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Entrepreneurship
Notes
Compiled by
Abdullah Khan
Student of BS English at GDC Samarbagh
“Learning Never Exhausts the mind”
__ Leonardo da Vinci
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 Entrepreneur :
Entrepreneur A person who sets up a business or businesses, taking on financial
risks in the hope of profit. An entrepreneur is an individual who creates a new
business, bearing most of the risks and enjoying most of the rewards. The
entrepreneur is commonly seen as an innovator, a source of new ideas, goods,
services, and business/or procedures.
 Characteristics OF Entrepreneur :
People may lack the personality and skills necessary for successful
entrepreneurship. There are some general characteristics and skills that many
successful entrepreneurs have:
1. Problem-solving :
Entrepreneurs often start their businesses after identifying a problem and then
coming up with a way to address it. Entrepreneurs are also able to figure out how
to solve problems that will occur during the development of the business.
2. Innovation :
Entrepreneurs are innovators, and are often engaged continuously in the process
of conceiving new products and services, renewing and improving current
offerings, and developing new business processes.
3. Risk-taking :
Entrepreneurs are not risk-averse. They are willing to risk their time, money and
even their reputation to get the business started and take their products or
services to market. Entrepreneurs are also willing to take risks even after they
establish a business, developing new products and approaches that can grow their
businesses.
4. Contrariness :
Entrepreneurs are often people who are eager to question why and how things are
being done – even if these processes are clearly "industry-standard." This doesn't
mean an entrepreneur should ignore industry best practices, but the entrepreneur
is also willing to challenge these practices if she believes that there is a better
way to do them.
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5. Persistence :
Entrepreneurs are persistent. They aren't easily discouraged and are willing to
work through discouragement and challenges. Entrepreneurs are willing to attend
trade shows, meet with bankers, call on clients and do what it takes to get the
business started, and then to make it successful.
6. Leadership :
Successful entrepreneurs are strong leaders. Leadership is an essential
entrepreneurial skill, as the entrepreneur will need to be able to cultivate trust and
support from the people who join his business as managers and workers. Many
new businesses are cash-poor and experience significant challenges – but a good
leader can inspire loyalty in workers who may not yet be receiving high wages,
as well as in employees who are facing roadblocks in their efforts to build the
company.
 Functions of entrepreneur :
The following points highlight the top five functions of an entrepreneur. The
functions are : •
1. Decision Making :
The primary task of an entrepreneur is to decide the policy of production. An
entrepreneur is to determine what to produce, how much to produce, how to
produce, where to produce, how to sell and so forth. Moreover, he is to decide the
scale of production and the proportion in which he combines the different factors
he employs. In brief, he is to make vital business decisions relating to the
purchase of productive factors and to the sale of the finished goods or services.
2. Management Control :
Earlier writers used to consider the management control one of the chief
functions of the entrepreneur. Management and control of the business are
conducted by the entrepreneur himself. So, the latter must possess a high degree
of management ability to select the right type of persons to work with him. But,
the importance of this function has declined, as business nowadays is managed
more and more by paid managers.
3. Division of Income :
The next major function of the entrepreneur is to make necessary arrangement
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for the division of total income among the different factors of production
employed by him. Even if there is a loss in the business, he is to pay rent, interest,
wages and other contractual incomes out of the realized sale proceeds.
4. Risk-Taking and Uncertainty-Bearing :
Risk-taking is perhaps the most important function of an entrepreneur. Modern
production is very risky as an entrepreneur is required to produce goods or
services in anticipation of their future demand. Broadly, there are two kinds of
risk which he has to face. Firstly, there are some risks, such as risks of fire, loss
of goods in transit, theft, etc., which can be insured against. These are known as
measurable and insurable risks. Secondly, some risks, however, cannot be insured
against because their probability cannot be calculated accurately. These constitute
what is called uncertainty (e.g., competitive risk, technical risk, etc.). The
entrepreneur undertakes both these risks in production.
5. Innovation :
Another distinguishing function of the entrepreneur, as emphasized by
Schumpeter, is to make frequent inventions — invention of new products, new
techniques and discovering new markets — to improve his competitive position,
and to increase earnings.
 Types of Entrepreneurship :
1. Classic entrepreneurs :
The so-called "classic" entrepreneur is someone who observes a gap in the
market or takes note of a business or consumer need, and develops a company
that addresses the deficit or the need. In some cases, the entrepreneur may also be
an inventor, although some classic entrepreneurs will team up with someone who
has invented a product. In many cases, the classic entrepreneur starts the business
and continues to own and manage it for many years.
2. Serial entrepreneurs :
A serial entrepreneur enjoys getting businesses started, and then sells the
business to another person or company. This type of entrepreneur is typically
somebody who is excited about starting something new and taking risks. Once
the business is doing well, however, this entrepreneur wants to move on to
another new and different challenge.
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3. Social entrepreneurs :
Social entrepreneurs incorporate social conscience with business. While their
businesses may still be for-profit, there is typically a strong mission statement
connecting the business with a social cause. For example, a social entrepreneur
may import fair trade goods for resale while also educating the public about the
importance of activism in the area of sustainably and responsibly sourcing
products.

 Entrepreneurship :
Entrepreneurship refers to the process of creating a new enterprise and bearing
any of its risks, with the view of making the profit.
 Entrepreneurship refers to all those activities which are to be carried out by a
person to establish and to run the business enterprises in accordance with the
changing social, political and economic environments. Entrepreneurship
includes activities relating to the anticipation of the consumers likes and
dislikes, feelings and behaviors, tastes and fashions and the introduction of
business ventures to meet out all these expectations of the consumers.
 Entrepreneurship is considered as a new product that would enable
businessmen to develop new form of business organization and new business
activities catering to the changing needs of the society. The liberalization of
cultural rigidities are mainly due to this new product entrepreneurship
 Entrepreneurship is the ability of entrepreneurs to assess the risks and
establish businesses which are risky but at the same time suits perfectly to the
changing scenarios of the economy.

 Advantages of entrepreneurship :
1. Learning to see possibilities :
 When you have to rely on yourself and your imagination in order to generate
income, this awareness goes with the territory.
 An entrepreneur has to develop the skill and train his or her mind to stay open
and receptive to potential ideas and possibilities. This doesn’t mean they get
involved in everything that comes their way. They must also learn the skill of
discernment – which is also of tremendous value.
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2. Defining your income :
 Who decides how much you’re getting paid? Chances are, there are several
factors at play including your boss, your company’s financial budget, the
board of directors, the economy, etc. These factors also determine whether
you’ll be staying at your job.
 So even if you’re working really hard and giving 110%, your salary might not
reflect it. But when you’re an entrepreneur, you create the relationship
between your efforts and your income

3. Flecibility in your scheduled :

 As an entrepreneur you can ditch the rigid schedule, Entrepreneurs focus on
results rather than on hours worked. And one study found that a results-based
work atmosphere leads to greater mental and physical wellness.

4. Learning to be in the moment :

 One of the great advantages of entrepreneurship is being able to abandon the
predictable and monotonous schedule of a traditional office job. Instead, you
plan and schedule your day, set regular goals and work to achieve them.

 Disadvantages of entrepreneurship :
Some of the major disadvantages of entrepreneurship are as follows ;

1. Risk of Loss :
Business failure can ruin an entrepreneur financially, and yes, the failure rate of
small business is relatively high when compared to established businesses.
Entrepreneurs should ask themselves if they are prepared to cope psychologically
with the failures associated with entrepreneurship.
2. Uncertainty of Income :
Starting and running an enterprise provides no guarantee of earning money.
Many small businesses barely earn enough to give the owner adequate income
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3. High Levels of Responsibility :
Entrepreneurs often have to take decisions beyond the domain of their knowledge
as many of them have difficulty finding advisers.

4. Long Working Hours :

Start-ups often demand long working. In many start-ups, the demands of owning
a business make achieving a balance between work and life difficult for
entrepreneurs. It becomes a full-time commitment where there are always some
things that need to be done.

 Five factors will be key to entrepreneurial success :

creativity, tolerance for risk, responsiveness to opportunities, leadership and the
ability to take advantage of the rights afforded to you.
1. Creativity and Accumulation of Ideas :
Do not be dissuaded by the challenge to be creative. You need not be the original
wheel creator to improve upon a stone cylinder. By standing on the shoulders of
giants, you can take existing ideas and make small improvements upon them.
Your best ideas may come to you as you are falling asleep or while you are
taking a shower. Recognize when you have a fresh idea and do not let them get
away from you. Write them down! Not every idea has to be a home run. By
accumulating your ideas, you will be able to dis-till the great ones from the rest
and be ready to run with the best.
2. Risk Tolerance and Taking Advantage of Opportunity :
 Rewards rarely come without risk. Your ability to take advantage of an
opportunity will depend, in part, on your tolerance for risk. As the founder of
a start-up, investors will expect you to have a vested interest in your business.
If you will not bet on your idea, why should anybody else?
 If you cannot afford the risk, financially or emotionally, then you might make
decisions that are too tepid to be successful. To do well, an entrepreneur needs
the strong sense of self-efficacy to believe the risk will be surmountable.
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3. Responsiveness to Opportunity :
Opportunity can leave quickly. With the internet, the spread of information and
ideas has led to deeper, faster competition to be the first mover. The ability to
respond to the market and new business opportunities can be the difference
between a successful entrepreneur and a failed business model. To be responsive,
an entrepreneur must have the flexibility of mind and resources necessary to see
and take advantage of new and upcoming possibilities. Learning from your
mistakes and those of others to implement change can keep businesses afloat.
Calcifying rigidity, on the other hand, can turn a start-up into dust.
4. Leadership and Inspiring Others :
It is up to the entrepreneur to marshal assets. Leaders are challenged with taking
possibilities and turning them into inspiring visions for others. You will
inevitably have to sell either your idea or your product to begin your
entrepreneurship. It will be up to the entrepreneur to take the idea and turn it into
actions and products to capitalize on the opportunity. Leadership can come in
many forms, but it is nevertheless essential to entrepreneurship. You must take
the lead for your ideas to come to fruition.

5. Intellectual Property Rights :

Intellectual property laws can provide you with exclusive business rights to
your ideas. If you do not protect your ideas, they may be copied – cheaply. Once
an idea is in the public domain, it may no longer be possible to use that idea as a
competitive advantage. Society values ideas being shared. In exchange for
sharing ideas, governments provide limited monopolies that will allow you to
capitalize on them for a period, making up in part for the costs you have incurred
in research and development. Intellectual property professionals can aid you in
seeking such rights.
 Role of entrepreneurship in economic development :
Entrepreneurs initiate and sustain the process of economic development in the
following ways:
1. Capital Formation :
Entrepreneurs mobilize the idle savings of the public through the issues of
industrial securities. Investment of public savings in industry results in
productive utilization of national resources. Rate of capital formation increases
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which is essential for rapid economic growth. Thus, an entrepreneur is the creator
of wealth.
2. Improvement in Per Capita Income :
Entrepreneurs locate and exploit opportunities. They convert the latent and idle
resources like land, labour and capital into national income and wealth in the
form of goods and services. They help to increase net national product and per
capita income in the country, which are important yardsticks for measuring
economic growth.
3. Generation of Employment :
Entrepreneurs generate employment both directly and indirectly. Directly, self-
employment as an entrepreneur offers the best way for independent and
honorable life. Indirectly, by setting up large and small scale business units they
offer jobs to millions. Thus, entrepreneurship helps to reduce the unemployment
problem in the country.
4. Balanced Regional Development :
Entrepreneurs in the public and private sectors help to remove regional
disparities in economic development. They set up industries in backward areas to
avail various concessions and subsidies offered by the central and state
governments. Public sector steel plants and private sector industries by Modis,
Tatas, Birlas and others have put the hitherto unknown places on the international
map.
5. Improvement in Living Standards :
Entrepreneurs set up industries which remove scarcity of essential commodities
and introduce new products. Production of goods on mass scale and manufacture
of handicrafts, etc., in the small scale sector help to improve the standards of life
of a common man. These offer goods at lower costs and increase variety in
consumption.
6. Economic Independence :
Entrepreneurship is essential for national self-reliance. Industrialists help to
manufacture indigenous substitutes of hitherto imported products thereby
reducing dependence on foreign countries. Businessmen also export goods and
services on a large scale and thereby earn the scarce foreign exchange for the
country. Such import substitution and export promotion help to ensure the
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economic independence of the country without which political independence has
little meaning.

 The concept of entrepreneurship :

The concept of entrepreneurship is elusive, that is difficult to define and taking
various meanings as it is viewed differently by different scholars with regard to
the context it is employed for. For example, the psychologist (behaviourist) see it
as “the need for achievement, perceived locus of control, and risk-taking
propensity”. The economist looks at it as bringing together the factors of
production (land, labour, capital, and entrepreneur) and bearing the risk of buying
at a certain price and selling at uncertain prices. While the sociologist views it as
the ability to recognize and act upon market opportunities in order to provide
social services. Neither of these approaches is sound and all-embracing because
each focuses upon some aspects of entrepreneurship and leaving some untouched.
However, four different definitions of the term entrepreneurship by different
scholars are stated below:
 Entrepreneurship education is the willingness and ability of an individual to
seek out investment opportunities in an environment and be able to establish
and run an enterprise successfully
 Entrepreneurship education is viewed as an attempt to create value through
recognition of business opportunities, communicative, and management skills
to mobilize human, financial and material resources necessary to bring a
project to function.
 Entrepreneurship education is the process of identifying, developing and
bringing a vision to life. The vision may be an innovative idea, an opportunity,
or simply a better way to do something. The end result of this process is the
creation of a new venture, formed under conditions of risk and considerable
uncertainty.

 the economist view of entrepreneurship :

