ENTREPRENEURSHIP

Meaning of an Entrepreneur
• Entrepreneur is a person who undertakes an enterprise.
• The process of creation is called entrepreneurship
• An entrepreneur can be considered as a person who bears the risk of
operating a business in the face of uncertainty about the future
conditions
• To conclude
an entrepreneur can be considered as an agent who buys the
four factors of production at certain prices in order to combine them
into product with a view to selling it at uncertain prices in future.
Definition of an Entrepreneur
• Entrepreneur is a person who organises, manages, develops and takes
the risk of running an enterprise”.
• Peter F. Drucker defines an entrepreneur as one who always searches
for change, responds to it and exploits it as an opportunity.
Innovation is the basic tool of entrepreneurs,
• International Labour Organization (ILO) defines entrepreneurs as
those people who have the ability to see and evaluate business
opportunities, together with the necessary resources and take
advantage of them and initiate appropriate action to ensure success.
Definition of Entrepreneurship
• Entrepreneurship is a process of creating something new with value
by devoting necessary time and effort, taking the accompanying
financial, psychic, and social risks, and receiving the resulting rewards
of monetary and personal satisfaction and independence”.
Concept of Entrepreneur/Evolution of the concept
• The word “Entrepreneur” is derived from French word
“Entreprendre” meaning “to undertake”.
• 16th century: In 16th century it was applied to those who were
engaged in military expeditions.
• 17th century: In 17th century it was extended to cover civil
engineering activities such as construction
• Richard Cantillon – in 1700s the term entrepreneur to refer to
economic activities.
• “An entrepreneur is a person who buys products & services at certain
prices with a view to selling its product at uncertain prices”.
• In the 18th century, the person with capital was differentiated from
the one who needed capital. In other words, the entrepreneurs were
regarded as capital users & capital providers as today’s venture
capitalists.
• In the late 19th and early 20th centuries, entrepreneurs were
frequently not distinguished from managers and were viewed mostly
from an economic perspective.
• In the Middle of the 20th century the term entrepreneur as an
innovator was established.
Functions of Entrepreneur
• Performs functions such as planning, organizing, managing, risk bearing
and decision making.
1.Entrepreneur as an Innovator
2. Entrepreneur as a Risk taker
3. Entrepreneur as an organizer
Innovator
New product(unfamiliar/New variety)
New method of production
New market
New source of raw material
New form of organisation
Risk taker
Assume possible risk
Buy all what is necessary
Bear uncertainty w/c is neither insured nor calculated
Try to reduce risk with experienc,foresight,professional help

