fuel or power that makes the organizational vehicle move or run."

vel of efforts towards the accomplishment of goal or fulfillment of need.

Nature of Motivation:
The nature of motivation emerging out of above definitions can be expressed as follows:

Motivation is internal to man:

Motivation cannot be seen because it is internal to man. It is externalized via behaviour. It

activates the man to move toward his / her goal.

A Single motive can cause different behaviours:

A person with a single desire or motive to earn prestige in the society may move towards to join
politics, attain additional education and training, join identical groups, and change his outward
appearance.

Different motives may result in single behaviour:

It is also possible that the same or single behaviour may be caused by many motives. For
example, if a person buys a car, his such behaviour may be caused by different motives such as
to look attractive, be respectable, gain acceptance from similar group of persons, differentiate
the status, and so on.

Motives come and go:

Like tides, motives can emerge and then disappear. Motives emerged at a point of time may
not remain with the same intensity at other point of time. For instance, an entrepreneur overly
concerned about maximization of profit earning during his initial age as entrepreneur may turn
his concern towards other higher things like contributing towards philanthropic activities in
social health and education once he starts earning sufficient profits.

Motives interact with the environment:

The environment in which we live at a point of time may either trigger or suppress our motives.
You probably have experienced environment or situation when the intensity of your hunger
picked up just you smelled the odour of palatable food.

You may desire an excellent performance bagging the first position in your examination but
at the same time may also be quite sensitive to being shunned and disliked by your class
mates if you really perform too well and get too much of praise and appreciation from your
teachers.
Thus, what all this indicates is that human behaviour is the result of several forces differing
in both direction and intent.

Understanding McClelland's Theory

In the early 1940s, Abraham Maslow created his theory of needs
. This identified the basic needs that human beings have, in order of their
importance: physiological needs, safety needs, and the needs for belonging, self-
esteem and "self actualization".

Later, David McClelland built on this work in his 1961 book, "The Achieving Society." He
identified three motivators that he believed we all have: a need for achievement, a need for
affiliation, and a need for power. People will have different characteristics depending on their
dominant motivator.

According to McClelland, these motivators are learned (which is why this theory is sometimes
called the Learned Needs Theory).

McClelland says that, regardless of our gender, culture, or age, we all have three motivating
drivers, and one of these will be our dominant motivating driver. This dominant motivator
is largely dependent on our culture and life experiences.

These characteristics are as follows:

Dominant
Motivator Characteristics of This Person
• Has a strong need to set and accomplish challenging goals.
• Takes calculated risks to accomplish their goals.
Achievement • Likes to receive regular feedback on their progress
and achievements.
• Often likes to work alone.
• Wants to belong to the
• group.
Affiliation Wants to be liked, and will often go along with whatever the rest of
• the group wants to do.
• Favors collaboration over competition.
• Doesn't like high risk or uncertainty.
Wants to control and influence others.
• Likes to win arguments.
Power • Enjoys competition and winning.
• Enjoys status and recognition.

Note:

Those with a strong power motivator are often divided into two groups: personal and
institutional. People with a personal power drive want to control others, while people with an
institutional power drive like to organize the efforts of a team to further the company's goals.
As you can probably imagine, those with an institutional power need are usually more desirable
as team members!
Using the Theory
McClelland's theory can help you to identify the dominant motivators of people on your team.
You can then use this information to influence how you set goals

and provide feedback, and how you motivate and reward

team members.

You can also use these motivators to craft, or design, the job

around your team members, ensuring a better fit.

Let's look at the steps for using McClelland's theory:

Step 1: Identify Drivers

Examine your team to determine which of the three motivators is dominant for each person. You
can probably identify drivers based on personality and past actions.

For instance, perhaps one of your team members always takes charge of the group when you
assign a project. He speaks up in meetings to persuade people, and he delegates responsibilities
to others to meet the goals of the group. He likes to be in control of the final deliverables. This
team member is likely primarily driven by the power.

You might have another team member who never speaks during meetings. She always agrees
with the group, works hard to manage conflict when it occurs, and visibly becomes
uncomfortable when you talk about doing high-risk, high-reward projects. This person is likely
to have a strong need for affiliation.

Step 2: Structure Your Approach

Based on the driving motivators of your workers, structure your leadership style

and project assignments around each individual team member. This will help ensure that they all
stay engaged

, motivated , and happy with the work they're doing.

