DIFFERENT VIEWS OF ENTERPRENEURSHIP

&
STAGES OF DEVELOPMENT

BY
D V Krishna varma.
 ENTREPRENEUR
 This is a hardworking individual who goes out of his way
to create his own business that answers a cry, spoken or
not, in his or her community. This person risks time, effort,
and money in order to start his or her own business.
 INTRODUCTION

 The concept of entrepreneurship and its theory have been

evolved over a period of more than two centuries.
 There are different opinions on the emergence of
entrepreneurship.
 The opinions may be classified into three categories. They
are :

 The economist view

 The sociologist view

 The psychologist view

 ECONOMIST’S VIEW

 G.F.Papanek and J.R.Harris are the main advocates of

this theory.
 Economic incentives are the main drive for the
entrepreneurial activities.
 These incentives and gains are regards as the sufficient
conditions for the emergence of industrial
entrepreneurship.
 When an individual recognizes that the market for a
product or service is out of equilibrium he may purchase
or produce at the prevailing price and sell to those who
are prepared to ,but at a higher price.
 SOCIALOGIST’S VIEW
 Sociologist argue that entrepreneurship is mostly likely
to emerge under a specific social culture.
 According to them social sanctions, cultural values and
role expectations are responsible for the emergence of
entrepreneurship.
 It is these beliefs which drive for a entrepreneurial
growth.
 PSYCHOLOGICAL VIEW
 According to the advocates of this theory
entrepreneurship is most likely to emerge when a society
has sufficient supply individuals possessing particular
psychological characteristics
 According to mc clelland it is the high need for
achievement which drive people towards entrepreneurial
activities.
 CHARACTERISTICS:

o An institutional capacity to see things in away which

afterwards proves correct.

o Energy of will to and mind to overcome fixed habits of

thought.

o The capacity to withstand social opposition.

 STAGES OF DEVELOPMENT

 When discussing how to finance your business it’s

helpful to establish an understanding of the traditional
stages of development for entrepreneurial companies
They are:

o Seed or Concept
o Startup,
o First, Second,
o Third, and
o Harvest
 SEED OR CONCEPT

This is the wild-eyed, perhaps incurable, inventor stage.

There is an idea, a concept, no management team, no
prototype, and patentability has not been determined. No
business plan, timetable, or market research has been
assembled.
 START UP

 . The prototype is being developed or the service is being

discussed with potential users, the business plan is being
refined, a management team is being identified, market
analysis is being undertaking, and beta tests are being set
up or initial customers are identified.
 More formal funding is being accomplished.
 FIRST STAGE
 The company is now a going concern. The product has
proven manufacturable and is selling.
 If it’s a service company, some customers have tried the
service.
 The initial management team is in place, the company
has experienced some setbacks, customers can confirm
product usage, marketing is being refined, adjustments
are being made in the business plan and the money
raising efforts continue.
 SECOND STAGE
 Significant sales are developing as are assets and
liabilities.
 The company is sporadically achieving break even, and
cash flow management becomes critical.
 Second-level management is being identified and hired.

 Export marketing is being explored and more

sophisticated management systems are being put into
place.
 THIRD STAGE

 It is also known as Mezzanine Stage

 All systems are really go and the potential for a major
success is beginning to be apparent.
 Snags are being worked out in all areas from design and
development of second-generation products; to
marketing and distribution; to management and all its
applied systems
 FOURTH STAGE

o It is also known as harvest stage.

o The end may be near for entrepreneurial companies.

o The company is sifting and sorting out its options
including going public, being acquired, selling out, or
merging.
o What started out as a dream has become an
entrepreneurial reality.