NANAK EDUCATION POINT

HEENA Takkar
CONTACT NO 8178359562
ENTREPRENEURSHIP AND NEW VENTURE PLANNING
UNIT 2 Types of Entrepreneurs
LESSON 1
Types of Entrepreneurs
Classification and Types of Entrepreneurs
Entrepreneurs come in various types, each with distinct
characteristics, goals, and approaches to business.

Here are some common types of entrepreneurs:

1. Serial Entrepreneur:
 Definition: A serial entrepreneur is someone who starts and leads
multiple businesses over their career.
 Characteristics: These individuals thrive on creating and
building businesses.
2. Social Entrepreneur:
 Definition: Social entrepreneurs are driven by a desire to create
positive social or environmental change. They often focus on
solving social issues through innovative business models.
 Characteristics: Social impact is a primary goal, and financial
profit is seen as a means to support and sustain their social mission.
3. Women Entrepreneur
 Definition: A woman entrepreneur is a woman who starts and
operates her own business, taking on financial risks in the hope of
profit.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
 Characteristics: These individuals seek a balance between work
and personal life and may prioritize autonomy and personal
satisfaction over rapid business growth.
4. Scalable Startup Entrepreneur:
 Definition: Scalable startup entrepreneurs aim to create high-
growth companies with the potential for rapid expansion and
significant market share.
 Characteristics: They often seek venture capital or angel
investment to fuel fast growth and focus on scaling their
business quickly.
5. Small Business Entrepreneur:
 Definition: Small business entrepreneurs typically establish and
operate small businesses, such as local shops, restaurants, or
service providers.
 Characteristics: They often prioritize stability, local community
impact, and personal relationships with customers.
6. Innovative or Tech Entrepreneur:
 Definition: Innovative or tech entrepreneurs are focused on
creating and bringing to market new and innovative products
or technologies.
 Characteristics: They thrive on technology, research, and
development, often working in industries such as software,
biotech, or hardware.
7. Corporate Entrepreneur (Intrapreneur):
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
 Definition: Corporate entrepreneurs, also known as
intrapreneurs, work within large organizations but adopt an
entrepreneurial mindset to drive innovation and growth.
 Characteristics: They navigate within the corporate structure
to introduce and implement new ideas, products, or processes.
8. Franchise Entrepreneur:
 Definition: Franchise entrepreneurs purchase and operate a
business based on an established and successful business model
developed by another company.
Characteristics: They benefit from the brand recognition and
support provided by the franchisor.
9. Cultural Entrepreneur:
Definition: Cultural entrepreneurs are focused on creating and
promoting cultural or artistic products and experiences.
Characteristics: They may include artists, musicians, writers,
and others who aim to make a cultural impact through their
creative work.
These categories are not mutually exclusive, and many entrepreneurs
may exhibit characteristics of more than one type, especially as their
careers evolve and they engage in various ventures.

Women Entrepreneur
A women entrepreneur is a woman who starts and operates her own
business, taking on financial risks in the hope of profit. Women
entrepreneurs play a crucial role in economic development, job
creation, and innovation.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
Here are some key points and considerations related to
women entrepreneurs:
1. Challenges: Women entrepreneurs often face unique challenges,
including gender bias, limited access to funding and resources, and
societal expectations. Overcoming these challenges requires
resilience, determination, and support from both the business
community and society at large.
2. Opportunities: Despite challenges, there has been a growing
recognition of the potential and value that women entrepreneurs
bring to the business world.
3. Diversity and Innovation: The inclusion of women in
entrepreneurship brings diversity to the business landscape. Diverse
perspectives lead to increased innovation and creativity, which can
positively impact the success and sustainability of businesses.
4. Networking and Support: Building a strong network and support
system is crucial for women entrepreneurs.
5. Success Stories: There are numerous success stories of women
entrepreneurs who have overcome challenges and built successful
businesses across various industries.
6. Policy and Advocacy: Advocacy for policies that promote gender
equality and support women in business is important.
7. Education and Training: Providing education and training
opportunities for women in business is essential.
8. Global Impact: Women entrepreneurs contribute not only to the
local economy but also to the global business landscape.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562

Encouraging and supporting women entrepreneurs is not just a

matter of equality; it’s also a strategic move that can lead to
increased economic growth and development.

