Chapter 1
2 FUNCTIONS OF ENTREPRENEUR (IIGD)
Entrepreneurship and the Entrepreneur
1.1 WHAT IS ENTREPENEUR
Entrepreneurship comes from a French word
“Entrependre” and the German word
“Uternehmen” both means individuals who are
“undertakers” i.e those who took the risk of a new
enterprise. Entrepreneurship use a dynamic activity
which helps the entrepreneur to bring changes in the
process, of production, innovation in production,
new usage of materials, creator of market etc. It is a
metal attitude to foresee risk and uncertainty and do
something new in an effective manner to achieve
certain goals.
Entrepreneur is an economic change with
knowledge, skills, initiative, drive, and spirit of
innovation to achieve goals. He identifies and seizes
opportunity for economic benefits. He is a risk
bearer, an organizer and an innovator.
The French economist Cantillon, the first to
introduce the term entrepreneur, defined him as an
agent who purchased the means of production for
combination into marketable products.
According to Economists- an entrepreneur is
the one who brings resources, labor, materials and
other assets into combination to produce a socially
viable product, and also one who introduces
changes, innovation and new order.
According to Management- a person with a
vision and action plan to achieve it is an
entrepreneur.
Entrepreneurs perform a vital function in
economic development. They have been referred to
as the human agents needed to “mobilize capital, to
explore natural resources, to create markets and to
carry on trade”. It might well be said that the
entrepreneurial input spells the difference between
prosperity and poverty among nations.
1.
➢ Identification of opportunities
➢ Introduction of new product
➢ Gathering resources or introducing new
methods of production
➢ Developing new markets
1.3 CHARACTERISTICS OF AN
ENTREPRENEUR (VKDIOVIGPGC)
1. Vision- he is able to visualize market demand,
socio economic environment and the future of
business venture.
2. Knowledge- he has sound conceptual
knowledge about all the technicalities of his
business.
3. Desire to succeed- he has multiple goals and a
seeks Opportunities to be
4. Independence- he is independent in work
decision making
5. Optimism- he knows to exploit opportunities
6. Value addition- he does not follow the
conventional rule of thumb, they have a desire to
create, innovative and add value.
7. Initiative- he takes the initiative to make an
action plan from limited resources.
8. Goal setting- he sets realistic goals
9. Problem solver- he is creative in problem solving
10. Good Human Relations- he is a good leader,
motivator and team builder
11. Communications Skills- he has ability to
persuade others
1.4 CHARACTERISTICS OF
ENTREPRENEURHIP (AOIRMG)
1. Ability to create enterprise: Entrepreneurship is
primarily an economic activity because it
involves creation and operation of an enterprise.
It is basically concerned with satisfying the
needs of customer with the help of production
and distribution of goods and services.
2. Organising function: An entrepreneur brings
together various factors of production for an
economic use. He co-ordinates and controls the
factors of production, efforts of the persons
engaged in his enterprise.
3. Innovation: Entrepreneurship is an automatic,
spontaneous, and creative response to changes
in the environment. It involves innovation of
something new to cause dynamic change and
spectacular success in the economy and create
conditions for growth of the economy.
4. Risk bearing capacity: Risk is an inherent and
inseparable element of entrepreneurship. He
assumes the uncertainty of future. An
entrepreneur guarantees rent to the landlord,
wages to employees and interest to the investors
in the hope of earning more than the expenses.
5. Managerial and leadership functions: An
industrial entrepreneur must have
additional personality traits such as
managerial and leadership skills. Managerial
and leadership qualities predominant
orientation in the direction of productivity,
working relation and creative integration
along with desire to make profit.
Entrepreneurship demands tactful handling of
risk and uncertainties because new commodity
and its acceptability are uncertain.
6. Gap filling: The gap filling between human
needs and the available products and leads to