The Economist, a renowned publication covering global economics and business,
typically views entrepreneurship as a crucial driver of economic growth,
innovation, and dynamism. Here are some key aspects of The Economist's
perspective on entrepreneurship:
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1. Economic growth :
The Economist recognizes entrepreneurship as a vital component of economic
growth, as it fosters the creation of new businesses, industries, and jobs.
Entrepreneurial ventures often introduce disruptive technologies, products, and
business models that fuel productivity and competitiveness.
2. Innovation :
Entrepreneurship is seen as a primary engine of innovation. Entrepreneurs are
often at the forefront of developing new ideas, technologies, and solutions to
address market needs or inefficiencies. The Economist emphasizes the
importance of fostering an environment conducive to innovation through policies
that support research and development, intellectual property protection, and risk-
taking.
3. Risk taking :
Entrepreneurship inherently involves risk-taking, as individuals or teams venture
into uncharted territory with uncertain outcomes. The Economist values the role
of risk-takers in driving progress and pushing the boundaries of what's possible.
However, it also recognizes the need for a supportive ecosystem that mitigates
some of the risks associated with entrepreneurship, such as access to financing
and regulatory frameworks that encourage experimentation.
4. Job Creation :
Entrepreneurial activity often leads to job creation, particularly in small and
medium-sized enterprises (SMEs), which are significant drivers of employment
in many economies. The Economist acknowledges the role of entrepreneurship in
reducing unemployment and stimulating economic activity, especially during
periods of economic downturn or structural transformation.
5. Policy Implications :
The Economist often advocates for policies that promote entrepreneurship and
remove barriers to entry for aspiring entrepreneurs. This includes measures such
as tax incentives for small businesses, streamlined regulatory procedures,
investment in education and skills development, and access to capital for startups.
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 Classical approach to entrepreneurship :
Although classical sociologists such as Max Weber and Karl Marx did not
extensively theorize the act of entrepreneurship, their works do possess mention
how the entrepreneurial activity was a driving force of social change in earlier
times.
1. Max Weber’s theory of social change :
 Max Weber was a German sociologist in the early 1900s. He attributed the
spread of entrepreneurial activity to the ethical attitudes of a particular
community. Moreover, this theory also explains how religion is intertwined
with the act of entrepreneurship.
 According to Weber, an individual’s interest in certain economic activities is
determined by the ethical values that they have been taught by their
community. Thus, religion plays an extremely important role in deciding
economic behaviour. Based on a large-scale data set of nearly ninety thousand
workers in India, research found that some religions, such as Islam and
Christianity, are found to be conducive to entrepreneurship, while others, such
as Hinduism, inhibit entrepreneurship (Tamvada et al., 2007). In his book The
Protestant Ethic and the Spirit of Capitalism, Weber argues that religions such
as Hinduism and Buddhism do not put great focus on materialism and tend to
shun capitalist products, thus inhibiting the desire for entrepreneurial activity.
This was one of the main reasons why the Protestant work ethic led to the
birth of capitalism in Northern Europe.
 Weber’s theory can be backed by various examples. When the Japanese
economy boomed in the 1980s, many people attributed its success to the
Japanese religion of Shintoism (Gurtler, 2018). Another interesting fact is that
England, which is the oldest capitalistic region in the world and one that went
on to colonize various different countries, is largely Protestant. The economic
rise of the United States of America was also driven by Protestant immigrants
from Europe (Gurtler, 2018). Thus, there is some evidence for the fact that
religion might play an important role in influencing economic behaviour.
2. Karl Marx’s theory of capitalism :
Marx classified the entrepreneur as the elite capitalist who appropriates profit and
exploits labour through economic mechanisms. According to Marx, the
entrepreneur sets up a production process and aims to maximization of profits,
however, he is not deserving of the surplus value that is generated from the
process, since the source entity of that profit is the wage worker who has been
exploited in the equation (Tsaliki, 2006). Marx thus inadvertently vilifies all
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those who claim to be entrepreneurs. Marx’s critique of the capitalist system is
very evident in his works and his theory explains the driving force behind a large
number of up-and-coming entrepreneurial organizations across the globe.

 Modern approach to entrepreneurship :

The modern approach to entrepreneurship is classified by the merging of
sociological context into other largely influential fields such as business economy,
psychological research and cultural studies. These theories have largely been
developed by acclaimed individuals who view entrepreneurship as an act that is
impacted by various factors. The theories that will be discussed here are
Hoselitz’s Theory, Mccleland’s Theory, Cochran’s Theory and Schumpeter’s
theory.
1. Hoselitz’s theory of leadership :
Hoselitz defined entrepreneurship as majorly an act of leadership and control. He
disagrees with the traditional Marxist approach, asserting that maximization of
profits comes secondary in the act of entrepreneurship while the primary factor
is leadership style and management technique. According to Hoselitz, most
entrepreneurs hail from a particular social class. This class is usually endowed
with generational wealth and power which further leads to training and
development of leadership skills in individuals belonging to that particular class.
Therefore, according to Hoselitz, socio-cultural factors such as class and
community play an important role in determining the extent to which an
individual will engage in entrepreneurial activity.

 Hoselitz also explained that marginal groups of individuals can thrive in

ambiguous situations, thus making them fit to be entrepreneurs. This is the
reason why Chinese in South Africa, Indians in the Middle East, etc are talent
pools of entrepreneurs

2. Mccleland’ needs of achievement theory :

 This theory takes into account psychological factors that impact economic
behaviour. According to David Mccleland, entrepreneurial activity is
characterized by innate needs that eventually determine the extent to which an
individual will engage in entrepreneurship. These needs are the need for
achievement, the need for power and the need for affiliation. Individuals who
are highly motivated and have a need for achieving challenging goals are
usually more interested in entrepreneurship tasks as compared to those who
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have a low or moderate need for motivation. Individuals who wish to exercise
control over others and acquire power are also more likely to be entrepreneurs.
People who desire to socially affiliate with others and gain social acceptance
and acknowledgement are also likely to become entrepreneurs in the future.

 Steve Jobs, CEO of Apple Inc., was known to have a high need for
achievement, so much so that he always chased perfection (Murphy Jr, 2019).
Other successful entrepreneurs like Falguni Nayak and Jeff Bezos frequently
stress on the importance of high drive and passion in entrepreneurial setups.

3. Cochran’s cultural theory of entrepreneurship :

Thomas Cochran emphasized the significance of cultural values in both the
attitudes of entrepreneurs as well as investors. According to him, entrepreneurs
are influenced by how their culture views certain factors of their occupation, such
as risk-taking attitudes and difficulty level of career development. An example
is India’s Parsi community, which is certainly small in number, yet possesses
immense contributions to the country’s business and entrepreneurial activities
(Times Now, 2020).

Some cultures value innovation and entrepreneurship, while others discourage it.
The consensus is that individualistic cultures such as those that exist in the global
west, put emphasis on individual achievements and autonomy while collectivist
cultures discourage it. This leads to more entrepreneurial activity in the
American and European areas.

4. Schumpeter;s theory of innovation :

In 1991, Schumpeter attributed the entrepreneurial activity to creativity and
innovation, largely asserting that reformation of all processes related to goods
and services is the only driving factor of entrepreneurship. Thus, according to
him, the introduction of new goods, new methods of production, creative
acquisitions, new markets and the new organization will all eventually lead to a
significant increase in entrepreneurial activity.

This theory essentially lays the foundation for how competition in a market
breeds innovation, which further leads to acts of entrepreneurship. This can be
backed up by various examples. The rise of Reliance Jio started as an act of
innovation, where high speed internet was provided to customers for dangerously
low prices for the first time in the country. This led to competition among other
telecom providers, leading to new and creative offers regarding data consumption
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in India. Reliance Jio is now the fastest growing mobile network in the world, all
because it challenged its competitors in various ways.

 Entrepreneurial behaviour :
The behaviour of an entrepreneur is dependent largely on his psychology and
motives which are the main determinants of be. haviour. These motives are
based on needs for survival and growth. The movements of an entrepreneur are
affected by the psychological background. Many theorists Akouri,
McClelland, Javillionar & Winter have given views related to
psychological factors as follows :

1. Achievement Motive :
Achievement motive is most important for an entrepreneur. It is this motive
which motivates people to do something different and extraordinary so that one
may feel that he has achieved or created something which others are not able
to do..lt motivates an entrepreneur to take an initiative for innovation. It also
makes one personally responsible for his actions and performances.

2. Desire to Influence Others :

Strong desire of the need for power, helps a person to become a successful
institution builder, Thus, it is necessary that an entrepreneur must have the ability
of self-management with a strong will power. Thus, they possess a strong desire
towards the need of influencing others.

3. Innovation :
This is an important psychological factor Of entrepreneurs. Generally, an
entrepreneur does those acts which are not taken up by other persons. They
transform the creative ideas into useful applications. According to Schumpeter, a
person is an entrepreneur only when he is an innovator, engaging himself in an
innovative behaviour. Thus, innovative behaviour is an entrepreneurial behaviour.

4. Hope for Success :

Entrepreneurs are always hopeful for future success. They work for being
successful which enlightens them with the confidence, positive attitude and high
energy level. Hope for success makes their behaviour strong and stable.
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5. Calculated Risk Taking :
Entrepreneur is a person who is always in a position to accept challenging job,
He works on those projects only, which are risky but have a probability of
success through their efforts. He does not rely on those ventures, which totally
depends on chance. In other words, the entrepreneur believes in calculated risk-
taking.

6. Self-Efficacy :
An entrepreneur has a drive for self-efficacy. They want to become the problem
solver, instead of problem avoiders. They do not want to copy others but they
want others to copy them. Further they feel proud of their achievements and live
in the present.

7. Self Confidence :
Entrepreneurs believe in themselves. They have confidence that they can outdo
anyone in their field. They tend not to accept the status quo, believing instead
that they can change the facts. Often, they insist the odds are better than the
facts would justify. They have winning habits. On the basis of self-confidence,
they become overachievers.

 Entrepreneurship and management :

1. Entrepreneurship :
 Entrepreneurship refers to the process of creating and developing a new
business venture or innovating within an existing business to introduce new
products, services, or processes. It involves identifying opportunities, taking
risks, and organizing resources to turn ideas into profitable ventures.
 The focus of entrepreneurship is on innovation, creativity, and risk-taking.
Entrepreneurs often identify market gaps or unmet needs and develop
innovative solutions to address them.
 Entrepreneurs are typically the founders or co-founders of businesses. They
take on the primary responsibility for initiating and driving the growth of the
business, often taking on significant risks in pursuit of their vision.
 Entrepreneurship requires a mindset characterized by creativity, resilience,
adaptability, and a willingness to take calculated risks. Entrepreneurs must be
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comfortable with uncertainty and ambiguity as they navigate the challenges of
starting and growing a business.
 Entrepreneurs often have a significant ownership stake in the businesses they
create or lead. They may have invested their own capital or secured funding
from investors to finance the venture.
2. Management :
 Management involves organizing, coordinating, and overseeing the activities
and resources of an organization to achieve its goals effectively and efficiently.
Managers are responsible for planning, organizing, leading, and controlling
the various functions within an organization to ensure its smooth operation
and success.
 Management focuses on optimizing resources, maintaining stability, and
achieving organizational objectives. Managers are tasked with coordinating
and directing the efforts of employees to ensure that tasks are completed
efficiently and effectively.
 Managers are individuals responsible for overseeing specific functions or
departments within an organization. They are tasked with implementing
strategies, directing employees, and making decisions that align with the
organization's goals and objectives.
 Management requires a mindset focused on organization, efficiency, problem-
solving, and strategic thinking. Managers must be able to analyze situations,
make decisions, and lead teams effectively to achieve desired outcomes.
 Managers typically do not have direct ownership of the organizations they
work for. They are employees of the company and are compensated through
salaries, bonuses, or other incentives.

 While entrepreneurship and management are distinct concepts, they are

closely interrelated in the context of running a successful business:
1. Entrepreneurs as a managers :
In the early stages of a venture, entrepreneurs often wear multiple hats and take
on managerial roles themselves. They may be responsible for tasks such as
strategic planning, financial management, marketing, and human resources.
2. Management skills for entrepreneurs :
As ventures grow, entrepreneurs need to develop strong management skills to
effectively lead their teams, delegate tasks, and ensure that operations run
smoothly. This may involve hiring managers or developing existing team
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members into managerial roles.
3. Entrepreneurial mindset in management :
Even in established organizations, fostering an entrepreneurial mindset among
managers can lead to innovation, adaptation to change, and a willingness to take
calculated risks. This can be vital for staying competitive in dynamic business
environments.
4. Integration of entrepreneurship and management :
Successful businesses strike a balance between entrepreneurship and
management. While entrepreneurship drives innovation and growth, effective
management ensures that resources are utilized efficiently, risks are mitigated,
and organizational goals are achieved.

 The process of entrepreneurship :

The entrepreneurial process involves finding and analyzing opportunities and
bringing resources together to achieve them.
1. Idea Generation :
This is the first step in the entrepreneurial process. An idea can be a problem or
solution. Here, the entrepreneur identified an idea worth pursuing. The
entrepreneur will conduct the feasibility study and take input from other
stakeholders.

2. Opportunity Analysis :
After identifying the opportunity, the entrepreneur will evaluate it. They will see
if the opportunity provides any value to the business or the consumer, whether it
will be sustainable in the long term if the profit is healthy, the market
competition, the risks associated with the opportunity, and the entrepreneur’s
product or service will be different or better than the competition.

3. Developing Plan :

After analyzing the opportunity, the entrepreneur develops a plan to realize it and
launch the company. This is a crucial step in the entrepreneurial process. The
plan will have a business strategy and operating structures, including steps for the
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formation of the company. It will provide details on business objectives, goals,
mission statement, and details of products or services.

4. Collecting Resources :

 Launching a new business requires resources, including financing, human

labor, materials, and more. If the entrepreneur is self-sufficient, they can self-
finance. However, they may go to investors or financial institutions to get the
funds.

 These days, entrepreneurs have a new option called crowdfunding. Using

these platforms, entrepreneurs raise awareness about their business and ask
for support.

 If the idea resonates with the audience, businesses can quickly raise a
significant amount.

5. Forming Organization :

Once the entrepreneur secures the funds and resources, they will launch the
company and form a legal entity. The structure of the organization will depend
on its requirements.

The entrepreneur will name the company and file the papers with the government
to form LLC, WLL or PLC, Corporation, or a Non-profit.

6. Growing Business :
After launching the company, it will start producing products or offering services.
The entrepreneur will ensure that the business is running smoothly and growing.
Now the operating plan will be executed. The entrepreneur will have regular
status updates and compare the actual progress with the planned progress. If
things are not going as planned, they will take corrective actions to bring the
progress on track.

 Entrepreneurial management :

 Entrepreneurial management comprises setting particular goals for the new

venture. Setting particular goals may help the entrepreneur control their
revolution and to accomplish a certain result. Entrepreneurial management is
the theory of utilizing the imaginative and creative abilities, skills and
proficiencies to adeptly open and manage a start-up company. It is a means of
 20
resolving a group problem through a distinctive and money-making business
solution.
 An entrepreneur is every time seen as an investigator. He/she thinks about a
big problem and discovers a creative solution to it. Efficiently, as it is known
that people pay back equally if the business plan gives a solution to their
critical issues, entrepreneurial management is highly productive.
 For example, the app innovator may set up a goal of 12,000 downloads by the
end of the year. The entrepreneur bid then engrossed on marketing, alternately
developing additional features for the app.

 Importance of Entrepreneur Management Plan :

A management plan for entrepreneurs is a deed that lists the targets and goals of
the management. It includes details on how the business will particularly achieve
its target, including sales, marketing and product expansion.

1. Sets an Idea in Place When Starting a New Business :

While starting a new business, you have to come up with a business idea, you
also need to stiffen the identity of the business, like what services or products
you will sell, where you will do business, and who will work for your company.
A management plan can help provide instruction in this process, which can also
help keep away from mistakes along the way.

2. To Do Necessary Research :

You might generate a business plan ahead of time when deciding to open a
business. You might also create a business plan if you intend to take your
existing business in a new direction. By writing out the features and finances of
the new plan, you can control a shift in money-making. This includes defining
your market, identifying who your customers are and how you will reach them.

3. Assess Competitors and Find Your Audience :

Another part of creating a management plan is investigating the current

companies in the production in which you want to work. By specifying
competitors and where they are not generally reaching customers, you can better
forecast how you will reach them. It can also help you choose your target viewers.
 21
4. Sets Objectives for Employees and Managers :

Setting and measuring objectives will certify that employees and managers are
clear on their duties. This can also help you choose the right employees for your
business by setting clear prospects and objectives.

If you change or update your targets, a management plan can help share these
new objectives, providing formation and responsibility.

