Subject Name :Entrepreneurship Management

Unit No: 2
Unit Name : Concept, Types and Classification of Entrepreneur

Faculty Name : Dr. Ashwini Kadam

 Entrepreneurship Management
Unit 2: Concept, Types and Classification of
Entrepreneur

Faculty Name :Dr. Ashwini Kadam

Unit No:2 Unit Name : Concept, Types and Classification of
Entrepreneur

Types and Classification of

Entrepreneurs
Classification of entrepreneurs on the Basis of Economic Development

Innovating Entrepreneur

Adoptive or Imitative Entrepreneur

Fabian Entrepreneur

Drone Entrepreneur

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Innovating Entrepreneur

 Innovative entrepreneur is one who assembles and synthesis information and

introduces new combinations of factors of production.
 They are characterized by the smell of innovativeness.

 These entrepreneurs sense the opportunities for introduction new ideas, new
technology, new markets and creating new organizations.
 Innovative entrepreneurs are very much helpful for their country because they bring
about a transformation in life style.

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Adoptive or Imitative Entrepreneur

 also known as adoptive entrepreneur.

 He simply adopts successful innovation introduced by other innovators.

 These entrepreneurs imitate the existing entrepreneurs and setup their enterprise in
the same manner. Instead of innovating, they just imitate the technology and methods
innovated by others.

 These entrepreneurs are very helpful in less developed countries as they contribute
significantly in the growth of enterprise and entrepreneurial culture in these countries.

 Further by adopting the technology, which is already tested, they generate ample
employment avenues for the youth and therefore they are treated as agent of economic
development.

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Fabian Entrepreneur

 The Fabian entrepreneur is timid and cautious.

 He imitates other innovations only if he is certain that failure to do so may damage

his business.

 They are very much skeptical in their approach in adopting or innovating new
technology in their enterprise. They are not adaptable to the changing environment.
They love to remain in the existing business with the age-old techniques of production.

 They only adopt the new technology when they realize that failure to adopt will lead
to loss or collapse of the enterprise.

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Drone Entrepreneur

 These entrepreneurs are conservative or orthodox in outlook. They never like to get
rid of their traditional business and traditional machinery or systems of the business.

 They always feel comfortable with their old fashioned technology of production
even though the environment as well as the society have undergone considerable
changes.

 Thus, drone entrepreneurs refuse to adopt the changes. They are laggards as they
continue to operate in their traditional way and resist changes.

 His entrepreneurial activity may be restricted to just one or two innovations. They
refuse to adopt changes in production even at the risk of reduced returns.

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Entrepreneurs according to the Type of Business

Business entrepreneur:

 Convert ideas(product or service) into reality

 Deal with both manufacturing and trading aspect of business

e.g. Small trading and manufacturing business like printing press, boutique etc.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Type of Business Contd……..

Trading Entrepreneur:

 Undertakes trading activities

 Concerned with marketing (Domestic and international level)

 Identifies Markets, Stimulate demand for product line among buyers

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Type of Business Contd……..

Industrial entrepreneur:

 Undertakes manufacturing activities only

 Identifies the need of customer and tailors a product.

 Converts Economic Resources and Technological Resources into profitable

ventures

 New product development etc (textile, electronics, etc)

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Type of Business Contd……..

Corporate entrepreneur:

 A Person who demonstrates his innovative skill in organising and managing

corporate undertaking.

 Business organisation registered under companies Act.

E.g. Google, TATA, Infosys, Microsoft etc.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Corporate Entrepreneurship

A process that goes inside an existing firm and that may lead to new business venture,
the development of new products, services or processes and the renewal of strategies
and competitive postures.

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Entrepreneurs according to the Type of Business Contd……..

Agricultural entrepreneur:

 One who undertakes Agricultural activities as raising and marketing of

Crops, fertilizer etc.