entrepreneurship. An entrepreneur identifies
the gap and takes necessary corrective measures
to find the gap, to achieve his action-oriented
motive in the enterprise as an entrepreneur with
the help of the entrepreneurship process.
1.5 TYPES OF ENTREPRENEURS
According to Clarence Banhof (IIFD)
Clarence Danhof classifies entrepreneurs into four
types innovative, imitative, fabian and drone. The
innovating entrepreneur is one who assembles and
synthesizes information and introduces noval
combinations of factors. He is an aggressive figure
and an industrial leader. The imitative entrepreneur
is also known as the adoptive entrepreneur He
simply adopts successful innovations introduced by
other innovators. The Fabian entrepreneur is timid
and cautions. He will imitate other innovations only
if he is certain that failure to do so may damage his
business. Finally there is the drone entrepreneur.
His entrepreneurial activity may be restricted to just
one or two innovations. He refuses to adopt changes
in production even at the risk of reduced returns.
The Innovative Entrepreneur: The innovative
entrepreneur is essentially the creation of Joseph
Schumpeter. In his opinion the most important
function of an entrepreneur is innovation. The
innovative entrepreneur is a key figure in the
process of development. He is highly motivated and
talented and is able to foresee potentially profitable
opportunities. Innovations involve problem solving
and the entrepreneur is a problem solver.
Adoptive or Imitating Entrepreneurs: Imitative
entrepreneurship is characterized by readiness to
adopt successful innovation inaugurated by
innovating entrepreneurs. In other words, imitators
follow the innovators after carefully observing how
the latter fare and to what extent their innovation
has caught the imagination of the society. These
groups are also revolutionary entrepreneurs with
the difference that they do not innovate the changes
themselves. They just imitate techniques and
technology initiated by others.
Fabian Entrepreneurs: Fabian entrepreneurship is
characterized by great caution and scepticism in
practicing any change. Such entrepreneurs have
neither the will to introduce new changes nor the
desire to adopt new methods. Such entrepreneurs
are shy and lazy. Their dealings are determined by
customs, religion, tradition and past practices. They
are not much interested in taking risks and they try
to follow the footsteps of their predecessors.
Drone entrepreneurs: Drone entrepreneur is one
who follows the traditional methods of production.
Under no circumstances will a drone entrepreneur
change the method of production he has introduced.
Such entrepreneurs may even suffer losses, but even
then they refuse to adopt and use new methods.
They are laggards because they continue in their
traditional ways of operation. Very often their
products lose their marketability and their operation
becomes uneconomical leading to their being
pushed out of the market.
According to Arthur H. Cole (ERC)
Empirical entrepreneur: hardly introduces anything
revolutionary and follows the principle of rule of
thumb
Rational entrepreneur: well informed about the
general economic conditions and introduces
changes that look more revolutionary
Cognitive entrepreneur: well informed, draws upon
the advice and services of experts and introduces
changes that reflect complete break from the existing
scheme of things
According to Ownership (PP)
Private entrepreneur: is motivated by profit and as
such would not enter those sectors of the economy
in which prospects of monetary rewards are not
bright. General infrastructure industries fall under
this category
Public entrepreneurs: This forces the Government to
take the initiative to start enterprises in these sectors.
In the less developed countries the entrepreneurial
functions of the Government has greatly widened
due to the lack of sufficient private entrepreneurs.
For example electricity generation and distribution
is Government owned.
According to Scale (LS)
Large scale entrepreneur: usually found in the
developed countries. They possess the financial
wherewithal and the necessary expertise to initiate
large scale enterprises and introduce novel technical
changes. The result is the developed countries are
able to sustain and develop a high level of technical
progress