5. Sets Goals for You as an Entrepreneur :

Setting clear goals is also obligatory for you as an entrepreneur. You can use a
management plan to list a particular target that you want to achieve, together
with target dates. This can provide you with a guide to construct your daily
commitment, while also providing you with responsibility as an entrepreneur.

6. Regulates When New Employees Are Needed :

As you expand your business and increase your income, you will need extra
employees to help with the daily tasks. But, engaging people before you're ready
to enlarge can decrease your profits. A business plan can help you assess the
right time to bring on new staff. It can also help with setting clear duties and
assumptions for each position. You can also use your plan to regulate what skills
to look for when hiring.

7. Help You in Making Important Business Decisions :

Decision-making is a major task as an entrepreneur. Some decisions, like when

to hire charge on a new space or expand the business, are not always easy to
make. With a clear business plan in place, you can control the certain times or
goals you must meet to make these major decisions.

 Key Elements of Entrepreneurial Management :

There are 5 Key Elements of Entrepreneurial Management They are as follows −

1. Innovation :

Every successful entrepreneur must be innovative in some way or the other and
he should be allowed to see the demand for a particular good or service in the
market because here is what makes them distinct from other entrepreneurs and
their progress is even more money-making. When an entrepreneur is innovative,
 22
he sees new opportunities approaching in distinct places where one cannot even
assume.

For example, Bhavish Agarwal and Ankit Bhati, the founders of OLA Cabs saw
the increasing demand for appropriate and inexpensive public transports in India
which ensured they turned that into imagination and went on to initiate OLA
Cabs. Today’s valuation of OLA is US$6.5 billion with quite 1.5 million rides on
a commonplace. So always be innovative and inventive and see new
opportunities which others cannot.

2. Organization :

The organization is one of the key factors of successful entrepreneurship. In the

absence of organization, everything will become disorganized and inconvenient
which further will cause losses, reducing goodwill, aggrieved customers, and
tension to the staff due to which the workers may leave the company.

3. Decision Making :

Entrepreneurs must observe every decision very carefully because they make a
lot of decisions every day and are generally responsible for being at risk and
should learn from their past mistakes. Decision-making could be a skill that
normally comes easily to entrepreneurs who are high-risk takers in the business
world.

4. Risk Bearer :

An entrepreneur needs to appreciate that risk can’t be totally gotten rid of from a
business, so he should be ready for its outcome as well. It can be that the
consumers won’t seem to be pleased with the commodities or services provided
or even the participant can provide the similar thing with better attributes and
better price or there might be changes in the government policies.

5. Vision :

Every successful entrepreneur has this one plan in his youth that he was anxious
about, but with time that fire fades away. Good entrepreneurs have that fire and
vision in them because without vision and willingness they cannot grow.
Unluckily, young entrepreneurs have these great sights which hardly ever change
into an idea.
 23
 Steps Involved in Successful Entrepreneurial Management :

To be prosperous indefinable, business practices frequently require

entrepreneurship and innovation.

Following are some of the steps involved in successful Entrepreneurial

Management −

1. Build A Great Team :

People are organized by nature. We just do better in groups. That initial strength
holds true in the business world too. There is power in numbers. Look for skilled
people. Find people who share your sight.

2. Anticipate and Plan for Growth :

A Bonsai Tree must grow for three to five years before it can even begin to be
trained. Those who grow the trees don’t wait to plan, even so. They develop a
strategy to establish the essential growth and features of the trees. A business is
very similar. If you don’t get ahead of your growth, you can’t grow profitably or
fruitfully.

3. Set Expectations :

In every aspect of the business, expectations need to be set. You must start by
positioning your own expectations and controlling what you are inclined to
describe as success. You’re also going to need to set expectations for the team.
Recognizing benchmarks and observing them can lift the confidence of your
team considerably.

4. Invest Appropriately :

Spending money is one of the least beloved activities for entrepreneurs and
business owners (compared to making money, which is one of the most beloved).
But investing is distinct from spending. Investing suggests a return, and returns
can be appraised. So, try not to spend, but never stop investing. Invest in
instructing, exchanging, identifying, internal marketing, team evolution and
culture.
 24
 Entrepreneurial Business :
 Entrepreneurship isn’t just running a business; rather, it is a name given to
anything done to change the world. An entrepreneur is a world-changer, an
innovator, and an opportunist.
 Entrepreneurship is launching, developing, and running a business venture
along with its financial risk. Such business ventures are valuable for economic
development as it allows a country to expand its businesses and resources in
the global market.
 However, most people perceive entrepreneurship as one-dimensional, and
they do not think about its various types. Today, we have decided to clear this
confusion for you and explain different types of entrepreneurial businesses in
hopes that you can start a profitable business venture.

 Types Of Entrepreneurial Businesses :

1. Small Business Entrepreneurship :
 It is common to see that more small businesses are running than more
prominent companies in today’s growing world. We can even roughly guess
that about 75 % of companies are small businesses. Such companies hire a
large workforce, and these businesses also make enough profits to make a
living and support their families.
 However, these types of businesses fail to capture attention from fundraising
organizations, and mostly these small businesses have to ask for capital from
their friends and families if needed.
 Examples of Small Businesses:
 Hairdressers
 Grocery Stores

2. Scalable Startup Entrepreneurship :

 Entrepreneurs set up their own companies in this example of an
entrepreneurship business, believing that their visions will positively change
the world. Startups usually get funding from venture capitalists, and they
prefer to hire the best employees.
 In short, such entrepreneurs focus on developing a reputable business model
that can grow. When they succeed in this first step, they search for venture
capitalists to help them start and grow their idea. However, these businesses
usually make a small proportion due to risk capital and outsize returns.
 Typically you will find that the most scalable startup entrepreneurship is in
technology industrial ventures.
 25
 Examples of Scalable Startups:
 Facebook
 Instagram

3. Large Company Entrepreneurship :

 These entrepreneurial businesses focus on sustaining innovations, offering
new products that are a variety of their core products. These entrepreneurial
businesses must continuously research and develop new products to meet
challenging customer demands and technological advancements. Often this is
done by partnering with innovative companies or even purchasing those
companies as well.
 Most large company entrepreneurship is a result of acquisitions and mergers.
A quick search of the example companies listed below will show you what I
mean.
 Examples of Large Company Entrepreneurship:
 Google
 Microsoft

4. Social Entrepreneurship :
 These entrepreneurial businesses focus on creating those products which
provide services to people and solve their social needs and problems. Social
entrepreneurs want to change the world and make it a better place rather than
just accumulating profits and acquiring wealth. Such entrepreneurial
businesses can be non-profit, profit, or hybrid.
 Their success is the widespread use of ethical practices, including impact
investing, conscious consumerism, and corporate social responsibilities.
 Examples of Social Entrepreneurship:
 Microfinance Institutions
 Educational Programs

 entrepreneurship In service institution :

Entrepreneurship in service institutions refers to the application of
entrepreneurial principles and practices within businesses that primarily offer
services rather than tangible products.
 Service institutions need to innovate to stay competitive. This could involve
developing new service offerings, improving existing ones, or finding
innovative ways to deliver services more efficiently.
 Successful service entrepreneurship requires a deep understanding of
customers' needs and preferences. Entrepreneurs in service institutions must
 26
constantly strive to deliver exceptional customer experiences to build loyalty
and attract new clients.
 Developing a clear value proposition is crucial for service institutions.
Entrepreneurs need to articulate what sets their services apart from
competitors and why customers should choose them.
 Efficient operations are essential for profitability in service businesses.
Entrepreneurs must optimize processes to deliver high-quality services in a
cost-effective manner.
 Effective marketing and branding are essential for service institutions to
attract and retain customers. Entrepreneurs need to develop strategies to
promote their services and build a strong brand reputation.
 Technology plays a crucial role in modern service institutions, enabling them
to improve efficiency, enhance the customer experience, and develop
innovative service offerings. Entrepreneurial leaders must stay abreast of
technological advancements and integrate relevant technologies into their
operations.
 Service institutions operate in dynamic environments where market trends,
customer preferences, and regulatory requirements can change rapidly.
Entrepreneurial leaders must be adaptable and responsive to these changes to
remain competitive.

 The new venture :

Starting a new venture, whether it's a service institution or any other type of
business, requires careful planning and execution. Here are the key steps to
consider when launching a new venture:
1. Idea generation :
Start by generating ideas for your new venture. Consider your interests, skills,
and market opportunities. Look for pain points or gaps in the market that your
venture could address.
2. Market research :
Conduct thorough market research to validate your business idea. Identify your
target market, understand their needs and preferences, and analyze your
competitors. Gather data to assess the demand for your product or service and to
identify potential challenges and opportunities.
 27
3. Business planning :
Develop a comprehensive business plan that outlines your venture's objectives,
target market, value proposition, revenue model, marketing strategy, operational
plan, and financial projections. Your business plan will serve as a road map for
your venture and will be essential for securing funding and guiding your
operations.
4. Funding :
Determine how you will finance your new venture. You may self-fund your
business, seek loans from banks or other financial institutions, or attract
investment from venture capitalists, angel investors, or crowdfunding platforms.
Consider the amount of funding you need and the most suitable sources for your
venture.
5. Building a team :
Assemble a team of skilled and motivated individuals who can help you launch
and grow your new venture. Look for people with complementary skills and
experiences who share your vision and passion for the business.
6. Product or service development :
Develop your product or service, ensuring that it meets the needs and preferences
of your target market. Test your product or service with potential customers to
gather feedback and make improvements as needed.
7. Continues learning and improvement :
Stay agile and open to learning throughout the process of launching and growing
your new venture. Be willing to adapt your strategies and make changes based on
new information and market dynamics.

 Innovation and Entrepreneurship :

 The concepts of innovation and entrepreneurship are undeniably interrelated:

 Innovation is the specific tool of entrepreneurs, the means by which they

exploit change as an opportunity for a different business or a different service.
It is capable of being presented as a discipline, capable of being learned,
capable of being practiced. Entrepreneurs need to search purposefully for the
 28
sources of innovation, the changes and their symptoms that indicate
opportunities for successful innovation. And they need to know and to apply
the principles of successful innovation.

 Drucker (1985) argued that innovation should be viewed as an economic or

social phenomenon rather than a technological term. Innovation is not about
making new inventions, but rather about recognizing how to take advantage
of opportunities and changes: “Systematic innovation therefore consists in the
purposeful and organized search for changes, and in the systematic analysis of
the opportunities such changes might offer for economic or social innovation”
 Types of innovation :
1. Pen and Distributed Innovation :
Led by Professor Ammon Salter. The purpose of this theme is to develop new
knowledge and inform
practice about open and distributed innovation. Developing and commercializing
an innovation requires
the coordination and integration of knowledge from many different sources and
networks. Increasingly,
innovators rely on external knowledge to complement and enrich their own
expertise.
2. Business Model Innovation :
Led by Dr Markus Perkmann, the research explores various questions regarding
such business model
innovation. What enables organizations to devise new business models and what
are the sources, and
consequences, of business model innovation? Current work focuses specifically
on the low-carbon energy
sector, which provides an ideal setting to investigate the ways
organizations‘ experiment with new ways
of deploying energy technologies, as well as generating and consuming energy.
3. Systems, Services and Design :
Led by Dr Andrew Davies, this Theme examines the design, integration and
operation of complex
systems, particularly in the infrastructure industries (e.g. energy, water, roads and
urban environments).
 29
Increasingly, organizations‘ are providing systems and services as
'smart'integrated solutions to improve long-term operational performance and
sustainability of outcomes.
4. Diffusion of Innovation :
Led by Professor Erkko Autio, Diffusion of Innovation conducts research on
innovation and technology
commercialization strategies in platform and ecosystem contexts. The Theme
also undertakes research on
determinants of new venture growth in technology-intensive business sectors
5. Strategic Entrepreneurship :
Led by Professor Bart Clarysse The content of this theme is in development.
6. Inclusive Innovation :

Led by Professor Gerry George. The content of this theme is in development.

 Importance of innovation :

effectiveness, novelty, and automation are some of the main characteristics of

innovation. These unique characteristics help in evoking several benefits for
businesses, which we have enlisted below; check out:

1. Solves complex business problems :

 Knowing the answer to what product management life cycle is cannot help
managers or executives solve complex business problems. Moreover, the
uncertainties and complex business situations fueled by the COVID-19
pandemic can make things worse for them.
 Therefore, to judiciously and effectively solve complex business problems, it
is imperative to use innovative ideas. Leaders must use external (online data,
literary works, etc.) and internal sources to develop innovative ideas to solve
complex business problems. At first, it might seem like a difficult task, but it
is considered to steer your business in the right direction.
 30
2. Increases productivity :
One of the benefits of innovation in business is the increase in productivity of
individuals, processes, and business models, among others. Simply put,

innovation presents new ideas to business leaders to increase efficiency with

minimum resources. Furthermore, reducing business and other risks.

3. Brings uniqueness and novelty to business process :

Business processes have been the same for more than a few decades. However,
with the introduction of innovation in business, there has been a disruption that is
believed to be caused due to novelty, creativity, and uniqueness. That is also
helping in making the business stand out from the rest and vicariously
contributing to increased revenue and market share.

4. Gives a competitive advantage :

Thinking innovatively or creatively can help managers and executives develop

unique marketing campaigns to help them stand out. Also, formulate promotional
and advertising strategies that will help in increasing market share and revenue,
giving the company a competitive advantage.

5. Reduces cost and increases revenue :

As mentioned above, one of the biggest advantages of innovation is that it helps

increase revenue and market shares. Subsequently, leading to a reduction in cost.
Meanwhile, innovation has many advantages in business, but the points
mentioned above will help business leaders, managers, and executives
understand the importance of using innovative ideas actively. If not, then in the
next part, we will discuss how innovation helps achieve business success.

 Sources of innovation :
Peter Drucker in his book “Innovation and Entrepreneurship” (1986) identified
seven sources of innovation.
1. The Unexpected :

An unexpected success, an unexpected failure or an unexpected outside event can

create opportunity. An example is the Post It Note. A product seen on almost
every every desk. Do you use one? The Post It Note arose because glue didn’t
work. It was invented by Spencer Silver who was trying to develop a super
 31
strong adhesive but instead created a low tack one. Although it was Silver’s
invention he could not find a way to use it and so 3 M commercialised it

2. The Incongruity :

A discrepancy between reality and what everyone assumes it to be or between

what is and what ought to be, can create an innovative opportunity. Think Digital
music. Before the Ipod was created digital music was illegally downloaded. A
combination of a court case, and people’s belief in equity opened an opportunity
which Apple filled. Apple realised society demanded fair play and created
something that filled the gap viz., the Ipod.

3. Innovation based on process need :

This is where much innovation and value creation occurs yet is often overlooked.
Yellow Tail Wines is inexpensive wine product sold in the US and created in
Australia. Its low price point required a new process as the normal system was
too expensive. To keep costs low they did the almost unforgivable and put red
and white wines in the same shaped bottle. Wine traditionalists were
shocked. But it fitted strategy.

4. Industry or market structure :

This refers to an opportunity for an innovation when the underlying foundation

of the industry or market shifts. For example, financial planners used to be paid
through commission resulting in some products being recommended which
provided highest benefit to the planner not necessarily to the client. The result
was unhappy clients. The combination of market forces and government
intervention has meant that payment for financial planning advice has moved to
fee-for-service.

