Startup and New

Venture
Management
Module -1
CONTENT PREPARED BY
PROF. CHINMOY GOSWAMI
Module 1: Concept and Definitions

1. Entrepreneur & Entrepreneurship

2. Entrepreneurship and Economic Development
3. A Typology of Entrepreneurs
4. Entrepreneurial Competencies: The Entrepreneur’s Role
5. Task and Personality
6. Entrepreneurial Skills: creativity, problem solving, decision making,
communication, leadership quality
7. Factors Affecting Entrepreneurial Growth: Economic
8. Non-Economic Factors; EDP Programmes
9. Entrepreneurial Training; Traits/Qualities of an Entrepreneurs
10. Entrepreneurial Process: Steps of entrepreneurial process
Entrepreneur & Entrepreneurship…

Definitions:
An Entrepreneur refers to a person who organizes, manages and operates multiple
businesses with different goals and takes financial risks also

An Entrepreneurship is defined as the process of starting, executing the business

activities with various departments in the business is known as entrepreneurship.

The difference
 It is needless to say both nouns represent almost the same thing, for the
exception that entrepreneurs are people and entrepreneurship is a process.
 Entrepreneurs are organizers while entrepreneurship is an organization.
 Entrepreneurs are inventors and innovators, while entrepreneurship is the
innovation.
Entrepreneur & Entrepreneurship