Small Scale entrepreneur: does not possess the
necessary talents and resources to initiate large scale
production and introduce revolutionary
technological changes.
1.6 PROCESS OF ENTREPRENEURSHIP
(IEPGCC)
A. Identify an Opportunity- an entrepreneur senses
opportunities and visualizes a market since they are
creative and open to new ideas and seek challenges.
They look for needs, wants, problems and
challenges that are not met or dealt effectively. Since
their ideas are innovative they gain first movers
advantage which provides product identification
and higher credibility in the market.
B. Establishing a Vision- it involves generation of
ideas using past experience and creativity to
develop new and innovative ways to solve a
problem, or satisfy a need. Out of many ideas the
most feasible and profitable are chosen and
narrowed to one best idea. He evaluates different
opportunities and the business environment to
assess the (a) real and perceived value of the
product/service (b) risks and rewards associated
with the project (c) and differential advantage in its
competitive environment.
C. Persuade others- he forms a foundation team
which consists of a group individuals who work
together to turn his vision into reality. They may be
partners, financiers, family members etc.
D. Gathering Resources- it involves using a business
plan to attract investors, venture capitalists,
financial institutions, promoters. The main task is to
research and identify resources that are needed to
turn the idea into a viable venture.
Resources can be categorized into: (FO)
Financial Resources – personal savings, retained
capital, banks, government institutions, family,
friend’s partnerships, venture capital, public issue
Operating Resources – they can be: (TIHI)
Tangible – (a) machines (b) raw materials (c) land
and building (d) office equipment’s. An
entrepreneur has to make a decision to buy, rent or
hire them.
Intangible – (a) company’s image (b) operating
procedures (c) transportation (d) management
Human- temporary/permanent employees, amount
of man power needed recruitment, selection and
training of staff, compensation, and organization
culture
Information – efficient management information
system is needed in order to have timely info about
customers, markets, competitors and external
environment. All the data is networked on real time
basis to speed up actions based on information.
E. Create New Venture- when all the resources have
been arranged, the next step is creation and
establishment of a new venture and running the
business venture successfully. It requires a lot of
enthusiasm and persuasion to gather optimum
resources and it requires a lot of perseverance and
passion to believe in self
F. Change/Adapt with time –it is necessary to
monitor and upgrade the organization with
changing market conditions. It requires availability
of funds to make changes and the adaptability of
human resources towards changed environment.
1.7 FUNCTIONS OF ENTREPRENEURSHIP
An entrepreneur has to perform the following
functions as a vital factor of production:
Primary Functions
Risk taking and Uncertainty Bearing: The future is
unpredictable. The entrepreneur has to take risks in
these circumstances. If the venture succeeds, the
entrepreneur profits; if it does not, losses occur.
Thus, taking risks forms an important
entrepreneurial function. Risks are of two types -
insurable and non-insurable. Non-insurable risks
are the possibility of changes in the tastes and
preferences of the consumer, techniques of
production and so on. These non-insurable risks are
called uncertainties. Uncertainty bearing in thus an
integral part of the entrepreneurial function. The
entrepreneur makes use of his initiative, skill and
good judgement to reduce the uncertainties of
business.
Taking Business Decisions: All decisions concerning
business are taken by the entrepreneur. Once the
entrepreneur is convinced that a particular line of
production offers large prospects of profit, he
decides to enter it. He has to formulate an action
plan regarding the product and the quality of the
product to be produced. He has to evolve the best
possible method of production which would earn
him a sizeable profit. Suitable changes in the size of
the business have to be effected by him.
Employment of personnel, choosing the location for