5. Changes in perception, mood and meaning :

Innovative opportunities can develop when a society's general assumptions,

attitudes and beliefs change. In Australia water is clean and safe to drink yet in
2013 bottled water sales were $621 million and represented 5% of the total
beverage market. Bottled water is tapping into the desire for improved health. It
lacks added chemicals.
 32
6. Demographics :

Changes in the population's size, age structure, composition, employment, level

of education and income are opportunities too. Aging population and reduced
family support have created robots for the elderly. Robots now assist in many
elements of life, from helping in every day tasks to being a companion.

7. New Knowledge :

Advances in scientific and non-scientific knowledge can create new products and
new markets. Think biotechnology. The identification of the human genome has
reshaped medical research and indeed life. It is now possible to have a personal
genome sequence mapped to obtain insights into your life: From ancestry
through to genetic disorders.

 The Innovation process :

 An innovation process is a set of strategic steps — marked by taking creative and

fresh approaches — designed to achieve a set of organizational goals within a
specific timeline. It’s a deliberate intervention to try out new ideas in solving
concrete business problems.
 Building any type of organizational culture is complex and dynamic and there
isn’t any silver bullet. You’ll need to adapt interventions based on the problems
you wish to solve and the resources that you have. Consider these steps as a
guide to jump start your innovation journey.

1. Define innovation :

For businesses new to a serious pivot towards becoming more innovative, this
process will seem and feel ambiguous. If not introduced properly, it’ll come across
as if company leadership is adopting a mere jargon or slogan. It’s vital to
communicate that you’ll be embarking on a strategic process to take on creative,
bold, and fresh ideas with strong potential to deliver meaningful results to the firm.

2. Define the goals :

Innovation processes often do not produce positive results when they are not aligned
with business goals and priorities. While anyone might engage in an innovative
undertaking merely for the sake of innovation, businesses and organizations
naturally must prioritize resources and direct them to real and pressing problems.
 33
3. Assemble your team :

When designing and implementing an innovation initiative, it’s critical to assemble a

team that’s committed to new, creative, and innovative approaches across all levels,
from the most senior executives to the specialists. Because an innovation process is
inherently in the business of trying out fresh and out-of-the box ideas, company
leaders have to exercise judgment on deploying individuals who have been working
on the same problem for quite some time.

4. Secure the budget :

What’s the use of initiating an innovation program if your business won’t fund its
most promising ideas? To get it off the ground, you need to prove to your staff that
you’re serious in trying out the creativity you’re asking from them. Do this by
soliciting inputs on how to reallocate the budget when beginning an innovation
process.

To be fair, the right ideas might not be there yet in the early stages. Have funding
necessary to put structures in place such as crafting an innovation strategy, setting up
collaboration tools, organizing workshops, and ups killing team members. This also
includes processes and initial resources to analyze and test ideas. When the right
idea comes, then the team can produce a detailed financial proposal that you can
more easily evaluate to trigger the appropriate funding for implementation.

5. Select collaboration tools :

To set up innovation teams for success, organizational leaders must create an

environment of collaboration, communication, and trust. This could come in the
form of dedicated time and physical spaces that enable experimentation and
exchange of ideas. To begin with (and at the very least), companies must provide
them with the proper collaboration tools to get the innovation process going.

6. Don not be afraid to take risks :

High level organizational leaders, especially shareholders, board members, the CEO,
and c-suite executives must recognize that not all seemingly innovative ideas are
viable or will be successful. Because some of them may feel that way in the
beginning, leaders mustn’t be naive that all outputs of their innovative processes will
be successful.
 34
7. Evaluate and improve :

While the innovation process is marked by experimentation of new approaches, it’s

still helpful to use metrics and benchmarks. Don’t be averse to setting KPIs or
looking at competitors for benchmarks while recognizing that you may uncover
other forms of value that you may not account for in the beginning. Setting targets
and indicators helps you evaluate whether your innovation project can be viable for
the firm.

 Peter Drucker view on entrepreneurship :

Peter Drucker, often considered the father of modern management theory, had
several insightful views on entrepreneurship. Here are some key points :

1. Entrepreneurship as innovation :

Drucker viewed entrepreneurship as primarily about innovation. For him,

entrepreneurs are individuals who search for change, respond to it, and exploit
opportunities. This innovation could be in the form of new products, services,
processes, or business models.

2. Focus on costumers needs :

Drucker emphasized the importance of understanding and meeting customer

needs. He believed that successful entrepreneurs focus on creating value for
customers rather than just making money. By identifying and addressing unmet
needs, entrepreneurs can build sustainable businesses.

3. Management as a key skill :

Despite the popular image of entrepreneurs as risk-takers and visionaries,

Drucker stressed the importance of effective management in entrepreneurship.
He argued that entrepreneurship requires a combination of creativity, innovation,
and managerial skills to turn ideas into successful businesses.

4. Systematic approach :

Drucker advocated for a systematic approach to entrepreneurship. He believed

that successful entrepreneurs follow a disciplined process that involves
opportunity identification, market analysis, resource allocation, and execution.
This systematic approach increases the likelihood of success and reduces the risk
of failure.
 35
5. Social responsibility :

Drucker believed that entrepreneurs have a responsibility not only to their

shareholders but also to society at large. He emphasized the importance of ethical
behavior, environmental sustainability, and social impact in entrepreneurship.
Successful entrepreneurs, in his view, create value not only for themselves but
also for their communities.

 Peter Drucker’s management theory :

Peter Drucker’s management theory embodies many modern concepts,

including the following:

 Decentralization :

Rosenstein said Drucker was focused on decentralizing – or democratizing –

workplace management. He wanted businesses to empower their staff so all
employees would feel valued and know their contributions and voices
mattered. He believed in assigning tasks that inspire workers, rewarding front-
line workers with responsibility and accountability, and uniting supervisors
and their subordinates to achieve shared organizational goals.

 Knowledge work :

Knowledge workers, such as engineers and analysts, are white-collar

employees whose jobs require handling or using information. Drucker – who
foresaw the knowledge-based economy years before the rise of computing and
the internet – placed a high value on workers who solved problems and
thought creatively, according to Rosenstein. He wanted to foster a culture of
employees who could provide insights and ideas as well as labor.

 Workforce development:

Drucker felt strongly that managers should improve and develop themselves
and their team members, according to Rosenstein. Investing in employee
training is intrinsic to Drucker’s philosophy. For example, he believed
external development – via participation in industry trade groups and
conferences – is especially valuable.
 36
 Corporate social responsibility :

Rosenstein said Drucker was a holistic thinker. Instead of looking at

businesses as discrete entities, he saw them as components of a larger social
system. In that context, he argued that businesses should see themselves as
part of a community and make decisions in that regard – with equal respect
for their external and internal impact. Drucker even viewed profits through a
social lens: A company is responsible for being profitable, he argued, so it can
create jobs and wealth for society.

 Organizational culture :

Companies have always had cultures, be they positive or negative, helpful or

harmful. But Drucker was among the first to suggest that managers could –
and should – shape and change workplace culture. “The spirit of an
organization is created from the top,” he said in his book Management: Tasks,
Responsibilities, Practices. “If an organization is great in spirit, it is because
the spirit of its top people is great. If it decays, it does so because the top
rots … No one should ever be appointed to a senior position unless top
management is willing to have his or her character serve as a model for
subordinates.”

 Customer experience :

According to the Drucker Society of Austria, steward of Drucker’s philosophy

in his home country, Drucker insisted that businesses have only one real
purpose: to create customers. By viewing business operations and
opportunities through that lens – the customer, not the business, decides
what’s important – he established a predicate for customer-focused companies
like Apple, Zappos and countless others that prioritize a great customer
experience.

 entrepreneurial profile :

Every entrepreneur is unique. Despite that, they have several shared qualities. An
entrepreneur is both a leader and a great motivator. It is such qualities that make
up an entrepreneurial profile.

1. Responsibility :

Every entrepreneur craves a personal responsibility for their start-up. The desire
to control resources and utilize them to achieve their goal exemplifies this quality.
 37
Responsibility for entrepreneurs and their entrepreneurial profile means the
following.

 Initiating and taking control over business initiatives

 Job creation
 Identifying and mitigating business risks, among others

2. Commitment :

Apart from responsibility, commitment to entrepreneurs is another quality of

entrepreneurial profile and is on another level. They are not only highly
motivated to achieve their goals but also committed to the same goals. At the
beginning of every start-up, entrepreneurs face several obstacles. Nevertheless,
they overcome, bringing the business to success. While most people have ideas
and wish to do something important, entrepreneurs only realize such dreams.’

3. Creativity and novelty :

The marks of a successful entrepreneur are creativity and innovation.

Entrepreneurs often come up with new and productive ideas that turn into
successful start-ups. Besides that, they work hard to develop and market their
unique business models. Such creativity not only makes them great leaders but
also great motivators.

4. Flexibility :
The ability to adapt to the changing business environment is vital for every
entrepreneur. Customer needs and expectations keep changing. For that reason,
an entrepreneur ought to be willing to make changes. In 2020, several brick-and-
mortar businesses collapsed. A score of others suffered huge losses. Covid-19
was the genesis of this predicament. Consequently, some companies opted to
move online. As a result of that, they thrived and now survive the pandemic. The
pandemic shifted the focus of most customers. Most customers now prefer
shopping online. This is good news to entrepreneurs who read the environment
and switched sides.

5. Skilled organizers :

Entrepreneurs are among the few people able to build something from scratch.
This skill makes it possible for them to gather the right people. Also, they know
the right resources and tools required to accomplish the task. Therefore, they can
organize resources and achieve the set objectives. Besides that, they know the
 38
right strategies to use when executing their plan. One of the traits that make
them skilled organizers is conscientiousness. They have great impulse control
that allows them to be organized and structured in their approach to business.

6. Risk-Taking :

Taking risks is at the core of entrepreneurship. They don’t have the luxury of
procrastination. Some people are risk-takers, but that does not make them
entrepreneurs. For example, law enforcement officers take risks every day on
duty. Entrepreneurs take risks that eventually pay off. Several ventures exist
today because of the risks entrepreneurs took many years ago. For example, Jeff
Bezos, the CEO of Amazon, took a risk and started the giant online retailer.
Besides that, he has remained relentless even with stiff competition.

 Entrepreneurial traits :
Entrepreneurial traits are the typical characteristics, abilities and thought patterns
associated with successful entrepreneurs. While some entrepreneurs are born
with these traits, others can develop them. These include:

1. Being a good listener :

An entrepreneur is expected to manage a business and most professionals in this
position are responsible for its start-up as well. Typically, entrepreneurship
involves finding and building relationships with investors, overseeing employees
and monitoring operations. To perform these activities well, you need to be an
effective leader. Leadership is the ability to lead others. An effective leader
mobilizes people to achieve goals and is perceived as a leader by their followers.

2. Being optimist :
Optimism can be described as focusing on the positives and being emotionally
resilient to the negatives. An entrepreneur who organizes, manages and operates
a business is likely to face many setbacks over time. For example, as you start
your business, you will need to complete a lot of paperwork concerning licenses,
tax forms, business plans and bank accounts. In the process of getting these
documents ready, there could be many issues that check your progress, such as
delays in getting a license or structural issues in your business plan.Being
optimistic can help you to overcome these problems quickly instead of becoming
demotivated by them. Like the other important entrepreneurial traits, optimism is
a quality that you will need to develop and maintain in your career.
 39
3. Being confident :
Confidence is a subjective belief that you have what is needed for something.
Entrepreneurs ask banks for loans, hire workers, motivate teams and build
relationships with clients and suppliers, so it is important for an entrepreneur to
be confident in their ability to do all these things well.

Being confident can help your business. Key stakeholders are more likely to
respond favorably to your proposals if you project your confidence.

4. Being passionate :
Being passionate about building and running your business can make it easier to
put in the effort needed for a successful enterprise. If you need to boost your
professional passion, consider these tips:

 Try to think of your job as more than just a livelihood and cultivate a genuine
love for what you do. You can remind yourself of why you decided to start
your own business or think of the positive impacts that your business has on
yourself, your employees, your clients or your community.

 Start each business day by reminding yourself of all the things that you look
forward to doing such as closing a deal or hiring a new employee.

5. Being disciplined :
Being disciplined can help you to achieve success as an entrepreneur.
Entrepreneurs are expected to work independently, set their own goals and
overcome setbacks. To do these things well, being disciplined is essential. You
can use the following advice to become more disciplined:

 Train yourself to be a self-starter who initiates and completes tasks without

the need for oversight.

 Give yourself a small reward each time you meet a goal. This will motivate
you to reach your targets without getting distracted.

6. Being competitive :
Competitiveness is a key trait among successful entrepreneurs. With
globalization and virtualization, industries are growing more competitive. To
 40
maintain a lucrative business, it is essential to develop a competitive attitude.
Consider the following advice to develop your competitiveness:

 Keep track of what your competitors are doing with market research and
market-monitoring services, and ensure that you do not fall behind in terms of
development.

 Identify the business tactics that work for your competitors as well as the ones
that do not work, and use these tactics to improve your business.

 Factor influencing entrepreneurship :

Entrepreneurship, in fact, is a complex phenomenon influenced by the interplay of
many distinct factors

1. Economic Factors :

The economic environment exercises the most direct and immediate influence on
entrepreneurship. This is likely because people become entrepreneurs due to necessity
when there are no jobs. “In countries where the economy is poorer, or where
unemployment rates are high, citizens turn to starting their own small
businesses where they see opportunity,” Trilby Rajna of Approved Index said.
Economic factors impacting entrepreneurship include:
i. Capital :
Capital is one of the most important factors, yet one of the biggest barriers when
launching a new business. Entrepreneurs require capital to start risky ventures and also
require instant capital to scale up the business quickly if the idea is found to be
successful. There are however numerous ways to fund a new venture including bank
loans, crowdfunding, and bootstrapping.
ii. Labor :
The availability of labor impacts entrepreneurship. Nevertheless, the quality rather
than the quantity of labor influences the emergence and growth of entrepreneurship.
iii. Raw Material :
The necessity of raw materials consisting of natural resources hardly needs any
emphasis for establishing any industrial activity and the emergence of
entrepreneurship. The absence of raw materials adversely affects the entrepreneurial
development.
 41
2. Psychological Factors :

They say entrepreneurship is not for the faint of heart. But then for whom is it! What
does it take for an individual to become an entrepreneur? While there isn’t a single
“ideal” entrepreneurial personality, one thing remains constant: an entrepreneurial
spirit. This type of spirit entails many traits and characters that make 400 million
entrepreneurs out of 7 billion people worldwide.
i. Passion :
Starting up a new business is not an easy task to pull off and a consistent and constant
commitment to the idea and the long hours it will require to turn it to a success is
essential. Passion is the fuel of this commitment that motivates entrepreneurs to rise
early in the morning and put their blood, sweat, and tears into their business.
ii. Need for Achievemen :
Entrepreneurs are self-starters with a need to achieve. This achievement motivation
isn’t necessarily driven by the incentives of financial gain only but also by the
satisfaction gain. To add, entrepreneurs’ motivation extends to reach their employees
and partners to keep them on the same page and drive them to achieve as well.
iii. Resilience :
Resilience comes with the package of the entrepreneurial spirit to help entrepreneurs
stay determined in the face of any defeat they might encounter throughout the process.
Failure is then a mere lesson to learn from and continue instead of giving up.