 Production and marketing of agricultural inputs and outputs

e.g. Dairy, horticulture, forestry etc.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the use of Technology

 Technical entrepreneur: Production oriented, possesses innovative skills

in manufacturing, quality control etc.•

 Non technical entrepreneur: Develops marketing, distribution facilities and

strategies

 Professional entrepreneur: Uses the proceeds from sale of one business

to start another one. Brimming with ideas to start new ventures

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Motivation

 Pure entrepreneur: Psychological and economic rewards motivate him•

 Induced entrepreneur: Incentives, concessions, benefits offered by

government for entrepreneurs motivates him•

 Motivated entrepreneur: Sense of achievement and fulfilment motivate

him

 Spontaneous entrepreneur: Born entrepreneurs with inborn traits of

confidence, vision, initiative.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Growth

 Growth entrepreneur: One who enters a sector with a high growth rate, is

a positive thinker

 Super growth entrepreneur: One who enters a business and shows a

quick, steep and upward growth curve

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Stages of Development

 First generation entrepreneur: Innovator, risk taker, among the firsts in

family to enter business•

 Modern entrepreneur: Who considers feasibility of business, which can

adapt to change and dynamic market•

 Classical entrepreneur: One who gives more importance to consistent

returns than to growth; concerned about customer and marketing needs.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Entrepreneurs according to the Scale of Operation

 Small Scale Entrepreneurs

 Medium Scale Entrepreneurs

 Large Scale Entrepreneurs

Lecture 2 – Characters of
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Entrepreneurial Leadership
Micro, Small and Medium Enterprises (MSME)

According to the Micro, Small and Medium Enterprises (MSME) Development Act of
2006, (India)

A Micro enterprise is where the investment in plant and machinery does not exceed
twenty five lakh rupees

A small enterprise is where the investment in plant and machinery is more than twenty
five lakh rupees but does not exceed five crore rupees

A medium enterprise is where the investment in plant and machinery is more than five
crore rupees but does not exceed ten crore rupees

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Social entrepreneur

 A social entrepreneur recognizes a social problem and uses entrepreneurial

principles to organize, create and manage a venture to achieve Social

change (a social venture).

 While a Business Entrepreneur typically measures performance in profit and

return, a social entrepreneur focuses on creating social capital.

Lecture 2 – Characters of
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Entrepreneurial Leadership
Social entrepreneur

Social Entrepreneurs are

 Ambitious
 Mission driven
 Strategic
 Resourceful
 Result oriented

E.g. Muhammad Yunus-founder of Grameen Bank,

Dr Verghese Kurien- father of the India’s milk revolution, Ela Bhatt-

founder of SEWA

Lecture 2 – Characters of
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Entrepreneurial Leadership
Social entrepreneurship

Social entrepreneurship is the attempt to draw upon business techniques to find

solutions to social problems.

Lecture 2 – Characters of
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Entrepreneurial Leadership
According to Capital Ownership

 Private Entrepreneur

 State Entrepreneur

 Joint Entrepreneur

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According to Gender and Age

 Man Entrepreneur

 Woman Entrepreneur

 Young Entrepreneur

 Old Entrepreneur

 Middle-Age Entrepreneur

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According to Area

 Urban Entrepreneur

 Rural Entrepreneur

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According to entrepreneurial activity

 Novice Entrepreneur : First time entrepreneurs hence , have no prior business

experience
 A serial Entrepreneur : The serial entrepreneur only ever operates one business after
another, but only one business at a time
 Portfolio Entrepreneur : Individuals who currently have minority or majority
ownership stakes in two or more independent businesses that are either new, purchased
and/or inherited.

Lecture 2 – Characters of
27
Entrepreneurial Leadership
Unit No:2 Unit Name : Concept, Types and Classification of
Entrepreneur

Concept of Intrapreneur
Definition and meaning

Intrapreneur is defined as ‘any of the dreamers who do’. They are responsible for creating
innovation of any kind within in the organisation.

An Intrapreneur is someone who works within a company to develop an idea into a

workable product.

Intrapreneurs are given a high level of autonomy for their projects by the companies they
work for and they are often said to be acting essentially like entreprneurs without the risk
associated with being an entrepreneur.