the production unit and everything that is needed
for the development of the business has to be
decided by him.
Managerial Functions: The entrepreneur combines
in him managerial functions, though they are
strict1y different from the standard entrepreneurial
duties. The entrepreneur arranges finance,
purchases raw materials, provides the necessary
infrastructure for production, supervises sales and
marketing and also assumes the role of the
personnel manager. The entrepreneur thus has a
multi-faceted personality when he undertakes
managerial functions.
Innovation: By far the most important function of an
entrepreneur is innovation. Here he introduces far-
reaching improvements in the quantity and quality
of the production line. He considers the economic
viability and technical feasibility of an invention. It
is this function of the entrepreneur which injects the
element of dynamism into the economic system.
Finally, providing leadership and having complete
control in the organization and management of
business is a function of paramount importance. The
moment the entrepreneur loses control over his
business, he ceases to be an entrepreneur.
Secondary Functions
Besides the above functions, the entrepreneur has to
perform many other activities at the later stage
namely:
1. Diversification of production.
2. Expansion of the enterprise
3. Maintaining cordial employer-employee
relations’
4. Tackling of labour problems
5. Co-ordination with outside agencies.
Other Functions
1. Management of scarce resources.
2. Dealing with public bureaucracy (licenses, taxes).
3. Acquiring and overseeing assembly of the factory.
4. Industrial designing and engineering.
5. Marketing of product and responding to
competitions.
6. Industrial new product.
7. Perception of market opportunities (novel or
imitative).
8. Financial and production management.
9. Management of customers and supplies relations.
10. Management of scarce resources.
1.8 BARRIERS TO ENTREPRENEURSHIP
(EFPSP)
A. Environmental barriers: (RMLI)
Raw material: Non-availability of raw materials
required for production during the peak season.
This leads to an increase in the price of raw materials
due to competition.
Labor:
- Shortage of skilled labor
- Lack of committed and loyal employees.
- Quality and quantity of labor.
Machinery: Machines are necessary but they are
also expensive and due to top change in technology
they become obsolete and require replacement
which requires cash in hand. It becomes very
difficult for the small business organization to keep
its production process updated.
Land and buildings: The acquisition of land and
construction of a building at a prominent place
requires huge expenditure. If the land is rented, it
becomes a fixed cost and a constant concern for the
entrepreneur.
Infrastructure support: Adequacy of electricity,
proper road, water and drainage facilities, etc.
Development authorities have little support due to
red-tapism and corruption
B. Financial constraints:
The availability of funds is a major concern. Delay in
starting or running business results in a delay in the
source of finance.
C. Personal barrier:
These are due to the emotional block of a person.
They cause a mental blockage. They are:
Lack of confidence: They feel that they will never
get a successful business idea and will be unable to
attract the necessary resources. Therefore, they reject
the idea of being self-employed.
Lack of dependence on others: The entrepreneur’s
aim is to gain their additional expertise through trial
and error and experience rather than seeking further
development or personal help from others.
Lack of Motivation: Loss interest and lack of
motivation when thoughts do not work.
Lack of patience: When entrepreneurs faced with
business challenges/problems in the first attempt,
the desire to achieve success or to become rich
immediately, in which they lose interest. They give
up during the initial loss
Inability to dream: Sometimes entrepreneurs are
short of vision or satisfied with what they have
achieved till now and lose interest in further
expansion of their business enterprise.
Sense of Pride/Embarrassment- they are too proud
or too embarrassed to take help.
D. Society barrier:
-Socio-cultural norms and values.
-The degree of approval or disapproval of
entrepreneurial behavior.