Social Entrepreneur
A social entrepreneur is an individual who establishes and leads a
business with the primary goal of addressing social or environmental
issues. While traditional entrepreneurs focus on profit generation,
social entrepreneurs prioritize creating positive societal impact.
Here are key characteristics and aspects associated with social
entrepreneurship:
1. Social Mission:
 Primary Focus: Social entrepreneurs are driven by a mission to
address specific social or environmental challenges rather than
solely maximizing profits.
 Measurable Impact: They often measure success in terms of the
positive impact on communities, individuals, or the environment.
2. Innovative Solutions:
 Creative Approaches: Social entrepreneurs use innovative and
sustainable approaches to address social issues.
3. Sustainability:
 Financial Viability: While social entrepreneurs prioritize their social
mission, they recognize the importance of financial sustainability.
A financially stable venture is better positioned to achieve long-
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
term impact.
4. Community Involvement:
 Engagement: Social entrepreneurs actively engage with the
communities they serve.
5. Collaboration:
 Partnerships: Collaboration is a key aspect of social
entrepreneurship. Social entrepreneurs often partner with
government agencies, nonprofits, businesses, and other
stakeholders to leverage resources and maximize impact.
6. Measuring Impact:
 Metrics: Social entrepreneurs use a variety of metrics to
measure and evaluate their impact.
7. Empowerment:
 Community Empowerment: Social entrepreneurs aim to
empower communities and individuals, enabling them to
participate actively in their own development and
improvement.
8. Systemic Change:
 Addressing Root Causes: Rather than just alleviating symptoms,
social entrepreneurs often seek to address the root causes of social
problems.
9. Adaptability:
 Flexibility: Social entrepreneurs must be adaptable and open
to adjusting their strategies based on the evolving needs of the
communities they serve or the changing landscape of the social
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
issues they are addressing.
10. Examples of Social Enterprises:
 Grameen Bank: Founded by Muhammad Yunus, Grameen Bank
provides microfinance services to empower individuals, particularly
women, in overcoming poverty.
Social entrepreneurship plays a crucial role in driving positive change
and creating sustainable solutions to some of the world’s most
challenging problems.
Social Entrepreneurship
Social entrepreneurs are those individuals associated with non-profit
organizations in raising funds by participating in societal events and
activities.

Social entrepreneurship plays the role of a change

agent in society by:
1. Adopting a mission statement to create and sustain social values.
2. Acting without being limited by resources currently in hand.
3. Recognizing new opportunities to serve the mission.
4. Continuously engage in the process of innovations, adaptation and
learning.
5. Exhibiting accountability for the outcomes created.
As per American professor Greg Dees, “Social entrepreneurs are a
special breed of leaders”.

Characteristics of a Social Entrepreneur

NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
1. Leadership
2. Emotional Balance
3. Vision
4. Ability to multitask
5. Decision making

Difference Between Business and Social

Entrepreneurship
Business Entrepreneurship Social Entrepreneurship

1. It is more about the 1. All about collective efforts

individual. for society.

2. It aims at producing goods 2. It aims at producing goods

and services. and services that can serve
the community and solve a
problem.

3. It focused on the market, 3. It focused on the market,

demand and trends. demand and trends. It
focuses on a solution-
oriented approach to a
social problem.