 "Entrepreneurship" may result in new organizations or revitalize mature

organizations in response to a perceived business opportunity. A new
business started by an entrepreneur is referred to as a startup company.
In recent years, the term has been extended to include social and
political forms of entrepreneurial activity.
 The capacity and willingness to develop, organize and manage a
business venture along with any of its risks in order to make a profit. The
most obvious example of entrepreneurship is the starting of new
businesses.
 In economics, entrepreneurship combined with land, labor, natural
resources and capital can produce profit. Entrepreneurial spirit is
characterized by innovation and risk-taking, and is an essential part of a
nation's ability to succeed in an ever changing and increasingly
competitive global marketplace.
Entrepreneurship and Economic
Development…
Role of Entrepreneurs in economic development of a country are.
1. Employment opportunities
Entrepreneurs employ labor for managing their business activities and provides employment opportunities to a large
number of people. They remove unemployment problem.
2. Balanced Regional Development
Government promotes decentralized development of industries as most of the incentives are granted for
establishing industries in backward and rural areas. Thus, the entrepreneurs to avail the benefits establish industries in
backward and rural areas.
3. Mobilization Of Local Resources
Entrepreneurs help to mobilize and utilize local resources like small savings and talents of relatives and friends, which
might otherwise remain idle and unutilized. Thus they help in effective utilization of resources.
4. Optimization Of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by providing high output capital
ratio as well as high employment capital ratio.
5. Promotion of Exports
Entrepreneurs reduce the pressure on the country’s balance of payments by exporting their goods they earn
valuable foreign exchange through exports.
Entrepreneurship and Economic
Development…
6. Consumer Demands
Entrepreneurs produce a wide range of products required by consumers. They meet the demand of the
consumers without creating a shortage for goods.
7. Social Advantage
Entrepreneurs help in the development of the society by providing employment to people and paves for
independent living They encourage democracy and self-governance. They are adept in distributing national
income in more efficient and equitable manner among the various participants of the society.
8. Increase per capita income
Entrepreneurs help to increase the per capita income of the country in various ways and facilitate
development of backward areas and weaker sections of the society.
9. Capital formation
A country can attain economic development only when there is more amount of investment and production.
Entrepreneurs help in channelizing their savings and savings of the public to productive resources by
establishing enterprises. They promote capital formation by channelizing the savings of public to productive
resources.
10. Growth of capital market
Entrepreneurs raises money for running their business through shares and debentures. Trading of shares and
debentures by the public with the help of financial services sector leads to capital market growth.
Entrepreneurship and Economic
Development
11. Growth of infrastructure
The infrastructure development of any country determines the economic development of a
country, Entrepreneurs by establishing their enterprises in rural and backward areas influence the
government to develop the infrastructure of those areas.
12. Development of Trader
Entrepreneurs play an important role in the promotion of domestic trade and foreign trade. They
avail assistance from various financial institutions in the form of cash credit, trade credit, overdraft,
short term loans, secured loans and unsecured loans and lead to the development of the trade in
the country.
13. Economic Integration
Entrepreneur reduces the concentration of power in a few hands by creating employment
opportunities and through equitable distribution of income. Entrepreneurs promote economic
integrationin the country by adopting certain economic policies and laws framed by the
government. They help in removing the disparity between the rich and the poor by adopting the
rules and regulation framed by the government for the effective functioning of business in the
country.
14. Inflow of Foreign Capital
Entrepreneurs help to attract funds from individuals and institutions residing in foreign countries for
their businesses.
A Typology of Entrepreneurs…
Depending upon the level of willingness to create innovative ideas, there can be the following types of
entrepreneurs:
1. Innovative entrepreneurs:
These entrepreneurs have the ability to think newer, better and more economical ideas of business
organisation and management. They are the business leaders and contributors to the economic
development of a country.
Inventions like the introduction of a small car ‘Nano’ by Ratan Tata, organised retailing by Kishore Biyani,
making mobile phones available to the common may by Anil Ambani are the works of innovative
entrepreneurs.
2. Imitating entrepreneurs:
These entrepreneurs are people who follow the path shown by innovative entrepreneurs. They imitate
innovative entrepreneurs because the environment in which they operate is such that it does not permit
them to have creative and innovative ideas on their own.
Such entrepreneurs are found in countries and situations marked with weak industrial and institutional base
which creates difficulties in initiating innovative ideas.
In our country also, a large number of such entrepreneurs are found in every field of business activity and
they fulfill their need for achievement by imitating the ideas introduced by innovative entrepreneurs.
Development of small shopping complexes is the work of imitating entrepreneurs. All the small car
manufacturers now are the imitating entrepreneurs.
A Typology of Entrepreneurs
3. Fabian entrepreneurs:
The dictionary meaning of the term ‘fabian’ is ‘a person seeking victory by delay rather than by
a decisive battle’. Fabian entrepreneurs are those individuals who do not show initiative in
visualising and implementing new ideas and innovations wait for some development which
would motivate them to initiate unless there is an imminent threat to their very existence.
4. Drone entrepreneurs:
The dictionary meaning of the term ‘drone’ is ‘a person who lives on the labor of others’. Drone
entrepreneurs are those individuals who are satisfied with the existing mode and speed of
business activity and show no inclination in gaining market leadership. In other words, drone
entrepreneurs are die-hard conservatives and even ready to suffer the loss of business.
5. Social Entrepreneur:
Social entrepreneurs drive social innovation and transformation in various fields including
education, health, human rights, workers’ rights, environment and enterprise development.
They undertake poverty alleviation objectives with the zeal of an entrepreneur, business
practices and dare to overcome traditional practices and to innovate. Dr Mohammed Yunus of
Bangladesh who started Gramin Bank is a case of social entrepreneur.
Entrepreneurial Competencies: The
Entrepreneur’s Role
“Entrepreneurial competencies can be defined as underlying characteristics such
as generic and specific knowledge, motives, traits, self-images, social roles, and skills
that result in venture birth, survival, and/or growth.”
Entrepreneurial Competencies: The
Entrepreneur’s Role…
1.Personal Entrepreneurial competencies
It is the personal characteristics of an individual who possess to perform the task effectively and
efficiently. Personal entrepreneurial competencies include the following:
a) Initiative
The entrepreneur should be able to take actions that go beyond his job requirements and to act
faster. He is always ahead of others and able to become a leader in the field of business. He Does
things before being asked or compelled by the situation and acts to extend the business into new
areas, products or services.
b) Sees and acts on opportunities
An entrepreneur always looks for and takes action on opportunities. He Sees and acts on new
business opportunities and Seizes unusual opportunities to obtain financing, equipment, land, work
space or assistance.
c) Persistence
An entrepreneur is able to make repeated efforts or to take different actions to overcome an
obstacle that get in the way of reaching goals. An entrepreneur takes repeated or different
actions to overcome an obstacle and Takes action in the face of a significant obstacle.
Entrepreneurial Competencies: The
Entrepreneur’s Role
2.Venture Initiation and success Competencies
In addition to personal competencies Entrepreneur must also possess the
competencies required to launch the enterprise and for its growth and survival.
It is further divided into two categories of competencies:
i. Enterprise launching competencies
1. Competency to understand the nature of business
2. Competency to determine the potential as an entrepreneur
3. Competency to develop a business plan
ii. Enterprise management competencies
1. Competency to manage the business
2. Competency to manage human resources
3. Competency to manage human resources
Task and Personality