-Financial stability and family background

-Caste and religious affiliation

E. Political barrier:

- Government incentives and concessions.

-Facilitating socio-economic settings

-Interest in the economic development of society.

Entrepreneurship provides employment and source

of earning to people. It helps in reducing the
monopoly of rich businessman and achieving a
balanced regional development and growth in
economy.
Chapter 2
entrepreneurs have followed:
Entrepreneurs Impact to Economy
2.1 ENTREPRENEURS HELP ECONOMY
Nurturing entrepreneurship can have a
positive impact on an economy and a society in
several ways. For starters, entrepreneurs create new
business. They invent goods and services, resulting
in employment, and often create a ripple effect,
resulting in more and more development.
“Entrepreneurs add to the gross national income.”
Entrepreneurs create social change. They
break traditions with unique inventions that reduce
dependence on existing methods and systems,
sometimes rendering them obsolete. Smartphones
and their apps, for example, have revolutionized
work and play across the globe.
Entrepreneurs invest in community projects
and help charities and other non-profit organizations,
supporting causes beyond their own.
2.2 ENTREPRENEURIAL ECOSYSTEM
There is research that shows high levels of
self-employment can stall economic development.
Entrepreneurship, if not properly regulated, can lead
to unfair market practices and corruption, and too
many entrepreneurs can create income inequalities in
society. Overall, though, entrepreneurship is a
critical driver of innovation and economic growth.
Therefore, fostering, entrepreneurship is an
important part of economic growth strategies of
many local and national governments around the
world.
To this end, governments commonly assist in
the development of entrepreneurial ecosystems,
which may include entrepreneurs themselves,
government-sponsored assistance programs and
venture capitalists. They may also include non-
government organizations, such as entrepreneurs’
associations, business incubators, and education
programs.
2.3 BECOMING AN ENTREPRENEUR
There are five general steps that most, if not all, successful
1. Ensure Financial Stability
This first step is not a strict requirement but its
definitely recommended. While entrepreneurs
have built successful businesses while being less
than financially flush (think of Facebook founder
Mark Zuckerberg as a college student), starting
out with an adequate cash supply and ensuring on
going funding can only help an aspiring
entrepreneur, increasing his or her personal
runway and give him more time to work or
building a successful business, rather than
worrying about making quick money.
2. Build a Diverse Skill Set
Once a person has a strong finance, it is important
to build a diverse set of skills and then apply those
skills in the real world. The beauty of step two is
it can be done concurrently with step one.
Building a skill set can be achieved through
learning and trying new tasks in real world
setting. For example, if an aspiring entrepreneur
has a background in finance, he can move into a
sales role at his existing company to learn the soft
skills necessary to be successful.
3. Consume Content Across Multiple Channels
As important as building a diverse skill set is, the
need to consume a diverse array of content is
equally so. This content can be in the form of
podcast, books, articles or lectures. The important
thing is that the content, no matter the channel,
should be varied in what it covers. An
entrepreneurs should always familiarize himself
with the world around him so he can look at
industries with a fresh perspective, giving him the
ability to build a business around a specific
sector.
4. Identify a Problem to Solve
Through the consumption of content across the
multiple channels, an aspiring entrepreneur is
able to identify various problems to solve. One
business adage dictates that a company’s product
or service needs to solve a specific pain point
either for another business or for a consumer
group. Through the identification of a problem,
an aspiring entrepreneur is able to build a
business around solving that problem.

