CHAPTER 1

ENTREPRENEUR

THE ULTIMATE MEASURE OF A MAN

IS NOT WHERE HE STANDS
IN MOMENTS OF COMFORT AND CONVENIENCE
BUT WHERE HE STANDS
AT TIMES OF CHALLENGE AND CONTROVERSY.
- Martin Luther King.

The words entrepreneur, intrapreneur and entrepreneurship have acquired special

significance in the context of economic growth in a rapidly changing socio-
economic and socio-cultural climates, particularly in industry, both in developed
and developing countries. Entrepreneurial development is a complex phenomenon.
Productive activity undertaken by him and constant endeavor to sustain and
improve it are the outward expression of this process of development of his
personality.

INTRODUCTION

The word 'entrepreneur' is derived from the Old French word 'entreprendre' which
was first used by the economic 'theorist' Richard Cantillon in 1755 in an essay
where he used this term to describe a person who assumed the risk of buying
goods in the belief that they could sell them at a higher price at a later time. So,
the term in French was used to describe 'one who undertakes' this particular risk.

Journalists have also been quick to place that tag on many of the colourful
corporate high flyers who have made incredible wealth in the world of business,
many at the expense of others and sometimes, if not outside their country's
governing laws, then quite possibly outside their moral ones. I believe that
entrepreneurs and these business people are two different species who operate in
the same sphere, but do so with a completely different mindset.

Also Known As: Often used as a synonym for a business person.

Common Misspellings: Entrpreneur, Entraprenur, Entreprenuer.

WHO IS AN ENTREPRENEUR?
Entrepreneur Is A Person Who Brings In Change Through Innovation For The
Maximum Social Good.
An entrepreneur is a person with a dream, originality and daring, who acts as the
boss, who decides as to how the commercial organization shall run, who co-
ordinates all activities or other factors of production, who anticipates the future
trend of demand and prices of products.
An entrepreneur is one of the important segments of economic growth. Basically
he is a person responsible for setting up a business or an enterprise. Infact, he is
one who has the initiative, skill for innovation and who looks for high
achievements. He is a catalytic agent of change and works for the good of people.
He puts up new green-field projects that create wealth, open up many employment
opportunities and leads to the growth of other sectors.
The entrepreneur displays courage to take risk of putting his money into an idea,
courage to face the competition and courage to take a leap into unknown future
and create new enterprises/ business. This creative process is the life blood of the
strong enterprise that leads to the growth and contributes to the national
development.
The entrepreneur will always work towards the creation and enhancement of
entrepreneurial society. The best entrepreneur in any developing country is not the
one who uses much capital but an individual who knows how to organize the
employment and training of his employees.
A classic example is that of Mr. Dhirubhai Ambani because he had all the dynamic
qualities of a successful entrepreneur, as a result of which today, he was the owner
of the largest private company in India. All decisions which he had taken to grow
were instinct and no one had taught him to take decisions.
We can define entrepreneur as one who innovates, raises money, assembles inputs,
choose managers and sets the organization going with his ability to identify them.

MEANING

• An entrepreneur is an individual who accepts financial risks and undertakes

new financial ventures. The word derives from the French "entre" (to enter)
and "prendre" (to take), and in a general sense applies to any person
starting a new project or trying a new opportunity

• An entrepreneur is a person who has possession of a

new enterprise, venture or idea and assumes significant accountability for
the inherent risks and the outcome.

• Entrepreneur in English is a term applied to the type of personality who is

willing to take upon herself or himself a new venture or enterprise and
accepts full responsibility for the outcome.

• The word entrepreneur is often synonymous with founder.

• Someone who assumes the financial risk of the initiation, operation and
management of a business
 • An entrepreneur is a person who has possession of an enterprise, or
venture, and assumes significant accountability for the inherent risks and
the outcome.
• Entrepreneur in English is a term applied to the type of personality who is
willing to take upon herself or himself a new venture or enterprise and
accepts full responsibility for the outcome.
• An entrepreneur is a person who organizes and manages a business
undertaking and assumes a risk for the sake of profit.
• He or she is an ambitious leader who combines land, labor, and capital to
often create and market new goods or services.