Examples of Using the Theory

Let's take a closer look at how to manage team members who are driven by each ofMcClelland's
three motivators:
Achievement

People motivated by achievement need challenging, but not impossible, projects. They thrive on
overcoming difficult problems or situations, so make sure you keep them engaged this way.
People motivated by achievement work very effectively either alone or with other high
achievers.

When providing feedback, give achievers a fair and balanced appraisal. They want to know what
they're doing right - and wrong - so that they can improve.

Affiliation

People motivated by affiliation work best in a group environment, so try to integrate them with a
team (versus working alone) whenever possible. They also don't like uncertainty and risk.
Therefore, when assigning projects or tasks, save the risky ones for other people.

When providing feedback to these people, be personal. It's still important to give balanced
feedback, but if you start your appraisal by emphasizing their good working relationship and
your trust in them, they'll likely be more open to what you say. Remember that these people
often don't want to stand out, so it might be best to praise them in private rather than in front of
others.

Power

Those with a high need for power work best when they're in charge. Because they enjoy
competition, they do well with goal-oriented projects or tasks. They may also be very effective in
negotiations

or in situations in which another party must be convinced of an idea or goal.

When providing feedback, be direct with these team members. And keep them motivated by
helping them further their career goals

. Comparative Theories
McClelland's theory of needs is not the only theory about worker motivation. Sirota's Three
Factor Theory

also presents three motivating factors that workers need to stay motivated and excited about what
they're doing: equity/fairness, achievement, and camaraderie.
Sirota's theory states that we all start a new job with lots of enthusiasm and motivation to do
well. But over time, due to bad company policies and poor work conditions, many of us lose our
motivation and excitement.

This is different from McClelland's theory, which states that we all have one dominant motivator
that moves us forward, and this motivator is based on our culture and life experiences.

Factors affecting
Entrepreneurship Development
Entrepreneurship is influenced by four distinct factors: economic development, culture,
technological development and education. In areas where these factors are present, you can
expect to see strong and consistent entrepreneurial growth.

These conditions may have both positive and negative influences on the emergence of
entrepreneurship. Positive influences constitute facilitative and conducive conditions for the
emergence of entrepreneurship, whereas negative influences create inhibiting milieu to the
emergence of entrepreneurship.

Let us look at each one of them in details.

Economic Factors
Economic environment exercises the most direct and immediate influence on entrepreneurship.
This is likely because people become entrepreneurs due to necessity when there are no other
jobs or because of opportunity.

The economic factors that affect the growth of entrepreneurship are the following:

1. Capital

Capital is one of the most important factors of production for the establishment of an
enterprise. Increase in capital investment in viable projects results in increase in profits which
help in accelerating the process of capital formation. Entrepreneurship activity too gets a boost with
the easy availability of funds for investment.

Availability of capital facilitates for the entrepreneur to bring together the land of one, machine
of another and raw material of yet another to combine them to produce goods. Capital is
there fore, regarded as lubricant to the process of production.

France and Russia exemplify how the lack of capital for industrial pursuits impeded the process
of entrepreneurship and an adequate supply of capital promoted it.
2. Labor

Easy availability ofright type of workers also effect entrepreneurship. The quality rather than
quantity of labor influences the emergence and growth of entrepreneurship. The problem of labor
immobility can be solved by providing infrastructural facilities including efficient transportation.

The quality rather quantity of labor is another factor which influences the emergence of
entrepreneurship. Most less developed countries are labor rich nations owing to a dense and even
increasing population. But entrepreneurship is encouraged if there is a mobile and flexible labor
force. And, the potential advantages of low-cost labor are regulated by the deleterious effects of
labor immobility. The considerations of economic and emotional security inhibit labor mobility.
Entrepreneurs, therefore, often find difficulty to secure sufficient labor.

3. Raw Materials

The necessity of raw materials hardly needs any emphasis for establishing any industrial activity
and its influence in the emergence of entrepreneurship. In the absence of raw materials, neither
any enterprise can be established nor can an entrepreneur be emerged

It is one of the basic ingredients required for production. Shortage of raw material can adversely
affect entrepreneurial environment. Without adequate supply of raw materials no industry can
function properly and emergence of entrepreneurship to is adversely affected.

In fact, the supply of raw materials is not influenced by themselves but becomes influential
depending upon other opportunity conditions. The more favorable these conditions are, the more
likely is the raw material to have its influence of entrepreneurial emergence.

4. Market

The role and importance of market and marketing is very important for the growth of
entrepreneurship. In modem competitive world no entrepreneur can think of surviving in the
absence of latest knowledge about market and various marketing techniques.