4. The purpose is to satisfy 4. The purpose is to promote

customers needs and earn their cause and improve
profits. society.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562

Corporate Entrepreneur
A corporate entrepreneur, often referred to as an “intrapreneur,” is
an individual within a large organization who behaves like an
entrepreneur but does so within the corporate setting.
1. Innovative Mindset:
Creativity: Corporate entrepreneurs possess a creative and
innovative mindset, constantly seeking new ideas and opportunities
to improve processes, products, or services within the organization.
2. Risk-Taking:
Risk Management: While entrepreneurs take risks to start new
ventures, corporate entrepreneurs navigate risk within the confines
of an existing organization.
3. Autonomy:
Decision-Making Authority: Corporate entrepreneurs are often
granted a degree of autonomy and decision-making authority to
implement new ideas.
4. Internal Networking:
Cross-Functional Collaboration: Intrapreneurs actively engage in
cross-functional collaboration, working with various departments to
bring diverse skills and perspectives together to drive innovation.
5. Resource Allocation:
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
Advocacy for Resources: Corporate entrepreneurs must advocate
for resources and support from senior management to implement
their initiatives.
6. Tolerance for Ambiguity:
Adaptability: Corporate entrepreneurs must be comfortable
operating in situations of uncertainty and ambiguity.
7. Focus on Customer Needs:
Customer-Centric Approach: Similar to entrepreneurs, corporate
entrepreneurs focus on understanding and meeting customer needs.
8. Goal of Growth:
Business Expansion: The ultimate goal of corporate entrepreneurship
is often to contribute to the growth and competitiveness of the
organization.
9. Learning from Failure:
Failure as a Learning Opportunity: Corporate entrepreneurs
understand that not all initiatives will succeed.
10. Examples:
Google’s 20% Time: Google famously allows its employees to spend
20% of their working hours on personal projects and ideas.

Family Business and Entrepreneurship

In order to turn the startup ideas into valuable businesses, an
entrepreneur requires strong support and an advisory system.
Supporting entrepreneurship is essential for the development and
improvement of the society.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
A society needs innovations and effective solutions to the problem of
the society and a bright & young entrepreneur can turn their
attractive ideas into successful achievement only if a support system
lies with the entrepreneur.

Family and Social Support for Entrepreneurship

Many small businesses rely on friends and family for social, financial
and operational support. One of the most important sources of
support for various entrepreneurs is the network of their friends and
family members.
Family and network of friends provide a strong support system to
help the entrepreneur so that they can face stress, balance work and
play and helps in fulfilling their responsibilities and maintaining a
successful business in uncertain marketplace.
Family and friends serve important roles for the entrepreneur like
advisors, employees, investors and partners.
Small businesses or entrepreneurs often view the support of their
personal connections in their tough and good times as friends and
family are a lifeline of them and prove a resource pool for skilled
jobs.

A survey conducted on this topic in 2016 found

that:
1. Most small business owners who borrow money from friends or
family are appreciative.
2. Most small business owners rely on family for support beyond
financing.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
3. Most small business owners and local communities rely on each
other.
This is absolutely true that family and business are two different
parts of life and both are distinct from each other But there is some
commonality between these two parts.
These both parts of life require a good amount of emotional
attachment and are involved at some emotional level.
There is a direct relationship between family support and the scope
of startup activities basically at the young nascent stage.

There are various pros and cons of running a

venture with the members of the family:

Pros:
1. Trustworthy Business Partners: Trustworthy partners in the
business help an entrepreneur to survive in tough time and it
generates a feeling of belongingness and affection.
2. Understand Each other’s Strengths and Weaknesses: The best
part for an entrepreneur to work with his family is he understands
the strengths and weaknesses of his family thoroughly and both
can gain the benefits of their synergies and compensate for each
other’s weaknesses.
3. Quality Time with Family: An entrepreneur has a great advantage
in working with his family in that he can spend most time with his
family at work.
4. Helps in Maintaining Traditions: The business with family support
makes possible to bring family tradition and helps in preserving it
over the years.
Cons:
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
1. Personal Conflicts Can Interrupt Business: The major problem
during working with family members is the disagreements or
arguments in the venture, in these situations it becomes difficult
for an entrepreneur to work at a productive level.
2. Too Much Leniency: When an entrepreneur works with his /her
family members with no strict rules and regulations, it also creates
serious problem for the venture as too much leniency is very risky
for any venture.
3. Lack of Fresh and New Ideas: An entrepreneur working with the
same professionals every time leads to a lack of new and fresh
ideas in the business.
4. One Revenue Stream: A business where all family members
work in a common place, the chances of financial issues are
generated.