DEFINITION OF ENTREPRENEUR

1. According to Oxford Dictionary : “One who undertakes an enterprise,

especially a contractor – acting as intermediary between capital and labor”
2. According to Peter .P. Drucker : “Innovation is the specific tool of
entrepreneurs, the means by which they exploit changes as an opportunity
for different business or a different service”
3. As per Peter Drucker- “An entrepreneur is one who always searches for
change, responds to it as an opportunity. Entrepreneurs innovate.
Innovation is a specific instrument of entrepreneurship”.
4. As per Joseph A. Schumpeter- “Entrepreneur is one who innovates, raises
money, and assembles inputs, chooses managers and sets the commercial
organization going with his ability to identify them and opportunities which
others are not able to identify and is able to fulfill such economic
opportunities”.
As per Walker- “An entrepreneur is one who is endowed with more than
average capacities in the task of organizing and co-coordinating the various
factors of production. He should be a pioneer, a captain of industry.

The process undertaken by an entrepreneur to augment his business interests

gave birth to “ENTREPRENEURSHIP”.

CHARACTERISTICS OF AN ENTREPRENEUR
1. Mental Ability – Entrepreneur must have creative thinking and must be able
to analyze problems and situations. He should be able to anticipate changes.
2. Business Secrecy – He should guard his business secrets from his
competitors.
3. Clear Objectives – He must have clear objectives as to the exact nature of
business or the nature of goods to be produced.
4. Human Relations – He must maintain good relation with his customers,
employees, etc. To maintain good relationship he should have emotional
stability, personal relations, tactfulness and consideration.
5. Communication Ability – He should have good communication skills means
both the sender and the receiver should understand each others message.
6. Technical Knowledge – He should have sufficient technical knowledge.
IN SHORT
1. Risk Taker
2. Self Confident.
3. Optimistic.
4. Zeal For Achievement.
5. Need For Independence.
6. Creative.
7. Imaginative.
8. Administrative Ability.
9. Communication Ability.
10.Clear Objectives.
11.Business Secrecy.
12.Emotional Stability.
13.Technical Knowledge.
14.Patience.
15.Hard Work.
16.Good Organiser.
17. Hardworking
18. Desire for high achievement
19. Highly optimistic
20. Independent
21. Have excellent foresight
22. Good organizers
23. Innovative
24. Excellent technical knowledge
Four Key Elements Of Entrepreneurship Are
• Innovation
• Risk Taking
• Vision
• Organising Skill.

ENTREPRENEURS - TOP 10 ESSENTIAL ENTREPRENEURIAL TRAITS

Are you intrigued by the possibility of being your own boss and starting a business
but not sure you have the right qualifications to be an entrepreneur? What are the
characteristics of an entrepreneur? Although there is no single perfect
entrepreneurial profile, there are many characteristics that show up repeatedly in
successful business owners.

Following are the top 10 essential entrepreneurial traits that anyone who is
interested in starting a business must possess:

(1) Independence - This is the most common denominator of all entrepreneurs.

They want to seize control of their future; thus they decide to become their own
boss instead of laboring under the gaze of a master.

(2) Persistence and Determination - The world of entrepreneurship is fraught with

both success and failure. An important quality of a successful entrepreneur is the
doggedness to continue pursuing a goal despite some setbacks and obstacles they
may encounter on the road. This persistence and determination is fueled by a
burning desire to achieve the goal of succeeding in the chosen field of business.
(3) Self-Confidence - Along with independence, an entrepreneur possesses self-
confidence. They believe in their capabilities and makes sure that they will put in
their best effort into their particular endeavors and likewise expect the best results
from it. Belief in one's capabilities is very important in achieving any goal -
especially in the world of entrepreneurship.

(4) Creativity - In the business world, you can not afford to be complacent and
uncreative unless you want the competition to move up on ahead of you. Creative
people are naturally curious, inquisitive, bright and highly flexible when thinking.
They keenly observe their environment and have an eye for spotting new trends
that could spark a business opportunity.

(5) Organized and goal-oriented - An entrepreneur knows the value of

organization in a business endeavor. A good entrepreneur has the ability to
consolidate resources.

(6) Visionary - An entrepreneur has a vision for his/her future.

(7) Risk-taking and Tolerance for Failure - A good entrepreneur realizes that
loss and failure are inherent in any business endeavor. Thus, an entrepreneur must
always be ready to make calculated risks and face whatever consequences
accompany those risks. As in all fields of endeavor, the characteristic of a
successful entrepreneur is in never giving up and in picking up the pieces and
continuing the journey even if failure momentarily obstructs the way.