1. Vision: An entrepreneur has a dream and he visualizes the ways and

means to achieve dream .In doing so he visualizes: Market Demands
Social-Economic Technological Environment
2. Knowledge: An entrepreneur has full knowledge about all the
technicalities of his business; be it technological, operational, financial
or market dynamic.
3. Desire to succeed: An entrepreneur has a strong desire to succeed
in life. Their dreams are not just limited to achieving one single goal but
they constantly work to achieve higher goals.
4. Independence: An entrepreneur needs independence in work and
decision-making. They don’t follow the rules of thumb but make their
own rules and destiny.
Task and Personality

5. Optimism: Entrepreneurs are highly optimistic about achieving their vision.

6. Value Addition: Entrepreneurs do not follow the conventional rules of thumb.
They have a constant desire to introduce something new to the existing business.
They create ,innovate or even add value to the existing products/services
7. Leadership: An entrepreneur exhibits the qualities of leader. They are good
planner, organizers, have good communication skill, good decision makers, take
initiative to implement plans and are result-oriented.
8. Hardworking: At times they are called workaholics. Work is worship for then. They
put in continuous efforts to achieve success and know that there is no substitute for
hark-work.
9. Risk-Taking Ability: Risk is an inherent and inseparable element of
entrepreneurship. He assumes the uncertainty of future. An entrepreneur
guarantees rent to the landlord, wages to employees and interest to the investor in
the hope of earning more than the expenses.
Entrepreneurial Skills: creativity, problem
solving, decision making, communication,
leadership quality
 CREATIVITY- A thorough observation of the entrepreneurial process shows that creative thinking is
the must have “skill” of an entrepreneur for the creation of new ideas. Creativity allows a person
to devise interesting processes, which gives so many advantages to entrepreneurs.
 PROBLEM SOLVING - Entrepreneurs, who create products or offer services that solve important
problems and bring value to the customers, are the ones who build successful businesses in the
long run. No wonder good problem-solving skills are in high demand in both worlds – the
traditional corporate world and the world of entrepreneurship.
 DECISION MAKING- Decision Making is all about employing one’s mental processes to come up
with a final choice after careful consideration of several options or alternatives. Effective and
successful decisions make profit to the company and unsuccessful ones make losses. This is why in
entrepreneurship, making intelligent decisions is regarded as very important because it could
mean the difference between success and failure of your endeavor.
 COMMUNICATION -Entrepreneurs with good people skills inspire others to be more confident in
expressing their opinions and encourage them to give feedback, which can speed up the
process of finding solutions.
 LEADERSHIP -Leadership raises many questions about the personal competencies of
Entrepreneurial leaders that enable them to successfully lead entrepreneurial endeavors.
Although identifying entrepreneur specific capabilities has been one of the main focuses of
entrepreneurship researches, our knowledge is limited about the personal leadership
competencies required in entrepreneurial context.
Factors Affecting Entrepreneurial
Growth: Economic
1. Capital- Capital is one of the most important factors of production for the establishment of an enterprise.
Increase in capital investment in viable projects results in increase in profits which help in accelerating the
process of capital formation. Entrepreneurship activity too gets a boost with the easy availability of funds for
investment.
2. Labor- Easy availability of right type of workers also effect entrepreneurship. The quality rather than
quantity of labor influences the emergence and growth of entrepreneurship. The problem of labor
immobility can be solved by providing infrastructural facilities including efficient transportation.
3. Raw Materials- The necessity of raw materials hardly needs any emphasis for establishing any industrial
activity and its influence in the emergence of entrepreneurship. In the absence of raw materials, neither any
enterprise can be established nor can an entrepreneur be emerged
4. Market- The role and importance of market and marketing is very important for the growth of
entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the absence of
latest knowledge about market and various marketing techniques.
5. Infrastructure -Expansion of entrepreneurship presupposes properly developed communication and
transportation facilities. It not only helps to enlarge the market, but expand the horizons of business too.

