Workshop on Developing Entrepreneurial Skills

Section A
Concept:

Entrepreneurship drives the growth and diversification of the economy and

contributes to the creation of wealth. Before we get into the specifics of the role of
entrepreneurship in economic development, let’s briefly encapsulate its significance.
Entrepreneurship’s importance lies in the following:

 Drives economic growth and creates new job

 Encourages innovation by bringing new ideas, products, and services to the
market
 Contributes to social change by developing products or services that reduce
people’s dependence on outdated technologies
 Addresses social and economic problems by creating solutions that meet the
needs of society
 Enables competition which improves business efficiency and lowers prices for
consumers

Definition:
Entrepreneurship is the pursuit of starting, managing, and scaling a business. It
involves combining innovation, skills, and vision to develop new products, services,
or ideas that meet market demand and create value for a target audience. Those
who choose this path often take on financial risks and require resilience and
problem-solving skills.

Entrepreneurship & Economic Development:

The role of entrepreneurship in economic development has nine salient takeaways:

1. Raises Standard of Living

A significant role of entrepreneurship in economic development is that it can greatly

enhance the standard of living for individuals and communities by setting up
industries and creating wealth and new positions. Entrepreneurship not only provides
large-scale employment and ways to generate income, it also has the potential to
improve the quality of individual life by developing products and services that are
affordable, safe to use, and add value to their lives. Entrepreneurship also introduces
new products and services that remove the scarcity of essential commodities.

2. Economic Independence

Entrepreneurship can be a path to economic independence for both the country and
the entrepreneur. It reduces the nation’s dependence on imported goods and
services and promotes self-reliance. The manufactured goods and services can also
be exported to foreign markets, leading to expansion, self-reliance, currency inflow,
and economic independence. Similarly, entrepreneurs get complete control over
their financial future. Through their hard work and innovation, they generate income
and create wealth, allowing them to achieve economic independence and financial
security.

3. Benefits of New Firms and Businesses

Entrepreneurs identify market needs and develop solutions through their products
and services to begin their business venture. By starting new firms and businesses,
entrepreneurs play a key role in shaping the economy and creating a more dynamic
and diverse business landscape. Entrepreneurship also promotes innovation and
competition, leading to new and improved products and services that contribute to
economic growth and development.

4. Creation of Jobs

Entrepreneurship is a pivotal driver of job creation. Running the operations of new

businesses and meeting the requirements of customers results in new work
opportunities. Entrepreneurship also drives innovation and competition that
encourages other entrepreneurs and investments, creating new jobs in a wide range
of industries, from manufacturing and construction to service and technology
sectors.

5. Encourages Capital Formation

Capital formation is the process of accumulating resources, such as savings and

investments, to fund new business ventures and support economic growth.
Entrepreneurship can encourage capital formation by attracting investment. In
addition, the creation of new businesses and the growth of existing firms can also
contribute to the development of a more diverse and dynamic economy that
encourages capital formation and opens the door to a wide range of investment
opportunities.

6. Elimination of Poverty

Entrepreneurship has the potential to lift people out of poverty by generating

employment and stimulating economic activity. Entrepreneurship also contributes to
the development of local economies and helps improve the overall standard of
living.

7. Community Development

Entrepreneurship promotes economic growth, provides access to goods and

services, and improves the overall standard of living. Many entrepreneurs also make
a positive impact on their communities and improve their well-being by catering to
underserved areas and developing environment-friendly products. Their work can
help build stronger, more vibrant communities and promote social and economic
development.

8. Optimal Use of Resources

Entrepreneurship can help identify market opportunities and allocate resources in the
most effective way possible. Entrepreneurs also play a key role in developing
innovative products and services that meet the needs of customers while optimizing
the use of available resources.

9. Increases Gross National Product and Per Capita Income

Entrepreneurship can play a significant role in increasing economic growth and

prosperity by increasing Gross National Product (GNP) and Per Capita Income
(PCI). GNP measures the total economic output of a country while PCI calculates the
average income per person. The increase in GNP can lead to a rise in PCI.
Entrepreneurship can contribute to GNP by creating new businesses and industries,
which can lead to job creation, increased consumer spending, and higher tax
revenue.
Different Types of Entrepreneurs:

 Classification by Clarence H. Danhof

1. Innovative Entrepreneur
An innovative entrepreneur is visionary and seeks new opportunities to create and
develop groundbreaking ideas, products, or services. They are known for their ability
to think creatively, take calculated risks, and disrupt traditional business models.
Example: Elon Musk, the CEO of Tesla and SpaceX, who revolutionized the electric
vehicle and space exploration industries. Mark Zuckerberg, the co-founder of
Facebook, transformed how people connect and communicate globally.

2. Imitative Entrepreneur
An imitative entrepreneur is an individual who focuses on replicating existing
business ideas, products, or services with minor modifications or adaptations. They
are skilled at identifying and duplicating successful business models in different
markets or contexts. While imitative entrepreneurs may lack novelty, they can still
succeed by capitalizing on proven concepts.
Example: Franchise owners who replicate established brand concepts and operate
multiple outlets.

3. Fabian Entrepreneur
A Fabian entrepreneur adopts a cautious and incremental approach to
entrepreneurship. They tend to proceed gradually, making calculated decisions and
mitigating risks as they progress. Fabian entrepreneurs prioritize stability and long-
term sustainability over rapid growth. They carefully analyze market conditions,
customer demands, and resource availability before making strategic moves.
Example: A small business owner who gradually expands their operations, carefully
considering market trends and customer feedback.

4. Drone Entrepreneurs
Drone entrepreneurs are another type of entrepreneur. These individuals resist
embracing new opportunities and fail to capitalize on them. They adhere to
conventional methods and are unwilling to adapt their production processes, even if
it results in losses. Their resistance to change earns them the label of “laggards.”

 On the Basis of Business Type

1. Business Entrepreneur
Business entrepreneurs start and manage businesses in various sectors. They
identify market opportunities, develop business plans, and create sustainable
enterprises.
Example: Mark Zuckerberg, the co-founder of Facebook, is a prominent business
entrepreneur who revolutionized social networking and built one of the most
successful technology companies in the world.
 2. Trading Entrepreneur
Trading entrepreneurs are involved in buying and selling goods or services. They
operate in the realm of trade and play a crucial role in connecting producers and
consumers.
Example: Jeff Bezos, the founder of Amazon, started as a trading entrepreneur by
establishing an online bookstore. His venture eventually grew into a global e-
commerce platform that offers a wide range of products and services.

3. Industrial Entrepreneur
Industrial entrepreneurs are involved in manufacturing and industrial sectors. They
set up factories, developed production processes, and produced goods on a large
scale.
Example: Elon Musk, the CEO of Tesla and SpaceX, is an industrial entrepreneur
who has significantly contributed to the electric vehicle and space exploration
industries. He has built advanced manufacturing facilities and developed innovative
technologies.

4. Corporate Entrepreneur
Corporate entrepreneurs exhibit entrepreneurial characteristics within existing
organizations. They drive innovation, develop new products or services, and identify
growth opportunities for the company.
Example: Google’s “20% time” policy allows employees to work on personal projects,
fostering a culture of corporate entrepreneurship. This initiative has led to the
creation of products like Gmail and Google News.

5. Agricultural Entrepreneur
Agricultural entrepreneurs are involved in agricultural activities, including farming,
livestock production, and agribusiness. They focus on optimizing agricultural
practices and finding innovative solutions to meet the needs of the farming industry.
Example: Joel Salatin, a sustainable farmer and advocate for regenerative
agriculture, is an agricultural entrepreneur known for his innovative farming methods.
He has developed practices that prioritize soil health and animal welfare.

 On the Basis of Technology

1. Technical Entrepreneurs
Technical entrepreneurs possess specialized technical knowledge or skills in a
specific field or industry. They leverage their expertise to develop innovative
products, services, or solutions.
Example: Bill Gates, the co-founder of Microsoft, is a technical entrepreneur with a
deep understanding of computer programming and software development. He used
his technical expertise to revolutionize the personal computer industry.

2. Non-Technical Entrepreneur
Non-technical entrepreneurs may not possess specialized technical knowledge but
excel in other areas such as business management, marketing, finance, or
leadership. They focus on identifying market opportunities, building teams, and
creating successful businesses.
Example: Oprah Winfrey is a non-technical entrepreneur who built a media empire.
While she did not have a technical background. She excelled in media production,
hosting talk shows, and connecting with audiences, which led to her success in
various ventures, including television, film, and publishing.