The fact remains that the potential of the market constitutes the major determinant of
probable rewards from entrepreneurial function. Frankly speaking, if the proof of pudding lies
in eating, the proof of all production lies in consumption, i.e., marketing.

The size and composition of market both influence entrepreneurship in their own ways.
Practically, monopoly in a particular product in a market becomes more influential for
entrepreneurship than a competitive market. However, the disadvantage of a competitive market
can be cancelled to some extent by improvement in transportation system facilitating the
movement of raw material and finished goods, and increasing the demand for producer goods.

5. Infrastructure
Expansion of entrepreneurship presupposes properly developed communication and
transportation facilities. It not only helps to enlarge the market, but expand the horizons of
business too. Take for instance, the establishment of post and telegraph system and construction
of roads and highways in India. It helped considerable entrepreneurial activities which took place
in the 1850s.

Apart from the above factors, institutions like trade/ business associations, business schools,
libraries, etc. also make valuable contribution towards promoting and sustaining
entrepreneurship' in the economy. You can gather all the information you want from these
bodies. They also act as a forum for communication and joint action.

Social Factors
Social factors can go a long way in encouraging entrepreneurship. In fact it was the highly
helpful society that made the industrial revolution a glorious success in Europe. Strongly affect
the entrepreneurial behavior, which contribute to entrepreneurial growth. The social setting in
which the people grow, shapes their basic beliefs, values and norms.

The main components of social environment are as follows:

1. Caste Factor

There are certain cultural practices and values in every society which influence the' actions of
individuals. These practices and value have evolved over hundred of years. For instance,
consider the caste system (the vama system) among the Hindus in India. It has divided the
population on the basis of caste into four division. The Brahmana (priest), the Kshatriya
(warrior), the Vaishya (trade) and the Shudra (artisan): It has also defined limits to the social
mobility of individuals.

By social mobility' we mean the freedom to move from one caste to another. The caste system
does not permit an individual who is born a Shridra to move to a higher caste. Thus,
commercial activities were the monopoly of the Vaishyas. Members of the three other Hindu
Vamas did not become interested in trade and commence, even when India had extensive
commercial inter relations with many foreign countries. Dominance of certain ethnical groups
in entrepreneurship is a global phenomenon

2. Family Background

This factor includes size of family, type of family and economic status of family. In a study by
Hadimani, it has been revealed that Zamindar family helped to gain access to political power and
exhibit higher level of entrepreneurship.
Background of a family in manufacturing provided a source of industrial entrepreneurship.
Occupational and social status of the family influenced mobility. There are certain
circumstances where very few people would have to be venturesome. For example in a society
where the joint family system is in vogue, those members of joint family who gain wealth by
their hard work denied the opportunity to enjoy the fruits of their labor because they have to
share their wealth with the other members of the family.

3. Education

Education enables one to understand the outside world and equips him with the basic
knowledge and skills to deal with day-to-day problems. In any society, the system of education
has a significant role to play in inculcating entrepreneurial values.

In India, the system of education prior to the 20th century was based on religion. In this rigid
system, critical and questioning attitudes towards society were discouraged. The caste system
and the resultant occupational structure were reinforced by such education. It promoted the idea
that business is not a respectable occupation. Later, when the British came to our country, they
introduced an education system, just to produce clerks and accountants for the East India
Company, The base of such a system, as you can well see, is very anti-entrepreneurial.

Our educational methods have not changed much even today. The emphasis is till on preparing
students for standard jobs, rather than marking them capable enough to stand on their feet.

4. Attitude of the Society

A related aspect to these is the attitude of the society towards entrepreneurship. Certain
societies encourage innovations and novelties, and thus approve entrepreneurs' actions and
rewards like profits. Certain others do not tolerate changes and in such circumstances,
entrepreneurship cannot take root and grow. Similarly, some societies have an inherent dislike
for any money making activity. It is said, that in Russia, in the nineteenth century, the upper
classes did not like entrepreneurs. For them, cultivating the land meant a good life. They
believed that rand belongs to God and the produce of the land was nothing but god's blessing.
Russian folk-tales, proverbs and songs during this period carried the message that making
wealth through business was not right.

5. Cultural Value

Motives impel men to action. Entrepreneurial growth requires proper motives like profit-making,
acquisition of prestige and attainment of social status. Ambitious and talented men would take
risks and innovate if these motives are strong. The strength of these motives depends upon the
culture of the society. If the culture is economically or monetarily oriented, entrepreneurship
would be applauded and praised; wealth accumulation as a way of life would be appreciated. In
the less developed countries, people are not economically motivated. Monetary incentives have
relatively less attraction. People have ample opportunities of attaining social distinction by non-
economic pursuits. Men with organizational abilities are, therefore, not dragged into business.
They use their talents for non-economic end.