(8) Perseverance and Hard Work - These are perhaps two of the most important
entrepreneurial traits.
(9) Commitment - An entrepreneur will not achieve success if he/she gives up at
the first sign of trouble.

(10) Honesty and Honor - Another very important mark of a good entrepreneur is
being honest and honorable in all business dealings and interpersonal
relationships - whether it is between business partners, employees, peers or
investors.

If you possess these traits, you may have the necessary skill set to become a
successful entrepreneur.

Summary - Entrepreneurial Traits

Maybe the term entrepreneur should rightly just belong to highly innovative and
wealthy global identities like those listed above, but all of us should be
acknowledged for being entrepreneurial when ever our outlook, choices and
positioning matches the first in the options list above. The way I see it, the more
entrepreneurial you can be the greater your chances will be of firstly identifying
your opportunity and secondly actually having the skills to exploit it when fate
delivers it to your door. Who knows, maybe by choosing to be more
entrepreneurial from today we may one day also add our name to the great
entrepreneurs listed above.
FUNCTIONS OF AN ENTREPRENEUR.

These are the functions performed by an entrepreneur.

1. Planning of the project: He is the organizer to conceive the idea of

launching the project and to program the structure of business.

2. Management: The entrepreneur is also responsible for the management

of business. He tries to have a least cost combination of factors of
production.

3. To Face Risks: He faces uncertainly and bears risks in his business

uncertainly comprising those risks against which it is not possible to insure.
He also faces the risk of other producers may enter the market.

4. Distribution of Rewards: He is responsible of distributing the rewards to all

factors of production. He pays the reward in the shape of rent, wage, and
interest and bears the risk of profit or loss himself.

5. Sale of Products: An entrepreneur is also responsible of marketing,

advertising. He wants to maximize his profits by selling his product in the
market.

6. Scale of Production: He decided the scale of business in according with the

provision of capital. Then, he takes the decision of what where and how to
produce goods.
7. Joint stock Organization: In a partnership, the entrepreneurial functions
are divided between the partners. But in public limited company, the board
of directors takes this responsibility with nationalized enterprise; the
entrepreneurial decisions are left to the government or a body to which
government has delegated its powers.

8. Identifying entrepreneurial opportunity – There are many opportunities in

the world of business. These are based on human needs like food, fashion,
education, etc., which are constantly changing. These opportunities are not
realised by common man, but an entrepreneur senses the opportunities
faster than others do. An entrepreneur therefore, has to keep his eyes and
ears open and require imagination, creativity and informativeness.

9. 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.

10. 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. Such a blue print of all the activities is termed as a 'business
plan' or a 'project report'.

11. 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.
 12. Setting up of the Enterprise – For setting up an enterprise the entrepreneur
may need to fulfil some legal formalities. He also tries to find out a suitable
location, design the premises, install machinery and do many other things.

13. 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. Only a properly managed organisation yields desired results.

14. 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 strives for achieving excellence.

MISCONCEPTIONS ABOUT ENTREPRENEURS

1. Entrepreneurs are born
2. They are profit-hungry
3. They are dishonest
4. They are favoured by luck.
5. Only rich people can become entrepreneurs
 6. It is a monopoly of certain communities

CONCEPTS AND DEFINITIONS

ENTREPRENEUR, ENTREPRENEURSHIP, ENTERPRISE

Entrepreneurship and therefore "the entrepreneur", is at the core of what makes

an enterprise succeeds, whether you call it an entrepreneurial firm, a small
business, a family business, a home-based business, or a new business.

So let us see- is setting up one’s business that simple and easy or is there more to
it. In order to know what being enterprising is all about we need to understand the
following terms- Entrepreneur, Entrepreneurship, and Enterprise.

ENTREPRENEUR

An entrepreneur is a person who starts an enterprise. He searches for change and

responds to it. A number of definitions have been given of an entrepreneur- The
economists view him as a fourth factor of production along with land labour and
capital. The sociologists feel that certain communities and cultures promote
entrepreneurship like for example in India we say that Gujaratis and Sindhis are
very enterprising.

Still others feel that entrepreneurs are innovators who come up with new ideas for
products, markets or techniques.

To put it very simply an entrepreneur is someone who perceives opportunity,

organizes resources needed for exploiting that opportunity and exploits it.
Computers, mobile phones, washing machines, ATMs, Credit Cards, Courier
Service, and Ready to eat Foods are all examples of entrepreneurial ideas that got
converted into products or services.

