ENTREPRENEURIAL DEVELOPEMENT

MODULE 1

Who is an Entrepreneur?
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A person who takes the risk converting a new idea into reality.

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Entrepreneur as a Risk- Bearer y Entrepreneur as an Organizer y Entrepreneur as an Innovator

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MEANING
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An entrepreneur is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome.

DEFINITIONS
An individual who bears the risk of operating a business in the face of uncertainty about the future conditions. -Encyclopedia Britannica y An individual is the one who innovates, and introduces something new in the economy. -Joseph A. Schumpeter
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EVOLUTION OF THE CONCEPT OF ENTREPRENEUR

13th Century- The origin of the English word entrepreneur comes from the French word ENTERPRENDRE , which means to do something or to undertake; meant to designate an organizer of musical or other entertainments. y 16th century- Applied to those who were engaged in military expeditions. y 17th century- extended to cover civil engineering activities : Construction. y 18th century- Economic aspect.
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Example:
Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on December 28, 1932, at Chorwad, Gujarat, into a Modh family. Dhirubhai Ambani started his entrepreneurial career by filling gas at a shell pump at a monthly salary of Rs 300. y Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built Indias largest private sector company, Reliance India Limited, from a scratch. Over time his business has diversified into a core specialization in petrochemicals with additional interests in telecommunications, IT, energy, power, retail, textiles, infrastructure services, capital market and logistics.
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DIFFERENCE BETWEEN A MANAGER AND ENTREPRENEUR

ENTREPRENEUR OWN BOSS TAKES OWN DECISION HIRES EMPLOYEES UNCERTAIN REWARDS WHICH CAN BE UNLIMITED MANAGER SALARIED EMPLOYEE EXECUTES THE DECISION OF THE OWNER HE IS AN EMPLOYEE FIXED REWARDS AND SALARY

FUNCTIONS OF AN ENTREPRENEUR
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Idea generation and scanning of the best suitable ideas. Determination of the business objectives. Product analysis and market research. Determination of form of Ownership. Completion of promotional formalities. Raising necessary funds. Procuring machine and materials. Recruitment of men. Undertaking the business operations.

WHY SHOULD YOU BECOME AN ENTREPRENEUR?

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You will be your own boss and boss to other people You will the chance to put your ideas into practice You will make money for yourself rather than for someone else You may participate in every aspect of running a business You will have the chance to work directly with your customers You will have the personal satisfaction of creating and running a successful business You will be able to work in a field or area that you really enjoy You will have the chance to build retirement value

TYPES OF AN ENTREPRENEUR
Classification Based On Functional Characteristics: y Innovating entrepreneurs: Introduces new goods, inaugurates new method of production, discovers new market and recognizes the enterprises. y Imitative entrepreneurs: Do not innovate the changes themselves, they only imitate techniques and technology innovated by others. y Fabian entrepreneurs: Enthusiastic in experimenting any change in their enterprises. y Drone entrepreneurs: Do not adopt the changes even be prepared to suffer from the loss of business.

Contd
Classification Based On Behavioral Scientist: y Solo operators: Work alone y Active partners: Joint venture y Inventors: Innovative activities y Challengers: Look for new challenges y Buyers: Buy the ongoing business to reduce risk y Life timers: Family business

Contd
Classification Based On the Developmental Angel: y Prime mover: Entrepreneur look for
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development, expansion and diversification of business. Manager: Entrepreneur does not initiate expansion. Minor Innovator: Entrepreneur contributes to economic progress by finding better use of existing resources. Satellite: Entrepreneur assumes suppliers role. Local trading: Entrepreneur limits his enterprise to the local market. E.g.: Small Scale Enterprises

Contd
Classification Based On type of Entrepreneurial Business:

Manufacturing: Entrepreneur produces products. y Wholesaling: Entrepreneur sells products to the

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middle man.

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Retailing: Entrepreneur directly sells the products to

the people who use or consume them.

Service:
products.

Entrepreneur sells services rather than

INTRAPRENEUR
AN EMERGING CLASS y A new breed of entrepreneurs is coming to the force in large industrial organization and emerge from within the confines of an existing enterprise. y E.g.: CEO, Directors
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DIFFERENCE BETWEEN ENTREPRENEUR AND INTRAPRENEUR

Difference Dependency Entrepreneur An entrepreneur independent in operations. Intrapreneur is An Intrapreneur is his dependent on the entrepreneur Funds are not raised by the Intrapreneur.

Raising of funds

An entrepreneur himself raises funds required for the enterprise.

Risk

Entrepreneur bears the risk An Intrapreneur does involved in the business. not fully bear the risk involved in the enterprise. An entrepreneur operates An Intrapreneur from outside. operates from within the organization.