Organizer
Raise sufficient capital
Plan, delegate and execute all facets of business
Manage and distribute profit wisely
Classification of Entrepreneur
1.Classification of Entrepreneurs based on Functional Characteristics
a. Innovative Entrepreneurs
b. Imitative or Adoptive Entrepreneurs
c. Fabian Entrepreneur
d. Drone Entrepreneur:
• Innovative Entrepreneurs : Introduces New Goods /Products / Services or
New Methods of Production or discovers New Markets or Reorganizes his
Enterprise. Such Entrepreneurs do well when a certain level of
development is already achieved; they look forward to improve upon the
Past.
• Imitative or Adoptive Entrepreneurs :Such Entrepreneurs do not Innovate themselves, but
Imitate or Copy Techniques & Technology innovated by other Innovative Entrepreneurs. They
are characterized by their readiness to adopt Successful Innovations by other Entrepreneurs.
They are particularly suitable for under Developed Regions as Adoption saves Costs of Trial &
Error.
• Fabian Entrepreneur: They display great caution & skepticism in experimenting with any
change in their Enterprise..
 Neither will to introduce nor adopt new change
 Driven by custom, religion, tradition and past practices
 They adopt changes only when there is an imminent threat to the very Survival of their
Enterprise
• Drone Entrepreneur: These Entrepreneurs are characterized by a Die – Hard Conservative
Attitude. Such entrepreneurs may even incur Huge Losses but they will not be ready to make
Changes in their existing production techniques.
Highly resistant to change. Old fashioned
Sink rather imitate
Suffer loss prefer traditional way
2)According to the type of business
i)Business entrepreneur
ii)Trading entrepreneur
ii)Industrial entrepreneur
(a)Large
(b)medium
(c)small
(d)tiny
iv)Corporate entrepreneur
v)Agricultural entrepreneur
(a)plantation
b)horticulture
c)dairy
d)forestry
vi)Retail entrepreneur
vii)service entrepreneur
i)Business entrepreneur: are individuals who conceive an idea for a new
product or service and then create a business to materialize their idea into
reality.
ii)Trading entrepreneur : Trading entrepreneur undertakes trading activities
not concerned with manufacturing work. Identifies potential markets.
ii)Industrial entrepreneur: is essentially a manufacturer who identifies the
potential needs of the customers
(a)Large
(b)medium
(c)small
(d)tiny
iv)Corporate entrepreneur: Corporate entrepreneur is an individual who
demonstrates his innovative skill in organizing and managing a corporate
undertaking
v)Agricultural entrepreneur : Are those who undertake agricultural
activities as raising and marketing of crops, fertilizers and other inputs of
agriculture
(a)plantation
b)horticulture
c)dairy
d)forestry
vi)Retail entrepreneur: Shops to sell finished goods to consumers in
exchange for money. Retail businesses can include grocery, drug,
department and convenient stores. Service related businesses such as
beauty salons and rental places are also considered retail businesses.
vii)Service entrepreneur: provides work performed in an expert manner by
an individual or team for the benefit of its customers such as accounting,
banking, consulting, education etc.
3)According to the use of technology
i)technical
ii)non technical
(iii)professional
iv)high tech
v)low tech
4)According to the motivation
i)pure
ii)induced
iii)motivated
iv)spontaneous
Entrepreneurs in technology classified as
1)Technical: Concentrates more on production than through sales and marketing
through the demonstration of his innovative abilities in matter of production of
goods and rendering of services and skills in production techniques.
2) Non-technical: Not concerned with technical aspects of the product and are
concerned only with the alternative distribution and marketing strategies to
promote their business.
