MB/201 ENTREPRENEURSHIP

DEVELOPMENT
 Entrepreneur
• Developed from French word “Entreprendre”,
meaning a person who undertakes risk of the new
enterprise.

• According to J. B. Say “One who brings together the

factors of production and combine them into a
product”.

• According to Joseph Schumpeter, “Entrepreneur is

an innovator who brings economic development
through new combinations of factors of production.
 Entrepreneurship

• It is the process of starting and operating own

business.

• Process of creating something new and assuming

the risks and rewards.
- Robert D. Hisrich, M. P. Peters & D. A. Shepherd
Characteristics/ Qualities of an
Entrepreneur
 Functions of an entrepreneur
1. Plan preparation
2. Site selection
3. Provision of all factors of production
4. Product quality maintenance
5. Sale of goods
6. Advertisement
7. Search for markets
8. Supervision
9. Risk taking
10. Innovation
Entrepreneur VS Intrapreneur
• Idea: Google allows time for personal projects. Some of
Google’s best projects come out of their 20 percent
time policy.

• Benefit: Paul Buchheit, the creator of Gmail, started on

the project in 2001 and worked up to its launch on April
1, 2004. Gmail became the first email with a successful
search feature and the option to keep all of your email
(1GB of storage) instead of frequently deleting to stay
under your limit. The initial launch was by invite only,
quite the superior commodity. Now, it’s considered a
faux pas not to have an email address ending in
@gmail.com.
• The idea of e-choupal, an ITC division germinated when
Sivakumar a manager in the ITC Group’s agribusiness
unit, approached ITC’s chairman, with a request of Rs
50 lakhs to test an idea. He wanted to procure farm
produce from soya farmers in Madhya Pradesh, thereby
eliminating middlemen.

• Today, e-Choupal, reaches out to over 4 million farmers

growing a range of crops in over 40,000 villages across
10 states.
 Difference between Manager and Entrepreneur
Basis Manager Entrepreneur
1. Motive Motive is to render services in an Motive of an entrepreneur is to
enterprise already set by someone start a venture for his personal
else. gratification.
2. Status Servant Owner
3. Risk Manager does not bear any risk Assumes risks an uncertainty.
involved in enterprise.
4. Rewards Salary which is certain and fixed. Profits, which are highly uncertain
and not fixed.
5. Innovation A manager simply executes the plan Entrepreneur himself thinks over
prepared by the entrepreneur. what and how to produce goods to
meet the changing needs of the
customers. Hence, he acts as
innovator/ change agent.
6. Qualification Needs to possess qualities and Needs to possess distinct
qualifications like high achievement qualifications in terms of sound
motive, originality in thinking, knowledge in management theory
foresightedness, risk bearing ability and practice.
etc.
Significance of Entrepreneurial Economic
Development
• Employment generation
• National income
• Balanced Regional development
• Harnessing Locally available resources and
Entrepreneurship
• Reducing unrest and social tension amongst youth
• Innovations in enterprises
• Improvement in living standards
• Economic independence
 Entrepreneurial Motivation

• It is process of transforming an ordinary individual

to a powerful businessman, who can create
opportunities and helps in maximizing wealth and
economic development.
 Internal factors
1. Need for self-actualization
 2. Optimism

• Individuals having
optimistic approach get
motivated by finding
opportunities during
critical situations
 3. Commitment
• Commitment towards a
goal can make to
achieve success. It
motivates
entrepreneurs by
inspiring and developing
emotional attachment
towards an objective.
4. Education
It motivates a person to innovate and create new
products, this result in establishing an organization or a
new business venture.

5. Background
Family background, occupational background and a
person’s own experience in a job motivates him/ her to
become an entrepreneur.

6. Financial background
Money can make many things it is the major thing in
deciding one’s status and development, strong financial
background facilitates to start a business.
EXTERNAL FACTORS
1. Influence
2. Availability of resources
3. Product’s demand
4. Government policies
5. Information availability
If there is abundant information then it automatically
creates interest in the minds of enthusiastic people to
become entrepreneurs.

6. Technological advancement
Technological advancement acts as a path to transform
ideas into products, feasibility in production and
expected success rate highly motivates to become
entrepreneurs.

7. Changing tastes and preferences

Changing tastes and preferences of the customers
maximizes the chance to produce substitute and
complementary goods, it creates a scope to innovation
and establishment of the new ventures.
Concept of Women Entrepreneurship

• It may be defined as a woman of group of women

who initiate, organise and run a business
enterprise.

• “Women who innovate, initiate or adopt business

activities are called women entrepreneurs.”
• J. Schumpeter
 Problems of Women Entrepreneurs

• Problem of Finance
• Limited Mobility
• Family Ties
• Lack of Education
• Male Dominated Society
• Low Risk Bearing Ability
 Myths about Entrepreneurs

• Entrepreneurs are born, not made

• Entrepreneurs are academic and social misfits
• Money is key eligibility to be an entrepreneur
• Great idea is sufficient
• My best friend is my best business partner
• Having no boss is fun
• Life will be simpler if I work for myself
Environmental factors affecting
success of a new business
 Internal Factors

• Value System
• Mission and Objective
• Human Resources
• Unions
• Physical Resource
• Company Image and Brand Equity
 External Factors

• Micro Indicators
Customers, prospective investors, competitors,
suppliers

• Macro Indicators: PESTLE

 Concept of Business Plan

• A written document that describes in detail how a

new business is going to achieve its goals.