 On the Basis of Motivation

1. Social Entrepreneur
A social entrepreneur is someone who starts a business with the goal of solving
social problems. Instead of just aiming to make a profit, they focus on making a
positive impact on society. They come up with innovative solutions to issues like
poverty, education, and environmental sustainability, aiming to change the world for
the better.
Example: Anshu Gupta, founder of Goonj in India, exemplifies social
entrepreneurship by repurposing urban surplus for rural needs, addressing clothing
scarcity and boosting dignity among the underprivileged. His innovative model
recycles waste, bridges urban-rural gaps, and showcases the power of combining
compassion with innovation for sustainable development.

2. Spontaneous Entrepreneur
A spontaneous entrepreneur is an individual who starts a business or engages in
entrepreneurial activities based on initiative and personal motivation rather than
being prompted or influenced by external factors. These entrepreneurs have an
inherent drive and desire to create and innovate, often pursuing their passions or
identifying opportunities independently.
Example: Mark Zuckerberg, the co-founder of Facebook, can be considered a
spontaneous entrepreneur. He started Facebook while he was a student at Harvard
University, driven by his passion for connecting people and creating a social
networking platform.

3. Induced Entrepreneur
An induced entrepreneur enters entrepreneurial activities due to external factors or
influences. These factors could include government policies, incentives, market
conditions, or economic circumstances. Induced entrepreneurship often arises in
response to specific opportunities or external stimuli.
Example: In response to government initiatives and incentives promoting renewable
energy, an individual starts a solar panel installation company. The entrepreneur was
induced to enter the industry due to favourable policies and the growing demand for
renewable energy solutions.

4. Motivated Entrepreneur
A motivated entrepreneur is an individual who is driven by a specific motive or
purpose to start and run a business. This motive could be financial gain, personal
fulfilment, social impact, or a combination of factors. Motivated entrepreneurs are
deeply committed to achieving their goals and are willing to put in the necessary
effort and resources.
Example: Anita Roddick, the founder of The Body Shop, was a motivated
entrepreneur driven by her strong commitment to ethical and sustainable business
practices. Her motivation was to provide high-quality beauty products while
promoting environmental and social responsibility.

 Other Categories of Entrepreneur

1. First-Generation Entrepreneur
A first-generation entrepreneur is an individual who starts a business or venture from
scratch without any family background in entrepreneurship. They often face unique
challenges as they build everything from the ground up. These entrepreneurs rely on
their ideas, skills, and resources to establish successful enterprises.
Example: First-generation entrepreneur is Jeff Bezos, the founder of Amazon, who
started the company as an online bookstore and grew it into one of the world’s
largest e-commerce and technology corporations.

2. Second-Generation Entrepreneur
A second-generation entrepreneur takes over an existing family business or venture
that their parents or another family member originally established. They inherit an
established foundation and have the advantage of learning from the experiences and
knowledge of the previous generation. Second-generation entrepreneurs often face
the challenge of balancing the preservation of the family legacy with the need for
innovation and growth.
Example: Second-generation entrepreneur is Ratan Tata, who succeeded his father
as the chairman of Tata Group, one of India’s largest conglomerates, and led its
expansion into various industries.

3. Third-generation Entrepreneur
A third-generation entrepreneur represents the next wave of family business
leadership, taking over from their parents and grandparents. They inherit a well-
established business and often have access to a wealth of resources and networks
built over multiple generations. However, they also face the challenge of maintaining
relevance, adapting to changing market dynamics and introducing innovations to
drive growth.
Example: Third-generation entrepreneur is Marta Ortega, the daughter of Amancio
Ortega, the founder of Inditex Group (owner of Zara). Marta actively manages the
company’s operations and promotes sustainability initiatives.

Social Entrepreneurship:

Social entrepreneurship is a new, innovative business venture that influences change.

Social entrepreneurs have a specific cause they care about, and they develop a
 business model around making a positive impact. The main goal is to create lasting
social change through business.

Some key areas of interest for social entrepreneurs include:

 Economic development
 Education
 Gender equality
 Healthcare
 Agriculture
 Environmental sustainability
 Renewable energy
 Community development

Social entrepreneurship can operate as a non-profit, for-profit, or hybrid business,

depending on your preferred business model and the funding availability.

The phrase 'social entrepreneurship' refers to a brand of entrepreneurship rooted in

funding or implementing solutions to cultural, social, or environmental problems. The
term is something of a catch-all that covers virtually any type of private organization
that uses business as a means to socially conscious ends.

Social entrepreneurship is a relatively fluid concept that covers a broad variety of

organizations. There's no definitive mold that says, "A socially entrepreneurial
business generates X amount of revenue within the confines of a Y organizational
structure for a Z type of cause."

For instance, both a mutual aid fund dedicated to assisting small businesses in
marginalized communities and a corporation that uses its proceeds to support
education for women in third-world countries could both be considered socially
entrepreneurial outlets.

Some social enterprises might not follow any sort of typical organizational structure
— they can be run entirely by volunteers who do not receive a paycheck or individual
contributors that participate of their own accord.

Startups:
The term startup refers to a company in the first stages of operations. Startups are
founded by one or more entrepreneurs who want to develop a product or service for
which they believe there is demand. These companies generally start with high
costs and limited revenue, which is why they look for capital from a variety of
sources such as venture capitalists.

KEY TAKEAWAYS

 A startup is a company that's in the initial stages of business.

 Founders normally finance their startups and may attempt to attract outside
investment before they get off the ground.
 Funding sources include family and friends, venture capitalists,
crowdfunding, and loans.
  Startups must also consider where they'll do business and their legal
structure.
 Startups come with high risk as failure is very possible but they can also be
very unique places to work with great benefits, a focus on innovation, and
great opportunities to learn.
 Startups are companies or ventures that are focused on a single product or
service that the founders want to bring to market. These companies typically
don't have a fully developed business model and, more crucially, lack
adequate capital to move onto the next phase of business. Most of these
companies are initially funded by their founders.
 Many startups turn to others for more funding, including family, friends, and
venture capitalists.
 Startups are companies or ventures that are focused on a single product or
service that the founders want to bring to market. These companies typically
don't have a fully developed business model and, more crucially, lack
adequate capital to move onto the next phase of business. Most of these
companies are initially funded by their founders.
 Many startups turn to others for more funding, including family, friends, and
venture capitalists.

Types Of Startups:

A startup company's purpose is to create products that target an untapped market or