Operation

CONCEPT OF ENTREPRENEURSHIP
The process of creating is called as Entrepreneurship. y Entrepreneurship can be defined as a process of action an entrepreneur undertakes to establish an enterprise. y Entrepreneurship is a process of giving birth to a new enterprise. y According to A.H Cole, Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or increase profit by production or distribution of economic goods and services.
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EVOLUTION OF ENTREPRENEURSHIP
Entrepreneurship During Pre- Independent:
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Evolution traced back to Rig-Veda: Metal

handicrafts existed in the society.

The manufacturing entrepreneurship in India emerged as the latest consequence of EIC. The company injected various changes in the Indian economy through export of Raw materials and import of finished goods in India. y The parsis established good rapport with the EIC to establish manufacturing sector in India. y At the time of 1st world war, the Indian Govt protected certain companies stating that receiving benefits should be registered in India with rupee capital.

East

India

Company-

Contd
Entrepreneurship During Post- Independent: y The first Industrial policy1948- The Govt made
three important resolutions 1. To maintain a proper distribution of economic power between private and public sector. 2. Encourage the Industrialization by spreading entrepreneurship from existing centers to other cities, towns, villages. 3. Distribute the entrepreneurship which concentrated in a few dominant communities to a large number of industrially potential people of varied social strata.

Contd
Govt provided various incentives and concession in the form of capital, technology, markets and land to the potential entrepreneurs to establish Industries. y e.g.: Some of the SML manufacturing units are TATA, Birla, Kirloskar etc.

Five year plan: 3rd five year plan-

DEVELOPMENT OF ENTREPRENEURSHIP
Entrepreneurial development cycle consisting of the following activities: 1. Stimulatory activities 2. Support activities 3. Sustaining activities

Stimulatory activities
Stimulatory activities: These activities ensure the emergence of entrepreneurs in the society. These can be achieved by the following activities: y Entrepreneurial activities y Planned publicity for entrepreneurial opportunities y Identification of potential entrepreneurs through scientific method y Motivational training to new entrepreneurs y Help and guidance in selecting and preparing projrct reports y Making available techno-economic information and product profiles y Evolving locally suitable new products and processes y Creating entrepreneurial forms y Recognition of entrepreneurs

Support activities
Support activities: These activities help a person to develop into an entrepreneur. These can be achieved by the following activities: y Registration of unit y Arranging finance y Providing land, shed, power, water and so on y Supplying of scarce raw materials y Getting licenses/import licenses y Providing common facilities y Granting tax relief or other subsidy y Offering management consultancy services y Help marketing the product y Providing information

Sustaining activities
Sustaining activities: These activities are all those that help in the continuous and efficient functioning of entrepreneur. These can be achieved by the following activities: y Help modernization y Help diversification/expansion/substitution production y Additional financing for full capacity utilization y Deferring repayment/ interest y Diagnostic industrial extension/ consultancy services y Production units legislation/policy change y Product reservation/ creating new ways for marketing y Quality testing and approving services y Need based common facilities centers

STAGES IN ENTREPRENEURIAL PROCESS

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First stage: Identifying and evaluate the opportunity. Second stage: Development of the business plan. Third stage: Determination of the required resources. Fourth stage: Management of the resource.

Development of the business plan

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Title page Table of contents Executive summary Major section: Description of business Description of industry Technology plan Marketing plan Financial plan Production plan Organization plan Operational plan summary

Determination of the required resource

Determine resources needed y Determine existing resources y Identify resource gaps and available suppliers y Develop access to those resources
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Management of the resource

Develop management style y Identify problems and potential problems y Implement control system y Develop growth strategy
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Identifying and evaluate the opportunity

Opportunity assessment y Creation and length of opportunity y Risk and returns of opportunity y Skills and goals y Competitive environment
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THE ENTREPRENEURIAL CULTURE

Example:
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Employees at Google enjoy a creative, relaxed and innovative culture. The open plan offices, informal structure and entrepreneurial culture help to create a fun working environment.

Entrepreneurial culture
Entrepreneurial culture implies a set of values, norms and traits that are conducive to the growth of entrepreneurship. y e.g.: No entrepreneur can overlook the countrys cultural heritage and values if he wants to survive and progress.
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Culture
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Culture, Is a "The collective programming of the mind which distinguishes the members of one human group from another. Culture underlies all components of work environment that support entrepreneurship.

Elements of an Entrepreneurial Culture:

       

People and empowerment focused Value creation through innovation and change Attention to the basics Hands-on management Doing the right thing Freedom to grow and to fail Commitment and personal responsibility Emphasis on the future and a sense of urgency

Thank you