Some definitions of an entrepreneur are listed below:

Definitions of an entrepreneur

Stems: from the French word ‘entrependre’ meaning one who undertakes or one
who is a ‘go-between’

1725: Richard Cantillon: An entrepreneur is a person who pays a certain price

for a product to resell it at an uncertain price, thereby making decisions about
obtaining and using the resources while consequently admitting the risk of
enterprise.

1803: J.B. Say: An entrepreneur is an economic agent who unites all means of
production- land of one, the labour of another and the capital of yet another and
thus produces a product. By selling the product in the market he pays rent of land,
wages to labour, interest on capital and what remains is his profit. He shifts
economic resources out of an area of lower and into an area of higher productivity
and greater yield.
1934: Schumpeter: According to him entrepreneurs are innovators who use a
process of shattering the status quo of the existing products and services, to set up
new products, new services.

1961: David McClleland: An entrepreneur is a person with a high need for

achievement [N-Ach]. He is energetic and a moderate risk taker.

1964: Peter Drucker: An entrepreneur searches for change, responds to it and

exploits opportunities. Innovation is a specific tool of an entrepreneur hence an
effective entrepreneur converts a source into a resource.

1971: Kilby: Emphasizes the role of an imitator entrepreneur who does not
innovate but imitates technologies innovated by others. Are very important in
developing economies.

1975: Albert Shapero: Entrepreneurs take initiative, accept risk of failure and
have an internal locus of control.

1983: G. Pinchot: Intrapreneur is an entrepreneur within an already established

organization.

ENTREPRENEURSHIP

Entrepreneurship can be described as a process of action an entrepreneur

undertakes to establish his enterprise. Entrepreneurship is a creative activity. It is
the ability to create and build something from practically nothing. It is a knack of
sensing opportunity where others see chaos, contradiction and confusion.
Entrepreneurship is the attitude of mind to seek opportunities, take calculated risks
and derive benefits by setting up a venture. It comprises of numerous activities
involved in conception, creation and running an enterprise.
According to Peter Drucker Entrepreneurship is defined as ‘a systematic
innovation, which consists in the purposeful and organized search for changes,
and it is the systematic analysis of the opportunities such changes might offer for
economic and social innovation.’

Entrepreneurship is a discipline with a knowledge base theory. It is an outcome of

complex socio-economic, psychological, technological, legal and other factors. It
is a dynamic and risky process. It involves a fusion of capital, technology and
human talent. Entrepreneurship is equally applicable to big and small businesses,
to economic and non-economic activities. Different entrepreneurs might have some
common traits but all of them will have some different and unique features. If we
just concentrate on the entrepreneurs then there will be as many models as there
are ventures and we will not be able to predict or plan, how and where, and when
these entrepreneurs will start their ventures.

Entrepreneurship is a process. It is not a combination of some stray incidents. It is

the purposeful and organized search for change, conducted after systematic
analysis of opportunities in the environment. Entrepreneurship is a philosophy- it
is the way one thinks, one acts and therefore it can exist in any situation be it
business or government or in the field of education, science and technology or
poverty alleviation or any others.

ENTERPRISE

Entrepreneur is a person who starts an enterprise. The process of creation is

called entrepreneurship. The entrepreneur is the actor and entrepreneurship is the
act. The outcome of the actor and the act is called the enterprise. An enterprise is
the business organization that is formed and which provides goods and services,
creates jobs, contributes to national income, exports and over all economic
development.

QUALITIES OF A SUCCESSFUL ENTREPRENEUR

Being an entrepreneur is about more than just starting a business or two, it is

about having attitude and the drive to succeed in business. All successful
Entrepreneurs have a similar way of thinking and posses several key personal
qualities that make them so successful in business. Successful entrepreneurs like
the ambitious Richard Branson have an inner drive to succeed and grow their
business, rather than having a Harvard Business degree or technical knowledge in
a particular field.
All successful entrepreneurs have the following qualities:

1. Inner Drive to Succeed : Entrepreneurs are driven to succeed and expand their
business. They see the bigger picture and are often very ambitious. Entrepreneurs
set massive goals for themselves and stay committed to achieving them regardless
of the obstacles that get in the way.