5. Solve that Problem
Successful startups solve a specific pain point for
other companies or for the public. This is known
as “adding value within the problem.” Only
through adding value to a specific problem or
pain point does an entrepreneur become
successful.
2.4 THE INDIVIDUAL ENTREPRENEUR
Entrepreneurial Feelings
A. There is no “true entrepreneurial profile”.
Entrepreneurs come from many educational
backgrounds, family situations and work
experiences.
B. Locus of Control.
1. Entrepreneurs must be able to sustain the
drive and energy required to form
something new and to manage the new
enterprise.
2. While research results are inconsistent,
internal control seems to be a
characteristic of entrepreneurs.
3. Internal beliefs appear to differentiate
entrepreneurs from the general public, but
not from managers since both tend toward
internality.
C. Feelings about Independence and need for
Achievement.
1. The entrepreneur also has a need for
independence, to do things in his or her
own way and time.
2. Another controversial characteristic of
the entrepreneurs needs for achievement.
D. Risk Taking.
1. Risk taking seems a part of
entrepreneurial process.
2. Although many studies have focus on risk
taking in entrepreneurship, no conclusive
relationship has been established.
2.5 ENTREPRENEURIAL BACKGROUND
AND CHARACTERISTICS
Only a few background characteristics have
differentiated the entrepreneur from managers.
A. Childhood Family Environment.
1. The impact of birth order and social status
has had conflicting research results.
2. Some studies have found that
entrepreneurs tend to be firstborn; others
find no relationship.
3. There is strong evidence that entrepreneurs,
both male and female, tend to have self-
employed or entrepreneurial parents.
A. Having a father or mother who is self-
employed provide a strong inspiration
in the example of independence and
flexibility of self-employment.
B. This feeling of independence is often
further enforced by entrepreneurial
mother.
4. The overall parental relationship may be
the most important aspect of the
childhood environment in establishing
the desirability of entrepreneurial
activity.
5. Parents of entrepreneurs need to be
supportive and encourage independence,
achievement and responsibility.
A. This supportive relationship appears
to be most important for females.
B. Female entrepreneurs tend to grow up
in middle to upper class
environments, where family are child
centered, and are similar to their
fathers in personality.
B. Education.
1. Education appears important in the
upbringing of entrepreneur, in the level of
education obtained, and in playing a
major role in coping with problems.
2. Although formal education is not
necessary for starting a new business, it
does provide a good background.
3. The ability to communicate clearly in
written and spoken work is also
important.
C. Personal Values.
1. Studies have failed to indicate that
entrepreneurs can be differentiated on
personal valued from managers,
unsuccessful entrepreneurs, or the
general public.
 2. Studies have shown that the entrepreneur
has a different set of attitudes about the
nature of management.
3. Five consensus characteristics have been
found:
a. Superior product quality
b. Quality service to customers
c. Flexibility, or the ability to adapt
to changes in the market
d. High caliber management
e. Honesty and ethics in business
practices
4. Ethics and ethical behavior are also very
important to entrepreneurs.
D. Age.
1. Entrepreneurial age, as contrasted to
chronological age, is the age of the
entrepreneur reflected in the experience.
2. Entrepreneurial experience is one of the
best predictors of success.
3. In chronological age, most entrepreneurs
start their careers between ages 22 and 55.
4. There are milestones years every five
years.
5. Generally, male entrepreneurs start their
first venture in their early 30s, while
women tend to do so in their middle 30s.
E. Work History.
1. Dissatisfaction with one’s job often
motivates the launching of a new venture.
2. Previous technical and industry
experience is also important once the
decision to start a business made.
3. Experience in the following areas is
particularly important: financing, product
or service development, manufacturing,
development of distribution channels,
and preparation of marketing plan.
4. As the venture become establish,
managerial experience and skills become
more important.
5. Entrepreneurial experience is also
important.
2.6 MOTIVATION
While motivations may vary, the reason cited
most often for becoming an entrepreneur is
independence not wanting to work for anyone else.
A. Other motivating factors differ between male
and female entrepreneurs.
1. Money is the second reason for men’s
starting a venture.
2. Job satisfaction, achievement,
opportunity, and money are the rank
order reasons for women.
2.7 ROLE MODELS AND SUPPORT SYSTEMS
One of the most important factors influencing
entrepreneurs in their career choice is the choice of
role models.
1. Role models can be parents, relatives or
successful entrepreneurs in the community.
2. Role models can also serve in a supportive
capacity as mentors during and after the new
venture is launched.
a. This support system is most crucial
during the start-up phase.
b. It is important that entrepreneur
establish connections and eventually
networks early in the venture
formation process.
A. Moral Support Network.
1. It is important for the entrepreneur to
establish a moral support network of
family and friends.
2. Most entrepreneurs indicate that their
spouses are their biggest supporters.
3. Friends can provide advice that is
more honest than that received from
others; also, encouragement,
