Entrepreneurship &

New Venture Creation

 Entrepreneur

The term entrepreneur is derived from the

French word ‘entreprendre’ which means ‘to
undertake’.
It means the person who undertakes the risk
of the new enterprise
In the 16th century the Frenchman who
organized and led military expeditions were
referred as Entrepreneurs
According to Richard Cotillion
An entrepreneur is a person who buys factor services at certain prices
with a view to selling its product at uncertain price (un- expected price)
According to International Labor Organization (ILO)
Entrepreneurs as those people who have the ability to see and evaluate
business opportunities, together with the necessary resources to take
advantage of them and to initiate appropriate action to ensure success
According to Peter F.Drucker
An entrepreneur is one who always searches for change, responds to it
and exploits it as an opportunity. Innovation is the specific tool of
entrepreneurs, that means by which they exploit change as an
opportunity for a different business or service
Nature/Characteristics of Importance of Entrepreneurs
Entrepreneur
Entrepreneur is a key The importance of any
player in economic entrepreneur is as follows:-
progress Develop new markets
Entrepreneurs Discover new sources of
introduce new things in materials
the economy Mobilize capital
They are considered as resources
the business leader and Introduce new
not as simple owner of technologies
capital. Create employment
 Finally to become successful entrepreneur one should have the following characteristics:-

Need to achieve (goals should achieve)

Independence (start business their own)
Risk bearing (ready to face uncertainty)
Locus of control (governing and shaping the goals with high control)
Determination (working sincerely on goal achieving)
Positive self-concept (thinking positive and analyze anything by SWOT
analysis)
Ability to find and explore opportunities (finding/grab opportunities)
Hope success (feeling success in each and every step they move no
failure)
Flexibility (measuring pros and cons of decision and tend to change if
situation demands)
Analytical ability of mind (unaffected by personal likes and dislikes)
Sense of efficacy (oriented always to goals no deviation or diversion by
external influence)
Openness to feedback and learning from experience (ready to accept feedback)
Confronting uncertainty (they are always optimistic, they take odd as the
opportunity)
Interpersonal skills (they like dealing with people at all levels)
Need to influence others (they influence the others by their goals and their
procedures/convince others)
Stress takers (ready to work for long hours with full energy)
Time orientation (they will stick on to the time, time is important)
Innovators (they will introduce new products and services)
Business communication skill (they must have good communication to lead market)
Telescopic ability (they will think every activity in microscope)
Leadership (they will act as leaders to lead business)
Business planning (they will plan present and future course of action)
Decision making (they have quick decision making ability)
Ability to mobilize resources (they will mobilize 6-M’s: Man, Money, Machinery,
Market and Method)
Self-confidence (they must have self-confidence about their goal achievement)
 FUNCTIONS

Prima ry Entre pre ne ur Func tion Func tions Impo rtant Othe r Func tio ns
Func tions fo r De ve lo ping
Co untrie s
1. planning 1. Idea generation 1. Management of 1. Diversification of
share resource production
2. Organizing 2. Determination of 2. Dealing with 2. Expansion of the
objectives public enterprise
3. Decision 3. Raising of funds 3. Acquiring and 3. Maintaining
making assembly of the cordial employer
factory and employee
relations
4. managing 4. Procurement of raw 4. engineering 4. Tackling labor
materials problem
5. innovation 5. Procurement of 5. New product 5. Coordination with
machinery outside agencies
6. Risk 6. Market research 6. Parallel
bearing opportunities
7. Un- 7. Determination of 7. marketing
certainty form of enterprise
bearing
8. Recruitment of 8. management
manpower
9. Implementation of 9. Customer
the project relation
 Role of Entrepreneur

