EMPLOYABILITY SKILLS – UNIT-4 ENTREPRENURSHIP SKILLS

Businesses cater to the needs of the society. But sometimes we find that there is a gap between
what is needed and is available. This gap can be used as an opportunity by some people who are
ready to take risk and fill the gap by providing necessary products and services. Such people are
entrepreneurs

some people are the owners of businesses, others are employed and get a salary/wage? The
owners are self-employed while the employees are wage earners

NEED ---- RECOGNIZE OPPORTUNITY ---- IDEA & START A BUSINESS ---- GROW A BUSINESS

Sowmya grew up in a village in Karnataka. Her parents came to Bangalore in search of a better
job.

Sowmya saw her parents working very hard.

Her father started working in a small shop which sold clothes and her mother started working as
a cook in someone’s house.

Sowmya wanted to support her family. She was now going to college and wanted to start making
money.

When she turned 18, Sowmya thought “What can I do, which will help me make more money and
where people will keep buying from me again and again?” (Need)

She noticed that the girls in her college cared about their health and did not want to eat chips and
other unhealthy food (Recognising opportunity).

She started making healthy snacks and sold them to her friends in college (Idea and start of a
business).

She then started selling her tasty-healthy snacks to people in her area.

As the demand for her snacks increased, she bought a small machine which would help her in
making more snacks.

She started making 5 times the snacks.

She started giving a small commission to her friends to sell these snacks in their own societies
(Growing the business).

After 2 years, Sowmya now sells her snacks in every small shop.

Opportunities are everywhere. You need to look for them/spot them.

 1. Define business.

Ans.

• Business is an economic activity.

• It involves continuous production and distribution of goods & services
• It can be for profit or non- profitable
2. Who is an entrepreneur?

Ans. Self-employed person who

• is willing to take calculated risk

• brings in new idea to start a business.
3. Are all self-employed persons entrepreneurs?

Ans. No, all self-employed persons are not entrepreneurs unless he/she introduces a new
method or idea in the business.

Example:
Ramu is chai wala selling tea near a busy bus stop.
He earns a lot and makes a good profit. He is a traditional business man.

Now, Rani also started a tea stall on the road side.

She decided to sell different flavours of tea, just like expensive tea parlours in the mall, at
a reasonable price.
Her clients vary from daily wage earners to actors and politicians because of her unique
idea. She is an entrepreneur

4. What kind of ideas or methods an entrepreneur can add to a business?

Ans. New ideas with which an entrepreneur adds value to a business can be
• new kinds of products — like adding varieties,
• new services - like home delivery or credit services,
• new marketing ideas,
• new cost reduction ideas.
5. What do you mean by entrepreneurship?

Ans. The process of developing a business plan, launching and running a business
using innovation to meet customer needs and to make a profit is entrepreneurship.
 6. List different benefits of entrepreneurship.

Ans. Benefits

• Economic Development: Money in circulation

• Social Development – More Jobs
• Improved standard of living – different kinds of products in market
• Optimal use of resources: Use of renewable resources
• More benefits at lower prices – products & services at competitive rates
7. What skills or qualities a person exhibits if he/she want to become an entrepreneur?

Ans. Qualities for an entrepreneur

• Patience
• Positivity
• Hard Work
• Never giving up
• Confidence
• Open to trial & error
• Creativity & Innovation
8. How is risk different from profit?

Ans. RISK: Situation where result is not known and could lead to loss.

Risk taking can lead to failure but entrepreneur accepts failure and is always ready to
take calculated risk

PROFIT: Excess earning after deducting all expenses

9. What is Wage Employment?

Ans. In this scenario, there are 2 parties – Employer & Employee

• It does not involve too much risk.

• Continuity of service depends upon
o terms & conditions laid down in the contract b/w 2 parties
o relationship b/w employer & employee

Example: Cook in a restaurant: Wage Employment

Food stall vendor: Entrepreneurship

10. What are the benefits of Entrepreneurship over Wage Employment?

Ans. Benefits of Entrepreneurship over Wage Employment

 • Do what you are interested in
• Work for yourself
• Make profits for yourself
• More risk, more profit
• Take his/her own decisions
• Can add creativity and innovation of his/her own

11. Explain the different types of Business activities.

Ans There are 3 types of business activities

Product Seller and buyer exchange an item

Example: Buying a dress
Service Seller helps the buyer to finish some work
Example: AC technician repairs AC
Hybrid Selling product as well as service
Example: Restaurant – food(product) + catering (service)

12. What is a difference b/w manufacturing business and Trade business?

Ans.

Manufacturing Business: Make a product and sell it

Products are usually made in factories

Trade Businesses: Buy and sell a product

Transport the product from factory ->warehouse ->Shops

Example: Wholesalers, Distributors and retail shops

13.Write the steps of starting a business.

Ans Steps of starting a business

• Innovate an Idea
• Getting money and material
• Understanding customer needs
• Improving product/service