Psychological Factors
Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate
especially upon psychological factors. These are as follows :

1. Need Achievement

The most important psychological theories of entrepreneurship was put forward in the early)
960s by David McClelland. According to McClelland 'need achievement' is social motive to
excel that tends to characterise successful entrepreneurs, especially when reinforced by cultural
factors. He found that certain kinds of people, especially those who became entrepreneurs, had
this characteristic. Moreover, some societies tend to reproduce a larger percentage of people
with high 'need achievement' than other societies. McClelland attributed this to sociological
factors. Differences among societies and individuals accounted for 'need achievement' being
greater in some societies and less in certain others.

The theory states that people with high need-achievement are distinctive in several ways. They
like to take risks and these risks stimulate them to greater effort. The theory identifies the
factors that produce such people. Initially McClelland attributed the role of parents, specially
the mother, in mustering her son or daughter to be masterful and self-reliant. Later he put less
emphasis on the parent-child relationship and gave more importance to social and cultural
factors. He concluded that the 'need achievement' is conditioned more by social and cultural
reinforcement rather than by parental influence and such related factors.

2. Withdrawal of Status Respect

There are several other researchers who have tried to understand the psychological roots of
entrepreneurship. One such individual is Everett Hagen who stresses the-psychological
consequences of social change. Hagen says, at some point many social groups experience a
radical loss of status. Hagen attributed the withdrawal of status respect of a group to the
genesis of entrepreneurship.

Hage believes that the initial condition leading to eventual entrepreneurial behavior is the loss of
status by a group. He postulates that four types of events can produce status withdrawal:

1. I.
The group may be displaced by force;
2. 11.
It may have its valued symbols denigrated;
3. 111.
It may drift into a situation of status inconsistency; and
4. IV. It may not be accepted the expected status on migration in a new society.

3. Motives
Other psychological theories of entrepreneurship stress the motives or goals of the entrepreneur.
Cole is of the opinion that besides wealth, entrepreneurs seek power, prestige, security and
service to society. Stepanek points particularly to non-monetary aspects such as independence,
persons' self-esteem, power and regard of the society.

On the same subject, Evans distinguishes motive by three kinds of entrepreneurs

1. Managing entrepreneurs whose chief motive is security.

2. Innovating entrepreneurs, who are interested only in excitement.
3. Controlling entrepreneurs, who above all otter motives, want power and authority.

Finally, Rostow has examined inter gradational changes in the families of entrepreneurs. He
believes that the first generation seeks wealth, the second prestige and the third art and beauty.

4. Others

Thomas Begley and David P. Boyd studied in detail the psychological roots of entrepreneurship
in the mid-1980s. They came to the conclusion that entrepreneurial attitudes based on
psychological considerations have five dimensions:

1. First came 'need-achievement' as described by McClelland. In all studies of successful

entrepreneurs a high achievement orientation is invariably present.
2. The second dimension that Begley and Boyd call 'locus of control' This means that the
entrepreneur follows the idea that he can control his own life and is not influenced by
factors like luck, fate and so on. Need-achievement logically implies that people can
control their own lives and are not influenced by external forces.
3. The third dimension is the willingness to take risks. These two researchers have come
to the conclusion that entrepreneurs who take moderate risks earn higher returns on
their assets than those who take no risks at all or who take extravagant risks.
4. Tolerance is the next dimension of this study. Very few decisions are made
with complete information. So all business executives must, have a certain
amount of tolerance for ambiguity.
5. Finally, here is what psychologists call 'Type A' behavior. This is nothing but "a chronic,
incessant struggle to achieve more and more in less and less of time" Entrepreneurs are
characterize by the presence of 'Type A' behavior in all their endeavors.

