ENTREPRENEURSHIP

DEVELOPMENT
• “Without vision, the people
perish…
• without entrepreneurship,
the economy and business
stagnates……..”
Entrepreneur
 INTRODUCTION TO ENTREPRENEURSHIP
1.1 Entrepreneur and Entrepreneurship
1.2 Characteristics of Entrepreneurs –
Entrepreneurial Competencies – Creativity,
Problem Solving, Decision Making,
Communication, Leadership, Self-Analysis,
Personal Efficacy, Culture & Values, Risk Taking
Behaviour, Technology Backup
1.3 Types of Entrepreneurs
1.4 Role of Entrepreneur in Economic Development
1.5 Factors Affecting Entrepreneurial Growth in
India
 Entrepreneurs
• “Entrepreneurs are people who have the
ability to see and evaluate business
opportunities, together with the necessary
resources to take advantage of them and to
intimate appropriate action to ensure
success.”
– -International Labor Organization
INTRODUCTION TO ENTREPRENEURSHIP
• Entrepreneurship is the art of starting a business, basically a
startup company offering creative product, process or service
• An entrepreneur is a creator or a designer who designs new
ideas and business processes according to the market
requirements and his/her own passion
• leadership, management ability, and team building skills to
be the essential qualities of an entrepreneur.
• An entrepreneur is an innovator or a creator who introduces
something new to the firm or economy. It can be a new
method of production, a new product, a new source of
material, a new market or any other similar innovation. Thus,
an entrepreneur is an innovator, creator, borrower,
purchaser, etc.
• Some famous entrepreneurs are Azim Premji, Lakshmi Mittal,
 Entrepreneurship

• Entrepreneurship refers to the process of

creating a new enterprise and bearing any of its
risks, with the view of making the profit
• It is an act of
– seeking investment and production
opportunity,
– developing and managing a business venture
 Four Steps to Entrepreneurship

–Opportunity spotting
–Opportunity assessing,
–Opportunity selecting
–Opportunity executing
 Four Steps to Entrepreneurship
i. Spotting Opportunities:
The first step to entrepreneurship is identifying
opportunities. The entrepreneur must be able to spot an
unmet need. Oftentimes this need is seen through an
inefficiency in the market - something that doesn't work
quite the way the entrepreneur would like it to. As a
result, the entrepreneur figures out a potential solution
and the opportunity is born.
ii. Assessing Opportunities:
Many entrepreneurs keep a journal that details the
myriad of opportunities they come across each day. While it
takes a creative skill set to identify opportunities, it takes an
analytical skill set to assess them. Each opportunity should
be assessed to, among others, determine its likelihood of
success and the financial and human resources required to
execute upon it.
 Four Steps to Entrepreneurship
iii. Selecting Opportunities:
One of the biggest risks in selecting the wrong opportunity is opportunity
cost; that is, the cost of having to forego another opportunity that may have
been wildly successful. Entrepreneurs should assess their potential
opportunities and come to a firm decision regarding which one to execute
upon. Once selected, the entrepreneurs cannot second-guess themselves. To
do so would lessen their focus and drive towards the selected opportunity,
both of which are critical in achieving success.

iv. Executing Upon Opportunities:

Execution, or the ability to generate the most value out of an opportunity,
requires a unique combination of creativity, passion, persistence, focus,
responsibility, intelligence, planning and energy. The entrepreneur needs to
know what tasks must be accomplished and be the main driver in seeing that
these tasks are completed in an appropriate manner. Having an
expertly written business plan will allow the entrepreneur to see the outline
of the actions that must been taken to ensure success.
Idea –[Generation-application-realization]
Entrepreneur and Entrepreneurship

