ESBE-Unit I

Entrepreneurship and Small Business Enterprises
Dr. S. Deva Prasad

Department of Mechanical Engineering,
e-mail: s.devaprasad@gmail.com
4 April 2020
Vignan Institute of Technology & Science, Hyderabad-508284
Vignan Institute of Technology and Science
COURSE OBJECTIVE
The aim of this course is to have a comprehensive perspective of inclusive
learning, ability to learn and implement the Fundamentals of
Entrepreneurship.
COURSE OUTCOMES
It enables students to learn the basics of Entrepreneurship and
entrepreneurial development which will help them to provide vision for their
own Start-up.
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SYLLABUS
UNIT-I : Entrepreneurial Perspectives
UNIT-II : New Venture Creation
UNIT-III : Management of MSMEs and Sick Enterprises
UNIT-IV : Managing Marketing and Growth of Enterprises
UNIT-V : Strategic perspectives in Entrepreneurship
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UNIT-I: Entrepreneurial Perspectives:

Evolution, Concept of Entrepreneurship, Types of Entrepreneurs, Entrepreneurial
Competencies, Capacity Building for Entrepreneurs.
Entrepreneurial Training Methods; Entrepreneurial Motivations; Models for
Entrepreneurial Development, The process of Entrepreneurial Development.
UNIT-II: New Venture Creation:

Introduction, Mobility of Entrepreneurs, Models for Opportunity Evaluation; Business
plans– Purpose, Contents, Presenting Business Plan, Procedure for setting up
Enterprises, Central level - Startup and State level - T Hub, Other Institutions
initiatives
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UNIT-III: Management of MSMEs and Sick Enterprises:

Challenges of MSMEs, Preventing Sickness in Enterprises – Specific Management
Problems; Industrial Sickness; Industrial Sickness in India – Symptoms, process and
Rehabilitation of Sick Units
UNIT-IV: Managing Marketing and Growth of Enterprises:

Essential Marketing Mix of Services, Key Success Factors in Service Marketing, Cost
and Pricing, Branding, New Techniques in Marketing, International Trade.
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UNIT-V: Strategic perspectives in Entrepreneurship:

Strategic Growth in Entrepreneurship, The Valuation Challenge in Entrepreneurship,
The Final Harvest of New Ventures, Technology, Business Incubation, India way –
Entrepreneurship; Women Entrepreneurs – Strategies to develop Women Entrepreneurs,
Institutions supporting Women Entrepreneurship in India.
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Recommended Books
TEXTBOOK(S):
1. Entrepreneurship Development and Small Business Enterprises, Poornima M. Charantimath, 2e, Pearson,
2014.
2. Entrepreneurship, A South – Asian Perspective, D.F.Kuratko and T.V.Rao, 3ed,Cengage, 2012.
(URL ebook: http://slidehtml5.com/zykj/mzik)
REFERENCE BOOKS:
1. Entrepreneurship, Arya Kumar, 4ed, Pearson 2015.
2. The Dynamics of Entrepreneurial Development and Management, Vasant Desai, Himalaya Publishing
House, 2015.
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In our Telangana State…..

Located at IIIT Hyderabad
campus….
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https://www.startupindia.gov.in/content/sih/en/startup-scheme.html
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UNIT: I Entrepreneurial Perspectives
S.No. Topic
1 Entrepreneurship Definition
2 Evolution, Concept of Entrepreneurship
3 Types of Entrepreneurs, Entrepreneurial Competencies,
4 Capacity Building for Entrepreneurs.
5 Entrepreneurial Training Methods; Entrepreneurial Motivations
6 Models for Entrepreneurial Development, The process of Entrepreneurial Development.
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Chapter Objectives
Studying this chapter should provide you with the entrepreneurial knowledge
needed:
• To examine the historical development of entrepreneurship
• To explore and debunk (throw light on) the myths of entrepreneurship
• To define and explore the major schools of entrepreneurial thought
• To explain the process approaches to the study of entrepreneurship
• To set forth a comprehensive definition of entrepreneurship
• To understand process of entrepreneural development
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AFTMME 2019 at IIT Ropar
Entrepreneur Definition
The Evolution of Entrepreneurship
• “Entrepreneur is derived from the French “entreprendre”, means “to

undertake”
• The entrepreneur – who under takes to organise, manage and assume
the risks of a business
Although no single definition of entrepreneur exists and no one

profile can represent today’s entrepreneur, research is providing an
increasingly sharper focus on the subject.
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Entrepreneurship: A MindsetChallenging the Unknown