3) Professional entrepreneur; Individuals who provide your company with
specialized service, including but not restricted to lawyers, accountants and
management consultants
4)High tech entrepreneur: is one who converts new knowledge and technologies
into economic and social benefits
5) Low tech entrepreneur: small firms,Non-research-intensive entrepreneurs
Based on motivation:
Are those entrepreneurs who use the motivated as a force to achieve their
objectives classified as
(i) Pure: Is an individual who is motivated by the cycological and economic
rewards. And undertakes an entrepreneurial activity out of personal
satisfaction, ego and status.
(ii) Induced: Is one who is induced to take up entrepreneurship task due to the
policy measures of the government which provides assistance, incentives,
concessions and necessary overhead facilities to star new venture.
(iii) Motivated entrepreneurs: Are motivated by the desire of self fulfillment. They
come into being because of the making and marketing of the new product for
the use of customers who is further motivated by the reward in terms of profit.
(iv) Spontaneous entrepreneur: Start their business by their natural talents are
the persons who take initiative, are bold confidence and have strong
conviction in their inborn ability.
5)According to growth
i)growth
ii)super growth
6)According to stages of development
i)modern
ii)classical iii)urban
7)According to the area
i)urban
ii)rural
8)According to the gender and age
i)men
ii)women
4) Based on Growth :
• Growth: Are those entrepreneurs who take a high growth industry which has substantial
growth prospectus.
• Super growth entrepreneurs: Are those who have shown enormous growth of performance
in their venture and Identified by liquidity of funds, profitability and gearing.
5) Based on stages of development:
(i)First generation: One who starts an industrial unit by his innovative skill who essentially an
innovator who combines different technologies to produce a marketable product or service.
(ii)Modern: Undertaking those ventures which suit to the changing and current demands in the
market.
(iii)Classical: Is one who is concerned with the customers an marketing needs through the
development of a self-supporting venture and is a stereotype entrepreneur whose aim is to
maximize the his returns at a consistent level with the survival of the firm.
9)According to the scale of operation
i)small
ii)large
10)Others or unclassified
i)professional
ii)non-professional
iii)modern
iv)traditional
v)skilled
vi)nonskilled
vii)imitating
viii)inherited
ix)forced
x)national international
xii)bureaucratic
xiiii)intrapreneur
xiv)immigrant
Characteristics of Entrepreneur
Characteristics of a successful Entrepreneur can be abbreviated as
E- Effective Communicator
N-Negotiating Skills
T-Total Commitment/Time Management/Tactical/Team Man
R-Risk Taking/Resourceful/Responsible
E-Emotional Stable/Ethical
P-Problem Solving/Passion/Perseverance/Patience
R-Result Oriented/Realistic/Relation-Public and Human
E-Energetic/Endurance
N-Networking Ability
E-Excellence in Economy
U-Unambiguous/Understand how to administer and organize
R-Real Innovator
Importance of Entrepreneurship
1. Pivot of Economic Development
2. Basis of Business
3. Organizer of Associate is Productive Resources
4. Contribution in Production of New Products
5. Development of New Production Techniques
6. Help in Removing Regional Disparities
7. Helpful in Capital Formation
8. Development of New Market
9. Establishment of New Industrial Enterprises
10. Help in Bringing Changes in Social Framework
11. Contribution to rising the Standard of Living
12. Encouragement to Investigation and Research
13. Contribution to Generate Employment Opportunities
14. Contribution in Development and Expansion of Existing Enterprises
Intrapreneur : An Emerging Class