• An entrepreneur is
someone who locates
the need of society and
tries to meet the same,
with his/her innovative
idea. On the other hand,
‘entrepreneurship’
which refers to the
process of establishing a
business entity, intending
to get profit, as a return
in the future.
Functions of an Entrepreneur
 Functions of Entrepreneur-
• 1.Innovation,2. Organization building, 3.Risk and
uncertainty bearing
• 1.Innovation
Schumpeter has firmly expressed his opinion that
the function of entrepreneurship is innovation.
– • Innovation of new product.
– • Innovation of new technology.
– • Innovation of new process of production
– methods.
– • Exploration of new markets.
– • Searching for the new sources and supply.
– • Innovation of industrial reconstruction method
Functions of Entrepreneur
• 2. Organization building.
– - Perception of market opportunities.
– - Gaining command over scarce resources.
– - Purchasing inputs.
– - Marketing the products.
– - Dealing with bureaucrats.
– - Managing human relations within the firm.
– - Managing customer and supplier relations.
– - Managing finance.
– - Managing production.
– - Acquiring and overseeing assembly of the factory.
– - Upgrading process and product.
– - Introducing new production techniques and products.
3.Risk and uncertainty bearing
 Characteristics of a Successful Entrepreneur

• Passion - Talk to successful entrepreneurs and you'll nearly

always hear the word passion when they describe what they
do. Following your passion is one of the best predictors of
success.
• Independent thinking - Entrepreneurs often think outside the
box and aren't swayed by others who might question their
ideas.
• Optimism - It's difficult to succeed at anything if you don't
believe in a good outcome. Entrepreneurs are dreamers and
believe their ideas are possible, even when they seem
unattainable.
• Self-confidence - This is not to say entrepreneurs never have self-doubt,
but they're able to overcome it, and believe they can achieve their goal.
• Resourceful and problem-solvers - Lack of assets, knowledge, and
resources are common, but entrepreneurs are able to get what they need
or figure out how to use what they've got in order to reach their business
goals. They never let problems and challenges get in the way, and instead,
find ways to achieve success despite hardships.
 Characteristics of a Successful Entrepreneur
• Tenacity and ability to overcome hardship - Entrepreneurs don't
quit at the first, second or even hundredth obstacle. For them,
failure is not an option, so they continue to work toward
success, even when things go wrong.
• Vision - Some of the more stringent definitions of
entrepreneurship include vision as a necessary element. It helps
to know your end goal when you start. Further, vision is the fuel
that propels you forward toward your goal.
• Focus - It's easy in this fast-paced, constant info-in-your-face
world to get distracted. This is especially true for business start-
ups that often get side-tracked by the shiny object syndrome
(i.e. products and services that promise fast results), or bogged
down in unimportant busywork. Successful entrepreneurs are
focused on what will bring results.
• Action-oriented - Entrepreneurs don't expect something from
nothing, and they don't wait for things to happen. They are
achievers. They overcome challenges and avoid procrastination.
Characteristics of a Successful Entrepreneur
 Qualities / Skills of an Entrepreneur