• A business plan layout is a written plan from a

marketing, financial and operational viewpoint.
Opportunity Identification and
Selection
 Opportunity Selection

• Step 1:Identify Your Business and Personal Goals.

• Step 2:Research Your Favourite Industries.
• Step 3:Identify Promising Industry Segments.
• Step4:Identify Problem Areas and Brainstorm
Solutions.
• Step5:Compare Possible Solutions with Your
Objectives and Opportunities in the Marketplace.
• Step 6:Focus on the Most Promising Opportunities.
 Formulation of Business Plan

1. General Information
2. Project Description
3. Market Potential
4. Capital Costs and Sources of Finance
5. Assessment of Working Capital Requirements
6. Other Financial Aspects
7. Economic and Social Variables
8. Project Implementation
 1. General Information
i ) Bio-data of promoter

ii) Industry profile

iii) Constitution and organisation

iv) Product details

 2. Project Description
i) Site
ii) Physical infrastructure
iii) Utilities
iv) Pollution control
v) Communication system
vi) Transport facilities
vii) Production process
viii) Machinery and equipments
ix) Capacity of the plant
x) Research and development
 3. Market Potential
i) Demand and supply position

ii) Expected price

iii) Marketing strategy

iv) After sales services

v) Transportation
4. Capital Costs and Sources of Finance

5. Assessment of Working Capital Requirements

6. Other Financial Aspects: Break even analysis

7.Economic and Social Variables: Employment

generation, local resource utilisation etc.
8. Project Implementation
 Contents of Business Plan
1. General Information
2. Promoter
3. Location
4. Land and Building
5. Plant and Machinery
6. Production Process
7. Utilities
8. Transport and Communication
9. Raw Material
10. Manpower
 Contents of Business Plan
11. Products
12. Market
13. Requirement of Working Capital
14. Requirement of Funds
15. Cost of Production and Profitability of first ten years
16. Break-Even Analysis
17. Schedule of Implementation
 Significance of Business Plan
1.To give direction to the vision formulated by
entrepreneur.
2.To monitor the progress after implementing
business plan.
3.To persuade others to join business.
4.To seek loans from financial institutions.
5.To visualize concept in terms of market availability,
organizational, operational and financial feasibility.
6.To identify actual strength and weakness of the
plan.
Concept of Women Entrepreneurship

• It may be defined as a woman of group of women

who initiate, organise and run a business
enterprise.

• “Women who innovate, initiate or adopt business

activities are called women entrepreneurs.”
• J. Schumpeter
 Problems of Women Entrepreneurs

• Problem of Finance
• Limited Mobility
• Family Ties
• Lack of Education
• Male Dominated Society
• Low Risk Bearing Ability
 Myths about Entrepreneurs

• Entrepreneurs are born, not made

• Entrepreneurs are academic and social misfits
• Money is key eligibility to be an entrepreneur
• Great idea is sufficient
• My best friend is my best business partner
• Having no boss is fun
• Life will be simpler if I work for myself
Environmental factors affecting
success of a new business
 Internal Factors

• Value System
• Mission and Objective
• Human Resources
• Unions
• Physical Resource
• Company Image and Brand Equity
 External Factors

• Micro Indicators
Customers, prospective investors, competitors,
suppliers

• Macro Indicators: PESTLE

 Concept of Business Plan

• A written document that describes in detail how a

new business is going to achieve its goals.

• A business plan layout is a written plan from a

marketing, financial and operational viewpoint.
Opportunity Identification and
Selection
 Opportunity Selection

• Step 1:Identify Your Business and Personal Goals.

• Step 2:Research Your Favourite Industries.
• Step 3:Identify Promising Industry Segments.
• Step4:Identify Problem Areas and Brainstorm
Solutions.
• Step5:Compare Possible Solutions with Your
Objectives and Opportunities in the Marketplace.
• Step 6:Focus on the Most Promising Opportunities.
 Formulation of Business Plan

1. General Information
2. Project Description
3. Market Potential
4. Capital Costs and Sources of Finance
5. Assessment of Working Capital Requirements
6. Other Financial Aspects
7. Economic and Social Variables
8. Project Implementation
 1. General Information
i ) Bio-data of promoter

ii) Industry profile

iii) Constitution and organisation

iv) Product details

 2. Project Description
i) Site
ii) Physical infrastructure
iii) Utilities
iv) Pollution control
v) Communication system
vi) Transport facilities
vii) Production process
viii) Machinery and equipments
ix) Capacity of the plant
x) Research and development
 3. Market Potential
i) Demand and supply position

ii) Expected price

iii) Marketing strategy

iv) After sales services

v) Transportation
4. Capital Costs and Sources of Finance

5. Assessment of Working Capital Requirements

6. Other Financial Aspects: Break even analysis

7.Economic and Social Variables: Employment

generation, local resource utilisation etc.
8. Project Implementation
 Contents of Business Plan
1. General Information
2. Promoter
3. Location
4. Land and Building
5. Plant and Machinery
6. Production Process
7. Utilities
8. Transport and Communication
9. Raw Material
10. Manpower
 Contents of Business Plan
11. Products
12. Market
13. Requirement of Working Capital
14. Requirement of Funds
15. Cost of Production and Profitability of first ten years
16. Break-Even Analysis
17. Schedule of Implementation
 Significance of Business Plan
1.To give direction to the vision formulated by
entrepreneur.
2.To monitor the progress after implementing
business plan.
3.To persuade others to join business.
4.To seek loans from financial institutions.
5.To visualize concept in terms of market availability,
organizational, operational and financial feasibility.
6.To identify actual strength and weakness of the
plan.