Family Support
Families play an important role in entrepreneurship in terms of the
strong links between family integration and entrepreneurial
outcomes or actions.
For young nascent entrepreneurs, family plays an important role in a
majority of young entrepreneur’s activities.

Family support strengthens a business’s performance.

Basically there are four types of family support i.e. financial, social,
human and physical support.
1. Financial support for entrepreneur
2. Social support for entrepreneur
3. Human support to the entrepreneur
4. Physical support for entrepreneur

1. Financial Support to Entrepreneur

NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
Financial support includes financial resources for entrepreneur to
strengthen businesses.
2. Social Support to Entrepreneur
For human-to-human activities that operate in a venture, social
capital is needed. A family does not directly participate in business
processes and initiatives, however the social capital of the family can
still influence risk creation.

3. Human Support to Entrepreneur

Family human capital is the knowledge, abilities and skills possessed
by individuals in the family members.
4. Physical Support to Entrepreneur
Family tangible capital includes tangible assets provided by the
family, such as a home, a vehicle, and computers utilised for
business.
Importance of Family Support in Entrepreneurship
A significant element for the entrepreneur to survive in most
challenging journey is a strong system at home and work both.
So, following is the way how do family members lend
support to entrepreneurs:
1. Emotional Assistance: There are lots of burdens on business
owners which can ease by family members like lending a listening
ear, showing encouragement, providing care and understanding
and having patience during tough times.
2. Financial Help: Most entrepreneurs start their business on the
basis of their savings and they have no funding sources
available.
3. Professional Advice: A family or network of friends plays an
important role as a guide or mentor and offers specific ideas
that can give directions towards the achievement of the goals.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
4. Volunteer Time: In the initial stage of the business, the budget
is limited and entrepreneur may have a huge workload.
5. Business Referrals: A strong network in the market is the first
major requirement in the business.
6. Business Gifts: Family members love to give gifts by which they
can participate in business activities and the more they grasp
the nuances of the responsibilities as owners, the more they
can assist in the entrepreneurial journey.

Family Business and Entrepreneurship

Family business is a broad term which includes family members,
family enterprise, family wealth and entrepreneurship, aims to
understand the human elements related to the family and
business both.

Introduction
The definition of “Family Business” according to Donnelley (1964) is
defined as one which has been closely identified with at least two
generations of a family and when this link has had an impact on both
corporate policies and the family’s interests and goals.
Family business is substantially controlled and managed by members
of family and is succeeded by the next generation of the family.
Family-run enterprises can teach entrepreneurs a lot, and it’s
important to constantly remind families to continue to be
entrepreneurial.
The difficulties of family life are added to business concerns in family
firms, broadening the spectrum of issues, requirements, and viable
solutions for every choice.
Family business literature clearly implies that families are important
and supportive contexts for entrepreneurial behaviour.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
There are 12 basic requirements for achieving
harmony in a family business.

1. Define Certain Limits

Family members that work in the same company can easily discuss
shop all the time. However, blending work, personal, and family life
will eventually result in a volatile brew.
2. Create Clear and Frequent Channels of Communication There will
always be issues and differences of opinion. Maybe you already
noticed them.
3. Separate Duties into Different Groups Even though different family
members could be qualified for the same jobs, responsibilities should
be divided up to prevent disputes.
4. Manage it Like a Company The traits of a good business may not
always be compatible with family harmony, so be prepared to handle
those situations when they come.
5. Appreciate the Benefits of Family Ownership Family-run
enterprises have special advantages. One is having access to other
family members’ human capital.
6. Be Fair to Family Members While some industry gurus suggest
never hiring family members, doing so negates one of the main
advantages of a family-run business.
7. Document Business Contacts
Without a clear plan for what they would get from the company
partnership, it is simple for family members to become involved in a
firm.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
8. Avoid Giving Family Members “Sympathy” Jobs Do not end up as
your children’s, cousins’, or other family members’ last resort
employer.
9. Draw distinct managerial boundaries. Employees who don’t report
to family members frequently get reprimanded since they
frequently have a present or assumed future ownership position in
the company.
10.Ask for Outside Counsel Sometimes, the decision-making process
for expanding a family business is excessively exclusive.
11. Create a Succession Strategy Without a documented succession
plan, a family business is asking for trouble. The strategy should
specify how and when the baton will be handed over to a new
generation.
12. First, You Need to Have Outside Experience Make sure your
children have at least three to five years of business experience
elsewhere before they join the company if they will preferably in a
completely unrelated field.