• Entrepreneurship is more than the mere creation of business:

▫ Recognize opportunities [Pickup problem to solve] - where others see
chaos or confusion
▫ Having the tenacity to push an idea through to reality
▫ Taking risks beyond security, are aggressive catalysts for change within the
marketplace
▫ Challenge the unknown and continuously create the future
• Entrepreneurship is an integrated concept that permeates an
individual’s business in an innovative manner.
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Summary…
• Entrepreneurship (Robert C. Ronstadt)
▫ The dynamic process of creating incremental wealth.
▫ This wealth is created by individuals who assume major risks in
terms of equity, time, and/or career commitment of providing value
for a product or service.
▫ The product or service itself may or may not be new or unique but
the entrepreneur must somehow infuse value by securing and
allocating the necessary skills and resources.
A good entrepreneur is one who is capable of inspiring confidence in people, and has the ability to
motivate them to work with him in fulfilling the economic goas set by him – Stephen Covey
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Who is entrepreneur?
• Individuals who discover market needs and launch new business to meet those
needs.
• They take risk and provide an impetus for change, innovation, and progress in
economic life.
• If a salaried employee comes up with some business idea, they will be rewarded with
a specified compensation and there is no ownership risks associated in such case.
Note: A manager is a person who is responsible for a part of a company, i.e., they 'manage' the
company. Managers may oversee a department and the people who work in it. In some cases,
the manager is in charge of the whole business.
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Who is entrepreneur?
The term entrepreneur is not only limited to founders of business firms; but can be
applied to the operators of family-owned firms, franchisees, and owner-managers who
have bought out the founders of existing firms. This definition excludes salaried
managers of larger corporations, even though sometimes described as entrepreneurs,
because of their flair for innovation and willingness to accept risk.
One of the examples of entrepreneurial ventures is Sergey Brin and Larry Page, the
founders of Google. If success is having your firm’s name outstanding, then these
two individuals can without question claimed to be successful. Google has clearly
been a phenomenal success, with a total stock value of over $140 billion at the end of
2006.
But while few of us can relate to Brin and Page’s level of success, as their experience
teaches us that we will never know what is possible until we try. 4 April 2020
An Integrated Definition
• Entrepreneurship
▫ A dynamic process of vision, change, and creation.
 Requires an application of energy and passion towards the creation and implementation of
new ideas and creative solutions.
▫ Essential ingredients include:
 The willingness to take calculated risks—in terms of time, equity, or career.
 The ability to formulate an effective venture team; the creative skill to marshal needed
resources.
 The fundamental skills of building a solid business plan.
 The vision to recognize opportunity where others see chaos, contradiction, and confusion.
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An Integrative Model of Entrepreneurial Inputs and Outcomes
Source: Michael H. Morris, P. Lewis, and Donald L. Sexton, “Reconceptualizing Entrepreneurship:

An Input-Output Perspective,” SAM Advanced Management Journal 59, no.1 (Winter 1994): 21–31.
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Concept of Entrepreneurship
Entrepreneurship is an action oriented activity . It is a world of immense

creativity and innovation inhabited by entrepreneurs, individuals who
involve take risk and create value in the form of new products and
services. Key characteristics include
• Vision
• Risk bearing • Drive to achieve
• Opportunity orientation
• Initiative and responsibility
• Innovative • Commitment,
• Persistent problem solving
determination, and
• Manage perseverance • Seeking feedback
• Internal locus of control
• Creative and Leadership • Independence
• Tolerance for ambiguity
• Team building
• Achievement capacity • Calculated risk taking • Tolerance for failure
• Organisation and co-ordination • High energy level

• Creativity and
• Professional Innovativeness
• Self-confidence and
• Business and result oriented… optimism
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
1) ACCORDING TO THE TYPE OF BUSINESS

▫ Business entrepreneurs:-who start business units after developing ideas for
new products/services.
▫ Trading entrepreneurs :-who undertake buying & selling of goods, but not
engage in manufacturing.
▫ corporate entrepreneurs:-who establish and manage corporate form of
organization which have separate legal existence.
▫ Agricultural entrepreneurs:- who undertake activities like raising and
marketing of crops, fertilizers and other allied activities.
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2)ON THE BASIS OF STAGES OF DEVELOPMENT