improve the existing one. Before working in a startup, understanding the types of
startups is essential. These six types are:
1. Scalable startups
Often, companies working in the technology domain belong to the scalable startup
group and these companies work hard to rapidly grow and achieve a high return on
investment (ROI). This type of startup requires extensive market research to
determine untapped market opportunities. Some examples of this type of startup are
consumer and business apps. This startup model requires external capital to
generate demand and ensure company expansion. Scalable startups do this by
raising capital from external investors.With the investment they receive, a startup can
support growth initiatives and focus on grabbing the target market's attention. A
scalable startup is a right choice if a business product or service has an untapped
market and offers vast growth potential.Related: Co-founder Duties And
Responsibilities (With FAQs)
2. Small business startups
The purpose of a small business startup is longevity rather than scalability. While
these businesses have an interest in growth, they grow at their own pace. Business
owners usually bootstraps and self-finance these startups. This means that they
have less pressure to scale. Some examples of small business startups include
hairdressers, grocery stores, travel agents and bakers. Also, many of these startups
are family-owned. A small business startup is a right choice if a business plans to
hire locals and family members to operate a business or create a sustainable and
long-lasting business.
3. Social entrepreneurship startups
Unlike other types of startups, a social entrepreneurship startup does not focus on
wealth generation for the founders. Instead, they build such a business to change
the environment and society positively. Some examples of these companies include
charities and non-profit organisations. These companies usually scale for doing
philanthropy activities. Though they operate like other startups, they do it through
donations and grants. A social startup is a right choice if a business plans to create a
positive environmental or social impact or if the company has an idea of solving a
widespread social problem.Related: Entrepreneur Vs. Intrapreneur: Differences And
Similarities
4. Large company startups
A large company or offshoot startup includes large companies that have been in
operation for a long time. Companies that fit into this category start with revolutionary
products and quickly become famous. As big businesses are self-sufficient, they
grow along with new market demands and trends. For this reason, it is essential for
these companies to keep up with changes to sustain themselves.Backed by support
and capital, these offshoot startups focus on diversifying product offerings and plans
to reach new audiences. An offshoot startup is a right choice if a business owns a
large company or wants to penetrate a new market that is not the business's primary
focus.
5. Lifestyle startups
People who have hobbies and want to pursue their passion can build a lifestyle
startup. Often, these business owners desire independence and spend their energy,
money and time building a startup. These business owners earn money by pursuing
their favourite hobby or activity. Some examples of lifestyle startups include a dancer
opening a dance school, an avid traveller starting a touring company or a software
developer starting online coding classes.A lifestyle startup is a right choice if a
business owner has a hobby they can pursue or is passionate and creative about
starting a new business on their hobby.Related: 10 Entrepreneur Characteristics
That Lead To Success
6. Buyable startups
Unlike other startups on this list, buyable startups do not aim to become large and
successful. A business owner builds such a company from scratch to sell it to a big
company. Usually, you are likely to find such companies in the technology and
software industry. Many of these startup industries are in the mobile application
development industry. A buyable startup is a right choice if a business owner wants
to develop a company but do not want to operate it long term or if the business idea
has tremendous growth potential.
Startup scenarios in India:
India has the 3rd largest startup ecosystem in the world; expected to witness YoY
growth of a consistent annual growth of 12-15%
India has about 50,000 startups in India in 2018; around 8,900 – 9,300 of these are
technology led startups 1300 new tech startups were born in 2019 alone implying
there are 2-3 tech startups born every day.
Indicators of Growth in the Startup Ecosystem:
The pace of growth in the startup ecosystem has increased to 15% year-on-year in
2018, while the growth of the number of incubators and accelerators has grown to
11%
Significantly, the number of women entrepreneurs stood at 14%, up from 10% and
11% in the previous two years.
Startups in the country have been able to create an estimated 40,000 new jobs over
the year, taking the total jobs in the start-up ecosystem to 1.6-1.7 lakh
Bangalore has been listed within the world’s 20 leading startup cities in the 2019
Startup Genome Project ranking. It is also ranked as one of the world’s five fastest
growing startup cities
Drivers of Startup Ecosystem:
Corporate Connect
Enterprises are realizing the disruptive potential of start-ups and are thus,
partnering/investing in them. Examples of corporate support:
Facebook in partnership with Startup India disbursed cash grants of $50,000 each to
the top 5 selected startups
10000 Women program by Goldman Sachs is providing women entrepreneurs all
around the world with a business and management education, mentoring and
networking and access to capital.
Microsoft Ventures Accelerator Program in India has recently picked up 16 startup
Government Support
Government of India is understanding the value of working with disruptive innovators
across the value chain and using their innovations to improve public service delivery.
Department of Animal Husbandary and Dairying has conducted a grand challenge in
association with Startup India to award top startups in 5 categories 10 lakhs INR.
Small Industries Development Bank of India has launched a scheme to provide
assistance to existing Small and Medium Businesses in need of capital for growth
Over 26 states in the country have Startup policies
Opportunities for Startups:
1. Large Population: The population of India is a huge asset for the country. By
2020, it is expected that the working age population would surpass the non-
working population. This unique demographic advantage will offer a great
opportunity to any startup. Various infrastructure issues and the bottom- of-
the- pyramid market would provide huge opportunities for the startups.
2. Connectivity: Indian telecom industry has nearly 100 crore subscribers, mobile
connectivity has made inroads in the rural and urban population. Government
of India’s digital push is going to improve connectivity and data to the next
level. The race to cheapest data has started and disruption is certain. The
cheap data has helps everyone to get their hands on it, start-ups will have an
easier time to tap into markets, territories and even traditional businesses.
3. Change of Mind Set of Working Class: Traditional career paths will be giving
way to Indian startup space. Challenging assignments, good compensation
packages would attract talented people to startups. Also, it is seen that
several high profile executives are quitting their jobs to start or work for
startups. To reinforce the trend being seen, a survey conducted by Economic
Times also confirmed that the number of Students joining startups and e-
commerce companies have grown considerably in the recent years.
4. Innovation Society: India has the largest youth population, which is the largest
driver for innovation, workforce, talent and future leaders. India has its own
challenges of education, health, infrastructure and the rising gap between
India and Bharat. This presents big opportunity for start-ups to solve a variety
of problems. India has the population of 1.3 billion people; the country’s
middle class is growing along with the consumers. The large diversity in the
India’s population makes a strong case for a rich services and products
economy. Start-ups should look at banks; our banking system has reaped the
maximum benefit of our population size.

Challenges for Startups:

The following are challenges for startups:
1. Revenue Generation: Several startups fail due to poor revenue generation as the
business grows. As the operations increase, expenses grow with reduced
revenues forcing startups to concentrate on the funding aspect, thus, diluting the
focus on the fundamentals of business. Hence, revenue generation is critical,
warranting efficient management of burn rate which in common parlance is the
rate at which startups spend money in the initial stages. The challenge is not to
generate enough capital but also to expand and sustain the growth.
2. Supporting Infrastructure: There are a number of support mechanisms that play
a significant role in the lifecycle of startups which include incubators, science and
technology parks, business development centers etc. Lack of access to such
support mechanisms increases the risk of failure.
3. Financial Resources: Availability of finance is critical for the startups and is
always a problem to get sufficient amounts. A number of finance options ranging
from family members, friends, loans, grants, angel funding, venture capitalists,
 crowd funding etc. are available. The requirement starts increasing as the
business progresses. Scaling of business requires timely infusion of capital.
Proper cash management is critical for the success of the startups.
4. Creating Awareness in Markets: Startups fail due to lack of attention to
limitations in the markets. The environment for a startup is usually more difficult
than for an established firm due to uniqueness of the product. The situation is
more difficult for a new product as the startup has to build everything from
scratch.
5. Government Policies: If entrepreneurs are the planets in the solar system, then
the government is the sun, the single largest facilitator. The government policies
are slowly and steadily increasing, although, it must be noted that India still
maintains a dismal ease of doing business raking as per the World Bank report.
Due to a maze of laws and regulations, it takes more of an effort for an
entrepreneur to start a business in India than most of the other places in the
world, and after he /she succeeds in setting up a business, it takes even a
greater effort to comply with sector, department, state and center laws.

Entrepreneurial Competencies:
Entrepreneurial competency is a set of skills and behaviour needed to create,
develop, manage, and grow a business venture. It also includes the ability to handle
the risks that come with running a business. Without a doubt, business owners and
startup founders must possess most of the entrepreneur competencies to succeed.
Just like other types of competencies, there are different sub-categories here. The
competencies could be technical, behavioural, attitude-based, or productivity-based.
Those with an entrepreneurial zeal need to play three prominent roles.
Creator
Organizer
 Market maker
So the competencies for entrepreneurship are designed to help people perform in
these roles effectively.

Employees with entrepreneurial competencies Employees without entrepreneurial

employees competencies

The ultimate need is freedom and creativity; hence, The ultimate need becomes job security; hence,
these employees take more risks. these employees take very few risks.

Time-based compensation is taken seriously and

These employees don’t worry about time-based
employees work only for what they feel their salary
compensation and are very invested in their jobs.
is worth.

Such employees are self-motivated and driven and Most employees function better when they are told
don’t require a lot of monitoring. what to do and are monitored.

Employees end up owning decisions and Employees like handing over responsibilities to
responsibilities. They enjoy accountability. others, doing only what is asked of them.

Employees have a sense of ownership to the Employees consider the organization as just a
organization. workplace to become financially stable.

Core competencies in entrepreneurship

While there are a lot of core competencies in entrepreneurship, here are some

basic ones you can look for in your employees the next time there is a competency

evaluation process happening.

 Risk-taking abilities
 Out-of-the-box thinking and creativity
 Problem-solving abilities
 Taking initiative
 Persistence
 Persuasion and social skills
 Business management skills
 Critical thinking skills
 Networking skills
 Effective communication skills
Traits/Qualities:
While there are certain traits that are common to many successful entrepreneurs, no
two are created equal. Every personality type demonstrates strength in specific
areas, each with a unique superpower that defines how they run and think about
their businesses.
Top entrepreneur traits include:
Discipline
Vision
Passion
Risk tolerance
Self reliance
Meet a few successful business owners who embody these traits.
Discipline: Cassey Ho
After moving across the country, Cassey Ho began filming workout videos to connect
with her old students in California. Within months, her YouTube channel, Blogilates,
started growing. Her new fans were demanding t-shirts and merch to support her
channels.