• Ability to organize : He should be able to organize various factors

effectively. He has to understand all the aspects of the business.
• Professional approach : He should be objective and professional in
approach.
• Risk bearer : He should be risk taker. He should be ready to bear
risk and uncertainties.
• Innovative : Organiser should be innovative. He should adopt
modern techniques of production. He should not be reluctant to
changes.
• Decision Making : One has to take right decision at a right time by
showing his promptness. Quick decisions are expected but hasty
decisions shouldn't be taken. Delay in decisions may increase cost
of project and reduce the profits.
• Negotiation skills : Businessman regularly comes into contact with
various persons like consumers, workers, government officials, etc.
so he should communicate tactfully.
 TYPES OF ENTREPRENEUR
1. According to the Type of Business
i. Business entrepreneur: Business entrepreneurs are those
entrepreneurs who conceive the idea of a new product or
service and then translate their ideas into reality.
ii. Trading entrepreneur: As the very name indicates trading
entrepreneur is concerned with trading activities and not
manufacturing.
iii. Industrial entrepreneur: As the very name indicates, an
industrial entrepreneur is one who sets up an industrial unit.
iv. Corporate entrepreneur: Corporate entrepreneur is the one
who plans, develops and manages a corporate body.
v. Agricultural entrepreneur: Agricultural entrepreneur is the
one who is engaged in the agricultural activities.
 2. According to Motivation
i. Pure entrepreneur: Pure entrepreneur is one who may or
may not possess an aptitude for entrepreneurship but is
tempted by the monetary rewards or profits to be earned
from the business venture.
ii. Induced entrepreneur: Induced entrepreneur is attracted by
the various incentives, subsidies and facilities offered by the
government.
iii. Innovating entrepreneur: Innovative entrepreneurs are
generally aggressive and possess the art of cleverly putting
the attractive possibilities into practice.
iv. Imitative entrepreneurs: Imitative entrepreneurs are
characterised by readiness to adopt successful innovations
inaugurated by successful innovating entrepreneurs.
 3.According to the Use of Technology
i. Technical entrepreneur: The strength of a technical
entrepreneur is in his skill in production techniques. He
concentrates more on production than on marketing.
ii. Non-technical entrepreneur: Unlike technical entrepreneur,
non-technical entrepreneur is not concerned with the
technical aspect of the product rather he spends more time in
developing alternative strategies of the marketing and
distribution to promote his business.
iii. Professional entrepreneur: Professional entrepreneur
means an entrepreneur who is interested in floating a
business but does not want to manage or operate it.
 4.According to stages of Development
i. First generation entrepreneur: First generation
entrepreneur are those entrepreneur who do not possess any
entrepreneurial background.
ii. Second generation entrepreneur: Second generation
entrepreneur are those entrepreneurs who inherit the family
business firms and pass it from one generation to another.
iii. Classical entrepreneur: A classical entrepreneur is a
stereotype entrepreneur whose aim is to maximize his
economic returns at a level consistent with the survival of
the unit but with or without an element of growth.
 5.According to Capital ownership
i. Private entrepreneur: When an individual or a group of
individuals set up an enterprise, arrange finance, bear the
risk and adopt the latest techniques in the business with the
intention to earn profits, he or the group is called as private
entrepreneur/entrepreneurs.
ii. State entrepreneur: As the name indicates, state
entrepreneur means the trading or industrial venture
undertaken by the state or the government itself.
iii. Joint entrepreneur: Joint entrepreneur means the
combination of private entrepreneur and state entrepreneur
who join hands.
 6 According to Gender and Age
i. Man entrepreneur
ii. Woman entrepreneur
iii. Young entrepreneur
iv. Old entrepreneur
v. Middle-aged entrepreneur
 7.According to Area
i. Urban entrepreneur
ii. Rural entrepreneur
 8.According to Scale
i. Large scale industry entrepreneur
ii. Medium scale industry entrepreneur
iii. Small scale industry entrepreneur
iv. Tiny industry entrepreneur
 Intrapreneurship
• Intrapreneurship involves people within a business
creating or discovering new business opportunities,
which leads to the creation of new parts of the
business or even new businesses.
• An intrapreneur is someone within a business that