Apart from the above factors, institutions like trade/ business associations, business schools, libraries, etc.
makes valuable contribution towards promoting and sustaining entrepreneurship’ in the economy.
Non-Economic Factors
1. Education -Education enables one to understand the outside world and equips him with the basic knowledge and
skills to deal with day-to-day problems. In any society, the system of education has a significant role to play in
inculcating entrepreneurial values. In India, the system of education prior to the 20th century was based on religion.
In this rigid system, critical and questioning attitudes towards society were discouraged. The caste system and the
resultant occupational structure were reinforced by such education. It promoted the idea that business is not a
respectable occupation. Later, when the British came to our country, they introduced an education system, just to
produce clerks and accountants for the East India Company, The base of such a system, as you can well see, is very
anti-entrepreneurial.
2. Attitude of the Society- A related aspect to these is the attitude of the society towards entrepreneurship. Certain
societies encourage innovations and novelties, and thus approve entrepreneurs’ actions and rewards like profits.
Certain others do not tolerate changes and in such circumstances, entrepreneurship cannot take root and grow.
Similarly, some societies have an inherent dislike for any money-making activity. It is said, that in Russia, in the
nineteenth century, the upper classes did not like entrepreneurs. For them, cultivating the land meant a good life.
They believed that rand belongs to God and the produce of the land was nothing but god’s blessing. Russian folk-
tales, proverbs and songs during this period carried the message that making wealth through business was not right.
3. Cultural Value- Motives impel men to action. Entrepreneurial growth requires proper motives like profit-making,
acquisition of prestige and attainment of social status. Ambitious and talented men would take risks and innovate if
these motives are strong. The strength of these motives depends upon the culture of the society. If the culture is
economically or monetarily oriented, entrepreneurship would be applauded and praised; wealth accumulation as a
way of life would be appreciated. In the less developed countries, people are not economically motivated.
Monetary incentives have relatively less attraction. People have ample opportunities of attaining social distinction by
non-economic pursuits. Men with organizational abilities are, therefore, not dragged into business. They use their
talents for non-economic end.
EDP Programmes
As the term itself denotes, EDP is a programme meant to develop entrepreneurial
abilities among the people. In other words, it refers to inculcation, development, and
polishing of entrepreneurial skills into a person needed to establish and successfully
run his / her enterprise. Thus, the concept of entrepreneurship development
programme involves equipping a person with the required skills and knowledge
needed for starting and running the enterprise.
Objective of EDP Programmes
a) Develop and strengthen the entrepreneurial quality, i.e. motivation or need for
achievement.
b) Analyze environmental set up relating to small industry and small business.
c) Select the product.
d) Formulate proposal for the product.
e) Understand the process and procedure involved in setting up a small enterprise.
Entrepreneurial Training
Entrepreneurial Training Programme offer a comprehensive combination of courses to
help young entrepreneurs develop their business ideas and self-confidence.
These training courses are available to start-up ventures or those who want to expand
their businesses. The Entrepreneurial Training Programme offers great resources to help
you develop a solid business and learn what it takes to build a thriving business.
1. Put your business idea to the test
2. Build a business plan that will attract investment
3. Explore real-world possibilities
4. Reduce costly trial and error and increase your chances of success
5. Get answers to your tough questions from our experienced facilitators and instructors
6. Use case studies, activities and readings to learn how others like you succeeded
7. Utilize weekly feedback to make your plan work
8. Learn how to alter your plan early on to increase your chance of success
Traits/Qualities of an Entrepreneurs…
1. Economic and dynamic activity: Entrepreneurship is an economic
activity because it involves the creation and operation of an enterprise
with a view to creating value or wealth by ensuring optimum utilization of
scarce resources. Since this value creation activity is performed
continuously in the midst of uncertain business environment, therefore,
entrepreneurship is regarded as a dynamic force.
2. Related to innovation: Entrepreneurship involves a continuous search for
new ideas. Entrepreneurship compels an individual to continuously
evaluate the existing modes of business operations so that more efficient
and effective systems can be evolved and adopted. In other words,
entrepreneurship is a continuous effort for synergy (optimization of
performance) in organizations.
Traits/Qualities of an Entrepreneurs