2. Strong Belief in themselves : Successful entrepreneurs have a healthy opinion

of themselves and often have a strong and assertive personality. They are focused
and determined to achieve their goals and believe completely in their ability to
achieve them. Their self optimism can often been seen by others as flamboyance or
arrogance but entrepreneurs are just too focused to spend too much time thinking
about un-constructive criticism.

3. Search for New Ideas and Innovation: All entrepreneurs have a passionate
desire to do things better and to improve their products or service. They are
constantly looking for ways to improve. They're creative, innovative and
resourceful.
4. Openness to Change : If something is not working for them they simply change.
Entrepreneurs know the importance of keeping on top of their industry and the
only way to being number one is to evolve and change with the times. They're up to
date with the latest technology or service techniques and are always ready to
change if they see a new opportunity arise.

5. Competitive by Nature : Successful entrepreneurs thrive on competition. The

only way to reach their goals and live up to their self imposed high standards is to
compete with other successful businesses.
6. Highly Motivated and Energetic : Entrepreneurs are always on the move, full
of energy and highly motivated. They are driven to succeed and have an
abundance of self motivation. The high standards and ambition of many
entrepreneurs demand that they have to be motivated!

7. Accepting of Constructive Criticism and Rejection : Innovative entrepreneurs

are often at the forefront of their industry so they hear the words "it can't be done"
quite a bit. They readjust their path if the criticism is constructive and useful to
their overall plan, otherwise they will simply disregard the comments as
pessimism. Also, the best entrepreneurs know that rejection and obstacles are a
part of any leading business and they deal with them appropriately.

8. An entrepeneur must be a risk-taker : A businessman must always have the

confidence and the guts to pursue a venture that he believes would push
through and flourish. He cannot be risk-averted, for it could take its toll on
the opportunities that he will miss.

9. An entrpeneur must think critically : A thorough analysis and study of the

industy and the business environment. In this way, he could identify the
trends and the current status of the industry that he wishes to pursue or join.
Matched with his risk-taking attitude, certain success awaits him. He should
think, always, "outside-of-the-box."

10. An entrepeneur must have a wide network of contacts : He must have

numerous connections with other entrepeneurs, so as to expand his horizons

and discover further business opportunities.
11. An entrepeneur must know how to rise again when he stumbles : Failure

is not the end of the game. Instead, it should be considered as a challenge

and as the start of another business chapter. Through failures, one learn to
cope and recover, as experience is gained at each circumstance.

12. An entrepeneur must be persistent and resourceful : Just like the

foregoing attribute, he must learn how to stand up from a fall, muster
enough courage to recover and face the business fray once more. IN the
process, as he perseveres, he is also ought to discover, invent and devise
ways on how to correct his previous mistakes and so prevent them form
recurring.
13. Self-confident : Self confidence is a key entrepreneurial skill for
success. It is easy to become demoralized, frustrated and resentful if you
lack self-confidence. Self-confidence is concerned with how a person feels
about his ability. A successful entrepreneur believes in his abilities. He is
not scared to explore un-chartered territories, take risk and take difficult
decisions. Self-confidence, however, is not a personal trait that either you
have or you don't. A person can have high self-confidence in one situation
and totally lack in another. This is one of those skills that can be developed
by training.
14. Hard working : Successful entrepreneurs are persistent and
hardworking. They master self-discipline to such extent that if a work is
important and related to their goals, they will, eventually, complete it.
Getting things done is the vital link between motivations and their outcome.
At times, entrepreneurs force themselves to choose work over fun, a boring
job against a pleasant one, working on tax papers rather than reading a
 glamour magazine. This requires a self-control that many people simply fail
to develop in them.
15. Responsible : Successful entrepreneurs try to take full responsibility
for their actions. They know that what they are today, and what they are
going to be tomorrow, depend solely on themselves, as it is the outcome of
their own choices and decisions. They are proactive people, who set goals,
walk an extra mile to achieve them and rely, primarily, on their own
resources and abilities.
16. Goal-oriented : Successful entrepreneurs are capable of leading
people and get work done by them. They use a combination of various
methods - effective motivation, planning, coaching and evaluation - to lead
people. They are concerned about the wellbeing of others and easily get
along with people.