Like an entrepreneur, an intrapreneur is driven, motive, creative and able to think outside of
the box.

Unlike entrepreneurs, intrapreneurs are far less exposed to the risk of failure. They have the
substantial finance of the company back their efforts and they can also take advantage of
connections, experience and skills available to the company.

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Characteristics of Intrapreneural Environment

Innovative Ideas

Encourage

Initial Opportunity Parameters

Availability of Resources

Encourage Teamwork

Evaluation

No Force

Reward

Alteration

Support of Top Management

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Intrapreneural Qualities

Innovator

Visionary

Knowledgeable

Flexibility

Encourage Teamwork

Diplomatic

Open to Discussion and Idea

Motivator

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Similarities and Differences between Entrepreneurship and
Intrapreneurship

The Size

Lack of communication

Feedback received in case of success/mistake

Dullness

Hierachies

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Entrepreneurship and Intrapreneurship: Advantages and Disadvantages

Entrepreneurship
Advantages Disadvantages
You are your own boss Money Pressure
The income increases Less benefits as the business is new
You have the chance to be original Long working hours
You have part of excitement Mistakes are magnified
and adventure
There are a lot of possibilities All decisions must be made along
Salary Potential

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Entrepreneurship and Intrapreneurship: Advantages and Disadvantages

Intrapreneurship
Advantages Disadvantages
Ability to stay in a friendly, well known Reward may not be up to expectation
environment
Practicing your skills within an Innovation may not be appreciated
organisation-lower risk accordingly
Using companies resources, good name, You can be innovative but to a certain
knowledge limit-you are not your own boss
Access to customers, infrastructure

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Characteristics of Intrapreneur

Self Motivated

Self-Confident and Courageous

Freedom

Education

Systems

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Comparison between Traditional Manager, Entrepreneur and
Intrapreneur
Factor Traditional Entrepreneur Intrapreneur
Manager
Primary Motive Promotion Independence chance to be Independence the chance to
creative be creative

Time focus Short term (to meet budgets) Survival and long term In between traditional
managers and entrepreneurs

Activity amount to risk Delegation, conservative , Do it oneself. Not concerned Do it ones slef
concerned about status about stauts

Failure and mistake decision Tries to avoid mistakes and Deals with mistakes and Attempts to hide the risk
supervises decision unless it is ready

Risk Careful Moderate risk taker Moderate risk taker

Relationship with others Hierarchy as basic relation Transactions and deal making Transactions within hierarchy
as a basic relationship

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Unit No:2 Unit Name : Concept, Types and Classification of
Entrepreneur

Women Entrepreneur
Introduction

Women Entrepreneurs may be defined as the women or a group of women who

initiate, organize and operate a business enterprise.

Government of India has defined women entrepreneurs as an enterprise owned and

controlled by a women having minimum financial interest of 51% of the capital and
giving at least 51% of employment generated in the enterprise to women.

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Constraints for the Development of Women Entrepreneurship

 Current Socio-economic transition in India

 Traditional societal constraints

 Household roles

 Lack of proper childcare facilities

 Increasing poverty

 Rising unemployment

 Reduction of the financial ability to educate girls and boys

 Greater pressure to marry at younger ages

 More visible domestic violence

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Barriers to Women Entrepreneurs

 Cultural Barriers

 Educational Barriers

 Economical Barrier

 Financial Barriers

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How to develop women entrepreneurs?

 Consider women as specific target group for all developmental programmes

 Better educational facilities and schemes should be extended to women folk

from government part

 Adequate training programme on management skills to be provided to

women community
 Encourage women’s participation in decision making

 Vocational training and Skill development training to be extended to women

community
 Training on professional competence and leadership skill to be extended to

women entrepreneurs

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How to develop women entrepreneurs? Contd…..

 Training and counseling on a large scale of existing women entrepreneurs

 Counseling through the aid of committed NGO’s, psychologists, managerial

experts and technical personnel should be provided

 Continuous monitoring and improvement of training programmes

 Activities in which women are trained should focus on their marketability and

profitability
 Making provisions of marketing and sales assistance from government part.