3. Social Factors :

Social factors can go a long way in boosting entrepreneurship. In fact, it was the highly
helpful society that made the industrial revolution a glorious success in Europe. Such
factors strongly affect the entrepreneurial behavior, which contributes to
entrepreneurial growth. The main components of the social environment include:
i. Family Backgroun :
Family background including the size, type, and economic status can influence
entrepreneurs and; therefore, entrepreneurship. Nonetheless, the entrepreneurial spirit
does not necessarily run in the family. According to some sources, 51.9% of all
entrepreneurs were the first to launch a business in their family.(2) Furthermore, less
than 1% of all entrepreneurs come from extremely rich or extremely poor families.
 42
ii. Education :
Studies state that 95.1% of all entrepreneurs hold a bachelor degree, 47% of those have
advanced in their education and acquired masters, Ph.D. or the like.(2) This is a well
enough indicator of the importance of education to the development of
entrepreneurship.
iii. Social Networks :
Interacting with the surrounding society and forming a reliable network is essential.
Social networks facilitate access to information and influence the quality, quantity, and
speed of information reception thus help identify opportunities.

 Support system :
A robust support system is the cornerstone of success and well-being for any
founder or entrepreneur. The entrepreneurial journey is rife with challenges, and
having a network of support can provide invaluable resources, advice, and
emotional assistance. Let's explore the key components of a strong support
system for founders:
1. Mentors and Advisors :
Experienced mentors and advisors serve as guiding lights for founders, providing
valuable insights, industry knowledge, and guidance. They can help founders
navigate challenges, make informed decisions, and avoid common pitfalls

2. Peer Networks :

Connecting with fellow founders and entrepreneurs is a powerful catalyst for

growth. Consider the success story of the founders of Airbnb, Brian Chesky, Joe
Gebbia, and Nathan Blecharczyk. Their collaborative spirit and shared
experiences played a pivotal role in the rise of their global platform.
3. Investors and Funding Sources :
Investors not only provide financial backing but also strategic advice and
industry connections. The support of venture capitalists like Peter Thiel and Reid
Hoffman played a crucial role in the growth of PayPal and LinkedIn, respectively.
 43
4. Emotional Support :

The emotional demands of entrepreneurship cannot be overstated. Mark

Zuckerberg, for example, leaned on his close-knit circle of friends and family
during the early days of Facebook, finding solace and encouragement in their
unwavering belief in his vision. During the nascent stages of Facebook, Mark
Zuckerberg drew strength and support from his tight-knit circle of friends and
family. They formed a steadfast pillar of encouragement, providing invaluable
emotional sustenance during the challenges of building a burgeoning social
media empire.

5. Educational Resources :

Access to educational resources, such as workshops, seminars, and online

courses, empowers founders to refine their skills and stay updated with industry
trends.

6. Advisory Boards :

Establishing an advisory board with experienced individuals provides strategic

input and guidance. The strategic direction of Starbucks was significantly
influenced by the advisory board, ensuring the company's sustained growth and
success.

7. Business Coaches :

Personalized guidance and accountability from a business coach can be

transformative. Bill Gates, despite his remarkable success, has always valued the
insights and coaching he receives, recognizing the importance of a trusted
advisor. Bill Gates, despite his extraordinary success as a tech visionary and
philanthropist, has consistently upheld the significance of seeking insights and
coaching from trusted advisors.
 Team work and networking organization :
Teamwork and networking are essential aspects of entrepreneurship, contributing
significantly to the success and growth of a business. Here's how they play
crucial roles:

1. Team work :
 In a team, members bring diverse skills and expertise to the table, enabling
the business to tackle various challenges effectively.
 44
 Different perspectives foster creative problem-solving approaches, leading to
innovative solutions.

 Teams allow for the efficient allocation of resources, including time, money,
and manpower, maximizing productivity.

 By sharing responsibilities and tasks, teams can distribute risks associated

with entrepreneurship, minimizing the impact of failures.

 Working in a team provides mutual motivation and support, boosting morale

during challenging times.

 Team members learn from each other, fostering personal and professional
development.

2. Networking in entrepreneurship :
 Networking facilitates access to valuable resources such as funding,
mentorship, talent, suppliers, and potential customers.

 Networking exposes entrepreneurs to new opportunities, markets, trends, and

partnerships that they might not have discovered otherwise.

 Interacting with other entrepreneurs, industry experts, and professionals

allows for the exchange of knowledge, ideas, and best practices.

 Networking provides opportunities for entrepreneurs to validate their business

ideas and receive constructive feedback from peers and mentors.

 Establishing relationships with influential individuals and organizations

enhances the credibility and reputation of the entrepreneur and their business.

 Networking helps entrepreneurs expand their market reach by connecting

with potential customers, distributors, and collaborators locally and globally.

 Motivation :
Motivation is a crucial factor in entrepreneurship as it fuels the drive, passion,
and persistence needed to overcome challenges and achieve success.
 45
 Types of motivation :
Here are some common types of motivation observed in entrepreneurship:

1. Intrinsic motivation :
This type of motivation comes from within and is driven by personal satisfaction,
fulfillment, and the enjoyment of the entrepreneurial process itself. Entrepreneurs
who are intrinsically motivated are passionate about their business idea, derive
joy from solving problems, and find fulfillment in the journey of building and
growing their venture.

 For example ; A scientist conducting research because they are genuinely

curious about a particular phenomenon and enjoy the process of discovery.

2. Extrinsic motivation :
Extrinsic motivation comes from external rewards or incentives, such as financial
gain, recognition, or social status. While intrinsic motivation is important,
extrinsic factors like the potential for profit, the desire for fame or prestige, or the
need for validation from others can also play a significant role in driving
entrepreneurial behavior.

 For example ; An employee working overtime to earn a performance bonus or

promotion.

3. Achievement motivation :
Entrepreneurs with high achievement motivation are driven by a desire to set and
accomplish challenging goals. They thrive on the sense of accomplishment that
comes from overcoming obstacles, reaching milestones, and seeing their vision
come to fruition. This type of motivation often leads to a strong work ethic,
resilience, and a willingness to take risks in pursuit of success.

4. Social motivation :
Social motivation refers to the desire to make a positive impact on others or
contribute to the greater good. Entrepreneurs who are socially motivated are
driven by a sense of purpose and a desire to create value not only for themselves
but also for their customers, employees, communities, or society as a whole.
They may be motivated by the opportunity to solve pressing social or
environmental problems through their business endeavors.
 46
5. Risk motivation :
Risk motivation refers to the willingness to take calculated risks in pursuit of
entrepreneurial opportunities. Entrepreneurs who are motivated by risk are
comfortable with uncertainty and ambiguity and see challenges as opportunities
for growth and innovation. They are willing to step outside of their comfort zone,
experiment with new ideas, and embrace failure as a natural part of the
entrepreneurial process.

 Motivation and its role in entrepreneurship :

Motivation plays a central role in entrepreneurship, serving as the driving force
behind the initiation, persistence, and success of entrepreneurial ventures.

1. Initiation of entrepreneurial ventures :

Motivation is often what sparks the decision to become an entrepreneur in the
first place. Whether it's a burning desire to pursue a passion, solve a problem, or
achieve financial independence, entrepreneurs are typically motivated by a strong
sense of purpose and vision for their venture.

2. Persistence and Resilience :

Building a successful business is rarely easy, and entrepreneurs inevitably
encounter numerous challenges and setbacks along the way. Motivation is what
keeps them resilient in the face of adversity, enabling them to persevere through
tough times, learn from failures, and keep pushing forward towards their goals.

3. Goal setting and achievements :

Motivation provides the energy and focus needed to set clear goals and take
consistent action towards achieving them. Entrepreneurs who are driven by a
strong sense of purpose and determination are more likely to establish ambitious
objectives and work tirelessly to turn their vision into reality.

4. Creativity and innovation :

Motivation fosters creativity and innovation by encouraging entrepreneurs to
think outside the box, challenge the status quo, and explore new opportunities.
When driven by a passion for their ideas and a desire to make a difference,
entrepreneurs are more likely to come up with novel solutions and disruptive
innovations that set their ventures apart.
 47
5. Leadership and team building :
As entrepreneurs build and grow their ventures, motivation plays a crucial role in
inspiring and motivating their team members. A passionate and driven leader can
rally employees around a shared vision, instill a sense of purpose and
commitment, and create a positive and high-performing work culture that fuels
organizational success.

6. Adaptability and growth :

Motivated entrepreneurs are open to learning, growth, and adaptation in response
to changing market conditions and evolving customer needs. They embrace
challenges as opportunities for growth, continuously seek feedback and insights,
and remain agile and flexible in their approach to business development.

 Compensation :
Compensation refers to the remuneration or rewards that employees receive in
exchange for their work, services, or contributions to an organization. It typically
includes both monetary and non-monetary components.

 Monetary compensation refers specifically to the financial rewards that

employees receive, while non-monetary compensation encompasses other
forms of rewards and benefits that hold value to employees.

 Monetary components of compensation typically include:

1. Base salary :
This is the fixed amount of money that an employee receives on a regular basis,
typically expressed as an annual figure but paid out in installments (e.g., monthly,
bi-weekly).

2. Bonuses :
Bonuses are additional payments made to employees on top of their base salary,
usually as a reward for achieving specific performance targets, meeting company
objectives, or demonstrating exceptional contributions.
 48
3. Commissions :
Commission-based compensation is common in sales roles and is calculated as a
percentage of sales revenue generated by the employee. This incentives
employees to increase sales and revenue for the organization.

4. Overtime pay :
Overtime pay is compensation provided to employees for any hours worked
beyond their regular working hours, typically at a premium rate higher than their
standard hourly wage.

5. Profit sharing :
Some companies offer profit-sharing programs where employees receive a share
of the company's profits in addition to their base salary. This aligns employees'
interests with the financial success of the organization.

6. Allowances :
These are additional payments or reimbursements provided to employees to
cover specific expenses such as travel, transportation, housing, or education.

 While monetary compensation is important for attracting and retaining talent,

non-monetary components of compensation are also significant and may
include:

1. Employee benefits :
This includes offerings such as health insurance, dental and vision coverage,
retirement plans (e.g., 401(k)), life insurance, disability insurance, and flexible
spending accounts.

2. Paid time off :

This encompasses vacation days, sick leave, and holidays during which
employees receive their regular pay while not working.

3. Work life balance program :

Employers may offer programs or benefits aimed at promoting work-life balance,
such as flexible work schedules, telecommuting options, parental leave, childcare
assistance, and wellness programs.
 49
4. Professional development :
Companies may invest in their employees' professional growth by providing
opportunities for training, certifications, workshops, conferences, tuition
reimbursement, or career development programs.

5. Recognition and rewards :

Recognizing employees' contributions through awards, praise, and other forms of
acknowledgment can contribute to their job satisfaction and engagement.

 compensation in its role in entrepreneurship :

1. Founder compensation :

Entrepreneurs often forego immediate monetary rewards in exchange for long-

term equity in their ventures. They may not draw a salary initially, instead
relying on personal savings or external funding to sustain themselves while
building the business. Founder compensation typically includes equity stakes,
which align their interests with the success of the company.

2. Attracting talent :

As the business grows, entrepreneurs need to attract skilled employees to drive

further development. Competitive compensation packages, including salaries,
bonuses, and benefits, play a crucial role in attracting and retaining top talent.
Startups often offer equity or stock options to employees, providing them with a
stake in the company's success and aligning their interests with the long-term
growth of the business.

3. Motivating employee :

Compensation serves as a powerful tool for motivating employees and aligning

their efforts with organizational goals. Performance-based incentives, such as
bonuses or profit-sharing arrangements, encourage employees to perform at their
best and contribute to the company's success. Additionally, equity compensation
can foster a sense of ownership and commitment among employees, driving their
dedication to achieving business objectives.

4. Resource allocation :

Effective compensation strategies help entrepreneurs allocate resources

efficiently within their organizations. By aligning compensation with strategic
 50
priorities, entrepreneurs can incentivize behaviors and activities that support the
company's growth objectives. For example, offering sales commissions can
incentivize sales representatives to generate revenue, while bonuses tied to cost-
saving initiatives can encourage employees to identify and implement efficiency
improvements.

5. Managing cash flow :

Cash flow management is critical for startups and small businesses, particularly
during the early stages of development. Entrepreneurs must balance the need to
compensate employees competitively with the necessity of maintaining adequate
cash reserves for operating expenses and growth initiatives. Flexible
compensation structures, such as variable pay or deferred compensation
arrangements, can help entrepreneurs manage cash flow fluctuations while still
rewarding employees effectively.

 Write the importance of support system , network and team work for the
success of an entrepreneur ?
The importance of a support system, network, and teamwork for the success of
an entrepreneur cannot be overstated. Here's why these elements are crucial:
1. Emotional support :
Entrepreneurship can be a challenging and lonely journey. A strong support
system, comprising friends, family, mentors, and advisors, provides emotional
support during tough times. They offer encouragement, empathy, and
understanding, helping entrepreneurs navigate through setbacks and maintain
resilience.
2. Knowledge sharing :
Networking allows entrepreneurs to tap into a wealth of knowledge and expertise.
By connecting with fellow entrepreneurs, industry professionals, and experts,
they can gain valuable insights, advice, and best practices. Networking facilitates
learning from others' experiences, avoiding common pitfalls, and staying
informed about industry trends and developments.
3. Resources access :
A robust network can provide access to resources critical for business success.
This includes funding opportunities, partnerships, suppliers, customers, and
talent. Through their network, entrepreneurs can identify potential investors,
 51
collaborators, and supporters who can contribute to their venture's growth and
sustainability.
4. Opportunity identification :
Networking exposes entrepreneurs to new opportunities and possibilities. By
engaging with diverse individuals and groups, entrepreneurs can discover
potential markets, niches, and untapped needs. Serendipitous encounters and
conversations within their network can lead to innovative ideas, partnerships, or
collaborations that propel their business forward.
5. Validation and feedback :
Interacting with peers and mentors in their network allows entrepreneurs to
validate their ideas and receive constructive feedback. This external perspective
helps refine their business concept, strategy, and execution plan. Feedback from
trusted individuals can uncover blind spots, identify areas for improvement, and
challenge assumptions, leading to better decision-making and problem-solving.
6. Team building :
Building a strong team is essential for scaling a business. Entrepreneurs rely on
talented individuals with complementary skills and expertise to execute their
vision effectively. A collaborative team fosters creativity, innovation, and
productivity, driving the company's growth and competitiveness. Effective
teamwork enables entrepreneurs to delegate tasks, leverage diverse perspectives,
and achieve collective goals efficiently.
7. Supportive ecosystem :
Entrepreneurs thrive in supportive ecosystems that provide access to mentorship,
funding, infrastructure, and networking opportunities. Vibrant startup
communities, incubators, accelerators, and industry associations foster
collaboration, knowledge sharing, and mutual support among entrepreneurs.
Being part of such ecosystems enhances an entrepreneur's chances of success by
providing a nurturing environment for growth and development.