After a few false starts and battling copycats, Cassey launched her DTC
brand, POPFLEX, selling fitness gear and workout outfits directly to fans, and
through an exclusive partnership with Target.
Vision: Emily Miller
Emily Miller’s passion for breakfast led her to imagine a cereal brand designed for
millennial and Gen Z customers. While the cereal industry is dominated by large
legacy brands, her vision for a cereal line that would speak to her target
audience translated into sales. Emily had confidence in her vision, bringing OffLimits
to life through a series of inclusive mascots. “Embrace being creative and weird.
Take an approach of, ‘If you don’t like it, we don’t care,’” Emily says.
Passion: James Hoffmann
James Hoffmann describes his interest in coffee as a “full-blown obsession.” His
career began when he was demonstrating espresso machines at a department store.
From there, he struck out on his own, opening a roastery, acquiring a café, and
launching a YouTube channel that now boasts almost two million subscribers.
Risk tolerance: Sonja Detrinidad
Sonja Detrinidad left a long career in the mortgage industry to take a chance on her
business idea. With stress from her professional life mounting, Sonja took up
gardening as a hobby, documenting her plant sourcing missions on social media.
When her humorous and candid content went viral on TikTok, she quit her job to
launch Partly Sunny Projects. “I thought, ‘Who’s going to want to buy plants during a
pandemic?’” she says. “And the answer was: everyone.”
Self reliance: Natalie Gill
Natalie Gill started her fresh flower business from her apartment, relying on savings
to bridge the gap after quitting her full-time job. She survived on little sleep and, at
times, an $11 per week food budget. “I remember eating a lot of rice and beans,” she
says. “I was only spending money on flowers, flower tools, and education, and
business expenses.” But she persevered through the toughest points of her journey
to build Native Poppy, a successful multi-location retail business.
Other helpful traits for entrepreneurs include perseverance, versatility, ambition,
critical thinking, and attention to detail. Chances are you possess some of these
qualities. Lean into the ones that make you unique.
Maybe you’re risk averse but have excellent discipline and attention to detail—your
strength will lie in building a steady business with a solid safety net. Or maybe you’re
not overly disciplined or focused on detail but you’re bursting with passion and vision
—you’d make a great leader, bringing on skilled partners attracted to your ideas and
enthusiasm.
1. Passion and Self-Motivation: Entrepreneurs are driven by a strong passion for
their ideas and ventures. They have a deep-rooted enthusiasm for what they do,
which fuels their motivation and keeps them focused and dedicated to achieving
their goals.
2. Risk-Taking and Tolerance for Uncertainty: Entrepreneurs are comfortable with
taking risks and are willing to embrace uncertainty. They understand that starting
and running a business involves inherent risks and are prepared to face and
manage them to pursue their entrepreneurial vision.
3. Creativity and Innovation: Creativity and innovation are the lifeblood of an
entrepreneur. Entrepreneurs are often creative thinkers who can generate new
ideas and think outside the box. They are adept at identifying gaps in the market
and developing innovative solutions to address them.
4. Adaptability and Flexibility: Entrepreneurs must be adaptable and flexible in their
approach. They can adjust their strategies and plans based on changing
circumstances, market conditions, and customer feedback. They embrace
change and view it as an opportunity for growth and improvement.
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5. Resilience and Perseverance: Entrepreneurship can be challenging, and
setbacks and failures are part of the journey. Entrepreneurs demonstrate
resilience by bouncing back from failures, learning from their mistakes, and
persisting in facing obstacles. They have the determination to keep going, even
when things get tough.
6. Vision and Goal-Orientation: Entrepreneurs possess a clear vision of what they
want to achieve and a long-term perspective. They set ambitious goals and
Particulars Entrepreneur Manager

It refers to persons who establish a They are individuals responsible for

Meaning company or enterprise and takes a administering and controlling a group of

financial risk to get profits. people in the company or enterprise.

They are visionaries who convert an

Position in the
idea into a business. They are the They are the employees of the company.
company
owners of the company.

Focus They focus on business startups. They focus on ongoing operations.

Risk They bear all financial and other risks. They do not bear any risks.

They focus on starting the business They focus on the daily smooth
Focus
and expanding the company. functioning of the company.

Their key motivation is the Their motivation comes from the power
Motivation
achievements of the company. that comes with the position.

Their reward is the profit they earn Their reward is the salary they draw from
Reward
from the company. the company.

They can be casual in their role and Their approach to every problem is formal,
Approach
have an informal approach. and they take a scientific approach.

Nature of They are risk-takers. They take They are risk-averse. Their job is to

decisions calculated risks to drive the company. maintain the status quo of the company.

Decision making The decisions tend to be intuitive. The decisions are calculative.
create actionable plans to bring their vision to life. They maintain focus on their
objectives and continuously work towards realizing them.
7. Strong Leadership and Management Skills: Entrepreneurs are effective leaders
who can inspire and motivate their teams. They can communicate their vision,
delegate tasks, and provide guidance. They understand the importance of
building and managing a cohesive team to achieve business success.
8. Networking and Relationship Building: Entrepreneurs understand the value of
networking and building relationships. They seek opportunities to connect with
mentors, industry experts, potential partners, and customers. They leverage their
networks to gain knowledge, support, and business opportunities.
9. Financial and Business Acumen: Entrepreneurs have a solid understanding of
financial and business principles. They can manage finances, create budgets,
analyse market trends, and make informed decisions to drive their ventures
forward.
10. Continuous Learning and Adaptation: Entrepreneurs thirst for knowledge and are
committed to continuous learning. They stay updated on industry trends, new
technologies, and best practices. They are open to feedback, embrace new
ideas, and adapt their strategies based on new information.

Factors affecting entrepreneurial growth :

For detail analysis, it is important to know and understand each and

every components of business environment that may affect the functioning of
enterprise or business. These components may be internal to entrepreneurs or
external. Factors that affect entrepreneurship growth are divided into various groups
so that strategies according to each group of factors can be devised. These factors
are classified into following categories/ groups:

1. Economic Factors
2. Social Factors
3. Psychological Factors
4. Government/Political Factors
5. Other factors

All the factors listed above are interconnected and mutually dependent on each
other. No single factor can facilitate the complete growth of entrepreneurship. For the
effective functioning and speedier growth of entrepreneurship, all the factors must
contribute in positive manner.

Let us discuss each factor in detail and try to understand their implications in the
emergence and growth of entrepreneurship.

4. Economic Factors

Economic factors are those which contribute in the economic development of the
economy. From economic point of view, these factors create conducive environment
for the economic development of country and also account for the establishment and
development of entrepreneurship. These factors actually provide the economic
security and favourable environment to an enterprise. Some of the major economic
factors that affect entrepreneurship growth are discussed as follow:

4.1 Capital: Capital or finance is the life blood of any enterprise or business and
one of the major prerequisite to start an entrepreneurial activity. Without capital,
entrepreneurs can never think to initiate his business. Availability of capital helps an
entrepreneur to arrange the basic means of business i.e. land, machinery, material,
manpower, etc.. Without adequate capital no one can combine all the means of
production. Supply of adequate capital also assists in generating or increasing
capital and profits. Supply of adequate capital is regarded as lubricant to drive the
engine of entrepreneurship growth. Research suggests that as the supply of capital
increases, entrepreneurship also increases and this has been already experienced in
the entrepreneurial societies like USA, China, Russia, and France. Researches
further suggest that one of the major reasons for entrepreneur’s failure is lack of
sufficient capital in many parts of the world.

4.2 Labour: The famous economist Adam smith has considered labour as an
important factor for economic development. Availability of quality labour in right
quantity always considers one of the major factors of economic as well as
entrepreneurship development. Cheap labour is another requisite of
entrepreneurship growth as it directly affects the emergence of entrepreneurship.
Availability of low-cost labour is a boost for entrepreneurs as it directly linked with the
smooth functioning andprofitsofan enterprise. Labourproblemsaffectthehighlabour
intensiveenterprises but entrepreneurs can manage the impacts of this problem by
bringing labour– saving innovations or through technology like Japan and USA did to
solve the problems of their industries. Labour issue can be better managed
than capital issue.

4.3 Raw Material: Another factor under economic factors that affect the growth of
entrepreneurship is necessity of quality raw material in economic cost. To establish
an enterprise in any region, availability of raw material is major determinant. In the
absence of raw material, neither entrepreneurship developed not entrepreneur
emerged. For example an entrepreneur wants to start a furniture house, he arranged
capital through private investment and borrowings from family, also arranges
skilled labour, but, if there is no timber available in nearby markets, all efforts will go
in vain. Entrepreneurs must understand the relevance of availability of raw material
as it directly affects the cost of production. Raw materials supply does not totally
hamper the growth of entrepreneurship as entrepreneurs can manage the problems
of supply of raw material through innovative supply chain system and application of
effective technology. If supply of raw materials is regular in the market, then there is
no need to put extra efforts for the growth of enterprise.