17. Risk taking : Risk taking- successful entrepreneurs must have ability
to face with any risk, evolved from the action taking. And also, they must
capable to find out any new solutions in their business matters or problems.
18. Creative and innovative : Creativity is the ability to use your insights
and come up with new solutions to old problems, get things done in a
different way or find a totally different approach for conventional things to
work together. Entrepreneurs need creative thinking ability virtually in
everything. Each new product, each new marketing method, each business
decision - all these are fertile ground for creative thinking. All
entrepreneurs have a passionate desire to do things better and to improve
their products or service. They are constantly looking for ways to improve.
They're creative, innovative and resourceful.
True entrepreneurs are resourceful, passionate and driven to succeed and
improve. They're pioneers and are comfortable fighting on the frontline The great
ones are ready to be laughed at and criticized in the beginning because they can
see their path ahead and are too busy working towards their dream.

IN SHORT
• High levels of optimism and confidence
• Vision and passion in their dreams and convictions
• Surround themselves with other like-minded people
• Highly resourceful, creative and inventive
• Seize opportunities and create their own whenever possible
• Know what motivates them and have a strong sense of personal identity
• Spend a substantial amount of time on introspection and self-discovery
• Refuse to let other people dictate how they should live
• Take responsibility for their happiness
• Spin challenges into their greatest motivators-and sometimes biggest
advantages
TYPES OF ENTREPRENEURS
Types of Entrepreneurs can be classified on different basis.
Some of these basis include :
1. Type of business
2. Use of Technology
3. Motivation
4. Growth
 5. Stages in Development
6. Others
The entrepreneurs which come under these basis are as follows:
TYPE OF BUSINESS
1. Business entrepreneur: Convert ideas into reality; deal with both
manufacturing and trading aspect of business (Small trading and
manufacturing business)
2. Trading entrepreneur: Undertakes trading activities; concerned with
marketing (Domestic and international level)
3. Industrial entrepreneur: Undertakes manufacturing activities only; new
product development etc (textile, electronics, etc)
4. Corporate entrepreneur: Interested in management part of organisation;
exceptional organising, coordinating skills to manage a corporate
undertaking (Ambani, Tata families)
5. Agricultural entrepreneur: Production and marketing of agricultural inputs
and outputs (Dairy, horticulture, forestry)

USE OF TECHNOLOGY
1. Technical entrepreneur: Production oriented, possesses innovative skills in
manufacturing, quality control etc.
2. Non technical entrepreneur: Develops marketing, distribution facilities and
strategies
3. Professional entrepreneur: Uses the proceeds from sale of one business to
start another one. Brimming with ideas to start new ventures
MOTIVATION
1. Pure entrepreneur: Psychological and economic rewards motivate him
2. Induced entrepreneur: Incentives, concessions, benefits offered by
government for entrepreneurs motivates him
3. Motivated entrepreneur: Sense of achievement and fulfillment motivate him
4. Spontaneous entrepreneur: Born entrepreneurs with inborn traits of
confidence, vision, initiative
GROWTH
1. Growth entrepreneur: One who enters a sector with a high growth rate; is a
positive thinker
2. Super growth entrepreneur: One who enters a business and shows a quick,
steep and upward growth curve
STAGES IN DEVELOPMENT
1. First generation entrepreneur: Innovator, risk taker, among the firsts in
family to enter business.
2. Modern entrepreneur: Who considers feasibility of business, which can
adapt to change and dynamic market.
3. Classical entrepreneur: One who gives more importance to consistent
returns than to growth; concerned about customer and marketing needs.
4. Innovating entrepreneurs are generally aggressive in collecting
information, analyzing and experimenting attractive possibilities into
practice. They are always creative and bringing in innovation in their work.
5. Imitative entrepreneurs are ready to adopt and are more flexible in
imitating techniques developed by others. They exploit opportunities as they
come and are mostly on a small scale. He is more of an organizer of factors
of production than a creator. In the context of a poor country, he is
 definitely a change agent and hence he is important in underdeveloped
countries.

OTHERS
1. Area: Rural and Urban entrepreneur
2. Gender/Age : Men and Women entrepreneur
3. Scale : Small and Large scale entrepreneur

ENTREPRENEURIAL SKILLS

If you are thinking of starting a business, you will need a broad array of
entrepreneurial skills to succeed in today's competitive market. You must possess
basic skills necessary to enable you to start, develop, finance, and market your own
home business enterprises. There are a number of qualities and skills you need to
have, including personal attributes, business skills and management capability.
While you may not have all of them right now, there are five basic skills you really
must have to run any kind of business.