 Value system :
A value system is the network of organizations and the value producing activities
involved in the production and delivery of an offering. The major business
processes are the value producing activities. Porter (1985) popularized this view
 52
of a business and the network of organizations involved with an offering to an
end customer. Terminology in this area bears some clarification.
 Value system or value chain :
Specifically, Porter called the value producing activities of one organization
a value chain and the network organizations involved in the production and
delivery of an offering to the end customer a value system.
 Value stream and supply chain :
Value stream is defined as the processes of creating, producing, and delivering an
offering and may be controlled by a single business or a network of businesses.
The term value stream brings focus onto the value creating activities regardless
of the business organizations that own them. Supply chain is often just the value
stream or system up to the point of conversion, the production of the offering, but
not its marketing, sales, distribution and service.
 Porter's (1985) value activities :
 Primary activities :
 Activities involved in the physical creation of the product and its sale or
transfer to the buyer as well as after sales assistance
 In bound logistics ; receiving, warehousing, inventory control of input
materials, etc.
 Operations ; value-creating activities that transform the inputs into the final
products
 Out bound logistics ; activities required to get the finished product to the
customer, including warehousing and order fulfillment
 Marketing and sales ; selling, channel selection, advertising, pricing, etc.
 Service ; customer support, repair services, etc.
 Support activities :
 Activities that support the primary activities and each other. These activities
can be associated with primary activities as well as the full value chain.
 Human resource management - recruiting, development, and compensation of
employees.
 Technology development ; research and development, process automation,
other technology development used to support the value chain activities
 Procurement ; purchasing the raw materials and other inputs used in the value
creating activities
 53
 Firm infrastructure :
Activities not associated with particular primary activities that support the full
value chain. This includes finance, legal, quality management, etc.
 Value system and competitive advantage :
Value activities are the discrete building blocks of competitive advantage. How
each activity is performed with its economics will determine if a firm is high or
low cost relative to its competitors. The firm's competitive advantage comes from
the way activities fit and reinforce one another. By seeing the company's value
chain and its value system as a whole, the firm can tailor its competencies to fit
together to provide a superior value proposition to the customer.
 Value system, strategy, and business design :
Value chain formulation focuses on how these activities create value and what
determines their cost, giving the firm considerable latitude in determining how
activities are configured.
 Value system architecture :
The complete view of the value system reveals the value system architecture. As
in all 'architecture,' a style or method of design and construction should become
evident, as well as opportunities to better design the system. There should be a
thematic and complementary arrangement of the activities first followed by
forming the activities into a structure. A value system design with gaps, without a
defined flow, or unidentified and unaligned value propositions of the players
raises a red flag for the possibility of an incomplete or ineffective strategy.
 Value system and strategy formation :
The value system design occurs early on in the strategy creation processes. This
activity produces strategic insights. For example, the incorporation of substitute
offerings and competitors into a value system view is a means for developing
insights into strategic opportunities. As specific strategic alternatives are
developed and assessed, defining each alternative's value system serves to reveal
any weak links in the system.
 Value system and strategy deployment :
As for defining the business model in preparation for deployment, the value
system becomes a clear representation of what you want
 54
the process ""battlefield"" to look like at the end of deployment. As such, it
serves as a guide to those involved with the ongoing dynamics of strategy
deployment where twists and turns are an everyday occurrence as the processes,
functions, and business relationships are further refined. Referring to the value
system design during the heat of battle can insure that the achievement of the
overall value proposition as defined in the strategy and that the hypothesis of the
strategy is in fact being tested.

 Small and medium enterprises (SMEs) :

 Small scale enterprises or small and medium-sized enterprises are companies
whose headcount or turnover falls below certain limits. An industry having
number of employees and gross revenue less than the specified limits is
known as small-scale industry or small- and medium-sized industry.
 An industrial undertaking is referred to as a small scale industry only if its
investment in fixed assets like plant and machinery is not more than 75 crore
(in manufacturing organisations) and 2 crore (in service organizations). No
matter, whether the fixed assets are purchased, rented, or are taken on lease.
Though, Government can always change these limits.
 In the Small and Medium Enterprises (SMEs), booming and rational markets
exist for the similar products and processes, and offerings are distinguished on
the basis of their value addition, quality, and superiority over competitive
products. The multiplicity in demand patterns and manufacturing practices
make sure the long-term existence of demand for various technologies,
procedures, consumer goods

1. Manufacturing Enterprises :
Manufacturing enterprises are the ones which are involved in production of any
products related to any industry listed in first schedule of industries
(Development and Regulation Act, 1951). On the basis of investment in plant
and machinery, manufacturing enterprises can be classified into micro, small and
medium enterprise as :
 An An enterprise in which investment on plant and machinery is up to 25 lac
is a micro enterprise.
 Art enterprise in which investment on plant and machinery is above 25 lac
and up to 5 crore is a small enterprise.
 55
 An enterprise in which investment on plant and machinery is above 5 crore
and up to 10 crore is a medium enterprise.

1. Service Enterprises :
Enterprises involved in delivering services are service enterprises. According to
the investment in equipment's. service enterprises can be classified into micro,
small and medium enterprise as :
 An enterprise in which investment on equipment is up to 10 lac is a micro
enterprise.
 An enterprise in which investment on equipment is above 10 lac and up to 2
crore is a small enterprise.
 An enterprise in which investment on equipment is above 2 crore and up to 5
crore is a medium enterprise.

 Objectives of Small and Medium Enterprises (SME):

The small scale sector can stimulate economic activity and is entrusted with the
responsibility of realizing the following objectives :
1. To produce job related opportunities at a faster rate with a very little amount
of investment.
2. To provide assistance in quality improvement and promoting exports in small
industries.
3. To eliminate regional differences by the means of calculated and purposeful
policy.
4. To promote development in small cities and villages.
5. To minimize inequalities in consumption, wealth, and income.
6. To organize efficiently and utilize skills as well as capital related resources to
the maximum.
7. To enhance the financial advancement in rural and less progressive areas of
the country.
8. To arrange regular earning source for underprivileged people in urban and
rural areas.
9. To make available the substitutes for industrial products which have to be
imported.
10.To combine small business with rural economy as well as large scale
businesses.
 56
11. To increase export and production along with up gradation in the quality of
products produced in cottage industry.
12. To accomplish independence and self-sufficiency by elimination of
obstructions due to evolution of big cities and urbanization.

 Characteristics of Small and Medium Enterprises :

The characteristics or features of SMEs sector are as follows :
1. Born Out of Individual Initiatives and Skills :
Generally, it is observed that SMEs are likely to develop along an individual
entrepreneur or a small group of entrepreneurs supported by a specific skill set or
range of abilities. There are other instances where these enterprises are
established exclusively as a medium to earn basic income or livelihood. These
enterprises can be retail or trading organizations, while in many countries SMEs
provide manufacturing services as well as retailing activities.

2. High Operational Flexibility :

These enterprises offer high operational flexibility as it involves less number of
people, flat hierarchical structure and direct involvement of owners. Here,
decisions related to product mix and price mix is made faster keeping in mind the
changing market conditions.

3. Low Production Cost :

SMEs have low overheads including fixed and operating cost. This in turn lowers
the cost of production and per unit cost.

4. High Propensity to Adopt Technology :

SMEs have the tendency to adopt and embody the technology being employed by
them.
 57
5. High Capacity to Innovate Export :
These enterprises are well-known for their proficiency in reverse engineering,
innovation and spontaneity. They have the ability to fulfill niche demands and
prerequisites. They are also competent enough to capture export markets with
low volumes.

6. High Employment Orientation :

SMEs acts as a source of employment generation, in few instances generating a
maximum of 80 per cent jobs. Compared to the bigger and major players in the
market, SMEs are likely to create more job opportunities for each unit of
investment made and employ labour intensive production techniques.

7. Reduction of Regional Imbalances :

SMEs have the flexibility of location in contrast with the large industries where
decentralization of authority and operations is difficult. Hence, it is worldwide
fact that, SMEs are can be established anywhere even if some locations are seen
as clusters.

 Importance of Small and Medium Enterprises (SMEs) :

Small enterprises play an important role in the overall growth of the economy of
the country. While the cost of investment in small-scale units would b
comparatively low, their potential for generation of employment as a sector is
relatively high. Development of small-scale units also results in dispersal of
industries to backward, rural, and semi urban areas, and this eventually leads to
reduction of regional imbalances in growth.
1. Large Employment Opportunities :
They are labour-intensive and hence their employment creation potential per unit
of investment is higher than that of larger industries. In countries like India
which carry huge mass of unemployed small industries are a boon. Since there
are more broad based and disperse than large industrial units, they facilitate :
 Decentralized regional development,
 Reduction of extreme disparities in income and wealth,
 Improvement of living standards of people,
 Removal of poverty.
 58

2. Prevents Concentration of Economic Power :

They facilitate the creation of a wider entrepreneurial base consisting of small
industrial owners and operators. They represent a diffusion of economic power
among a large number of small entrepreneurs rather than concentration of
economic power among a small number of large entrepreneurs.

3. Mobilize Local Resources :

They permit an effective mopping-up and mobilization of small savings, scarce
capital and local materials, human resources and skills.

4. Development of Some Towns :

They help in development of small- and medium-sized towns and cities which
have more spread effects on regional industrial development.

5. Low Capital-output Ratio :

Their capital resources are modest. They are more suitable for capital-scarce
countries like India. The capital output ratio for small industries is said to be
lower than for large industries.

6. Contribution to Industrial Growth :

They contribute substantially to industrial production and industrial growth.

7. Facilitate Development of Large-scale Industries :

They support the development of large industries by meeting their requirements
of inputs of raw materials, intermediate goods, spare parts, etc., and by utilizing
their output for further production. The productivity and capacity utilization of
large units depends to some extent upon the fulfillment of their specialized
requirements by small-scale units.
 59
 Scope of Small and Medium Enterprises :
There is a huge scope for the small enterprises which some includes a variety of
business activities ranging from manufacturing to retailing There exist particular
areas of economic processes that can be effectively managed by creating SME.
The scope of SME is explained as follows :

1. Manufacturing Industries :
These include small business units which are mainly involved in manufacturing
of products consumed directly by the customers and also by other processing
firms. These are of following types :

2. Village and Cottage Industries :

These industries are established in the homes of the workers, mostly in villages
and rural regions.

3. Hand-looms and Handicrafts :

These industries are mainly formed with the help of craftsman, artisans,
technicians, etc., who operate from their houses. Such industries are pollution-
free and typically require workplace of less than 300 square feet, power
consumption of less than 2KW and employees not more than 5. These industries
mostly produce handicrafts, small plastic and paper products, toys, dolls,
electronic and small electrical gadgets.

4. Modern Small Industries :

These industries include :

a) Small Enterprises :
Small scale industry is defined by the Government of India as an undertaking
which has the maximum investment of 1 crore in plants and machinery.
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b) Ancillary Industries :
According to Government of India, if the total investment in the plant and
machinery of industry does not exceed more than 75 lac, then it will be termed as
ancillary industry. These industries are mainly involved in the production of parts,
components, sub-assemblies, tooling or intermediaries, or in offering services of
production to other units supplying 30% of their production or services.

c) Tiny Units :
Industries which have fixed investment in plant and machinery of not more than
5 lacs are called tiny units. These units include various types of service providers
such as laundry. zeroing, repairs, maintenance of customer equipment and
machinery. hatching, poultry, etc.

5. Trading Industries :
Firms which are mainly involved in the sales and purchase of the goods and
services are termed as trading industries. These industries act as a middleman
between the consumers and producers. Wholesaler, retailer and commission
agents are the typical examples of trading industries.

6. Service Industries :
Business units which provide various types of services in the rural areas (or
towns having maximum population of 5 lacs) are termed as service industries.
These industries must not have investment of more than 72 lacs in plant and
machinery. These industries may provide the following services :
 Professional services, e.g.. legal services. Consultancy, accounting medicine,
etc.
 Commercial services, e.g.. real estate. transport. repair shops, constructing
warehousing, etc.
 Personal services, e.g. dry cleaning. restaurants, fashion shops, etc.
 61
 Role of SME Sector in Economic Development :
The Small and Medium-sized Enterprises (SME) sector plays a crucial role in the
economic development of a country in several ways:
1. SMEs are significant contributors to employment creation, particularly in
developing economies. They offer job opportunities to a large segment of the
population, including skilled and unskilled workers, thereby reducing
unemployment rates and poverty levels. Moreover, SMEs often provide
employment opportunities in rural and semi-urban areas, promoting inclusive
growth and reducing regional disparities.
2. SMEs make substantial contributions to the Gross Domestic Product (GDP)
of a country. Despite their relatively small size individually, collectively,
SMEs account for a significant portion of the national output. Their diverse
range of activities across various sectors such as manufacturing, services,
agriculture, and trade contributes to overall economic growth and
development.
3. SMEs are often centers of innovation and entrepreneurship, driving
technological advancements, product development, and market innovations.
Their agility, flexibility, and adaptability enable them to respond quickly to
changing market demands and consumer preferences, fostering competition
and stimulating economic dynamism.
4. SMEs play an essential role in the supply chain ecosystem, serving as
suppliers, subcontractors, and distributors for larger firms. They form linkages
with larger corporations, both domestically and internationally, contributing to
the competitiveness and resilience of the economy. SMEs often provide niche
products or specialized services that complement the offerings of larger
companies, enhancing overall productivity and efficiency.
5. SMEs contribute to the development of local industries and value chains by
utilizing local resources, skills, and expertise. They promote indigenous
entrepreneurship and foster the growth of domestic industries, reducing
reliance on imports and enhancing economic self-sufficiency. Moreover,
SMEs often serve as incubators for new industries and sectors, laying the
foundation for future economic diversification and expansion.
6. SMEs play a vital role in international trade and export promotion,
particularly for emerging economies. They serve as exporters of goods and
services, contributing to foreign exchange earnings and trade balance.
Governments often support SMEs through trade promotion initiatives,
capacity-building programs, and market access facilitation to enable them to
tap into global markets and participate in international trade.
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 Financial and marketing problems of SMEs :
Managers of Small and Medium-sized Enterprises (SMEs) often face various
financial and marketing challenges that can impact the sustainability and growth
of their businesses. Here are some common problems and potential solutions for
each area:
1. Financial problems :
i. Limited access to capital :
SMEs often struggle to access financing from traditional sources such as banks
due to limited collateral, lack of credit history, or high interest rates. This can
hinder their ability to invest in growth opportunities or meet working capital
needs.
 Solution :
Explore alternative financing options such as government grants, venture capital,
angel investors, crowdfunding, or peer-to-peer lending platforms. Additionally,
building a strong relationship with local banks and financial institutions may
improve access to credit over time.
ii. Cash flow management :
Poor cash flow management is a prevalent issue for SMEs, leading to liquidity
problems, late payments to suppliers, and difficulties in meeting financial
obligations.
 Solution :
Implement effective cash flow forecasting and monitoring systems to track
income and expenses accurately. Negotiate favorable payment terms with
suppliers and encourage prompt invoice payments from customers. Consider
implementing measures to reduce overhead costs and improve operational
efficiency.
iii. Dept management :
Accumulating debt can become a significant burden for SMEs, especially if they
have taken on loans with high interest rates or unfavorable repayment terms.
 63
 Solution :
Develop a debt management strategy to prioritize and reduce high-interest debts.
Consider refinancing or consolidating existing loans to lower interest rates or
extend repayment periods. Focus on improving profitability and generating
positive cash flows to repay debts more effectively.