▫ First generation entrepreneurs:-who do not possess any entrepreneurial
background. They start industry by their own innovative skills.
▫ Second generation entrepreneurs:-who inherit the family business and pass
to next generation.
▫ Classical entrepreneurs:-who aims to maximize his economic returns at a
level consistent with the survival of the unit with or without an element of
growth.
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3)ON THE BASIS OF MOTIVATION

▫ Pure entrepreneurs:-who are basically motivated to become
entrepreneurs for their personal satisfaction, ego etc..
▫ Induced entrepreneurs:- who are induced to take up entrepreneurial role
by the assistance and policy of government including incentives, subsidies
etc.
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4) ON THE BASIS OF TECHNOLOGY

▫ Technical entrepreneurs:- who are task oriented and ‘craftsman type’. They
prefer doing to thinking.
▫ Non-technical entrepreneurs:- who are not concerned with technical side,
but rather with marketing and promotion.
▫ Professional entrepreneurs:- who start a business unit, but later sell the
running business and start a new unit later.
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5)ON THE BASIS OF CAPITAL OWNERSHIP

▫ Private entrepreneurs:- individual or group set up enterprise, arrange
finance, share risk etc..
▫ State entrepreneurs:- means the trading or industrial venture undertaken
by the state or the government itself.
▫ Joint entrepreneurs:- the combination of private and government
entrepreneurs.
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OTHER CLASSIFICATIONS
6)ACCORDING TO GENDER AND AGE
▫ Man entrepreneurs
▫ Women entrepreneurs
▫ Young entrepreneurs
▫ Old entrepreneurs
▫ Middle-aged entrepreneurs
7)ACCORDING TO AREA
▫ Urban entrepreneurs
▫ Rural entrepreneurs
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8)ACCORDING TO SCALE
▫ Large scale entrepreneurs
▫ Medium scale entrepreneurs
▫ Small scale entrepreneurs
often said that “economy is the effect for which
▫ Tiny scale entrepreneurs entrepreneurship is the cause". The development of
9)OTHERS economy is usually associated with its industrial
development.
▫ Spiritual Entrepreneur
▫ Social entrepreneurs An entrepreneur is a person who organizes the factors of
productions - land, labour and capital, and establish a
▫ Edupreneurs business venture and carries out the operations in the
business in a profitable manner.
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Entrepreneurial competencies are defined as underlying

characteristics possessed by a person, which result in
new venture creation.
These characteristics include generic and specific

knowledge, motives, traits, self-images, social roles,
and skills that may or may not be known to the
person.
That is, these characteristics may be even unconscious

attributes of an individual.
Some of these competencies are innate while others

are acquired in the process of learning and training
and development.
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Entrepreneurial Competencies
“Entrepreneurial competencies can be defined as

underlying characteristics such as generic and
specific knowledge, motives, traits, self-images,
social roles, and skills that result in venture
birth, survival, and/or growth.”
– Bird (1995)
“Total ability the entrepreneur to perform this
role successfully. Several studies have found
positive relationship between existences of
competencies and venture performance”.
– Man, Lau& Chan

Souce: http://www.simplynotes.in/mbabba/entrepreneurial-competency/
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1.Personal Entrepreneurial competencies - the personal characteristics of an
individual who possess to perform the task effectively and efficiently, they
include
a) Initiative - The entrepreneur
▫ able to take actions that go beyond his job requirements and to act faster.
▫ always ahead of others and able to become a leader in the field of business.
▫ does things before being asked or compelled by the situation and acts to
extend the business into new areas, products or services.
b) Sees and acts on opportunities - An entrepreneur
▫ always looks for and take action on opportunities.
▫ sees and acts on new business opportunities and
▫ seizes unusual opportunities to obtain financing, equipment, land, workspace
or assistance.
c) Persistence - An entrepreneur
▫ able to make repeated efforts or to take different actions to overcome an
obstacle that get in the way of reaching goals.
▫ Takes action in the face of a significant obstacle.
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individual who possess to perform the task effectively and efficiently, they
include (Cont’d)
d) Information Seeking - An entrepreneur
▫ able to take action on how to seek information to help in achieving business
objectives or clarify business problems.
▫ do personal research on how to provide a product or service.
▫ seek information or ask questions to clarify what is wanted or needed.
▫ personally undertake research and use contacts or information networks to
obtain useful information.
e) Concern for High Quality of Work - An entrepreneur
▫ acts to do things that meet certain standards of excellence that gives him
greater satisfaction.
▫ states a desire to produce or sell a top or better quality product or service.
▫ compare own work or own company’s work favourably to that of others.
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1.Personal Entrepreneurial competencies - the personal characteristics of an individual who
possess to perform the task effectively and efficiently, they include (Cont’d)
f) Commitment to Work Contract - An entrepreneur