Steps for setting up business enterprise

The procedure in setting up of a business unit is a time consuming, complex and complicated
activity. It involves various steps, procedures and formalities.
The following steps are involved in process of setting up a new business enterprise:
1. Identification of business opportunity.
2. Generation of business idea.
3. Feasibility Study.
4. Preparation of a business plan.
5. Launching the enterprise.
Step1. Identification of business opportunity:

This is the first step in setting up of a business unit Entrepreneur is an opportunity seeker. As
observed by Albert Einstein "In the middle of every difficulty lies opportunity". He
perceives an opportunity and strives to translate the opportunity into an idea.
Opportunities do not come suddenly. The entrepreneur must show alertness to grab
opportunities when they come. The opportunities must be carefully scrutinized and evaluated.
The process of identifying opportunity involves identifying the needs and wants of the
customers, scanning the environment, understanding the competitor's policy etc.
To identify the right business opportunity, an entrepreneur needs to consider the following :
• Identify Market Inefficiencies
• Remove Key Hassles
• Customers Desire to Experience Something New
• Pick a Growing Sector/Industry
• Product Differentiation
• Cash Flow Considerations
• Listen to your potential clients and past leads. When you're targeting potential
customers listen to their needs, wants, challenges and frustrations with your
industry.

• Listen to your customers.

• Look at your competitors.
• Look at industry trends and insights.

Step 2. Generation of business idea:

This is the most important function of an entrepreneur.
The ideas that provide value for the customer, profit for the entrepreneur and benefit for society
and can be transformed into products of services are called business ideas. Idea is generated
through vision. Idea generation is a critical skill in entrepreneurship and involves insight,
observation, experience, education, training etc. It involves lot of creativity on the part of
entrepreneur and generally arises from an opportunity in the market.
The various sources of information for business ideas can be personal experience, observing
markets, prospective consumers, developments in other nations, government organizations and
trade fairs & exhibitions. This can be done through environmental scanning and market survey.
An entrepreneur is not someone with clever ideas but someone who has the ability to tum that
idea into a real business. An entrepreneur conceives the idea of launching the project and
program the structure of business. Converting a business idea into a commercial venture is at
the heart entrepreneurship.
The entrepreneur than undergoes detailed investigation of an idea. He analyse the idea to find
out the feasibility whether the project is profitable of not. An entrepreneur must show the
initiative to develop the idea and implement it in practical sense.
Note: here we need to understand what is meant by innovation and creativity and how
important they are for generation of business idea in entrepreneurship.
ID Role of Innovation and Creativity:

Innovation may be defined as exploiting new ideas leading to the creation of a new product,
process or service. Innovation deals with coming up with creative idea and turning that idea
into process. It may be defined as the process of doing new things or doing old things in new
ways. Entrepreneurship is a source of innovation.

Creativity means to come up with new ideas, concepts, process and products. In other words,
it means the ability to bring something new in existence.
Entrepreneurship process involves innovation and creativity. Entrepreneurs are innovators.
They constantly develop new ideas, concepts and process to survive in a competitive business
world. Entrepreneurship is an art of finding creative solutions to the problems. Innovation and
creativity are essential for sustainable growth and economic development.
ID Stages In Creativity Process

In the nutshell we can say that, Ideas evolve through a creative process whereby a
person with imagination germinates ideas, nurtures them and develops them
successfully.
Step 3. Feasibility Study: After the selection of a worthy idea, an entrepreneur undertakes
various researches relating to
market selection, competition, location, machinery and equipment's, capital, customer
preferences etc. to test the feasibility of the project.

A feasibility study is an evaluation of a proposed project. It is the study of the project to find
out whether the project is profitable or not. In other words, feasibility study involves an
examination of the operations. Project has to be viable not only in technical terms but also in
economic and commercial terms too. The objective of financial analysis is to ascertain whether
the proposed project will be financially viable.
Feasibility study is a detailed investigation of the proposed project to determine whether the
project is financially, economically and technically viable or not. Feasibility Study contains the
comprehensive, detailed information about the business structure, availability of resources and
whether the business will run efficiently or not.
Feasibility study is conducted in the following areas:
---, Market/ commercial Feasibility:
It involves study of market situation, current market, anticipated future market, competition,
potential buyers, etc.
---, Technical Feasibility:
This study involves study of technological aspects related to the business, like location of the
business, layout, infrastructure, plant and equipment, effluent treatment and discharge, foreign
collaboration, transportation, resource availability etc.
---, Financial Feasibility:
Financial feasibility denotes the financial aspects of the business. This study helps to
understand requirement of start-up capital, sources of capital, reh1rns on investment, etc. It
helps to assess the financial health of the business.
---, Socio- economic Feasibility:
This study is important to determine the extent to which the project is meeting its social
economic objectives of development. It involves social cost-benefit analysis for testing national
profitability. It helps to know the contribution of the project towards employment generation,
income distribution, foreign exchange savings, development of backward regions, etc.
---, Preparation of Feasibility Report:
Feasibility report is the final conclusion drawn about the business after conducting the
feasibility study. The feasibility report includes the confirmation of the proposed project. It

gives the detail about technical, economic and financial, environmental, socio-cultural and
operational aspects of the project.
It is a formal document prepared by the experts. It gives the information on the authenticity of
the feasibility study. The feasibility report answer the question 'the plan must be
implemented or not'.
The feasibility report contains information on:
a. It helps him to determine the viability of the venture.
b. It provides guidance to the entrepreneur in planning realistic goals.
c. It helps to identify possible roadblocks.
d. It is a pre-requisite to obtain finance.