2. Marketing problems :
i. Limited marketing budget :
SMEs often have constrained marketing budgets compared to larger competitors,
making it challenging to reach target audiences effectively.
 Solution :
Focus on cost-effective marketing strategies such as social media marketing,
content marketing, email marketing, and search engine optimization (SEO).
Leverage digital platforms and tools to reach a wider audience without
significant financial investment. Additionally, prioritize activities that provide the
highest return on investment (ROI) for the marketing budget available.
ii. Lack of market differentiation :
SMEs may struggle to differentiate their products or services in crowded markets,
leading to commoditization and price competition.
 Solution :
Identify and emphasize unique selling propositions (USPs) that set the business
apart from competitors. Focus on delivering exceptional value, personalized
customer experiences, or niche offerings that address specific customer needs.
Invest in branding, storytelling, and customer engagement initiatives to build
brand loyalty and differentiation.
iii. Limited marketing expertise :
SME managers may lack expertise or resources to develop and execute effective
marketing strategies, leading to suboptimal outcomes.
 Solution :
Invest in marketing training and skill development for employees or consider
 64
outsourcing certain marketing functions to external agencies or consultants.
Collaborate with industry associations, business networks, or mentors who can
provide guidance and support in developing and implementing marketing
initiatives tailored to the business's needs.
 What is entrepreneurial marketing ?
Marketing refers to the activities a company uses to persuade customers to make
a purchase, and entrepreneurial marketing is defined by its entrepreneurial
approach to those activities. In contrast to traditional marketing, which relies on
the standard execution of common tactics, an entrepreneurial approach to
marketing identifies new tactics or executes existing tactics in new ways.

 The 6 pillars of entrepreneurial marketing :

There are many different definitions of entrepreneurial marketing. I believe that
the fundamental features that separate this entrepreneurial approach from
conventional marketing are best captured by what I call the TROPIC framework:
1. Tolerant of Risk :
Entrepreneurial marketing must be risk tolerant because validating innovative
opportunities requires experimentation that will sometimes fail to generate a
return on investment.
2. Resourceful :
It is resourceful because it uses all resources at its disposal to acquire and retain
customers. This includes internal resources, resources shared with partners, and
resources under external control.
3. Opportunistic :
It’s opportunistic because it exploits existing circumstances to create value.5
4. Proactive :
It’s proactive because it doesn’t assume existing circumstances are static, instead,
it actively seeks out opportunities to disrupt the status quo.
5. Innovative :
It’s innovative because it “creates, communicates and deliver values ” in new
ways.
 65
6. Customer-centric :
Finally, it is customer-centric because it depends on high levels of customer
engagement to get feedback on new and existing products and to raise brand
awareness through word of mouth.
 Developing an entrepreneurial marketing strategy :
Not all situations require an entrepreneurial marketing approach. It is particularly
effective for small- and medium-sized enterprises (SMEs) and early-stage
startups. These types of companies are operating under different circumstances
than the corporations around which traditional marketing theory was
developed.17 Entrepreneurial marketing is based on the experiences of
entrepreneurs and marketers at SMEs and startups, so it’s more relevant to their
circumstances.
Entrepreneurial marketing strategies are also well suited to conditions of
uncertainty. For example, when:
 Traditional market research isn’t possible
 You haven’t achieved product-market fit
 You’re creating a new category

 A FRAMEWORK :
We’ll get into specifics below, but here is a broad framework to guide your
entrepreneurial marketing efforts.
1. Create Opportunities :
Identify an existing problem (whether people are aware of it or not) and
developing a credible solution that delivers measurable results.
2. Scale :
Work with as many experts and insiders as you can to increase efficiency,
credibility, and product efficacy. In other words, hire the right people and make
the right connections.
3. Accelerate the Process :
Get your product or service in the hands of the people who will benefit most
from it so you can get valuable feedback and generate WOM.20
Examples :
An entrepreneurial approach should make efficient use of resources to “do[]
more with less.”21 That means:
 Stretching resources further.
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 Using resources that others can’t or in ways that others can’t
 Using external resources.
 Combining resources in ways that lead to a whole greater than the sum of the
parts;
 Using existing resources to get other resources.
Five entrepreneurial marketing strategies include:
4. Expeditionary marketing :
Identify new markets through the process of “successive approximation,” quickly
developing and launching products to accumulate knowledge and feedback that
result in a competitive advantage.23
5. Guerrilla marketing :
Generate free publicity and word of mouth through unconventional marketing
campaigns that leverage external resources and take people by surprise.24
6. Viral marketing :
Generate electronic word of mouth (eWOM) by targeting existing social
networks with digital and physical content that members of that network will
share and reshare.
7. Buzz marketing :
Generate enthusiasm and word of mouth (WOM) through events or publicity
stunts that people will talk about.26
8. Radical marketing :
Work to build a community of loyal customers by taking a customer-centric
approach and increasing customer engagement.27
9. Growth hacking :
Use technology, analytics, and testing to identify cost-efficient tactics to achieve
growth. This approach is primarily applied to SaaS marketing.
10.Agile marketing :
Streamline marketing operations to enable the rapid development and execution
of successive marketing activities that build on the knowledge gained from the
activities that came before.
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 characteristics of entrepreneurial marketing :

1. Innovativeness :
 Among other characteristics of entrepreneurial marketing that you need to
master is innovativeness. An innovative firm has the ability to ensure a flow
of new ideas. By maintaining such a flow, it is possible to come up with new
products and services.
 Since the world has become extremely competitive, it is crucial to gain the
upper hand by focusing on being innovative. If there is something that you
can do differently or in a better way, you will be able to attract customers.
 Entrepreneurial marketing depends heavily on innovativeness. People are
drawn to innovation. If you can provide them with something new or different,
they are likely to take an interest in what you have to offer. You can start by
learning how to be more innovative.

2. Focus on Customers :
 Next, entrepreneurial marketing requires firms to focus on their customers.
An entrepreneur has to adopt a creative approach for acquiring, retaining, and
developing customers.
 When you pay attention to your customers, you equip your firm with the
knowledge to meet customer requirements.
 The truth is that it is impossible to do marketing right without focusing on
your customers. You need to be able to connect with customers to get them
hooked. This is only possible when you devote your efforts to learning more
about your client base.
 As you boost your customer knowledge, you will come up with a marketing
strategy that enables you to best target your audience. It is a characteristic that
you cannot afford to overlook.

3. Utilize Opportunity :
 Speaking of characteristics of entrepreneurial marketing, we should mention
that the pursuit of opportunity is essential. You must recognize its importance
and devote your efforts towards making the most of it.
 68
 In fact, entrepreneurship is generally termed as a process that involves
discovery and evaluation to exploit opportunities.
 An entrepreneurial opportunity is a situation wherein new goods and services
are introduced by analyzing customers’ needs. Only when you understand the
market will you be able to find an opportunity that you can utilize.
 By utilizing opportunities that come your way, your chances of succeeding as
an entrepreneur are increased. However, you must be continuously on the
lookout for new opportunities as you might just identify something amazing
that allows you to take your firm to the next level.

4. Risk Management :
 Since entrepreneurs are known for taking risks, they need to focus on risk
management. Entrepreneurship is all about risk calculation. It requires the
identification of risk factors and attempts to mitigate or control those risk
factors altogether.
 Entrepreneurial marketing relies on the management of risk. It is integral to
its success. Without proper risk management, you are likely to fail. Hence,
you need to learn more about risk management. It will help ensure that you
are prepared for what is to come.
 By improving your risk management capabilities and implementing a
comprehensive business risk management plan, you can expect to limit the
risk and take calculated risks for the best outcome. You will find it to be
useful as it will boost your probability of success.

5. Value Creation :
 Finally, entrepreneurial marketing requires value creation. It is an important
part of the mix. With value creation, you get to move past innovation and
focus on improving your relationship with customers.
 When you provide value, you get to show customers that your product or
service is worth the cost.
 Value creation is something that every entrepreneur needs to provide. It is a
prerequisite for ensuring transactions are made. The characteristic requires
entrepreneurs to come up with waytBuild brand awo add value to the lives of
their customers.
 If you can convince people that your product or service adds value, you will
have no trouble getting customers interested in what you have to offer.
 69
However, it can be difficult to create value. You need to ensure that your
innovativeness bears fruit.
Whether you want to provide internet marketing services or any other services to
your client base, you have to make it count.

6. Proactive Orientation :
 One of the characteristics of entrepreneurial marketing is proactive orientation.
 Entrepreneurial firms have to continuously search for new ways to gain a
competitive advantage. This is where the need to make changes to established
methods in production or marketing becomes necessary.
 A proactive approach allows firms to constantly evaluate different techniques
to determine what works best for them. To succeed as an entrepreneur, it is
crucial to test the waters and come up with a unique marketing strategy that
allows you to attract customers to your products.
 As you continue to try out new ideas, you will gain a better understanding of
your customer base. It will help catapult your business to new heights. The
fact is that proactive orientation is all about seeking the new and trying
something that no one has ever done before.
 Purpose of marketing plan :
No matter your industry, there is so much competition nowadays. You need a
way to stand out from the crowd. You need to build a name for your business and
show people what you can do.
Marketing plan allow your company to;
 Build brand awareness
 Boost consumer engagement
 Offer sale support

 Steps for marketing plan :

There are so many different types of marketing plans, but one of the most all-
encompassing, successful strategies is full-funnel marketing.
1. Examine you current situation and goals :
 Before you can begin your marketing efforts, it's important to self-reflect on
your current situation through an executive summary.
 Reflecting is a method to help you take a closer look at your business, its
 70
mission statement and ways to grow in that mission. In the marketing world,
this is commonly called a SWOT analysis.
 Strengths
 Weaknesses
 Opportunities
 Threats
 SWOT is a handy acronym to help you keep track of the areas you need to
identify when building your new marketing plan.
 Before you can genuinely begin an effective marketing plan, consider
completing a thorough SWOT analysis. It can help you understand where you
are, assist in your strategy development, and build a roadmap for where you
are going.
 Another big piece of your roadmap is the marketing goals you set for your
business. You can also set goals for each marketing campaign. Marketing is
meant to help you grow your business, so you should know how you want
that growth to look.
2. Identify your audience and build brand awareness :
To build brand awareness, you should first identify your target market. You can
cast a wide net at the beginning of your full-funnel marketing approach. However,
that does not mean you won't still have some direction in mind.
 Business to consumer :
If your business operates B2C, then you may need to make a profile of your ideal
customer. This profile should include prospect demographics, including:
 Age
 Sex
 Family composition
 Business to business :
If your business operates B2B, you should make a profile but use slightly
different categories. For B2B marketing, focus on customer segments like:
 Type of business
 Job title
 Size of business
Regardless of your target audience, be sure to narrowly define them in this step
because it can be your guide as you plan your content strategy.
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 Build brand awareness :
Once you have identified your target customers, you should build brand
awareness through your marketing strategy. Marketing has evolved over the
years, so you'll need to research trends that might resonate with your target
audience in your marketing mix.
Consider attraction marketing and digital marketing activities and strategies like:
 Blog post and editorial content
 Social media post
 Videos and podcasts
3. Drive customer interest :
 Now that you've cast a wide net, it's time to narrow the funnel. At this stage,
your consumer is aware of your brand, so it's time to drive their interest
toward a specific product or a service.
 One thing that may always remain true in marketing is that stories sell. Stories
build brand awareness because people love them. They are a way to build
relationships, find common ground, and show the consumer what your brand
is all about.
 When you are developing your marketing tactics with whichever methods you
choose, create a narrative that shows existing and new customers why your
product differs from your competitors.
4. Converts interest to purchase :
 Once you have the interest of your customer base, the biggest challenge
comes in: conversion. Conversion is getting your customer further down the
funnel from simply being interested into making a purchase.
 In eCommerce, part of your marketing strategy comes from your website.
When potential customers visit your online store, their shopping experience
should be as smooth as possible.
 To facilitate this, ensure your site is aesthetically pleasing, easy to navigate,
and fully optimized. Your website should include product pages with detailed
descriptions and visuals, an easy-to-use click-to-cart process, and customer
service options.
5. Foster relationship to promote retention :
 This is the final step of the full-funnel approach, which hinges on keeping
your consumer inside the funnel. While it might not sound like it, customer
experience is a marketing tool.
 72
 Marketing is about getting yourself noticed and the relationship you nurture
with the customer once you've pulled them in. To promote consumer retention,
keep them engaged with your brand.
 You can build loyalty by offering incentives through email marketing and
other platforms. In addition, continue to tell stories that make sense for your
brand and connect with your customer.
 Finally, maintain a strong customer service department so that when it's time
for your customer to make a repeat purchase, they have another smooth
experience.

 Role of Entrepreneurship in 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
 73
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.
 74
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.

 the Japanese experience in Entrepreneurship :

Japan has a rich history in entrepreneurship, albeit with some unique
characteristics compared to Western models. Here are some key points about the
Japanese experience in entrepreneurship:
1. Traditional Japanese business culture :
Japan has a long history of craftsmanship and entrepreneurship, with traditional
artisanal skills being passed down through generations. Craftsmanship and
attention to detail are highly valued in Japanese culture, which has contributed to
the country's reputation for quality products.
2. Corporate culture :
Japan is also known for its strong corporate culture, with many large corporations
dominating the business landscape. Lifetime employment and seniority-based
promotion systems have been common in Japanese companies, which historically
may have stifled entrepreneurial spirit to some extent. However, this is changing
gradually with the rise of startups and a more flexible labor market.
 75
3. Keiretsu and Zaibatsu :
Historically, Japan's business landscape was dominated by large conglomerates
known as zaibatsu before World War II and later keiretsu, which are groups of
companies with interlocking business relationships. This structure often made it
difficult for small startups to compete, but it also provided opportunities for
collaboration and support within these networks.
4. Innovation and technology :
Japan has been a leader in innovation and technology, particularly in sectors like
electronics, automotive, and robotics. Companies like Sony, Toyota, and
Panasonic have been at the forefront of technological advancements. However,
the focus has traditionally been more on incremental improvements rather than
disruptive innovation.
5. Government and support :
The Japanese government has implemented various initiatives to promote
entrepreneurship and innovation, including funding programs, incubators, and
regulatory reforms to make it easier to start and operate businesses.
6. Entrepreneurial challenges :
Despite these strengths, Japan has faced challenges in fostering a vibrant startup
ecosystem. Cultural factors such as risk aversion and fear of failure have been
cited as barriers to entrepreneurship. Additionally, access to funding, particularly
venture capital, has historically been limited compared to countries like the
United States.
7. Changing landscape :
In recent years, there has been a growing interest in entrepreneurship among
younger generations in Japan. The success of startups like Rakuten, Mercari, and
LINE has helped to inspire a new wave of entrepreneurs. Government efforts to
promote entrepreneurship and initiatives to support startups have also been
contributing factors to the changing landscape.
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 Case study of Entrepreneurs :
1. Masayoshi Son :
 Background :
Masayoshi Son is a Japanese entrepreneur and the founder and CEO of Soft Bank
Group Corp., one of the largest technology conglomerates in the world. Born in
Japan in 1957, Son moved to the United States to attend the University of
California, Berkeley, where he studied economics and computer science.
 Entrepreneurial journey’s :
1. Early ventures :
Son's entrepreneurial journey began during his time at Berkeley, where he started
his first business importing and selling used video game consoles from Japan to
the United States. This initial venture laid the groundwork for his future
entrepreneurial endeavors.
2. Funding softbank :
In 1981, at the age of 24, Son founded Softbank Corp., originally as a software
distribution company. The company quickly expanded into various technology-
related ventures, including publishing, computer trade shows, and internet
services.
3. Investment strategy :
Son is perhaps best known for his bold and aggressive investment strategy. He
has a keen eye for identifying promising technology startups and has made
strategic investments in companies such as Yahoo!, Alibaba, and Uber, among
others. SoftBank's Vision Fund, launched in 2017, is one of the largest
technology investment funds in the world, with a focus on transformative
technologies such as artificial intelligence, robotics, and biotech.
4. Challenges :
Despite his success, Son has faced significant challenges and setbacks along the
way. SoftBank's investment in WeWork, for example, faced criticism and
financial losses following the coworking company's failed IPO attempt.
Additionally, the collapse of the dot-com bubble in the early 2000s led to
substantial losses for SoftBank.
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5. Resilience and adaptability :
Despite these challenges, Son has remained resilient and adaptable, continuing to
pursue new opportunities and investments. He has shown a willingness to learn
from failures and pivot when necessary, demonstrating the resilience that is often
essential for successful entrepreneurship.