▫ places the highest priority on getting a job completed.
▫ make a personal sacrifice or take extraordinary effort to complete a job.
▫ accept full responsibility for problems in completing a job for others and express concern for
satisfying the customer.
g) Efficiency Orientation - A successful entrepreneur
▫ always looks/finds ways to do things faster or with fewer resources or at a lower/less cost.
▫ uses information or business tools to improve efficiency.
▫ expresses concern about costs vs. benefits of some improvement, change or course of action.
h) Systematic Planning - An entrepreneur
▫ develops and uses logical, step-by-step plans to reach goal/s.
▫ plan by breaking a large task into subtask and develop plans, then anticipate obstacles and
evaluate alternatives.
▫ take a logical and systematic approach to activities.
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individual who possess to perform the task effectively and efficiently, they include
(Cont’d)
i) Problem Solving - Entrepreneurs
▫ identify new and potentially unique ideas to achieve his goals.
▫ generate new ideas or innovative solutions to solve problems and they take alternative
strategies to solve the problems.
j) Self-Confidence – An Entrepreneur
▫ with this competency will have a strong belief in self and own abilities.
▫ express confidence in their own ability to complete a task or meet a challenge.
▫ stick to their own judgment while taking decision.
k) Assertiveness - An entrepreneur
▫ confronts problems and issues with others directly.
▫ with this competency vindicate the claim to asset their own rights on others.
▫ demand recognition and disciplines those failing to perform as expected.
▫ asset own competence, reliability or other personal or company’s qualities.
▫ also assert strong confidence in own company’s or organization’s products or service.
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1.Personal Entrepreneurial competencies - the personal characteristics of an individual who
possess to perform the task effectively and efficiently, they include (Cont’d)
l) Persuasion - Entrepreneurs
▫ with this competency successfully pursue others to perform the activities effectively and
efficiently.
▫ can persuade or influence others for mobilizing resources, obtaining inputs, organizing
productions and selling his products or services.
m) Use of Influence Strategies- An entrepreneur
▫ is able to make use of influential people to reach his business goals.
▫ with this competency influence the environment (Individuals/Institution) for mobilizing resources
organizing production and selling goods and services to develop business contacts.
n) Monitoring - Entrepreneurs with this competency normally monitor or surprise all the
activities of the concern to ensure that the work is completed by maintaining good quality.
o) Concern for Employee Welfare - Entrepreneurs with this competency take action to
improve the welfare of employees and take positive action in response of employee’s
personal concerns.
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Venture Initiation and success Competencies Vignan Institute of Technology and Science
In addition to personal competencies
Entrepreneur must also possess the competencies required to launch the enterprise and for its
growth and survival. It is further divided into two categories of competencies:
i. Enterprise launching competencies
ii. Enterprise management competencies
i. Enterprise launching competencies