understanding, and assistance.
4. Relatives can also be sources of moral
support, particularly if they are also
entrepreneurs.
B. Professional Support Network.
1. The entrepreneurs also need advice and
counsel which can be obtained from
members of a professional support
network.
2. Most entrepreneurs indicate that they
have mentors.
a. The mentor is coach, sounding board,
and advocate.
b. The individual selected needs to be
experts in the field.
 c. An entrepreneur can initiate the
“mentor finding process” by
identifying and contacting a number
of experts.
3. Another source of advice is a network of
business associates.
a. Self-employed individuals who have
experience in starting a business are
good sources.
b. Clients and buyers are also important
as they provide word-of-month
advertising.
4. Suppliers are good components of the
professional support network – they help
establish credibility with suppliers and
provide good information on trends in the
industry.
5. Trade associations are good network
additions, as they keep up with new
developments and can provide overall
industry data.
6. Affiliations with individuals developed in
hobbies, sporting events, civic
involvements, and school alumni groups
are excellent sources of referrals, advice,
and information.
C. Each Entrepreneur needs to establish both a
moral and professional support network to
share problems with and gain overall support.
2.8 MALE VERSUS FEMALE
ENTREPRENEURS
A. Women are now starting new ventures at
a higher rate than men.
1. Women are starting businesses in the U.S
at twice the rate of all businesses.
2. Women now own about 6.2 million small
businesses, employing 9.2 million
people.
B. In some aspects female entrepreneurs
possess very different motivations,
business skills, and occupational
backgrounds.
1. Factors in the start-up process for male
and female entrepreneurs are different
especially in such areas as support
systems, sources of funds, and problems.
2. Men are motivated by the drive to control
their own destinies.
3. Women tend to be more motivated by the
need for achievement arising from job
frustration.
C. Departure points and reasons for starting
the business are similar for both men and
women.
1. Both have generally had a strong interest
and experience in the area of their
venture.
2. For men, the transition for a new venture
is easier when the venture is an outgrowth
of a present job.
3. Women often leave a previous
occupation with a high level of frustration
and enthusiasm for the new venture rather
than experience.
D. Start-Up Financing.
1. Males often have investors, bank loans or
personal loans in addition to personal
funds as sources of start-up capital.
2. Women usually rely solely on personal
assets or savings.
3. Obtaining financing and lines of credit
are major problems for women.
E. Occupations.
1. Both groups tend to have experience in
the field of their ventures.
2. Men more often have experience in
manufacturing, finance, or technical
areas.
3. Most women usually have administrative
experience, often in service-related fields.
F. Personality.
1. Both men and women tend to be
energetic, goal oriented and independent.
2. Men are often more confident and less
flexible and tolerant than women.
G. The background of male and female
entrepreneurs tends to be similar.
1. Women are a little older when they
embark on their careers.
2. Men often have studied in technical- or
business-related areas, while women tend
to have liberal arts education.
H. Support Groups.
1. Men usually list outside advisors as most
important supporters, with spouses being
second.
 2. Women list their spouse’s first, close 1. An Inventor:
friends second, and business associates a. Tends to be well educated.
third. b. Has family, educational, and
3. Women usually rely more heavily on a occupational experiences that contribute
variety of sources for support and to free thinking.
information than men. c. Is a problem solver.
I. Nature of Venture. d. Has a high level of confidence.
1. Women are more likely to start a business e. Is willing to take risk
in a service-related area. f. Has the ability to tolerate ambiguity and
2. Men are more likely to enter uncertainty.
manufacturing, construction, or high 2. A typical inventor places a high premium on
technology fields. being an achiever, and is not likely to view
monetary benefits as measure of success.
B. An inventor differs from entrepreneur.
2.9 MINORITY ENTREPRENEURSHIP 1. An entrepreneur falls in love with a new
venture, while the inventor falls in love with
A. The differences in behavior of various groups the inventions.
must be understood in the context of the 2. The development of a new venture based on
environment and economic opportunities an inventors work often requires the expertise
available, making research difficult. of an entrepreneur to commercialize it.
B. Most literature dealing with minority
entrepreneurship has focused on the
characteristics of the group under study.
1. In terms of ownership, one study found:
a. The lowest participation rate is for
African-Americans.
b. The second highest but fastest
growing rate is for Hispanics.
c. The highest rate is for Asians.
2. Studies have also found differences in
education, family background, and age
when starting the venture.
C. Studies have found differences between
ethnic groups in benefiting from community
resources.
D. Entrepreneurship has increase among Asians,
African-Americans, Hispanics, and Native
Americans.
1. Hispanics owned businesses make up
5.8% of businesses.
2. Asian American owners make up 4.4%.
3. African American own 4.0% and
American Indians 1%.
4. This 15% minority share is up from 6.8%
in 1982.