Step 4: Preparation of a business plan:

It this step an entrepreneur prepares a good business plan, the designs and creates the
organisational structure for implementation of his plan. This plan is further used to achieve the
realistic goals.
A business plan, as defined by Entrepreneur, is a "written document describing the nature of
the business, the sales and marketing strategy, and the financial background, and containing a
projected profit and loss statement." It serves as the blueprint for how you will operate your
business. It is an effective means of defining your goals and the steps needed to reach them.
---, Need and purpose of a business plan:
A business plan spells out your purpose, vision and means of operation. It also serves as
your company's resume, explaining your objectives to investors, partners, employees and
vendors. It serves the following purposes:
• Maintaining Business Focus.
• Securing Outside Financing.
• Understanding consumers and competitors.
• Fuelling Ambitions and Mapping Growth.
• Enlightening Executive Talent or to understand employee needs.

• To assess feasibility of your venture.

---, Contents of a business plan:

a. Executive Summary
Your executive summary should appear first in your business plan. It should summarize what
you expect your business to accomplish. A good executive summary is compelling. It reveals
the company's mission statement, along with a short description of its products and services.
It might also be a good idea to briefly explain why you 're starting your company and include
details about your experience in the industry you're entering.
b. Company Description
The next section that should appear in your business plan is a company description. It's best to
include key information about your business, your goals and the customers you plan to serve.
Your company description should also discuss how your business will stand out from others
in the industry and how the products and services you're providing will be helpful to your
target audience.
c. Market Analysis
Ideally, your market analysis will show that you know the ins and outs of the industry and the
specific market you're planning to enter. In that section, you'll need to use data and statistics
to talk about where the market has been, where it's expected to go and how your company
will fit into it. In addition, you'll have to provide details about the consumers you'll be
marketing to, such as their income levels. Further information about markets, pricing systems,
methods of distribution, sales forecast, etc. to be enclosed.
d. Competitive Analysis
A good business plan will present a clear comparison of your business to your direct and
indirect competitors. You'll need to show that you know their strengths and weaknesses and
you know how your business will stack up. If there are any issues that could prevent you from
jumping into the market, like high upfront costs, it's best to say so. This information will go in
your market analysis section.
e. Description of Management and Organization

Following your market analysis, your business plan will outline the way that your organization
will be set up. You'll introduce your company managers and summarize their skills and
primary job responsibilities. If you want to, you can create a diagram that maps out your chain of
command.Don't forget to indicate whether your business will operate as a partnership, a sole
proprietorship or a business with a different ownership structure. If you have a board of
directors, you'll need to identify the members.
f. Breakdown of Your Products and Services
If you didn't incorporate enough facts about your products and services into your company
description (since that section is meant to be an overview), it might be a good idea to include
extra information about them in a separate section. Whoever's reading this portion of your
business plan should know exactly what you're planning to create and sell, how long your
products are supposed to last and how they'll meet an existing need?
It's a good idea to mention your suppliers, too. If you know how much it'll cost to make your
products and how much money you're hoping to bring in, those are great details to add. You'll
need to list anything related to patents and copyright concerns as well.
g. Marketing Plan
In your business plan, it's important to describe how you intend to get your products and
services in front of potential clients. That's what marketing is all about. As you pinpoint the
steps you're going to take to promote your products, you'll need to mention the budget you'll
need to implement your strategies.
h. Sales Strategy
In this section of business plan, one needs to decide, How will you sell the products you're
building? That's the most important question you'll answer when you discuss your sales
strategy. It's best to be as specific as possible. It's a good idea to throw in the number of sales
reps you're planning to hire and how you'll go about finding them and bringing them on board.
You can also include sales targets.
i. Manufacturing and Operational Plan

