Process of entrepreneur

Identifying entrepreneurial opportunity

There are many opportunities in the world of
business.Anentrepreneur senses the opportunities
faster than others do .And therefore, keeps his eyes
and ears open and apply imagination, creativity
and innovativeness in attaining business success.

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 Functions of an entrepreneur
Turning ideas into action
An entrepreneur should be capable of turning his
ideas into reality. He collects information
regarding the ideas, products, practices to suit the
demand in the market. Further steps are taken to
achieve the goals in the light of the information
collected

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 Functions of an entrepreneur
Feasibility study
The entrepreneur conducts studies to assess the
market feasibility of the proposed product or
services. He anticipates problems and assesses
quantity, quality, cost and sources of inputs
required to run the enterprise.

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 Functions of an entrepreneur
Resourcing
The entrepreneur needs various resources in terms
of money, machine, material, and men to running
the enterprise successfully.
 An essential function of an entrepreneur is to
ensure the availability of all these resources

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 Functions of an entrepreneur
Setting up of the Enterprise
For setting up an enterprise the entrepreneur may
need to fulfill some legal formalities. He also tries
to find out a suitable location, design the building,
and do many other things.

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 Functions of an entrepreneur
Managing the enterprise
One of the important function of an entrepreneur is
to run the enterprise. He has to manage men,
material, finance and organize production of goods
and services. He has to market each product and
service, after ensuring appropriate returns (profits)
of the investment.

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 Functions of an entrepreneur
Growth and Development
Once the enterprise achieves its desired results, the
entrepreneur has to explore another higher goal for
its proper growth and development. The
entrepreneur is not satisfied only with achieving a
set goal but constantly struggle for achieving
excellence

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 Factors Affecting Entrepreneurship

These factors may have been both positive and negative

influence on the appearance of entrepreneurship.
Economic Factor: Factors such as availability of finance,
labor, land, accessibility of customers, suppliers are the
factors that stimulate entrepreneurship. Capital is one of
the most important fundamentals to establish an enterprise.
Availability of sufficient capital affects the introduction,
survival and growth of a business enterprise

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 Factors Affecting Entrepreneurship

Socio-Economic Factors
The empirical studies have identified the following
socioeconomic factors:
Social Security
Family background
Level of Education
Level of perception

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 Factors Affecting Entrepreneurship

Personal Factors
Personality traits such as inner desire for control of their
activities, tolerance for risk, high level of tolerance to
function in adverse situations
Political
Some researchers felt that the growth of entrepreneurship
cannot be explained fully unless the political set-up of a
country is taken into consideration

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 Barriers to Entrepreneurship
A large number of entrepreneurs particularly in the small
enterprises fail due to several problems and barriers like
Lack of market knowledge
 Lack of technical know how
Lack of seed capital
Absence of Ideal Market conditions.
Lack of Education
Lack of attitude and training
Inadequate infrastructure facilities.
Corruption in administration.
Unstable state government
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 Common Myths About Entrepreneurs

• Myth 1: Entrepreneurs, like leaders, are born, not

made
– This myth is based on the mistaken belief that some people
are genetically predisposed to be entrepreneurs.
– The consensus of many studies is that no one is “born” to
be an entrepreneur; everyone has the potential to become
one.
– Whether someone does or doesn’t become an entrepreneur
is a function of the environment, life experiences, and
personal choices.

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 Common Myths About Entrepreneurs

Although no one is “born” to be an entrepreneur, there are common

personality qualities and characteristics of successful entrepreneurs

• Creative • Optimistic character

•Achievement motivated • Influential
• Alert to opportunities •Self-confident
• Energetic • Tolerant of uncertainty
• Has a strong work ethic • Visionary
• Is a moderate risk taker

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 Common Myths About Entrepreneurs

• Myth 2: Entrepreneurs Are Gamblers

– A second myth about entrepreneurs is that they are
gamblers and take big risks. The truth is, most
entrepreneurs are moderate risk takers.
– The idea that entrepreneurs are gamblers originates from
two sources:
• Entrepreneurs typically have jobs that are less structured, and so
they face a more uncertain set of possibilities than people in
traditional jobs.
• Many entrepreneurs have a strong need to achieve and set
challenging goals, a behavior that is often connected with risk
taking.

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 Common Myths About Entrepreneurs

• Myth 3: Entrepreneurs Are Motivated Primarily by

Money
– While it is difficult to think that entrepreneurs don’t seek
financial rewards, vise verse money is rarely the reason
entrepreneurs start new firms.

The desire to make money, alone, is not a good enough

reason to start one’s own business.

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 Common Myths About Entrepreneurs

• Myth 4: Entrepreneurs Should Be Young

– The most exciting age range for early stage entrepreneurial
activity is 25 to 34 years old.
– While it is important to be energetic, investors often
mention the strength of the entrepreneur as their most
important criteria in making investment decisions.
• What makes an entrepreneur “strong” in the eyes of an investor is
experience, maturity.

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 Types of Start-Up Firms

Types of Start-up Firms

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Economic Impact of Entrepreneurial Firms
(1 of 2)

• Innovation
– Is the process of creating something new, which is central
to the entrepreneurial process.
– Small entrepreneurial firms are responsible for 55% of all
innovations .
• Job Creation
– In the past two decades, economic activity has moved in
the direction of smaller entrepreneurial firms, which may
be due to their unique ability to innovate and focus on
specialized tasks.

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 Entrepreneurial Firms’ Impact on Society
and Larger Firms
• Impact on Society
– Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our
health, and entertain us in new ways.
– Phones, computer, internet, new products. Etc….
• Impact on Larger Firms
– Many entrepreneurial firms have built their entire business
models around producing products and services that help
larger firms become more efficient and effective.
– As the audit companies

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 How to avoid the pitfalls

Know your business in depth: Right types of experience in the

business you plan to start. Get the best education in business area
•Develop a solid business plan
•Well-written business plan is a essential element in
preparing for business success
Manage financial Resource: Have an adequate of capital
for start-up
“ Estimate how much capital you need to get the business
going and then double that figure”
- Have enough cash to pay the bills and obligations
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 How to avoid the pitfalls

Learn how to manage people effectively:

Well training
Well motivated employees
Attracting talented and skillful employees
Keeping the best employees
Maintain a positive attitude
Understand financial statements

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 Thank you

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 Activity1.2

Explain the Concept of Entrepreneurship

Entrepreneurship – Meaning – Types – Qualities of an
Entrepreneur – Factors influencing Entrepreneurship –
Functions of Entrepreneurs, Barriers to Entrepreneurship-
factors contribute to the success of entrepreneurship.

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