takes risks in an effort to solve a given problem.
• Two famous examples of products that were the
result of intrapreneurial activity are:
– Gmail (Google)Employees at Google are allowed time for personal projects. Some of Google’s best
projects come out of their 20 percent time policy. One of these was Gmail, launched on 1 April 2004.
– PlayStation (Sony)Ken Kutaragi, a relatively junior Sony Employee, spent hours tinkering with his
daughters Nintendo to make it more powerful and user friendly. What came from his work turned
into one of the world’s most recognisable brands - the Sony PlayStation
 How to encourage intrapreneurship?
• Look out for – and encourage -
entrepreneurial activity
• Give employees ownership of projects
• Make risk-taking and failure acceptable
• Train employees in innovation
• Give employees time outside the confines of
their job description
• Encourage networking & collaboration
• Reward entrepreneurial thinking and activity
 DISTINCTION BETWEEN AN
ENTREPRENEUR AND A MANAGER
ENTREPRENEURS
1. Status: An entrepreneur is the
owner of his enterprise. He
makes his own investment and
owns his business.
2. Target: The main target of an
entrepreneur is to start his
venture by setting up as a sole-
trader or firm or a company.
MANAGERS
1. Status: A manager is just an
employee in the enterprise which
is owned and run by
entrepreneur.
2. Target: The main goal or
motive of a manager is give his
services to an enterprise set up
by someone else i.e. an
entrepreneur.
ENTREPRENEURS
3. Decision making: All of the
policies and strategic decisions,
like those comprising of expansion
diversification, take-over etc are
taken by the entrepreneur.
4.Rectification of wrong
decisions: The wrong decisions
taken by the entrepreneur may not
be rectificable and may result in
losses or even closure of the unit.
MANAGERS
3. Decision making: While all
those managerial, operational
decisions which would have
impact on the short-and medium-
term results are taken by the
managers.
4. Rectification of wrong
decisions: Whereas the wrong
decisions taken by the managers
can be amended and rectified by
the entrepreneur.
 ENTREPRENEURS
5. Innovations: An
entrepreneur innovates and
exploits his innovation
commercially.
6. Risk bearing: An
entrepreneur being the owner of
his unit undertakes all risks and
uncertainty of running his
enterprise.
7. Skills: The skill expected from
an entrepreneur is in the form of
creativity, innovation, desire for
high achievement, intuition etc.
MANAGERS
5. Innovations: A manager is
merely an officer or an executive
who is appointed for the
promotion of the unit.
6. Risk bearing: A manager
doesn’t bear any risk because he is
paid fixed salary.
7. Skills: Whereas manger
depends on public dealing abilities
and conceptual abilities.
 ENTREPRENEURS MANAGERS
8. Qualification: An entrepreneur 8. Qualification: On the other
doesn’t need to have distinct hand, a manager now a days need
degree from a reputed university. to possess degree in the stream of
management theory and practice.
9. Rewards: The reward of an 9. Rewards: A manager gets his
entrepreneur is the profit earned monthly salary as his reward for
by him. the services rendered by him.
Roles of Entrepreneurship in Economic Development of a Country
 Roles of Entrepreneurship in Economic Development of a Country
• A beginner in the market, who has something new to offer to society
and starts right from scratch to establish and run the enterprise.
• An innovator, who has a thought-provoking idea or concept in his/her
mind, that has the capability to lead the marketplace.
• A developer, who develops a business model, to give shape to the
idea.
• A leader, who provides guidance and support to his/her men, to work
in a specific direction or change the same (if required) so as to achieve
the target.
• An in charge who is accountable and responsible for the success or
failure of the venture, for the decisions made by him/her.
• A promoter, who takes all the relevant steps to turn the dream into
reality.
• A forecaster, who foresees, future opportunities and threats which
can affect the venture, positively or negatively.
• A risk-taker, who has the ability to anticipate the risk in the future
moves, and take the risk, if they are beneficial to the enterprise.
Role of Entrepreneurs in Economic Development
• Capital formation.
• Generation of employment.
• Improvement in per capita income.
• Reduces concentration of wealth.
• Balanced regional development.
• Resource mobilization.
• Improvement in standard of living.
• National self-reliance.
• connecting natural resources.
• Backward and forward linkages.
• Sense of purpose.
 Entrepreneurial performance ,EP = f (SB, MF, KA, FS and EV)