•Competency to understand the nature of business
-To analyse the personal advantage of owning a small business.
-To analyse the personal risks of owning a small business.
-To analyse how to maximize the opportunities and minimize the risks of owning a
business.
•Competency to determine the potential as an entrepreneur
-To consider the personal qualification and abilities needed to manage own business.
-To evaluate the own potentials for decision making, problem solving and creativity.
-To determine own potential for management, planning, operations, personnel and
public relations.
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i. Enterprise launching competencies (Cont’d)
•Competency to develop a business plan
-To identify how a business plan helps the entrepreneur.
-To recognize how a business plan should be organized.
-To identify and use the mechanisms for developing a business plan.
•Competency to obtain technical assistance
-To prepare for using technical assistance.
-To select professional consultants. A business plan is
-To work effectively with consultants. a written description of business's future.
a document that tells what is planned to do and
how one planned to do it.
It’s “also a road map that provides directions so a business can plan its future and helps it
avoid bumps in the road.”
A business plan, as defined by Entrepreneur, is a “written document describing the
nature of the business, the sales and marketing strategy, and the financial
background, and containing a projected profit and loss statement.” However,
business plan can serve several different purposes
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• Competency to a choose the type of ownership
-To analyze the type of ownership of business.
-To follow the steps necessary to file for ownership of the business.
-To define politics and procedures for a successful multi-owner.
• Competency to plan the market strategy
-To use goods classification and life cycle analysis as planning tools for
marketing.
-To develop and modify marketing mixes for a business.
-To use decision making tools and aid in evaluating marketing activities.
-To evaluate operations to improve decision making about marketing.
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•Competency to locate the business
-To analyze customer transportation, access, parking and so forth. i.e. relative
to alternative site locations.
-To complete a location feasibility study for the business.
-To determine the cost of renovating or improving a site for the business.
-To prepare an occupancy contrast for the business.
•Competency to finance the business
-To describe the source of information available to help in estimating the financing
necessary to start a new business.
-To determine the finance necessary to start a new business.
-To prepare a project profit and loss statement and a projected cash flow statement
for the new business.
-To prepare a loan application package.
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•Competency to deal with the business
-To determine the need for legal assistance.
-To select the provisions that is desired in the lease.
-To prepare sales contract (such as credit sales or long-term sales) that may be
utilized in the contracts
-To evaluate contracts.
-To determine the need for protection of ideas and intentions.
•Competency to comply with government regulations
-To appraise the effects of various regulations on the business operations.
-To acquire the information necessary to comply with the various rules and
regulations affecting the business.
-To develop policies for the business to comply with the Government rules and
regulations.
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Enterprise Management Competencies Vignan Institute of Technology and Science
ii. Enterprise Management Competencies (Cont’d)

•Competency to manage the business
-To plan goals and objectives for the business.
-To develop a diagram showing the organizational structure for the business.
-To establish control practices and procedures for the business
•Competency to manage human resources
-To write a job description for a position in the business.
-To develop a training programme online for employees.
-To develop a list of personnel for employees in the business.
-To develop an outline for an employee evaluation system.
-To plan a corrective interview with an employee concerning a selected problem.
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•Competency to promote the business
-To create a long-term promotional plan.
-To describe the techniques used to prepare advertising and promotion
-To analyse competitive promotional activities.
-To evaluate promotional effectiveness.
-To plan a community relations programme.
•Competency to manage sales efforts.
-To develop a sales plan for the business.
-To develop policies and procedures for serving the customers.
-To develop a plan for training and motivating salespeople.
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•Competency to keep business records
-To determine who will keep the books for the business and how they will be
maintained.
-To describe double-entry bookkeeping.
-Select the types of journals and ledges that you will use in the business.
-To identify the types of records that will be used in the business to record sales, cash
receipts, cash disbursements, accounts receivable, accounts payable, payroll, petty
cash, inventory, budgets and other items.
-To evaluate the business records.
-To identify how a micro-computer may be used to keep he business records.
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•Competency to manage the finances
-To explain the importance of cash flow management.
-To identify financial control procedures.
-To describe how to find cash flow patterns.
-To analyse trouble spots in financial management.
-To describe how to prepare an owner’s equity financial statement.
-To analyse financial management ratios applicable to a small business.
-To identify the components of break even point problem.
-To review microcomputer application for financial management.
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•Competency to manage customer credit and collection
-To analyse the legal rights and resource of credit guarantors.
-To develop a series of credit collection reminders and the follow up activities.
-To develop various credit and collection policies.
-To prepare a credit promotion plan.
-To discuss information resources and systems that apply to credit and collection
procedures.
•Competency to protect the business
-To prepare policies for the firm that will help minimize losses due to employee theft,
vendor theft, bad cheques, shoplifting, robbery, injury or product liability.
-To determine the kinds, amounts and costs of insurance needed by the firm.
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Capacity Building for Entrepreneurs.