Indian Family Businesses’ Challenges

Big firm houses with three or more generations confront the weight
of expansion and sustenance due to the numerous difficulties faced
by family businesses.

Family-owned businesses keep up with tough

challenges like:
1. Splits: There are splits that cause a firm to fail, such as a conflict
between a father and son or even between relatives. For instance,
after Mr. G. D. Birla’s passing, the Birla Community broke into a
number of businesses.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
2. LPG: For family-run businesses, liberalisation, outsourcing, and
globalisation are major threats. So the family enterprises must
respond with a new set of strategies.
3. HR Concerns: Maintaining the Indian brain is a significant issue for
Indian enterprises to find untapped talent, offer them wage packages
and other forms of compensation that are in line with the industry,
delegate authority to them, and give them space to operate.
4. Transnational Attack: Due to the risks associated with their global
product and service quality, multinational firms pose a significant
challenge because they are more professionalised, concentrated,
coordinated, and willing to take risks.
6. Lack of professionalism includes incompetent management and
conflicts between experienced CEOs and family members running the
company.

Role and Contribution of Family Business Towards

Growth of Entrepreneurship
India is believed to have the third highest number of family-owned or
family-controlled businesses which consists of approximately 90% of
all businesses that are incorporated in India.
Definition: “A family business is a commercial organization in which
decision-making is influenced by multiple generations of a family,
related by blood or marriage or adoption, who has both the ability to
influence the vision of the business and the willingness to use this
ability to pursue distinctive goals”

Key Take a ways

 Entirely owned and managed by members of a single-family
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
 Owned, controlled and operated by members of one or several
families.
 Interest and significant commitment towards business.

Characteristics of Family Business

1. Family members are loyal to the principles of the founder.
2. The entity has to ensure uniformity in its operations.
3. Succession planning is an ongoing process.
4. Indulgence of family members in business operations.
5. Ensures the effective utilization of in-house talent in family.

Three Circle Model of Family Business

The three-circle model has the three overlapping circles consisting
three different groups namely Family, Ownership and Business. A
particular person carries one of the seven sections that are formed
by the overlapping groups. The owner has the position in the top
circle. The left circle is occupied by family members and the right
circle is taken by the employees.
The three-circle model depicts seven different groups having varied
levels of involvement in the family business.

All seven sections are given below:

1. Family members not involved in the business, but who are
descendants or spouses/partners of owners.
2. Family owners not employed in the business.
3. Non-family owners who do not work in the business.
NANAK EDUCATION POINT
HEENA Takkar
CONTACT NO 8178359562
4. Non-family owners who work in the business.
5. Non-family employees.
6. Family members who work in the business but are not owners.
7. Family owners who work in the business.
The long-term success of a family business system
depends on the functioning and mutual support of each of these
groups.

Approaches to Avoid Conflicts in Family Business

1. Coping Approach: This involves adopting to negotiation among
family members try and resolve conflict and agree on common
terms.
2. Arbitrary Approach: In this approach, the elder person of the
family will be allotted the power to frame rules and control business
activity.
3. Managed Approach: This approach states that a person who has
the ability to maintain better relationships with key individuals in
business and have the ability to understand business and manage the
same should be appointed as the lead person for the business.

Measures to Overcome Family Business

Challenges and Problems
1. Family Constitution or Governance
2. Developing a Succession Plan
3. Family Gathering and Get Together
4. Appointing an outside Board of Advisors
5. Training and orientation