 Financial institutions should provide more working capital assistance both

for small scale and large scale venture

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How to develop women entrepreneurs? Contd…..

 Making provision of micro credit system and enterprise credit system to the
women entrepreneur at local level
 Infrastructure in the form of industrial plots and sheds to set up industries is
to be provided by state run agencies
 Industrial estates could also provide marketing outlets for display and sale of
product made by women
 A women Entrepreneur’s Guidance cell set up to handle the various
problems of women entrepreneurs all over the state
 District Industries centres and Single Window agencies should make use of
assisting women in their trade and business guidance
 Training in entrepreneurial attitudes should start at the high school level through
well designed courses

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Special schemes for women entreprneurs

Trade-related Entrepreneurship Assistance and Development scheme for

women(TREAD)

Objectives of Scheme :
o To conduct training programmes for women

o To impart training to women in entrepreneurship

o To support NGOs which are engaged in entrepreneurship training

o To support National level institutions which are engaged in entrepreneurship

training

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Trade-related Entrepreneurship Assistance and Development scheme for
women(TREAD)

Three major components of the scheme are :

 Govt. of India grant upto 30% of the total project cost to the Non-
government organisations(NGOs) for promoting entrepreneurship among
women.

 Govt. of India grant upto Rs. 1 lakh per programme to training institutions
/NGOs for imparting training to the women entrepreneurs.

 Need-based government of India grants up to Rs. 5 lakh to National

Entrepreneurship Development Institutions and any other institutions of
repute

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Credit Guarantee Fund Scheme

The Govt. introduced the Credit Guarantee Fund Scheme for Small Industries in May
2000 with the objective of making available credit to SSI units, particularly tiny units,
for loans up to Rs. 25 lakh without collateral/third party guarantees.

The Scheme is being operated by the Credit Guarantee Fund Trust for
Industries(CGTSI) set up jointly by the Government of India and SIDBI

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Support for Entrepreneurial and Managerial Development

MSME DIs regularly conduct EDPs/MDPs for existing and prospective entrepreneurs
and charge fee for such courses.

20% of courses conducted exclusively for women

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Seed Capital Scheme

 Govt. provides funds at 10% to unemployed youths and women aged 18-35
years, with minimum qualification VIIth pass

 Maximum seed capital available is Rs. 5 Lakhs

 Assistance percentage is 10% to 15% of total fixed capital, 22.5 % for

backward classes

 Repayment period is seven years.

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Prime Minister Employee Guarantee Scheme

 Maximum age of 35 years with qualification of Xth pass

 Assistance by way of loans up to 95% of project cost

 15% subsidy is made available

 Subsidy up to 15% or Rs. 7500/- whichever is less provided by govt. of India

 Parents of the candidates cannot have income annual income exceeding

Rs. 24000/-

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National Equity Fund

 Scheme is implemented by National Bank or State Finance Corporation

 No condition for age or qualification

 Loan is granted for service as well as industry-oriented purpose

 Candidate should contribute around 10% of the total cost of the project

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Women Industries Fund Scheme

 Women entrepreneurs get 15% seed capital of the total cost of the project

 The cost of the project should not exceed not more than Rs. 10 lakhs

 Women entrepreneurs should contribute at least 10% of total cost of the

project

 In case of partnership/public limited then the contribution of the women

should be 51%

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Single Window Scheme

 To facilitate women entrepreneurs in getting term loans and working capital

from one and same institution

 Applicable for both male and female entrepreneurs

 This scheme is applicable to the project where total expense are up to 20

lakhs (excluding working capital and marginal money)

 Loan has to be repaid within the period of ten years

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District Industries Centre Scheme (DIC)

 The main object is to start industries in rural areas where the population is
less than 1 lakh

 Investment in machinery up to Rs. 2 lakh is allowed

 20% of this investment is granted as seed capital

 For backward classes the seed capital is up to 30%

 The interest rate is 4 %

 Remaining capital needs to be financed by banks or financial institution

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 Entrepreneurship Development of women
through Self-Help Group