The Four Capacity Building Pillars of Entrepreneurship are Operational,
Management, Financial Management, and Personal capacities.
Entrepreneur capacity building involves developing the combination of all four

capacity elements, to provide the ingredients for a great entrepreneurial
success.
These capacities are gained through experience throughout your career, while
others are learned through educational avenues. Some successful
entrepreneurs are born with strong personality traits, and some behaviors are
strengthened through learned responses in the business environment.
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• Operational Capacity Building
▫ Having a brilliant understanding of an industry and business at ground level
builds operational capacity.

▫ involves working in a variety of business operations for a period of time
prior to diving into entrepreneurship.
▫ where you gain valuable insight into what makes businesses tick.
▫ Understanding the dynamics on the floor, in the cubicles, in the field and
out on the road, gives you the perspective on how to lead, organize and
plan for operations.
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• Management Capacity Building
▫ Taking operational experience one more step,
gaining management experience in a field or business will be directly

applicable to managing your own business.
▫ The valuable experience one gains in managing operations, resources and
people will give you the applicable tools for own business.
▫ With a few years of management experience, you will gain management
capacity and an understanding of responsibilities and accountabilities at
that level… all precursors to managing your own company.
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• Financial Management Capacity Building
▫ Through a combination of work experience and education, one need to be well-
grounded and versed in managing finances.
▫ One need to be able to accurately estimate and build financial statements and to
understand them.
▫ With gained skills, one will need to be able to analyze financial statements,
looking at trends and indicators and what those all mean to your business.
▫ Financial reports provide key indicators and information on the business’ financial
health…there is a wealth of information in the financial statements.
▫ Other parties, partners and financial institutions will be looking at you and your
organization’s ability to manage finances.
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• Personal Capacity Building
▫ Of extreme importance, if you don’t have some key
personal, entrepreneurial traits you may be closing up shop fast.

▫ Some people are born with strong traits while other behaviors can be picked
up along the development pathway.
▫ Demonstrating strong traits and behaviors such as dedication, perseverance,
ambition, determination, strong-will, openness, honesty, transparency,
fairness, etc may move you along the pathway to become a successful
entrepreneur.
Source: https://strategyplanone.wordpress.com/2012/03/07/the-four-capacity-building-pillars-of-entrepreneurship/
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Entrepreneurial Training Methods

• Individual instruction
• Group instruction
Entrepreneurial Training Methods
An entrepreneurship training model can be defined as a

• Lecture method structure or layout of constructs that form the framework of an
entrepreneurship training intervention.
• Demonstration method
• Written instruction method
• Conference
• Meetings
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Source: Entrepreneurship Development and Small Business Enterprises (3rd Edition By Poornima M., Charantimath
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Entrepreneurial Performance Education Model

(E/P model)
The model, as developed by Van Vuuren and Nieman (1999: 6), is concerned with
the elements that drive entrepreneurial performance and was developed to guide
syllabi and curriculum development.
The formula for the E/P model is illustrated as:

E/P = f [aM (bE/S x cB/S)]
Where,
E/P = Entrepreneurial Performance
M = Motivation
E/S = Entrepreneurial Skills
B/S = Business Skills
a to c = Constants
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Entrepreneurial Performance (E/P)

Entrepreneurial performance is based on the starting of a business/utilising of an opportunity,
and growth of the business idea.
Holland (1985: 20) states, in his theory of vocational choice, that the interaction of work
environment and personality may affect performance in a career. Specifically, higher levels
of fit between the personality and work environment characteristics will result in higher
performance in that role.
Van Vuuren (1997:3) agrees that entrepreneurial performance goes hand in hand with
entrepreneurial achievement or results to the realising of set entrepreneurial goals.
This construct can be presented as: firstly, an increase in productivity; secondly, the increase
in the number of employees employed, which implies the expansion of the business; thirdly,
the net value of the business; fourthly, a core aspect in entrepreneurship, namely the
increase in profitability; and finally, the completion of the first market-related transactions.
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McClelland (1961: 40) similarly argues that need for achievement will be
related to successful performance in an entrepreneurial role. Entrepreneurs
who are high in achievement motivation are more likely to overcome obstacles,
utilise resources for help, compete and improve their skills. Therefore, one
would expect to find differences in achievement motivation in high-
performance entrepreneurs versus low performance entrepreneurs.
Friedrich et al. (2003: 3) report on the findings of McClelland’s Achievement

Motivation training of small business conducted in India and in the USA in
1969. The results showed evidence that Achievement Motivation training
significantly improves small business performance, provided that there is some
minimum support from the economic infrastructure in the form of available
loans, market opportunities and the labour force.
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• EMT – Entrepreneurship Motivation Training
Source: Entrepreneurship Development and Small Business Enterprises (3rd Edition) By Poornima M., Charantimath
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What motivates a person to start his/her own business?