In your business plan, the operations plan section describes the physical necessities of your
business' operation, such as your physical location, facilities, and equipment. Depending on
what kind of business you'll be operating, it may also include information about inventory
requirements, suppliers, and a description of the manufacturing process. An operations plan is
helpful for investors, but it's also helpful for you and employees because it pushes you to think
about tactics and deadlines.
j. Financial Projections
In the final section of your business plan, you'll reveal the financial goals and expectations that
you've set based on market research. You'll report your anticipated revenue for the first 12
months and your annual projected earnings for the second, third, fourth and fifth years of
business. The following schedules and statements to be included: Start up projections, income
statement, cash flow statement, balance sheet and break even analysis.
k. Appendices and Exhibits
In addition to the sections outlined above, at the end of your business plan, include any
additional information that will help establish the credibility of your business idea, such as
marketing studies, photographs of your product, permits, intellectual property rights such as a
patent, credit histories, resumes, marketing materials, and/or contracts or other legal
agreements pertinent to your business.

Factors Influencing Entrepreneurship Development

When we look at the most successful entrepreneurs, there's a wide diversity of schooling,
backgrounds, and upbringings among them. However, there are some common traits and skills
that many of these successful entrepreneurs have demonstrated or developed prior to their
success.

The remaining question is: how can we help foster these skills and characteristics in our own
kids and help prepare them to become the next generation of successful entrepreneurs? In many
cases, economic, social, and psychological factors can shape or contribute to the development
of these traits or skills in young future entrepreneurs, so it's important to consider the
environment and factors in your child's upbringing if you're hoping to prepare them for an
entrepreneurial path.
Here at Beta Bowl, we're all about inspiring teens to chase their dreams. But is there anything
standing in your child's way?

Economic Factors
Economic factors can play an interesting and formative role in the development of future
entrepreneurs. For those who are raised in a more desperate situation, with less access to capital
and fewer opportunities to achieve financial success, their desperation could actually urge them
to pursue entrepreneurship to seek out a more comfortable life and create their own
opportunities. This has been the case with entrepreneurs like Daymond John, who's talked about
how his financial struggles growing up pushed him to be the hustling and hard-working
successful entrepreneur that he is.

Capital

Access to capital is one factor that can facilitate and accelerate entrepreneurship, as capital is
often required for research and development, production or manu facturing, and marketing. This
is the reason venture capitalists, angel investors, entrepreneurial incubators, and accelerators are
around - to help connect the aspiring entrepreneurs in need of capital with the supportive
investors , who have the necessary capital and believe in the ideas they're funding.

That said, with crowdfunding, equity crowdfunding, and the new developments in technology
over the past decade, it's become a lot easier to start and build a company, even without venture
capital funding. In fact, there are affordable and efficient options for getting many products
created, which can make the barriers to entry in entrepreneurship a lot lower and allow many
more people to pursue this route. These days, you can even start chasing your dreams while
you're still in high school.

Related: How to Start a Business in High School

Labor

The availability and affordability of good labor is another factor that impacts entrepreneurship,
as it can be difficult to find qualified employees to work for a new startup. However, like access
to capital, this is another factor that is much less problematic these days, largely due to sites like
UpWork and Fiverr.

It has become much easier, faster, and cheaper to connect with highly skilled and qualified
potential employees from all over the world through these freelancer marketplaces, and no
matter where you are located, you can likely find the necessary labor to carry out your idea for a
reasonable price.
Market

The one factor that applies as much now as it did decades ago is the market: it's necessary to find
the ideal target market for your idea, service, or product if you have hopes of selling it and
making any money. However, while a market for an idea must still exist to ensure its success and
profitability, finding and accessing that market has become much easier in recent years, as well.

With all of the social networks out there , digital publications, and online groups and forums,
finding and reaching a targeted market has never been easier or cheaper. So, while there must be
a large enough target market that is interested in your idea to ensure its profitability, if that
market is out there, reaching them should be much easier today than it would have ten years
ago.

Social Factors

Social factors can have a significant impact on a person's likelihood to pursue entrepreneurship
or to do so successfully, but they aren't guaranteed to steer a person in one direction or another.
That said, social factors in terms of the family background of entrepreneurship or encouragement
from family towards an entrepreneurial path can play a great role in guiding a teen towards an
entrepreneurial future.

Family background

A family background in entrepreneurship is one of the best and most direct ways to immerse a
child in the entrepreneurial mindset and to exemplify the benefits of starting and running one's
own business. For those who have a positive experience with their own family business, they
may be more likely to pursue their own ventures in the future, and they may see the
entrepreneurial route as more customary and less unconventional or risky.