1. Initiator A key man who imagine new opportunities, techniques,

new products/services
2. innovator Brings overall change by innovation and creativity
3. coordinator Coordinate social and economic values of society
4. leader act as a leader with outstanding leadership qualities
5. Social worker He always works for the wellbeing of the society
6. Welfare agent He will encompass/cover all sectors and fields welfare
7. employer He will act as employer by in taking some unemployed
8. Development Contributes service for development the country and
agent building country economy
 Quality of a Successful Entrepreneur
 Inner drive to succeed
( should have feeling to
win in the heart)
 Strong belief in
themselves
 Search for new ideas
and innovation
 Openness to change
 Competitive by nature
 Risk taker
 Accepting of constructive
criticism and rejection
(ready to accepts
mistakes)
 Time management
 Vision and leadership
 Ethics and morals
 Discipline yourself
 Highly motivated and
energetic
 Ethics and Social Responsibility of Entrepreneurs

 The word ‘ethics’ is  It also referred business

derived from Greek word ethics
 Business ethics refers to the
‘ethos’ which means
application of ethics to
standard or ideals that
business
should prevail
 Business ethics is a
 Entrepreneurship ethics specialized study of moral
are the moral principles right or wrong. It
which should govern the concentrates on moral
entrepreneurship standards as they apply to
activities. business policies, institutions
and behavior
 Principles of Entrepreneurs Ethics
 An Entrepreneur will think of themselves as a
part of community not just ‘profit maker’
 An Entrepreneur will treat the environment
as a silent ‘stakeholder’, a party to which
they are wholly accountable
 An Entrepreneur will protect the privacy
rights of the suppliers, customers and
employees
 An Entrepreneur will deliver what they
promises, and promise what they can deliver
 Misconceptions about Entrepreneurs

Entrepreneurs are born and Entrepreneurship

is Hereditary
Entrepreneurs are profit Hungry and
Exploit(hard work done by Labor)
Entrepreneurs are Dishonest(fraud & cheating)
Entrepreneurs are favored by luck
Only Rich people can become entrepreneurs
Entrepreneurship is monopoly (a market in
which there are many buyers but only one
seller )of certain communities
 Entrepreneurship

� The Entrepreneurship was defined as ,” Entrepreneurship is

the attempt to create value through recognition of business
opportunity, the management of risk taking appropriate to
the opportunity and through the communicative and
management skills to mobilize human, financial and material
resources necessary to bring a project to successful”
� According to A.H.Cole,” Entrepreneurship is the purposeful
activity of an individual or a group of associated individuals,
undertaken to initiate, maintain or maximize wealth, profit by
production or distribution of economic goods and services
� Entrepreneurship= Entrepreneur + Enterprise
(Process) (Person) (Object)
 Nature/Characteristics of Entrepreneurship

Purposeful activity
Decision making
Accepting challenges
Risk taking
Building organization
Dynamic process (bring new opportunities)
Gap filling function (filling goods and services to society)
Skillful management
Innovation
Mobilization of resources
 Economic Activity (creation and operation of an enterprise)
 Difference

Ent r e pr e ne ur Ent r e pr e ne ur s hip

1. Refers to a person 1. Refers to a process
2. visualizer 2. vision
3. creator 3. creation
4. organizer 4. organization
5. innovator 5. innovation
6. technician 6. technology
7. initiator 7. Initiative
8. Decision maker 8. decision
9. planner 9. planning
10.leader 10.leadership
11.motivator 11.motivation
12.programmer 12.action
13.Risk taker 13.Risk taking
14.communicator 14.communication
15.Administrator 15.administration
MY190012572430Z
Factors Affecting Entrepreneuship
Internal Factors
 External Factors
 Government polices & regulations
 Shortage of power, water,
transport and critical raw
materials
 Business trends
 Changes in population
 Economic fortunes of customer
 Changes in buying habits
 Competitive pressures and
conditions
 Economic cycles
 Changing demand patterns
 Industry trends
 Unions
 Inflation
 International events
 Competitors
 Rigid institutional formalities
 State of technology
 