Pretorius et al. (2005: 416) suggest that motivation contributes towards qualities like inner control,
persistence, leadership, decisiveness, determination and sheer guts.
Another important aspect that can be associated with motivation is a need for achievement. The
concept of need for achievement (nAch) was formulated in the 1950s (McClelland, Clark, Roby &
Arkinson, 1958: 11).
McClelland and his colleagues argued that high-nAch people are more likely than low-nAch people to
engage in energetic and innovative activities that require planning for the future and entail an
individual’s responsibility for task outcomes, they also argued that high-nAch people should also
prefer tasks that involve skill and effort, provide clear performance feedback and hold moderate
challenge or risk.
The author based his hypothesis on individual observation, and proposed the following logical
psychological supposition: The more an individual achieves, the more he/she would like to achieve.
This achievement is tied to specific action behaviour. The author therefore argues that the motives are
rational or can be rationally deduced from the completion of certain actions.
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It is important to note that training in achievement motivation within the

entrepreneurial context is fundamentally aimed at emphasising rivalry
and competition in order to set very high standards for achievement.
Antonites (2003) therefore believes that motivation on the one hand and
achievement motivation on the other play a vital role throughout the
training aimed at providing entrepreneurial as well as business skills.
McClelland and Winter (1971) in Henry et al. (2003: 35) point out that
training courses designed to develop achievement motivation have
significantly improved small business performance.
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Entrepreneurial Skills (E/S)

Individuals’ belief in their own ability to start a business plays an important role
in their decision to start a business. People who believe that they have the
ability to start a business are five times more likely than others to actually
attempt to start a business.
Twelve core enterprise skills that are essential for successful

entrepreneurship. These include the ability to assess and appreciate one’s
strengths and weaknesses and evaluate one’s performance; to communicate
with other people; to negotiate; to deal with people in power and authority; to
resolve conflict; and to cope with stress and tension.
In addition, making decisions, planning one’s responsibilities and solving
problems were highlighted.
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Entrepreneurial skills
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• Financial risk - cost of establishment of a new venture, product

development cost and the costs of running the business on a daily
basis.
• Personal risk - the energy and effort that the entrepreneur puts into
the business and the fear of failure.
• Time risk - the time it takes for a new idea to be developed into an
opportunity and then into a final product/service to be considered
right for the market.
• Social risks - being socially accepted or rejected in the community
with reference to starting an own business.
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Opportunity identification:
The continuous identification of opportunities throughout the life cycle of the

business is a differentiating characteristic of the true entrepreneur.
Timmons and Spinelli (2004) point out that not all ideas are opportunities. They
distinguish the two by indicating that opportunities must be:
· Durable (long-lasting in the market and industry);
· Timely (during the period when the window of opportunity stays open);
· Attractive (there must be a demand in the market for the product/service);
and
· Able to add value (add benefits, convenience to customers’ lives).
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Business Skills (B/S)
Business skills are required to run the business on a daily basis.
Nieman and Bennet (2006) mention that there are certain functional
areas in a business which are essential for any entrepreneur. These
areas include: general management, marketing management, financial
management, human resource management, production and operations
management, corporate communications management, information
management and e-business, and purchasing and materials management.
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The entrepreneurship training model based on the