However, the family background in entrepreneurship isn't the only way to influence a child
towards pursuing their own ventures; education and encouragement is another option. Families
who do not have firsthand entrepreneurial experience, but who do introduce their children to
entrepreneurship through educational entrepreneurship programs like Beta Bowl can similarly
influence their children towards an entrepreneurial path and equip them with the necessary skills
to succeed.

Education

Education can play a large role in leading a student down an entrepreneurial or more traditional
corporate path. Unfortunately, the formal education system in the U.S. has, for many decades,
trained students to prepare for specific occupations, and therefore, produced those with
aspirations of becoming corporate employees, rather than entrepreneurs. However, that, too, has
changed drastically in the past decade.

As entrepreneurship has become a more popular topic of discussion, it's also become a greater
emphasis of study in business schools and colleges. More universities have included
entrepreneurship majors, minors, and entire departments. Nonetheless, if you're hoping to equip
your child for an entrepreneurial future, you would be better served by seeking out an
entrepreneurial program that is specifically designed to give them those skills, experience, and
resources - this is exactly what Beta Bowl does, and that's why aspiring teen entrepreneurs
enroll.

Cultural Value

Though it may seem to have a less direct impact on our kids, the cultural views and value of
entrepreneurship do impact the prevalence of an entrepreneurial focus among the youth. The
good news here is that our culture in the U.S. has come to highlight and reward entrepreneurship,
especially in the past two decades.

From the "dot corn boom" to shows like Shark Tank and the rise of unicorn startups (those with
over 1 billion dollar valuations) with apps like Uber, Airbnb, and Snapchat to the social media
influencer millionaires, we have seen a great rise in entrepreneurship over the past two decades,
and we've seen the financial reward for those involved.

This increase in the popularity of entrepreneurship has also contributed to its increased focus at
universities, and it has become more accepted, applauded, and revered in our society. For this
reason, our culture has placed a great value on entrepreneurship, and this is a wonderful factor
that can encourage young kids and teens to become future entrepreneurs.

Psychological Factors

Perhaps the most direct factors impacting a person's likelihood to become an entrepreneur or at
least a successful one, are in fact psychological and may be inherent or instinctual in certain
people. While a person's upbringing can influence their psychological factors like creativity, risk
tolerance, drive, and leadership, these can also be personality traits that are deeply rooted in who
a person is, regardless of outside factors. Parents can try to instill those traits that would be
beneficial, but at the end of the day, people are independent people, and it's impossible to
control which skills and traits they truly master and embrace.
Creativity and Ideas

Having creativity and new ideas obviously play a huge part in a person's entrepreneurial journey,
as entrepreneurship often sparks out of creative innovation. In order to foster creativity in a child
or teen, it's best to encourage them to brainstorm ways to make current products or services
better, faster, cheaper, or somehow different.

Related: Traits that Colleges Look for in Applicants

By encouraging your child to run with their imagination and use it to think up new products,
services, or improvements on current ones, you're helping them exercise their entrepreneurial
muscle. This is a great way to put them into an entrepreneurial mindset, and by the time they're
an adolescent or teen, they may be coming up with ideas good enough to tum into real
businesses.

Risk Tolerance

Entrepreneurship is often inherently risky, to some degree, and it takes a person with at least a
minimal level of risk tolerance to truly stick it out and weather the storm. In order to prepare
your child for an entrepreneurial future, you should help them develop their risk tolerance. You
can do this by encouraging and rewarding them for taking on new challenges, so they get used to
facing new and unfamiliar situations and get over their fear of failure. That said, you can also
have conversations with them about business opportunities and discuss the idea of calculated
risks. The goal here is to help them develop a mindset of risk tolerance, without adopting a
careless attitude of throwing caution to the wind.

Leadership and Inspiring Others

Leadership is one aspect of entrepreneurship that no founder can avoid, as an entrepreneur is in

charge of turning an idea into a business. Oftentimes, entrepreneurs become accidental leaders
and learn these leadership skills "on the job," but it's never too early to prepare.

You can help your child develop their leadership skills by encouraging them to take on roles like
project leader in school, team captain in sports, and club president in their after-school clubs.
You can also encourage them to pursue independent projects outside of school, in which they are
heading up the entire operation and learning real-life leadership skills outside of school-related
activities. Here are some other leadership activities high school students can pursue.

Beta Bowl gives students an opportunity to develop these leadership skills outside the
classroom in an independent real-world experience, as they build their own business, create a
business plan and marketing strategy, and present it to investors.