4.4 Market: It is the market that provides the potential reward to the
entrepreneurs. Market consists of producers and buyers or a place where seller sells
his/her produces to customers. Market is major determinant for the success of any
entrepreneurial initiatives and without market no one can survive in the world of
entrepreneurship. Entrepreneurs can generate capital, arrange labour, procure raw
materials but he cannot create market, he can only generate demand for his
produces. Consumption of final products rests with the demand of the customers.
Market size and composition of market influence the behaviour of entrepreneurs.
Nature, size, and composition of market especially dominance of a product in a given
market more influential for the growth of entrepreneurship. Distance of market from
enterprises also affects the functioning of enterprise but entrepreneur through
effective transportation can manage the challenges thrown by distance issue. There
are many examples where we can see that rapid development of market significantly
increase the appearance of entrepreneurs like the German and Japan economy.

5. Social Factors

Social scientists support that economic factors alone are not sufficient to boost
entrepreneurship in any region. An entrepreneur can never be successful where
society fails. Advocates of social theory state that influence of economic factors on
entrepreneurship growth depends on social factors also. Some of the social factors
that affect entrepreneurship growth are discussed here under:

5.1 Entrepreneurship Legitimacy: For entrepreneurship establishment and

growth, system of norms and values within a social setting are major social
determinants. The system of social norms and values is known as legitimacy of
entrepreneurship. Approval and rejection of society in terms of norms and
value influences the entrepreneur’s behaviour. Schumpeter; famous economist,
describes these social norms and values as an appropriate social climate for
entrepreneurship development. Various academicians propounded that to be a
successful entrepreneurs, social support is must. The social status of entrepreneurs
considers the most important among the entrepreneurship legitimacy. For
entrepreneurship growth, social norms and values may be adapted or changed.
Entrepreneurship legitimacy may affect or disturb the appearance of
entrepreneurship but not completely eliminate. Environment where legitimacy is very
low but government support is very high, there entrepreneurship growth may be
experienced.

5.2 Social Mobility: Entrepreneurship growth also depends on social mobility.

Social mobility includes both social as well as geographical mobility. Openness and
flexibility in the social and cultural system affect the entrepreneurship growth. Some
academicians advocate that entrepreneurs grow in flexible and liberal society where
society adapts itself according to the changing environment. There are many
examples where it is proved that due to movement of young and educated males
from a region results into growth of entrepreneurship after their return.

5.3 Social Marginality: Sometime entrepreneurship growth also depends on

social marginality. Social marginality means a group of society supports a particular
role for an individual due to differences from main social groups. An economy
sees growth of entrepreneurship where a particular social system expects from an
individual to assume entrepreneurial roles. This marginality may be due to religious,
cultural, and migration issues, etc. Social marginality determined by
entrepreneurship legitimacy and social mobility. There as examples which explain
that where entrepreneurial legitimacy is low individuals are mobilized towards non-
entrepreneurial roles and if legitimacy is high, main stream individuals will assume
entrepreneurial roles. There are various factors that contribute for social marginality
which ultimately results in entrepreneurial growth. For example one is presence of
positive attitude toward a particular profession or business within the social group
and another is a very high degree of unity or solidarity with in the social group.

5.4 Security: Entrepreneurs’ social and economic security also affects

entrepreneurship growth. Entrepreneurs’ emerged in that society which provides
security to him/her. Many scholars advocate that entrepreneurs’ security is an
important facilitator of entrepreneurship growth. It is not decisive that what is the
appropriate level or amount of security which results in entrepreneurial emergence.
Few said a little bit security is enough while other advocate moderate security. Few
other propound that entrepreneurs emerged in turbulent conditions because
sometimes it positively contributes. But, security is regarded significant factor for
entrepreneurial growth. This is also justifiable as entrepreneurs’ afraid from losing
their assets and they expect an amount of security for their survival and where they
get, entrepreneurship emerged in that society.

6. Psychological Factors

Along with economic and social factors psychological factors also contribute in the
growth of entrepreneurship. If an economy provides best economic environment and
society also supports entrepreneurial endeavour but, if individuals are not self
motivated then all economic and social support will be wasted. There are various
psychological theories of entrepreneurship which propounded that for
entrepreneurship development positive attitude and motivation is crucial. Following
are the psychological factors that affect entrepreneurial growth:

6.1 Motivation for high achievement: According to D. McClelland’s theory of

need achievement, primarily, motivation for high achievement is the major
psychological determinant for entrepreneurship development. This theory advocates
that entrepreneurship emerged in a society that reflects need for
achievement. Society that has high need achievement would expect high growth in
entrepreneurship. McClelland further states that due to need for high achievement
one succeeds and other fails in entrepreneurship due to low motivation. Further, it is
suggested that need or motivation for high achievement can be developed
through trainings.

6.2 Status Respect: Status respect is another psychological factor that affects
entrepreneurship growth. Academicians stated that withdrawal of expected status
respect forces group of society or individuals to opt for something different or unique
to get the status respect and most of the times to express,
dissatisfied individualsopts for entrepreneurship. Hagen (1962) supports this fact
through the example of Japan’s development. He stated that Japan experience high
growth in entrepreneurship due to withdrawal of status respect from colonial rule and
Samurai group which force Japan’s society for increased innovation and creativity.
Withdrawal of status respect may be due to:
i. Social groups displaced from their origin.
ii. Values of social groups may be disrespected.
iii. Status respect inconsistency.
iv. Migration into new society.
 Withdrawal of social respect gives rise to following situations:

i. To get an identity, individuals work hard and remain different through his
business.
ii. To survive in such society, adopt a new way of adaptive life.
iii. Try to be innovative and creative as an entrepreneur work to establish a new
society.

7. Government/Political Approach

All above discussed economic, social and psychological factors directly or

indirectly influenced by the actions of government. To achieve the developmental
objectives, government through its various policy initiatives (which are discussed in
module 15) tries to provide congenial environment to entrepreneurs. These policy
measures may be in the form of economic policies, social schemes, and various
training programmes. Government can facilitate the establishment and growth of
entrepreneurship by creating basic facilities and services to the entrepreneurship.
Entrepreneurial growth is affected by various government actions such
as development of special economic zones, industrial areas, industrial estates,
and favourable policy initiatives. In India, government is trying to
provide favourable entrepreneurial environment by enacting MSMED Act 2006,
establishing separate ministry for MSME sector and by launching various attractive
schemes for entrepreneurs. If government is not active or least interested in the
economic development of society, no growth in entrepreneurship will be there. Other
factors are also influenced by the government actions and approaches towards
entrepreneurship development.

8. Other Factors

Besides economic, social, psychological, and government/political factors, there

are many other factors that affect the emergence and development of
entrepreneurship. Few of them are discussed below:

8.1 Infrastructural Development: Ultimate goal of development is to provide the

benefits to the last citizen of the country. Most of the times, economic factors
are favourable for entrepreneurship, society also adapts the environment, and
government policies are also attractive but poor infrastructure for the business
negatively influences the psychology of the entrepreneur. Sound infrastructural
development may nullify the problems of location in many cases. Infrastructural
facilities create positive way for small enterprises growth whether that is artisans or
agri-entrepreneurs. Infrastructural programme coordinated with other element may
gear up the growth of entrepreneurship. For example; there is a small horticulturist in
a hilly town and totally focusing on the development of horticulture produces but
there is no cold store or warehouse to stock the produces, in such case, slowly few
small entrepreneurs may leave their business which is their choice. But, in this case,
if proper warehouse or cold store is developed, this will boost the growth of such kind
of enterprises.

8.2 Environmental Scanning: Another factor that affects the development of

entrepreneurship is integrated approach of environmental analysis. Key to growth of
entrepreneurship is effective analysis or careful research of surrounding
environment. Environmental scanning gives the idea of enterprise’s strengths &
weaknesses and opportunities and threats posed by environment. It gives
theclearideaaboutthetargetandbeneficiary customers, their activities, needs,
and shopping habits. Most of the times, entrepreneurs fail due to poor analysis of
environment which results in slow growth of entrepreneurship.

8.3 Training: For the proper and speedier growth of entrepreneurship,

entrepreneurs should have the necessary and adequate knowledge and skills to run
the enterprise. Most of the entrepreneurship initiatives fail due to poor knowledge
and ineffective implementation of idea. Other reason for failure or slow growth rate of
entrepreneurship establishment is lack of skills. All these components are not
permanent and out of control, these can be solved through proper education and
training. Training significantly contributes in the establishment and development of
entrepreneurship as it imparts necessary knowledge and skills to entrepreneurs for
the smooth operations of the business. Proper training institutes and training
programmes boost entrepreneurs to initiate entrepreneurial activity and positively
influence their psychology. Moreover, training also helps in creating high need for
achievement. Training further motivates entrepreneurs to take initiative and also
helps in acquiring necessary competencies to achieve success in business.