3. Profit potential: “Profit potential is the likely level of return

or compensation to the entrepreneur for taking on the risk
of developing an idea into an actual business venture.”
Without profit potential, the efforts of entrepreneurs would
remain only an abstract and a theoretical leisure activity.
4. Risk bearing: The essence of entrepreneurship is the
‘willingness to assume risk’ arising out of the creation and
implementation of new ideas. New ideas are always
tentative and their results may not be instantaneous and
positive.
Successful and Unsuccessful
Entrepreneurs
 Successful
 Creative and Innovative
 Position themselves in shifting or new markets
 Create new products
 Create new processes
 Create new delivery
 Unsuccessful
 Poor Managers
 Low work ethic
 Inefficient
 Failure to plan and prepare
 Poor money managers
Entrepreneurial Process
Steps of entrepreneurial process…
1. Discovery: An entrepreneurial process begins with the idea generation, wherein
the entrepreneur identifies and evaluates the business opportunities. The
identification and the evaluation of opportunities is a difficult task; an
entrepreneur seeks inputs from all the persons including employees, consumers,
channel partners, technical people, etc. to reach to an optimum business
opportunity. An entrepreneur can evaluate the efficiency of an opportunity by
continuously asking certain questions to himself, such as, whether the
opportunity is worth investing in, is it sufficiently attractive, are the proposed
solutions feasible, is there any competitive advantage, what are the risk
associated with it.
2. Developing a Business Plan: Once the opportunity is identified, an entrepreneur
needs to create a comprehensive business plan. A business plan is critical to the
success of any new venture since it acts as a benchmark and the evaluation
criteria to see if the organization is moving towards its set goals. An entrepreneur
must dedicate his sufficient time towards its creation, the major components of a
business plan are mission and vision statement, goals and objectives, capital
requirement, a description of products and services, etc.
Steps of entrepreneurial process
3. Resourcing: The third step in the entrepreneurial process is resourcing, wherein
the entrepreneur identifies the sources from where the finance and the human
resource can be arranged. Here, the entrepreneur finds the investors for its new
venture and the personnel to carry out the business activities.
4. Managing the company: Once the funds are raised and the employees are
hired, the next step is to initiate the business operations to achieve the set goals.
First of all, an entrepreneur must decide the management structure or the
hierarchy that is required to solve the operational problems when they arise.
5. Harvesting: The final step in the entrepreneurial process is harvesting wherein, an
entrepreneur decides on the future prospects of the business, i.e. its growth and
development. Here, the actual growth is compared against the planned growth
and then the decision regarding the stability or the expansion of business
operations is undertaken accordingly, by an entrepreneur.
Thank You