These five skills are:

Sales and marketing skills : Sales and marketing are the two most important
skills you must have when you plan to start your own business. A business is
nothing if it has no customers. You may have the fanciest computer with the
latest graphics software, but if no one is knocking at your door to hire you as a
graphic designer, then you better rethink why you are in business in the first
place. Maybe you are better off employed by a firm. To have revenues and
profits, you first need to have customers. To get customers, you must be able to
market your business and possess the skills to close the sale.
As you plan your business, you must begin to think how to reach your target
audience and the people who may need your products or service. This entails
understanding the concept of marketing, and using the tools that your budget
permits. You must have a knack for understanding what people wants, listening
to their needs, and interact well with other people. It would be extremely
helpful if you possess excellent written and oral communication skills to help
you sell your products and services (more so if you are a solo entrepreneur who
will be doing everything by yourself). You need to create a buzz about your
business by talking to people and presenting to them your business. You need to
write ads, press releases and story ideas about your business. Starting a business
is a time to get out of your timid self and begin to aggressively market your
venture. That’s the only way you can succeed.

Financial know-how : You are in business to make money. Therefore, the

most important skill you must have is the ability to handle money well. This
includes knowing how to stretch the limited start-up capital that you have,
spending only when needed and making do with the equipment and supplies
that you currently have. You also need to identify the best pricing structure for
your business in order to get the best kind of return for your products or
services.

Success in business is not limited to those who have tons of capital in the
beginning. Look at the failed dot-coms with funding of as much as $100
million. Even if they are awash with cash, they still ended up as a failure
because they were not able to manage their money well. They lavished
themselves with high-tech office furniture and gave their CEOs fancy jets to fly,
only to have their cash flow depleted in less than a year.If you are able to
manage your cash flow well when the business starts to run, you will be able to
survive the ups and downs of self employment. The important thing is to always
focus on the bottomline. For every spending, always ask yourself: “How much
will this contribute to my bottom line?” If it will not give your business
anything in return financially, better think twice before opening your wallet.

Self-motivation skills : As an entrepreneur, you do not have the luxury of

bosses and bureaucracy to tell you what needs to be done. Everything rests on
your shoulder from thinking where to get the money to fund the business, to
developing the product, to determining how to reach the customer, and so on.
Only you will create the plans, and change them should the situation shifts. You
need to be smart enough to know when you need to go ahead, and when to stop.

To succeed in business, you must be a self-starter with a clear desired goal in

mind. You must have the confidence in yourself, and in your ideas (how can
you sell your ideas to others if you yourself do not believe in them?). More
importantly, you must be willing to focus your energy and work hard towards
each and every step that will make your enterprise a success. Especially if you
work at home, it is doubly hard to get into the work mindset: sometimes, the
television is just too tempting that it is hard to get out of your pajamas and
begin typing in your computer. You therefore must have that extra drive and
commitment to make sure that you are taking the necessary steps to make your
dream of a successful business a reality.

Time management skills : The ability to plan your day and manage time is
particularly important for a home business. When you wake up in the morning,
you must have a clear idea of the things you must do for the day. Especially if
you are running a one-person operation, you must have the ability to multi-task
be the secretary at the start of the day typing all correspondences and emails,
become the marketing man writing press releases before noon, make sales call
in the afternoon, and become a bookkeeper before your closing hours. Imagine
if you are selling products and you still have to create the products, deliver and
fulfill the orders, rush to the bank to cash the checks. Lots of job for a simple
home-based business! No, you don’t have to be a superman (or superwoman).
You simply have to know how to manage time and prioritize your tasks.

One difficulty of working from home is that you can never seem to stop. There
are simply too many things to do, as if work never stops (and it doesn’t!). Part
of having good time management skills is knowing when to stop and when to
leave work, and begin doing your other roles in your family as the husband,
wife, mother or father. You must be able to know how to keep your home life
separate from your work life, and ensure that there exists a balance between the
two.

Administration skills : If you can afford to hire an assistant who will organize
your office space and file your papers and mails, lucky you! However, most
start-up entrepreneurs cannot afford such luxuries. Over and above the tasks of
managing, marketing and planning your business, you also need to possess a
great deal of administration skills. You need to file your receipts so tax time
will not be a trip to Hades. You need to do all the work in terms of billing,
printing invoices, collecting payments, and managing your receivables.

Starting a business is never easy, even if you have the perfect background and
 possess all the above skills. Having all the needed skills and qualities will not
even ensure your success. But having these basic skills will, at least, lessen the
pain of the start-up process, giving you greater chance in seeing your business
grow and prosper.