The Seven Stages in the Entrepreneurial Life Cycle:

Stage 1. Opportunity Recognition

This “gestation” period is quite literally the “pre-start” analysis. It often occurs over a
considerable period of time ranging from one month to ten years. At this stage it is
important to research and understand the dimensions of the opportunity, the concept
itself, and determine how to decide whether it is attractive or unattractive. The
individuals need to look internally and see if they are truly ready for
entrepreneurship. The vast majority of people, including almost all inventors, never
move off of this stage and remain just “considering” entrepreneurship.

Stage 2. Opportunity Focusing

This is a “sanity check,” a go/no-go stage gate for part-time entrepreneurs because it
fleshes out shaky ideas and exposes gaping holes. Venture capitalist Eugene
Kleiner, of Kleiner Perkins Caufield & Byers, says, “Focus is essential; there can be
the possibility of the business branching out later, but the first phase of a company
should be quite narrowly defined.” It is important to include objective, outside
viewpoints because different people can investigate the same opportunity and come
to opposite conclusions.

Stage 3. Commitment of Resources

Most entrepreneurs see commitment as incorporating their business or quitting their
day job. But this stage actually starts with developing the business plan. There is a
huge difference between screening an opportunity and researching and writing a
business plan. Writing an effective business plan requires a new level of
understanding and intense commitment. The process will take between 200 to 300
hours, so squeezing that amount of time into evenings and weekends can make this
stage stretch over three to twelve months. A common mistake entrepreneurs make is
skipping the business plan; commit other resources, start the venture, then follow up
and try to determine exactly what the focus will be for the venture.

Stage 4. Market Entry

Profitability and success define the market entry stage. The entrepreneur is
committed with a very simple organization, the resources were correctly allocated
according to the business plan, and the first sales were made. This is what defines
success in the very early stages. If the business model was profitable, reasonable
objectives were met, and the venture is on track for attaining true economic health,
then the entrepreneur can chose between a capital infusion for growth or remaining
small with self-financing (bootstrapping).

Stage 5. Full Launch and Growth

At this stage, the entrepreneur needs to choose a particular high-growth strategy.
Upon considering such alternatives, quite often the entrepreneur chooses to remain
a small business and never passes this stage or perhaps opts to remain operating as
a sole proprietor. Or the venture could remain small for the simple fact that not all
small ventures can or will become big companies. They are not fast growth potential
because there is not enough room in the market for growth, their production and
management systems are not scalable, or they will not scale because the rate is too
great of a challenge to the management.

Stage 6. Maturity and Expansion

Now the venture is a market leader at cruising altitude. The growth becomes a
natural extension of the venture through professional management practices. This
professional management team is implementing the venture’s growth strategy
through global expansion, acquisitions, and mergers as cash is plentiful and
inefficiencies are completely flushed out.

Stage 7. Liquidity Event

This harvesting stage is focused on capturing the value created in the previous
stages through a business exit. Typical exits are an initial public offering (IPO) or
being acquired by a larger publicly traded corporation. Unfortunately, most of the
literature in entrepreneurship has concentrated on the earlier stages. Little attention
has been given to exits. We know from experience that the opportunity to exit
successfully from a venture is a significant factor in the entrepreneurial life cycle,
both for the entrepreneur and for any investors providing investment capital along
the way.
 Section B

Opportunities for Entrepreneurs and Identifying & Selecting the

Best Opportunity:

1. Learning Outcome

After completing this module students will be able to:

i. Understand the concept of Opportunity.
ii. Understand the Need for Opportunity Identification & Selection
iii. Know the various business opportunities
iv. Understands the Opportunity Identification and Selection

An entrepreneur has innumerable opportunities available to him but he has to

identify the best opportunities out of the existing opportunities. One can have a large
list of the available opportunities from the magazines, Internet, Government, Friends,
relatives and so on. To select the best business opportunity, one needs creativity,
skills and vision to analyse the available information. It is also important for an
entrepreneur to identify the opportunities and also to select the best opportunity. At
times, entrepreneur may be in dilemma and may find one opportunity more lucrative
and the other time can also find other opportunity more profitable.
Therefore, entrepreneur has to choose the best opportunity by applying his mind and
soul so that he/she can make profits.

3. Concept of an opportunity

In general, the word opportunity means a favourable situation or a circumstance

provided to do something for the advancement or progress.
Therefore, business opportunity is a favourable chance available for an entrepreneur
to run the business and earn profits at a given point of time in particular environment.
For an entrepreneur opportunity means a product or a project. Therefore,
identification of opportunity, product or a project is similar.

An entrepreneur may come across a large number of profitable opportunities but

he has to select the most possible and hopeful project. Therefore, Project
identification and selection are the important phases for an entrepreneur.

Peter Drucker has explained the three types of opportunities in this context,
as following:
a. Additive Opportunities: these are the opportunities which are realted to the
use of the available resources without making any changes. Therefore, there is very
less risk in such opportunities.
b. Complementary Opportunities: These are related to the introduction of the
new ideas which directs the change in the available arrangement. There is a greater
risk in such opportunities.
c. Breakthrough Opportunities: These are related to the huge change in the
existing arrangements which thus involve huge risk.

A good opportunity has two characteristics:

1. A good and wide market scope i.e. easy demand and supply of the product.
2. Heavy return on investment i.e good profits.

A business opportunity must be evaluated from the view point of production,

technology, demand, profits, society etc.

4. Need for Opportunity Identification and Selection

Enterprise and entrepreneur are complimentary to each other. Therefore, the

success of an entrepreneur depends on his suitability of the enterprise and at the
same time the successful enterprise can be started if the entrepreneur has the
characteristics and skills to handle that enterprise. Therefore, there is a need for the
opportunity identification and selection because if opportunity is not selected on the
basis of the skills and there is non- suitability between the entrepreneurs and the
enterprise then there will be business failure.

5. Business Opportunities in various sectors

There are innumerable opportunities exists in the business environment but one
requires a vision to identify the available opportunities. Various business
opportunities available are like following:
 Textiles: India is famous for its textiles from the very beginning and every region has
its own unique style of dressing which thus offers a wide and diversified market.
Moreover, India has a huge potential to grow as a market leader in the textile sector.
Surat, Ludhiana etc. has emerged as an export hub of the textiles. Therefore, a
better understanding of the textile industry and the customer needs helps in
discovering the potential it holds.
 Software: India is having large number of the software engineers with leading
business in software. With growing business in the software industry and the
increasing business outsourcing from the foreign companies is providing tremendous
opportunities for the entrepreneurs to invest in this sector.
 Tourism: It is one of the most promising and fastest growing industries as India has
the potential for tourism development. India covers 15% of the world population and
shares only 0.40% in the world tourism. It is not because of the lack of tourism in the
country but because of the undiscovered tourism opportunities. Therefore,
entrepreneurs has the opportunity to helps in discovering the tourism potential as it is
being estimated that India can become the number one tourist destination of the
world.
 Engineering Goods: India is one of the largest exporters of the engineering goods.
Therefore, entrepreneurs can earn by meeting the increasing demand of the
engineering goods.
 Automobile: India has become a hub of producing low cost automobile parts and is
very rapidly becoming hot spot for the automobile industry. India is
manufacturing large number of cars with strong engineering know-how
but still there is some undiscovered segments which offers the wide opportunities to
the entrepreneurs.
 Ayurveda and Traditional medicines: India is known for its ayurveda and herbal
products. With the increasing demand of the ayurvedic products, it is offering a
unique business to the entrepreneurs.
 Packaging: Indian business is growing in every field like agriculture, consumer
goods, infrastructure etc. So, there is a huge demand of the packaging material like
plastics. So there is a big opportunity for the entrepreneurs in this sector also.
 Healthcare sector: Indian healthcare sector is at the growing stage and with the
growth in the medical tourism this sector will offer wide prospects for the
entrepreneurs as there will be cost-effective treatments.
 Media: The media industry is offering a wide scope to the entrepreneurs. There is a
boom in television, print media, advertising, radio etc from the past few years.
Therefore, this particular sector is the most promising sector as it is about to grow at
a double rate. According to the report of FICCI (Federation of Indian chamber of
Commerce and Industry), innovation, marketing, Distribution,
competition, digitisation etc will give boost to the media and entertainment sector in
the coming years.
 Floriculture: With the growing demand for the fresh flowers, this sector is opening
up a new opportunity for the entrepreneurs. Although Indian Floriculture segment is
small and unorganised, but as it has a huge potential and with the increasing
demand one can think of business in this sector.
 Toys: this industry is the evergreen industry. India has the potential to make safe
and cost effective toys. Although china is giving a tough competition in this
sector, but the Chinese toys contains toxics where India has an advantage to
produce safe and durable toys.
 Biotechnology: After the software industry, biotechnology sector has the highest
potential and offers opportunity for the entrepreneurs. It has been proved that
agricultural biotechnology ahs a huge impact on the productivity. Therefore, huge
importance is being given to the research and development to produce crops which
are resistant to heat, cold, insects etc. It also helped in producing improved quality
food products. With the increasing importance of the agro-biotechnology, it is
providing various options to the entrepreneur to start a business in the field of
horticulture, poultry, dairy, agriculture and production of fruits and vegetables.
 Recycling Business: E-waste is rising at an unmanageable speed with the
development in the technology. According to the UN report, computer waste will
grow about 500 % from 2007 to 2020, alone in India. Therefore, this alarming
problem opening up new business opportunity for the young entrepreneurs to
manage e-waste and develop techniques to dispose the e-waste.
 Energy Solutions: India has a huge population and so are the consumption needs
of the populated country. It is difficult for the nation to generate power with the
limited resources. Therefore, in the power starved nation like ours, there is a
need of the cost-effective and power saving methods. Government has already
initiated steps to use cost effective methods by implementing the national Solar
Mission. Therefore, solar engineering is a big opportunity for the entrepreneurs.
 Organic Farming: This sector is prevalent in India since long but with the increasing
demands of the organic products especially in foreign is opening up wide opportunity
for the Indian entrepreneurs. Although farmers in India are focusing on the
organic farming, but still are not able to meet the increasing demand. Therefore,
there is a huge scope for the entrepreneurs rto invest in this sector and thus earning
large benefits.
 Corporate demands: As large companies are opening up their offices in India,
therefore, there is a huge demand of the formal clothes. Moreover, there is an
increasing trend of the corporate gifting, so one can try his luck in this sector also.
 Social Ventures: India is a hub of social problems. Social entrepreneurs are the
persons who provide solutions to the social problems. Therefore, to provide solutions
to the social problems, entrepreneurs have started their social ventures. For e.g:
SEWA, Lizzat pappad etc. though it is one of the challenging tasks but is
offering opportunity to the young entrepreneurs to step in.
 Franchising: After the Liberalisation, Privatisation and Globalisation in 1991, India is
opened economy. Franchising helps in spreading brands all over the world. So, it is
a good opportunity for the entrepreneurs to invest in franchisee business as it
has well maintained image and low risk.
 Education and Training: Competition in the education is increasing. There is a
good scope in the education sector and training sector with the increasing demand
and competition. Students prepare endlessly for the competitive exams be it for the
government exams or training courses. Therefore, entrepreneurs has the scope to
provide the training and education facilities at the competitive rates. Moreover, India
has the potential to attract students from the abroad which can open up large
opportunities for the Indian entrepreneurs in this sector.