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Characteristics of an Ideal SHG :

 An ideal SHG comprises 15-20 members

 All the members should belong to the same socio-economic strata of society
 Rational leadership should be encouraged for the distribution of power and
to provide leadership opportunities to all the members
 Member should regularly attend meetings, save money and participate in all
activities voluntarily
 The procedure of decision making in SHG should democratic in nature
 The group frames rules and regulations, which are required in its effective
functioning
 Transparency in account keeping and accounts should be maintained and
updated regularly
 An SHG should be socially viable institution

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Role of Self Help Groups in empowering women

 Socio –economic progress of women and nation

 Increase awareness among women regarding savings, education, health,

environment, cleanliness, family welfare etc.
 self empowerment

 Rural development

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Remedial Measures and Suggestions

To solve the problems facing by women entrepreneurs, some remedial measures

and suggestions are given below:

 Governmental Efforts
 Stress on women education
 Financial assistance
 Enhance practical and technical knowledge
 Market facilities
 Infrastructural development
 Self-employment training programs
 Transfer of technology and information
 Research and survey programs

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Unit No:2 Unit Name : Concept, Types and Classification of
Entrepreneur

Social Entrepreneurship
Who is Social Entrepreneur

Social Entrepreneurs drive social innovation and transformation in various fields

including education, health, environment and enterprise development.

A social entrepreneur, similar to business entrepreneur, builds strong and sustainable

organisations, which are either set up as not-for-profits or companies.

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Social Entrepreneurship

Social entrepreneurship is
 About applying practical, innovative and sustainable approaches to benefit
society in general, with an emphasis on those who are marginalized and
poor.
 A term that captures a unique approach to economic and social problems, an
approach that cuts across sectors and disciplines grounded in certain values
and processes that are common to each social entrepreneur.
e.g. education, health, welfare reform, environment, economic development,
agriculture etc.
 An approach that sets the social entrepreneur apart from the rest of the crowd
of well-meaning people and organisations who dedicate their lives to social
improvement

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Some Common Traits of Social Entrepreneurs

 Belief in the innate capacity of all people to contribute meaningfully to

economic and social development

 A driving passion to make that happen

 A practical but innovative stance to a social problem

 Zeal to measure and monitor their impact

 A healthy impatience

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Organizational models in social entrepreneurship

 Leveraged non-profit ventures

 Hybrid non-profit ventures

 Social business ventures

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Advantages of Social Enterprise

 Easier to raise funds

 Easy marketing and promotion

 Easier to garner support from likeminded individuals

 Customized services

 Cost effectiveness

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Non Governmental Organisations

The decades starting with the 1990’s witnessed the proliferation of a new kind of sector
among the various agencies and governmental departments engaged in public service.
This sector was the Non-profit or the NGO (Non Governmental Organizations) that
mushroomed all over the world to fill the gap between the governmental agencies and
public.

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Unit No:2 Unit Name : Concept, Types and Classification of
Entrepreneur

Entrepreneurial Development
Program(EDP)
Meaning

Entrepreneurial Development Programme means a programme conducted to help a

person in strengthening his entrepreneurial motive and in acquiring skill and
capabilities required for promoting and running an enterprise efficiently.

A well designed EDP has three approach:

 Developing achievement motivation and sharpening entrepreneurial traits

and behaviour
 Guidance on industrial opportunities, incentives, facilities and rules and

regulations
 Developing managerial and operational capabilities

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Importance of EDP

 Economic Growth

 Balance regional development

 Eliminates poverty and Unemployment

 Optimum use of local resources

 Successful launching of new unit

 Empowers new generation entrepreneurs

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Problems of EDPs

 No policy at the National level

 Problems at the pre-training phase

 Over estimation of trainees

 Duration of EDPs

 Non availability of Infrastructural facilities

 Improper methodology

 Mode of selection

 Non availability of competent faculty

 Poor response of financial institutions

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Thank You