entrepreneurial performance education mode
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Entrepreneurial Education Model (E/E model)
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The Education for improved Entrepreneurial
Performance Model (E for E/P model)
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The improved entrepreneurship training model
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The process of Entrepreneurial Development
• Phases include
▫ Stimulatory Phase
▫ Support Phase
▫ Sustenance Phase
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Stimulation phase
• Involves implementing stimulatory activities for creating interest and
awareness among potential entrepreneurs
• Laying foundation for the emergence of entrepreneurship in society
• Activities such as
▫ Planned publicity on opportunities to become entrepreneur
▫ Entrepreneurial education
▫ Counselling, Motivational training
▫ Identification of potential entrepreneurs
▫ Providing guidance in selection of product/service
▫ Preparing Project reports
▫ Creating forums, recognition and rewarding existing entrepreneurs
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Support Phase
• Involves implementation of support activities that help in new venture
creation
• Nurture and promote
▫ Registration of enterprise
▫ Prototype development
▫ Finance agreements
▫ Land, shed, power and common facility centre
▫ Management Consultancy services, marketing support
▫ Guidance for selecting plant and machinery, getting approvals and licenses
4 April 2020
Sustenance phase
• Implementation of sustenance activities in the continuous and efficient
function of enterprise
▫ Modernization
▫ Diversification
▫ Expansion
▫ Getting additional financial support
▫ Research and development
▫ Support for survive, develop and grow after it is set up industry
4 April 2020

ESBE-Unit I

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ESBE-Unit I

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Entrepreneurship and Small Business Enterprises

Dr. S. Deva Prasad

UNIT-I : Entrepreneurial Perspectives

UNIT-II : New Venture Creation

UNIT-III : Management of MSMEs and Sick Enterprises

UNIT-IV : Managing Marketing and Growth of Enterprises

UNIT-V : Strategic perspectives in Entrepreneurship

UNIT-I: Entrepreneurial Perspectives:

UNIT-II: New Venture Creation:

UNIT-III: Management of MSMEs and Sick Enterprises:

UNIT-IV: Managing Marketing and Growth of Enterprises:

UNIT-V: Strategic perspectives in Entrepreneurship:

In our Telangana State…..

2 Evolution, Concept of Entrepreneurship

3 Types of Entrepreneurs, Entrepreneurial Competencies,

4 Capacity Building for Entrepreneurs.

5 Entrepreneurial Training Methods; Entrepreneurial Motivations

6 Models for Entrepreneurial Development, The process of Entrepreneurial Development.

• “Entrepreneur is derived from the French “entreprendre”, means “to

Although no single definition of entrepreneur exists and no one

Entrepreneurship: A MindsetChallenging the Unknown

• Entrepreneurship is more than the mere creation of business:

An Integrative Model of Entrepreneurial Inputs and Outcomes

Source: Michael H. Morris, P. Lewis, and Donald L. Sexton, “Reconceptualizing Entrepreneurship:

Entrepreneurship is an action oriented activity . It is a world of immense

• Organisation and co-ordination • High energy level

1) ACCORDING TO THE TYPE OF BUSINESS

2)ON THE BASIS OF STAGES OF DEVELOPMENT

3)ON THE BASIS OF MOTIVATION

4) ON THE BASIS OF TECHNOLOGY

5)ON THE BASIS OF CAPITAL OWNERSHIP

Entrepreneurial competencies are defined as underlying

These characteristics include generic and specific

That is, these characteristics may be even unconscious

Some of these competencies are innate while others

“Entrepreneurial competencies can be defined as

– Man, Lau& Chan

f) Commitment to Work Contract - An entrepreneur

1.Personal Entrepreneurial competencies - the personal characteristics of an

i. Enterprise launching competencies

i. Enterprise launching competencies (Cont’d)

i. Enterprise launching competencies (Cont’d)

i. Enterprise launching competencies (Cont’d)

ii. Enterprise Management Competencies (Cont’d)

ii. Enterprise Management Competencies (Cont’d)

ii. Enterprise Management Competencies (Cont’d)

ii. Enterprise Management Competencies (Cont’d)

ii. Enterprise Management Competencies (Cont’d)

Capacity Building for Entrepreneurs.

Entrepreneur capacity building involves developing the combination of all four

Capacity Building for Entrepreneurs.

builds operational capacity.

Capacity Building for Entrepreneurs.

gaining management experience in a field or business will be directly

Capacity Building for Entrepreneurs.

Capacity Building for Entrepreneurs.

personal, entrepreneurial traits you may be closing up shop fast.

Entrepreneurial Training Methods

An entrepreneurship training model can be defined as a

Entrepreneurial Performance Education Model

The formula for the E/P model is illustrated as:

Entrepreneurial Performance (E/P)

Friedrich et al. (2003: 3) report on the findings of McClelland’s Achievement

• EMT – Entrepreneurship Motivation Training