6. Identifying a Business Opportunity

 An entrepreneur should be the opportunity seeker and his most important task is
to Identify, discover and to select the best business opportunity. A good opportunity
must be capable of converting into a feasible project. An entrepreneur may come
across multiple opportunities but he has to select the most promising and possible
opportunity because the success of the enterprise depends on the proper
identification and selection of the project.

Project Identification is the foremost step for starting a new business but is one of
the most difficult tasks. Therefore, project identification is the process of selecting the
few possible projects out of the several opportunities available.

To identify the possible projects, one has to go through the following steps:

6.1. Idea Generation:

This is the first and most important stage in project identification. It is an

intellectual process that requires vision, initiative, scheme and inquisitiveness. The
Project idea can come out from one or more following sources:
a. Trade fairs and trade journals.
b. through experience of others in the particular business,
c. success stories of friends, relatives.
d. Surveys, reports, newspapers, periodicals.
e. detailed analysis of demand and supply
f. Government policies and support for the development of the various sectors.
e. Increasing demand of certain goods and services in the domestic market as well
as foreign market.
f. Easy Availability of raw material, skilled labour
g. invention of new technology.

Idea can be generated with the help of the following methods:

a. Brainstorming
b. Focus Groups
c. Problem inventory analysis.

a. Brainstorming: This technique was originally used by Alex Osborn in 1938 in

an American company to persuade innovative thinking in a group of six to eight
people. Through this method a large number of ideas are generated without any
criticism. In this method, people are encouraged to produce as many ideas they can
generate without any criticism and evaluation. It works on the principle of no criticism
and quantity raises quality.

b. Focus Groups: This group consists of 6-12 members belonging to different

socio-economic backgrounds to focus on the particular matter. The group has a
moderator to have the detailed discussion. Ideas are generated and detailed
discussions are carried on to identify the excellent ideas.

c. Problem Inventory analysis: This method is more like a focused group method
but in this method along with generating ideas, it also considers the problem a
product faces. In this method, focus group is provided with the list of the problems in
a general product category and then identifying and discussing the problems of the
products in that category.

Idea generation phase helps in opportunity scanning and opportunity identification

and thus helps in identifying and idea and thus converting it into an opportunity. At
the idea stage, there is a just an Idea of what to do but at the opportunity stage,
entrepreneur actually converts his idea into opportunity by gaining insight into what
actually to do. For e.g: Arjun and Raman are friends. Raman is working a company
and Arjun is still searching for the job. Raman suggested Arjun to start a business,
this is called an Idea. Later on after analyzing the various businesses, when Arjun
has decided to go to start a transport business, then it is an opportunity. Therefore,
this phase helps in identifying the opportunity.

6.2. Choosing the right line of business:

Once the idea is conceived then prospective entrepreneur has to go through the
detailed analysis to choose the right type of business and has to input his cost and
time to examine the potential of his ideas. To analyse, he has to:
a. study the environment of the product
b. future prospects of the demand of the product.
c. availability of technology.
d. access to technical know-how
e. access to the market.
f. availability of raw material and skilled labour
g. availability of customers
h. complexity of legal provisions
Identifying a business opportunity is complex and very risky task. Therefore,
prospective entrepreneur has to go through various analysis. Before selecting the
best opportunity, an entrepreneur explore and analyse all business opportunities. For
analyzing the available business opportunities, following explorations can be done:

a. Environment exploration: This means the study of the environment factors

that has an impact on the business. This includes the study of the economic factors
like gross domestic product, national income, per capita income, social factors like
demographic features, lifestyle, values, beliefs etc. technological factors like, labour
intensive technology, capital intensive technology etc. political environment like,
political parties, stability of the government, personal interest of the politicians etc
and the legal environment i.e. laws and regulations.,

b. Present business exploration: this exploration is related to the present

scenario of the business like the consumption pattern, demand pattern, income
pattern etc.

7. Opportunity Selection

As soon as the project identification ends, project selection starts. In the project
identification phase, an entrepreneur may have identified different opportunities
which he considers good for him. In this phase, he/she has to select the best
opportunity out of the identified ones which is most promising and most profitable
under the given conditions. Project selection refers to the balanced choice of a
project where the cost ratio is low and profits are more. This is the most important
phase as the whole project depends on this phase only.

The prospective entrepreneur should conduct SWOT analysis to select the best
opportunity. He/she should anaylse the strengths, weaknesses, competitive
advantages (opportunities) and challenges (threats) offered by each of the idea. On
the basis of this analysis, the most suitable project opportunity is selected. The
prospective entrepreneur should select the best opportunity with the help of the
following criteria:

a. Investment Size: It means the cost of the project. In terms of Investment, an

entrepreneurs should choose between the small scale, medium-scale and large-
scale business on the basis of the funds he can raise from the various sources and
the amount he is investing. Entrepreneur should choose the project which suits best
of his investment.

b. Location: The location of the project should be such that which provides
advantages. It should be such that is near to the market, transport facility is easily
available. It should be at the places where there are the facilities of Industrial
Development Corporation and other agencies. The proposed location should
have variety of skilled and cheap human resources.

c. Technology: Entrepreneur should give due consideration to the technology

required for the project. He/She should select the project which requires the verified
and easily available technology.

d. Equipment: An entrepreneur should choose the best equipments for the project
and should take the advice of the experienced consultant. The cost and quality of
the equipments should be within the budget.

e. Marketing: An entrepreneur should choose the project which has wide scope to
enter into the market and can help in making good market share and profits. He
should not go for the projects which are having cutthroat competition and are difficult
to enter as a beginner.

f. Selection of the product

An entrepreneur should select the product which he/she thinks will earn profits.
He/she should take into account the government policies, present market size,
demand etc.
Organizational Feasibility Analysis:

Organizational feasibility aims to assess the prowess of management and sufficiency

of resources to bring a product or idea to market Figure 11.12. The company should
evaluate the ability of its management team on areas of interest and execution.
Typical measures of management prowess include assessing the founders’ passion
for the business idea along with industry expertise, educational background, and
professional experience. Founders should be honest in their self-assessment of
ranking these are

Resource sufficiency pertains to nonfinancial resources that the venture will need to
move forward successfully and aims to assess whether an entrepreneur has a
sufficient amount of such resources. The organization should critically rank its
abilities in six to twelve types of such critical nonfinancial resources, such as
availability of office space, quality of the labor pool, possibility of obtaining intellectual
property protections (if applicable), willingness of high-quality employees to join the
company, and likelihood of forming favorable strategic partnerships. If the analysis
reveals that critical resources are lacking, the venture may not be possible as
currently planned.46

Financial Feasibility Analysis:

A financial analysis seeks to project revenue and expenses (forecasts come later in
the full business plan); project a financial narrative; and estimate project costs,
valuations, and cash flow projections Figure 11.13.