TYPES OF RISK FACED BY ENTREPRENEUR:

1. Financial risk
2. Family and social risk
3. Career risk
4. Psychological risk.

THE ENTREPRENEURIAL PROCESS

A wide range of factors could influence someone to become an entrepreneur,
including environmental, social, personal ones, or a combination of them. After
one decides to be an entrepreneur, there are four steps of the entrepreneurial
process he/she has to follow:
1. Spot and assess the opportunity.
2. Draw up a business plan.
3. Establish the resources needed and get them.
4. Run the company created.
1. Spot and assess the opportunity, to identify an opportunity and analyse its
potential in terms of: market needs, competitors and market potential and
product lifecycle. It is important the entrepreneur to test his/her business
idea/concept with potential customers, asking if they would buy the product
or service, doing some research to find the market size and whether if it is
growing, stable or stagnating, finding out about his/her competitors strengths
and weaknesses, threats and opportunities.
2. Draw up the business plan.
The business plan is an important part of the entrepreneurial process. A well
planned business will have more chance to succeed all the other aspects of
the company being equal. It is crucial for the entrepreneur to know how to
plan his/her actions and lay out strategies for the business to be created or
under expansion.
3. Establish the resources needed and provide them.
The entrepreneur should use his/her planning ability and bargaining skills to
get to know the best alternatives on the financing market for their business,
that is, which will offer the best cost benefit ratio.
4. Run the firm created.
Running the company can seem to be the easiest part of the entrepreneurial
process, since the opportunity has been identified, the business plan
developed and the source of funding provided. But running a company is not
as straightforward as it seems. The entrepreneur must recognize his/her
limitations, recruit a first rate team to help manage the company,
implementing actions to minimise problems and maximise profits. That is,
the firm has to produce more, with the fewest resources possible, combining
efficiency and efficacy.
BENEFITS OF ENTREPRENEUR:
1. He provides opportunities for self expression and realization of
one’s own passion of doing something new and different.
2. Offer opportunities for growth and self development.
3. Monetary rewards are more.
4. He has the power of decision making.
5. Rewards of working for oneself is highly satisfying and motivating.
6. Contributes to the development of the community as one generates
employment for others.
7. Entrepreneur initiates and constitutes change in the economic
development and structure of business.
8. Combining factor of production
9. Risk acceptance.
10. maximizing shareholders’ return
11. Using market information for opportunities

SIGNIFICANCE OF ENTREPRENEUR IN ECONOMY.

1. Brings Overall Change.
2. Focuses On Research And Development.
3. Brings In Economic Development.
4. Improvement In Standard Of Living.

ENTREPRENEUR vs. MANAGER RELATIONSHIP

Are all small entrepreneurs managers? Are all small business managers
entrepreneurs? The terms entrepreneur and manager are many times used
interchangeably yet they are different. An entrepreneur starts a venture then a
manager takes over to organize and co-ordinate continuous production. An
entrepreneur is being enterprising as long as he starts something new then the
routine day-to-day management of the business is passed on to the manager. The
main differences between the two are summed up below:

TRADER VS ENTREPRENEUR

TRADER ENTREPRENEUR

A trader is not always an entrepreneur An entrepreneur also a trader

Involve in buying and selling Involve in creating new product

Always work out to gain profit Besides profit, also considered about
 satisfaction and successful

Not interested in new technology Always alert and follow any new changes
evolvement and new changes and technologies

Selling common stuff Introduce new products

Competition is a common challenge Competition is a challenge that needs

further details

Focus on daily matter Farsighted and try to improve in the

future

Short term profit oriented Long term profit oriented

CONCLUSION
JUST WHO IS AN ENTREPRENEUR?

• Anyone who has ever looked at a problems and seen it as an opportunity is a

likely prospect.

• While there's no single entrepreneurial archetype, certain common traits

indicate an entrepreneurial personality.

• They tend to set realistic and achievable goals, and when they do take risks,
they're usually calculated ones based on facts and experience, rather than
instincts.

• Entrepreneurs are driven not by the need to make money, but by the need to
make their dreams a reality.
• More often than not, money is a byproduct of an entrepreneur's motivation
rather than the motivation itself.

• Entrepreneurs are participants, not observers; players, not fans.

• And to be an entrepreneur is to be an optimist, to believe that with the right

amount of time and money, you can do anything.