According to Dr. Sharma entrepreneurial performance is a

function of the following factors:
• i) Socio-cultural Background of the Entrepreneur (SB) – This implies the
environment in which the entrepreneur was born and brought up. It
conditions the values and attitudes of the entrepreneur.
• (ii) Motivational Force (MF) – It implies the motives which prompt a
person to undertake entrepreneurship, e.g., wealth, status, self-
employment, etc.
• (iii) Knowledge and Ability of the Entrepreneur (KA) – It refers to the
education, training and experience of the entrepreneur.
• (iv) Financial Strength (FS) – It means the funds which an entrepreneur
can mobilise from internal and external sources.
• (v) Environmental Variables (EV) – These consist of Government policies
market conditions, availability of technology and labour situation.
Symbolically, EP = f (SB, MF, KA, FS and EV)
 Factors Affecting Entrepreneurship Growth in India
1. Traditional Society
• Indian society suffers from traditions, customs, and superstitions. Religion,
caste, and creed still dominate Indian society. Traditionally, some jobs are
treated as inferior jobs.
2. Hereditary Jobs
• In India, selection of work, occupation, and business has continued on the
basis of hereditary adoption, caste system, religious and sex differentials,
and other factors and not on the basis of interest, capacity, and feelings
3. Unproductive Expenditure
• The Indian capital has always been shy. Indian people either keep their
savings hidden or spend it for unproductive purposes, like on marriages,
religious festivals, and occasions, feast on death, birth celebrations,
ornaments, fixed property, luxury goods and likewise.
4. Lack of Basic Infrastructure
• Basic infrastructure facilities, like transportation, communication, banks,
insurance, water, electricity, Raw materials, stock exchange, Marketing
Services, capital market, organized product marketing, etc. have not been
up to the mark in India.
 Factors Affecting Entrepreneurship Growth in India
5. Lack of Entrepreneurial Spirit
The development of enterprise and Entrepreneurship depends
upon the nature of human resources.
6. Cultural Values
• The cultural values have negotiated the entrepreneurship
development or growth. Religion has Deep Impact on Indian
society.
7. Lack of Education Training Facilities
• Education and training facilities relating to entrepreneurship skill
lack in India.
8. Lake of Favourable Environment
• All sections of the society like workers, consumers, investors,
government, society, and even the competitors, etc. Have
contribution in operating an Enterprise. But, it is unfortunate
that in India, labour does not have the enthusiasm to work.
 Factors Affecting Entrepreneurship Growth in India
9. Deficiency of Capital
• As compared to the people Western countries, Indian people at
large are not capable to maintain their living standard, due to
price rise. Only the capitalistic class has the courage to establish
Industries.
10. Social and Cultural Factors
• Socio- Cultural factors have also proved to be the obstacle in
entrepreneurship growth in India. Reason being that country is
dominated by the caste system, social evils, religious
superstitions, etc
11. Competition with Big Industrial Houses
• In India, business activities are centralized in hands of few
Industrial houses. They have a Monopoly in business. Similarly,
priority is being accorded only to public sector industries in the
country
 Factors Affecting Entrepreneurship Growth in India
1 2 thoughts Against Innovations and Changes
• Our country has been dominated by traditional perceptions.
• The scientific and logical approach towards the problem has
been lacking. Neglect of innovations, Research, and
investigations, residence to changes, etc. have blocked the
entrepreneurship growth in India.
13. Lack of Techno structure
• Professional managers, experts, and trained employees are
required for efficient operation of the companies and public
sector enterprises
14. Centralization of Economic Power
• Dominance by few industrialists on most of the industries in
India implies that small entrepreneurs do not get the
opportunity to get ahead. The big industrialist is capable of
molding the government policies and rules in their favor.
 Factors Affecting Entrepreneurship Growth in India
15. Low Expenditure on Research and Development
• The government and private entrepreneurs incur expenditure on
research and development activities.
16. Insufficient Government Facilities and Incentives
• In India, the development of infrastructural facilities is quite
inadequate.
17. Bureaucracy and Red tapism
• Besides the fact that Government of India has been provided
providing very few facilities to the entrepreneur, another fact is
that due to the prevalence of Bureaucracy and red-tapism, even
these facilities have benefited very few entrepreneurs.
18. Other obstacles
• The entrepreneurship growth or development has also not been
possible due to the competition of the public sector with the
private sector.
 assignments

1. Define: Entrepreneur , Entrepreneurship

Intrapreneurship, social Entrepreneurship,
innovation
2. Four Steps to Entrepreneurship
3. Functions of Entrepreneur-
4. Characteristics of a Successful Entrepreneur
5. Types of Entrepreneurs
6. Role of Entrepreneurs in Economic Development
7. Factors Affecting Entrepreneurship Growth in
India