The financial analysis may typically include these items:

 A twelve-month profit and loss projection

 A three- or four-year profit-and-loss projection
 A cash-flow projection
  A projected balance sheet
 A breakeven calculation

The financial analysis should estimate the sales or revenue that you expect the
business to generate. A number of different formulas and methods are available for
calculating sales estimates. You can use industry or association data to estimate the
sales of your potential new business. You can search for similar businesses in
similar locations to gauge how your business might perform compared with similar
performances by competitors. One commonly used equation for a sales model
multiplies the number of target customers by the average revenue per customer to
establish a sales projection:

T×A=ST×A=S
Target(ed) Customers/Users×Average Revenue per Customer=Sales
ProjectionTarget(ed) Customers/Users×Average Revenue per Customer=Sales
Projection

Another critical part of planning for new business owners is to understand

the breakeven point, which is the level of operations that results in exactly enough
revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-depth
discussion on calculating breakeven points and the breakdown of cost types). It
yields neither a profit nor a loss. To calculate the breakeven point, you must first
understand the two types of costs: fixed and variable. Fixed costs are expenses that
do not vary based on the amount of sales. Rent is one example, but most of a
business’s other costs operate in this manner as well. While some costs vary from
month to month, costs are described as variable only if they will increase if the
company sells even one more item. Costs such as insurance, wages, and office
supplies are typically considered fixed costs. Variable costs fluctuate with the level
of sales revenue and include items such as raw materials, purchases to be sold, and
direct labor. With this information, you can calculate your breakeven point—the sales
level at which your business has neither a profit nor a loss.47 Projections should be
more than just numbers: include an explanation of the underlying assumptions used
to estimate the venture’s income and expenses.

Projected cash flow outlines preliminary expenses, operating expenses, and

reserves—in essence, how much you need before starting your company. You want
to determine when you expect to receive cash and when you have to write a check
for expenses. Your cash flow is designed to show if your working capital is adequate.
A balance sheet shows assets and liabilities, necessary for reporting and financial
management. When liabilities are subtracted from assets, the remainder is owners’
equity. The financial concepts and statements introduced here are discussed fully
in Entrepreneurial Finance and Accounting.

Market Feasibility Analysis:

A market analysis enables you to define competitors and quantify target customers
and/or users in the market within your chosen industry by analyzing the overall
interest in the product or service within the industry by its target market Figure 11.14.
You can define a market in terms of size, structure, growth prospects, trends, and
sales potential. This information allows you to better position your company in
competing for market share. After you’ve determined the overall size of the market,
you can define your target market, which leads to a total available market (TAM),
that is, the number of potential users within your business’s sphere of influence. This
market can be segmented by geography, customer attributes, or product-oriented
segments. From the TAM, you can further distill the portion of that target market that
will be attracted to your business. This market segment is known as a serviceable
available market (SAM).

Projecting market share can be a subjective estimate, based not only on an analysis
of the market but also on pricing, promotional, and distribution strategies. As is the
case for revenue, you will have a number of different forecasts and tools available at
your disposal. Other items you may include in a market analysis are a complete
competitive review, historical market performance, changes to supply and demand,
and projected growth in demand over time.

To become a business opportunity, your idea needs to have a potential economic

value:

 It needs to be able to create profit. There have to be customers willing to pay

for the product.
 It should also be new and innovative.
 It also needs to be attractive and desirable for people who want to buy it.
There are two ways to recognise opportunities:

 You can discover them or

 You can create them yourself and with others.
Entrepreneurs discover opportunities when they search for them in existing markets.
This means they observe technological, economic or social trends. Recognising
opportunities is a cognitive process. It relies on the ability of people to recognise
patterns and connect the dots.

Entrepreneurs create opportunities when they engage with others in bouncing ideas
back and forth, and each time it becomes more specific what the user needs are and
how they are going to be solved. Creating opportunities is a social process. It relies
on the ability of entrepreneurs to interact.

Market Entry Strategies:

Market entry strategies are methods companies use to plan, distribute and deliver
goods to international markets. The cost and level of a company's control over
distribution can vary depending on the strategy it chooses. Companies usually
choose a strategy based on the type of product they sell, the value of the product
and whether shipping it requires special handling procedures. Companies may also
consider their current competition and consumer needs.
1. Exporting
Exporting involves marketing the products you produce in the countries in which you
intend to sell them. Some companies use direct exporting, in which they sell the
product they manufacture in international markets without third-party involvement.
Companies that sell luxury products or have sold their goods in global markets in the
past often choose this method.Alternatively, a company may export indirectly by
using the services of agents, such as international distributors. Businesses often
choose indirect exporting if they're just beginning to distribute internationally. While
companies pay agents for their services, indirect exporting often results in a return
on investment (ROI) because the agents know what it takes to succeed in the
markets in which they work.
2. Piggybacking
If your company has contacts who work for organizations that currently sell products
overseas, you may want to consider piggybacking. This market entry strategy
involves asking other businesses whether you can add your product to their
overseas inventory. If your company and an international company agree to this
arrangement, both parties share the profit for each sale. Your company can also
manage the risk of selling overseas by allowing its partner to handle international
marketing while your company focuses on domestic retail.
3. Countertrade
Countertrade is a common form of indirect international marketing. Countertrading
functions as a barter system in which companies trade each other's goods instead of
offering their products for purchase. While legal, the system does not have specific
legal regulations like other forms of market entry do. This means companies may
solve problems like ensuring other companies understand the value of their products
and attempting to acquire goods at a similar level of quality. Countertrading is a cost-
effective choice for many businesses because the practice may exempt them from
import quotas.
4. Licensing
Licensing occurs when one company transfers the right to use or sell a product to
another company. A company may choose this method if it has a product that's in
demand and the company to which it plans to license the product has a large market.
For example, a movie production company may sell a school supply company the
right to use images of movie characters on backpacks, lunchboxes and notebooks.
5. Joint ventures
Some companies attempt to minimize the risk of entering an international market by
creating joint ventures with other companies that plan to sell in the global
marketplace. Since joint ventures often function like large, independent companies
rather than a combination of two smaller companies, they have the potential to earn
more revenue than individual companies. This market entry strategy carries the risk
of an imbalance in company involvement, but both parties can work together to
establish fair processes and help prevent this issue.
6. Company ownership
If your company plans to sell a product internationally without managing the
shipment and distribution of the goods you produce, you might consider purchasing
an existing company in the country in which you want to do business. Owning a
company established in your international market gives your organization credibility
as a local business, which can help boost sales. Company ownership costs more
than most market entry strategies, but it has the potential to lead to a high ROI.
7. Franchising
A franchise is a chain retail company in which an individual or group buyer pays for
the right to manage company branches on the company's behalf. Franchises occur
most commonly in North America, but they exist globally and offer businesses the
opportunity to expand overseas. Franchising typically requires strong brand
recognition, as consumers in your target market should know what you offer and
have a desire to purchase it. For well-known brands, franchising offers companies a
way to earn a profit while taking an indirect management approach.
8. Outsourcing
Outsourcing involves hiring another company to manage certain aspects of business
operations for your company. As a market entry strategy, it refers to making an
agreement with another company to handle international product sales on your
company's behalf. Companies that choose to outsource may relinquish a certain
amount of control over the sale of their products, but they may justify this risk with
the revenue they save on employment costs.
9. Greenfield investments
Greenfield investments are complex market entry strategies that some companies
choose to use. These investments involve buying the land and resources to build a
facility internationally and hiring a staff to run it. Greenfield investments may subject
a company to high risks and significant costs, but they can also help companies
comply with government regulations in a new market. These investments typically
benefit large, established organizations as opposed to new enterprises.
10. Turnkey projects
Turnkey projects apply specifically to companies that plan, develop and construct
new buildings for their clients. The term "turnkey" refers to the idea that the client can
simply turn a key in a lock and enter a fully operational facility. You might consider
this market entry strategy if your clients comprise foreign government agencies.
International financial agencies usually manage arrangements between companies
and their overseas clients to ensure the companies provide high-quality service and
the client pays the full amount due.