 Entrepreneurial Decision Process
Entrepreneurship is the process of creating
something new with value by devoting the
necessary time and effort and assuming the risk
The new venture is formed through a very
personal human process
There are 3 steps in the entrepreneurial decision
process
 The decision to leave a present career or lifestyle
 The decision to form new venture
 The decision that both external and internal
factors make new venture creation possible
 Types of Start Up Firms by Entrepreneurs

1. Salary These are small firms that afford their owner or owners a level of
Substitute income similar to what they would earn in a conventional job (fixed
Firms
income)
Example:- Dry cleaners, saloons
2. Life style Lifestyle firms provide their owner or owners the opportunity to
firms pursue a particular lifestyle and earn a living while doing
Example:- Tour Guides
3. Entrepreneurial These firms create value towards the customers
Firms Example:- E-Bay, Google
 Scope of Entrepreneurship
Entrepreneurship Works in different ways in
different economic systems, such as……
Capitalism

Socialism

Mixed Economy
 Scope of Entrepreneurship

Capitalism(Private) Socialism(Public) Mixed Economy(Private+

Public)
 A capitalist economy  A Socialism economy  A Mixed economy
represents free represents free represent both services for
enterprise, which service towards the free of cost and sometimes
means freedom to save society development pay and use
and invest  No competition  Good Competition
 Free competition  Good Interference  They have to satisfy the
 very less interference from Government customer and Government
from Government  Price of the  This is Stability in Nature
 Price of the Product/Service may  Price of the
product/Service may be determined on Product/Service may be
be determined on the the basis of service determined by the
basis of the force of providers /sponsors Government Sometimes
demand and supply
 Role of Entrepreneurship in Economic Development
 Increase in National Income
 Balanced Regional Development
 Bringing Change in Structure of Business and
Society
 New Products, New Services and New Business
 Dispersal of Economic Power
 Better Standards of Living
 Creating Innovation
 Production Evolution Process
 Product/Service Evolution Process
Before starting a product or service an
Entrepreneur should follow the evolution
steps in order to produce a product or
provide a service
1.Exploration
2.Screening
3.Business Analysis
(risk/return/features/recommendations/creativit
y)
4.Development
5.Testing
6.Commercialization (full scale production )
 Problems of Entrepreneurship
 Wrong surveys
 Lack of identification of projects
 Lack of infrastructure
 Lack of quality control
 Lack of market promotion
 Lack of technology
 Lack of finance
 Lack of consulting services
Factors Favoring Entrepreneurship as a Career Options
 High need for Independence
 To satisfy the dream of having high financial
rewards
 Opportunity to deal with all aspects of a business
 Achievement orientation
 Implantation of Ideas
 Insecurity of Job
 Family Business
 Risk Taking
 Government Economic Policy (Assistance from
Government)
 Vision to Leave a Long Lasting Mark (Zeal to
Innovate new product/Service)
 The Four Areas

1. Create the Right Environment

for Success
2. Ensure that Entrepreneurs have
access to the Right Skill
3. Ensure that Entrepreneurs have
access to ‘Smart Capital’
4. Enable Networking and
Exchange
 The Future of Entrepreneurship

⁇Both the Central Government and various State Governments are

taking increased interest in promoting the growth of
entrepreneurship.
⁇Individuals are being encouraged to form new businesses and are
being provided such government support as tax incentives, buildings,
roads, and a communication system to facilitate this creation process.
⁇The encouragement by the central and state governments should
continue in future as more lawmakers are realizing that new
enterprises create jobs and increase the economic output of the
region.
⁇ Every state government should develop its own innovative industrial
strategies for fostering entrepreneurial activity and timely
development of the technology of the area.
⁇ The states should have their own state-sponsored venture funds,
where a percentage of the funds has to invested in the ventures in the
states. 
⁇Society’s support of entrepreneurship
should also continue.
⁇This support is critical in providing
both motivation and public support.
⁇A major factor in the development of
this societal approval is the media.
⁇ The media should play a powerful
and constructive role by reporting on
the general entrepreneurial spirit in
the country highlighting specific
success cases of this spirit in
operation.