 Entrepreneur : Elon Musk :

 Background :
Elon Musk, born on June 28, 1971, in Pretoria, South Africa, is a visionary
entrepreneur known for his groundbreaking work in various fields such as
electric vehicles, space exploration, and renewable energy.
 Case study :
1. Founding Zip2 :
 In 1995, Musk co-founded Zip2, a company that provided business directories
and maps for newspapers.
 Despite facing challenges in the early stages, Musk demonstrated his ability to
innovate and adapt by constantly improving the product and securing
partnerships with major newspapers.
 The company was eventually sold to Compaq for nearly $300 million, earning
Musk his first significant entrepreneurial success.
2. Founding X.com (later Paypal ) :
 Following the sale of Zip2, Musk co-founded X.com, an online payment
company.
 Despite internal conflicts and challenges, Musk's leadership and vision helped
the company navigate through turbulent times, eventually leading to its
merger with Confinity, which operated PayPal.
 Under Musk's leadership, PayPal became one of the leading online payment
platforms globally, transforming the way money is transferred and
revolutionizing e-commerce.
3. Founding SpaceX :
 In 2002, Musk founded SpaceX with the goal of reducing space transportation
costs and enabling the colonization of Mars.
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 Facing skepticism from industry experts and numerous setbacks, including
failed rocket launches, SpaceX persisted, leveraging Musk's leadership,
technical expertise, and strategic vision.
 Today, SpaceX is one of the most prominent players in the aerospace industry,
known for its reusable rocket technology and ambitious plans for
interplanetary travel.
4. Founding Tesla :
 Musk became involved with Tesla Motors (now Tesla, Inc.) in 2004, joining
as chairman of the board and later becoming CEO.
 Under Musk's leadership, Tesla has revolutionized the automotive industry
with its electric vehicles, pushing boundaries in performance, range, and
autonomous driving technology.
 Despite facing production challenges, financial difficulties, and criticism from
skeptics, Musk's unwavering commitment to innovation and sustainability has
propelled Tesla to become one of the most valuable car manufacturers
globally.
5. Others ventures :
Musk has been involved in various other ventures, including SolarCity (a solar
energy services company), Neuralink (focused on developing brain-computer
interface technology), and The Boring Company (aimed at reducing traffic
congestion through underground tunnel systems).

 Mark Zuckerberg :
Mark Zuckerberg, the co-founder, and CEO of Facebook, is one of the most
renowned entrepreneurs of the 21st century. His journey from creating a simple
social networking platform in his Harvard University dorm room to leading one
of the largest and most influential technology companies globally is an inspiring
case study in entrepreneurship.
1. Early life and education :
 Mark Zuckerberg was born on May 14, 1984, in White Plains, New York.
 He showed an early interest in computers and programming, creating a
messaging program called "ZuckNet" for his father's dental office when he
was just 12.
 Zuckerberg attended Harvard University, where he studied psychology and
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computer science.
2. Founding Facebook :
 In 2004, while at Harvard, Zuckerberg launched "TheFacebook," a social
networking site, with his roommates Dustin Moskovitz, Eduardo Saverin,
Andrew McCollum, and Chris Hughes.
 The platform's initial purpose was to connect Harvard students but quickly
expanded to other Ivy League schools and eventually to colleges and
universities worldwide.
 The rapid growth led Zuckerberg to drop out of Harvard in his sophomore
year to focus full-time on developing Facebook.
3. Growth and expansion :
 Facebook's user base continued to grow exponentially, attracting the attention
of investors.
 In 2006, Zuckerberg turned down offers from major companies, including
Yahoo!, and secured funding from Accel Partners.
 Facebook expanded beyond educational institutions, opening up to anyone
aged 13 and older with a valid email address.
 The company introduced several features and innovations, including the News
Feed, which transformed Facebook into a dynamic platform for sharing and
consuming content.
4. Challenges and controversies :
 Facebook faced numerous challenges and controversies over the years,
including privacy concerns, data breaches, and accusations of facilitating
misinformation and political manipulation.
 Zuckerberg appeared before Congress multiple times to address these issues
and defend Facebook's policies and practices.
5. Acquisitions and diversification :
 Under Zuckerberg's leadership, Facebook acquired several companies,
including Instagram in 2012 and WhatsApp in 2014, expanding its reach and
influence in the social media landscape.
 In 2012, Facebook went public in one of the largest initial public offerings
(IPOs) in history, further cementing Zuckerberg's status as a tech industry
titan.
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6. Meta platforms :
In 2021, Zuckerberg announced that Facebook would be rebranded as Meta
Platforms, Inc., reflecting the company's broader focus on building the next
generation of internet platforms, including virtual and augmented reality
technologies.

 Jeff Bezos :
1. Early life :
 Jeffrey Preston Jorgensen (later Bezos) was born on January 12, 1964, in
Albuquerque, New Mexico. His parents divorced when he was young, and his
mother remarried a Cuban immigrant named Miguel Bezos, whose surname
Jeff adopted.
 Bezos graduated from Princeton University in 1986 with degrees in electrical
engineering and computer science. He then worked on Wall Street in various
capacities, including at a quantitative hedge fund.
2. Founding Amazon :
 Bezos founded Amazon.com in 1994 as an online bookstore in his garage in
Seattle. He initially operated the company under the name Cadabra Inc., but
later changed it to Amazon.
 Bezos had a grand vision for Amazon from the beginning, aiming to create an
"everything store" where customers could find and purchase anything they
wanted online.
 Under Bezos's leadership, Amazon continuously expanded its offerings,
starting with books and gradually adding categories such as electronics,
apparel, and cloud computing services.
 Bezos prioritized long-term customer satisfaction over short-term profits,
which led to initiatives like Amazon Prime (offering fast shipping and
additional services) and customer reviews, enhancing the overall shopping
experience.
3. Key strategies and initiatives :
i. Diversification :
Bezos diversified Amazon's business beyond e-commerce, venturing into areas
such as cloud computing (Amazon Web Services), streaming media (Amazon
Prime Video), smart devices (Amazon Echo), and artificial intelligence (Alexa).
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ii. Vertical integration :
Amazon vertically integrated its operations by not only selling products but also
manufacturing its own hardware (e.g., Kindle e-readers) and providing logistics
services through initiatives like Amazon Logistics.
iii. Decision making :
Bezos emphasized the importance of data in decision-making processes,
employing sophisticated analytics to understand customer behavior, optimize
operations, and drive innovation.
iv. Culture of innovation :
Bezos fostered a culture of innovation within Amazon, encouraging
experimentation, embracing failure as a learning opportunity, and prioritizing
bold bets on new ideas and technologies.
4. Challenges :
 Amazon faced increasing scrutiny over its market dominance and alleged
anti-competitive practices, leading to investigations by regulatory authorities
in various countries.
 The company has been criticized for its treatment of workers, including issues
related to working conditions, wages, and labor union suppression.
 Amazon has been under pressure to address its environmental impact,
particularly concerning carbon emissions from its logistics operations and
data centers.
5. Leadership style :
i. Long term vision :
Bezos is known for his long-term vision and willingness to invest in projects with
distant payoffs, even if they initially generate little or no profit.
ii. Risk taking :
Bezos has demonstrated a willingness to take bold risks and pursue
unconventional ideas, such as entering new markets and investing in emerging
technologies.
iii. Costumer obsession :
He is deeply committed to understanding and serving the needs of Amazon's
customers, often stating that customer satisfaction is the foundation of the
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company's success.
iv. Data driven and analytical :
Bezos is highly analytical and data-driven in his decision-making approach,
relying on quantitative metrics to evaluate performance and guide strategic
direction.

 Steve Jobs :
1. Early life :
Steve Jobs was born on February 24, 1955, in San Francisco, California. He was
adopted shortly after birth and grew up in Silicon Valley. From a young age, Jobs
showed an interest in electronics and became friends with Steve Wozniak, with
whom he later co-founded Apple.
2. Founding Apple :
In 1976, Steve Jobs, along with Steve Wozniak and Ronald Wayne, founded
Apple Computer Inc. in the Jobs family garage. Their goal was to develop and
sell personal computers. Their first product, the Apple I, was followed by the
highly successful Apple II, which catapulted the company into prominence.
3. Visionary leadership :
Jobs was renowned for his vision and ability to anticipate consumer needs. He
envisioned technology not just as functional tools but as elegant and user-friendly
devices that could seamlessly integrate into everyday life. This vision drove the
development of groundbreaking products like the Macintosh, iPod, iPhone, and
iPad.
4. Product innovation :
Under Jobs's leadership, Apple became synonymous with innovation. He
famously believed in creating products that customers didn't even know they
wanted until they saw them. For example, the iPhone revolutionized the
smartphone industry by introducing a touchscreen interface and app ecosystem,
setting new standards for usability and design.
5. Focus on design :
Jobs was passionate about design and believed in creating products that were not
only functional but also aesthetically pleasing. He famously said, "Design is not
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just what it looks like and feels like. Design is how it works." This emphasis on
design excellence helped differentiate Apple's products in the market.
6. Marketing and branding :
Jobs was a master marketer who understood the importance of storytelling and
branding. He was known for his captivating product presentations, such as the
iconic Apple keynote addresses, where he would unveil new products with
dramatic flair. These presentations not only generated buzz but also created an
emotional connection with consumers.

 Jack Ma :
1. Early life and education :
 Jack Ma grew up during China's Cultural Revolution, facing numerous
challenges including rejection from college entrance exams multiple times.
 He started learning English at an early age by offering free tours to foreign
tourists in his hometown Hangzhou.
2. Founding Alibaba :
 In 1999, Jack Ma along with a group of friends founded Alibaba Group,
initially operating out of his apartment in Hangzhou.
 Alibaba's primary goal was to create an online marketplace to connect
Chinese manufacturers with overseas buyers.
 Despite facing initial skepticism and struggling to attract investors, Alibaba
eventually gained traction and became one of the leading e-commerce
platforms globally.
3. Achievements :
 Alibaba's Taobao, an online shopping platform, was launched in 2003, and it
quickly gained popularity by offering free listings, challenging eBay's
dominance in China.
 In 2004, Alibaba Group launched Alipay, an online payment platform, which
played a crucial role in facilitating transactions within Alibaba's ecosystem.
 The company went public on the New York Stock Exchange (NYSE) in 2014,
raising $25 billion in what was then the largest initial public offering (IPO) in
history.
 Under Jack Ma's leadership, Alibaba expanded its business into various
sectors including cloud computing, digital entertainment, logistics, and
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finance.
4. Leadership style :
 Jack Ma is known for his charismatic and unconventional leadership style,
often emphasizing the importance of innovation, risk-taking, and
perseverance.
 He is also a proponent of "996" culture, advocating for employees to work
from 9 a.m. to 9 p.m., six days a week, a controversial stance that has sparked
debates on work-life balance and labor rights in China.
5. Challenges :
 Alibaba has faced various challenges over the years, including allegations of
counterfeit goods on its platforms, regulatory scrutiny, and competition from
domestic and international rivals.
 Jack Ma's outspoken nature and criticism of Chinese regulators have
occasionally landed him in hot water, leading to speculation about political
motivations behind certain regulatory actions against Alibaba.

 Carl Jung's theory of extroversion and introversion :

Carl Jung's theory of extroversion and introversion provides valuable insights
into how personality traits can influence entrepreneurial behavior and success.
Carl Jung's theory of extroversion and introversion offers valuable insights into
the diverse ways in which personality traits can shape entrepreneurial behavior
and success. While no single personality type guarantees success in
entrepreneurship, understanding one's own tendencies and leveraging them
effectively can lead to more fulfilling and impactful ventures. Additionally, teams
with a diverse mix of extroverts, introverts, and Ambiverts can benefit from a
range of perspectives and approaches, fostering innovation and resilience in the
entrepreneurial journey.
1. Extroversion :
 Characteristics :
Extroverts are typically outgoing, sociable, and energized by external stimuli.
They tend to be assertive, action-oriented, and enjoy engaging with others.
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 Entrepreneurial implications :
Extroverted entrepreneurs often excel in networking, sales, and marketing roles.
Their ability to connect with people, pitch ideas, and build relationships can be
advantageous in attracting investors, forming partnerships, and acquiring
customers. They may also thrive in leadership positions where they can energize
and motivate teams.
2. Introversion :
 Characteristics :
Introverts, on the other hand, are more inward-focused, reflective, and reserved.
They tend to prefer solitude or small-group interactions over large social
gatherings. Introverts often exhibit deep thinking, creativity, and a preference for
depth over breadth in relationships.
 Entrepreneurial implications :
Introverted entrepreneurs may excel in roles that require deep analytical thinking,
strategic planning, and innovation. Their tendency to introspect and reflect can
lead to unique insights and creative solutions to problems. While they may find
networking and public speaking challenging, introverts often shine in areas such
as product development, research, and focused one-on-one interactions with key
stakeholders.
3. Ambiversion :
 Characteristics :
Some individuals exhibit a balance of extroverted and introverted traits, known
as ambiversion. Ambiverts can adapt their behavior to different situations,
switching between outgoing and reserved as needed.
 Entrepreneurial implications :
Ambiverts may possess a versatile skill set that enables them to thrive in various
entrepreneurial roles. They can leverage their ability to connect with others while
also tapping into their capacity for deep focus and introspection. Ambiverts may
excel in leadership roles that require both visionary thinking and attention to
detail.
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 Impact on entrepreneurial success :
1. Networking and relationship building :
Extroverts may have an edge in building extensive networks and forming
strategic alliances, while introverts may excel in cultivating deeper, more
meaningful relationships with select partners or customers.
2. Risk taking and innovation :
Extroverts may be more inclined to take bold risks and pursue opportunities
aggressively, whereas introverts may take a more cautious approach, focusing on
thorough research and analysis before making decisions.
3. Leadership style :
Extroverts often exhibit charismatic and dynamic leadership styles, whereas
introverts may lead through quiet influence, leading by example, and
empowering others.