2.10 ENTREPRENEURS VERSUS

INVENTORS
A. An inventor, an individual who creates something
for the first time, is a highly driven individual
motivated by his or her own work and personal
ideas.
Chapter 3
The Student as Entrepreneur: A Self-
Evaluation
3.1 WHY YOU SHOULD DO A FORMAL SELF-
ASSESSMENT?
How much do you know about yourself? If
you are like most people, you probably have to give
a lot of thought to this question before you can
answer it. You might know what your hobbies are
and that you are (or aren’t) a people person. You
probably couldn’t explain, with ease, what work
related values are important to you and, while you
may know some things that you are good at, you may
not have a complete list of all your aptitudes.
Even if you could provide a rundown of every
one of your characteristics, there’s a good chance you
don’t know how to use that information to help you
find a career that is good fit. Utilizing a variety of
self-assessment tools will help you put together all
the pieces of the puzzle.
3.2 ANATOMY OF SELF-ASSESSMENT
A self-assessment, to be effective, must take
into account individuals work-related values,
interests, personality type, and aptitudes. All of these
characteristics make up who you are, so ignoring any
of them won’t give you an accurate answer.
Let’s take a look at each one:
• Work Related Values: Your values are the
ideas and beliefs that are important to you.
Your work-related values can include
autonomy, prestige, security, interpersonal
relationships, helping others, flexible work
schedule, outdoor work, leisure time, and
high salary. If you take these things into
account when choosing a career, you have a
better chance of achieving job satisfaction.
• Interests: Your likes and dislikes regarding
various activities make up your interests.
Strong and other psychologist discovered
many years ago that people who share similar
interests also the same type of work. Based
on this theory he developed what is now
called the Strong Interest Inventory, an
assessment many career development experts
use to assist their clients with career planning.
Examples of interests include reading,
running, golfing, and knitting.
• Personality Type: Your personality type is
made up of your social traits, motivational
drives, needs and attitudes. Carl Jung, a Swiss
psychiatrist, developed a theory of
personality that is widely used in career
planning and is the basis for the Myers-
Briggs Type Indicator (MBTI), a highly
popular personality inventory. Knowing what
your type is can help you choose an
occupation because particular personality
types are better suited to certain careers, as
well as work environments, than are others.
• Aptitude: Aptitude refers to an individual’s
natural talent, learned the ability, or capacity
to acquire a skill. Examples include math,
science, visual art, music verbal or written
communication, reading comprehension,
logic and reasoning, manual dexterity,
mechanics, or spatial relations. You may
have multiple aptitudes. It is important to
keep in mind that having an aptitude for
something, doesn’t mean you will necessarily
like doing it. Or you may enjoy doing it, but
not for work.
3.3 A FEW QUESTIONS TO ASK YOURSELF:
1. Do I have the personality, temperament, and
mindset of taking on the world on my own terms?
2. Do I have the required ambiance and resources to
devote all my time to my venture?
3. Do I have an exit plan ready with a clearly defined
timeline in case my venture does not work?
4. Do I have concrete plan for next “x” number of
months or will I face challenges midway due to
family, financial or other commitments? Do I
have a mitigation plan for those challenges?
5. Do I have the required network to seek help and
advice as needed?
 6. Have I identified and build bridges with
experienced mentors to learn from their
expertise?
7. Have I prepared the rough draft of a complete risk
assessment, including dependencies on external
factors?
8. Have I realistically assessed the potential of my
offering and how it will figure in the existing
market?
9. If my offering is going to replace an existing
product in the market, how will my competitors
react?
10. To keep my offering secure, will it make sense to
get a patent? Do I have the capacity to wait that
long?
11. Have I identified my target customer base for the
initial phase? Do I have scalability plans ready for
larger markets?
12. Have I identified sales and distribution channels?

3.4 QUESTONS THAT DELVE INTO

EXTERNAL FACTORS:

1. Does my entrepreneurial venture meet local

regulations and laws? If not feasible locally, can
I and should I relocate to another region?
2. How long does it take to get the necessary license
or permissions from concerned authorities? Can I
survive that long?
3. Do I have a plan about getting the necessary
resources and skilled employees, and have I made
cost considerations for the same?
4. What are the tentative timelines for bringing the
first prototype to market or for services to be
operational?
5. Who are my primary customers?
6. Who are the funding sources I may need to
approach to make this big? Is my venture good
enough to convince potential stakeholders?
7. What technical infrastructure do I need?
8. Once the business is established, will I have
sufficient funds to get resources and take it to the
next level? Will other big firms copy my model
and kill my operation?