An organization
desiring to establish an
intrapreneurial
environment must
implement a
procedure for its
creation.
Intraprenuer
Is an emerging class found in large industrial organizations who emerge from within the confines
of the large industrial organizations.
In big organizations top executives are encouraged to catch hold of new ideas and convert them
into products through research and development activities within the framework of the
organization.
In many organisations, top executives are found leaving their jobs and starting their own
enterprises and have become competitors to ventures they quit.
GRIFFORD PINCHOT –III- Large corporation should create smaller systems within and allow
executives to operate like entrepreneurs and be provided with adequate financial resources and
autonomy for development and application of their ideas.
These intra corporate entrepreneurs-intrapreneurs
Comparison between Entrepreneurship and Intrapreneur
Myths of an Entrepreneurship
• Entrepreneurs are born that way.
• The only requirement is a good idea.
• Starting a new business guarantees freedom.
• Most entrepreneurs are successful financially
• Starting a business is easy.
• Launching a company quickly leads to wealth.
• Only money motivates employees.
• Businesses either flourish or fail.
• All responsibility falls on the entrepreneur.
• Businesses need someone with an MBA at the helm.
• Quitting is for losers
Problems faced by Entrepreneurs/ Entrepreneurship
1. Lack of a viable concept
2. Lack of market knowledge
3. Lack of technical skills
4. Lack of seed capital
5. Lack of business know how
6. Complacency—lack of motivation
7. Social stigma
8. Time presence and distractions
9. Legal constraints and regulations
10. Monopoly and protectionism
11. Inhibitions
12. Enfold regulations
13. Obsolescence of technology or idea
14. Unstable & unpredictable markers
15. Globalization & entry of foreign goods
 Women Entrepreneur
Factors influencing women entrepreneur
• Economic independence
• Establishing their own creativity
• Establishing their own identity
• Achievement of excellence
• Building confidence
• Developing risk taking ability
• Motivation
• Equal status in society
• Greater freedom and mobility
Functions of women entrepreneur
• Exploration of the prospects of starting a
new business
• Pool up the resources
• Establish the industrial enterprise
• Manage the business
• Development of strategies.
• To assume risk & uncertainty
• To develop business & business decision
• Motivation
• Supervision & leadership
• Challenges in the path of women entrepreneurs
• Lack confidence
• Problem of finance & working capital
• Socio- cultural barriers
• Production problem
• Inefficient Marketing Arrangements
• Male dominations
• Steps to be taken to develop women entrepreneurship
1. Provide basic education & establish special institutions to train women
entrepreneurs.
2. Conduct special workshops to women for better awareness.
3. Liberal financial support to motivate women entrepreneurs
4. Favourable credit policies to women
5. Provide better marketing help to women entrepreneurs
6. Provide need- based training for development of skills & entrepreneurship.
7. Establish self-help groups, Voluntary agencies & social welfare organization for
women entrepreneurs
8. Provide concessions to women entrepreneurs.
9. Provide a common platform to all the concerned agencies & R & D organization to
achieve an interacted approach for promoting women entrepreneurs
Role of entrepreneurship in economic development
1. Entrepreneurship promotes capital formation by mobilizing the savings of
the public.
2. Entrepreneurship provides immediate large scale employment thereby reducing
the unemployment problem in the country.
3. Entrepreneurship promotes balanced regional development.
4. Entrepreneurship helps reduce the concentration of the economic power.
5. Entrepreneurship stimulates equitable redistribution of wealth, income and even
political power in the interests of the country.
6. Entrepreneurship encourages effective resource mobilization of capital and skill
which otherwise would remain unutilized and idle.
8. Entrepreneurship promotes export trade which is an important ingredient for
economic development
9.They are basically change agents and bring in change in society
10.Successful entrepreneurs become icons and inspire other small entrepreneurs.
Entrepreneurship in India
• Entrepreneurship is regarded as closely associated with the Economic History of India.
• This is traced way back to even as early as Rig Veda, when Metal Handicrafts
manufacturing cottage & small enterprises existed in the Country.
• It has passed through several Ups & Downs. The important ones include the Decline of Indian
Handicrafts Industry towards the end of the 18th Century, entry of the East India company.
• The Swadeshi Campaign for Indian Manufactured Goods, the First World War, Emergence of the Indian
Managing Agency Systems by promoting Joint Stock Companies, the Second World War, Partition of
Undivided India & undertaking planned development of Entrepreneurship in the Country by GoI after
Independence in 1947. For the purpose of encouraging Entrepreneurship, the GoI brought out the
First Industrial Policy Resolutions in 1948 which was subsequently revised from Time to Time.
• Three Important Resolutions in the Industrial Resolutions policy
1. To maintain a proper distribution of economic power between Private & Public Sector.
2. To encourage Rapid Industrialization by moving the concept of Entrepreneurship from existing
centers to other cities, towns & rural areas.
3. To disseminate the Entrepreneurship acumen concentrated in a few dominant communities to a
large number of Industrially Potential People of varied Social Background.
Entrepreneurship development cycle
Entrepreneurship development model

Psychological Model: This model signifies that psychological factors are responsible for the
development of entrepreneurial behavior in individuals.

Sociological Model: This model considers societal factors responsible for the development of
entrepreneurial behavior in individuals.

Population-Ecology Model :This model analyzes the determinants of entrepreneurship development

.
Factors Influencing the growth of Entrepreneurship
• Risk Tolerance : Rewards rarely come without risk. Ability to take advantage of
an opportunity will depend on tolerance for risk.
• Responsiveness to Opportunity: The ability to respond to the market and
new business opportunities can be the difference between a successful
entrepreneur and a failed business model.
• Leadership and Inspiring Others: It is up to the entrepreneur to marshal
assets.
• Intellectual Property Rights: Intellectual property laws can provide with
exclusive business rights to ideas
Stages in entrepreneurial process
• Stage-1:Identification and evaluation of B-opportunity
Market need exists or fulfills/size/competition/patent/revenue source
• Stage-2: Development of B plan
Description of future directions
• Stage-3: Determination of the resources required
Quantity/quality/prices/source
• Stage-4: Creation and actual management of the enterprise
legal & practical hurdles/ potential problems & possible solutions