1 ENTREPRENEUR

A person who sets up a business or businesses, taking on financial risks in the hope of profit
An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most
of the rewards. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services,
and business/or procedures.

Nature of Entrepreneurship
Creation of Enterprise

Entrepreneurship is a process that refers to the creation and running of a new enterprise. It is an activity under
which a person called an entrepreneur starts a new venture using a new idea.

Economic Activity

Entrepreneurship is an economic activity as it involves creating and running a new business through optimum
utilization of all combined resources. It ensures that all scarce resources are efficiently used for deriving better
returns in the form of profit. 

Innovation and Creativity

It is the process of discovering new ideas and concepts and implementing them in business ventures.
Entrepreneurship involves bringing innovation in the market by introducing new products or process that
delivers better service.

Risk Bearing

It is an activity which involves huge risk which every entrepreneur needs to undertake for starting a venture.
New ideas developed and implemented by the entrepreneur are uncertain and may result in losses.

Profit

Profit earning is the sole objective of an entrepreneur for undertaking risk . Entrepreneurs start a new venture
with a view to earning profits.

Gap Filling

Entrepreneurship is a process of recognizing and filling the gap between customer needs and available
products or services. It focuses on removing the deficiencies from the currently available products to fulfill the
needs of customers.

Organizing Function

It is an organizing function that brings together different factors of production like land, labor, and capital.
Entrepreneurship is concerned with coordinating and managing all resources engaged within the enterprise.
2 COMPARISONS BETWEEN ENTREPRENEUR VS MANAGER

BASIS FOR ENTREPRENEUR MANAGER

COMPARISON

Meaning Entrepreneur refers to a person who creates Manager is an individual who takes the
an enterprise, by taking financial risk in order responsibility of controlling and
to get profit. administering
the organization.

Focus Business start-up On-going operations

Primary Achievement Power

motivation
Approach to task Informal Formal

Status Owner Employee

Reward Profit Salary

Decision making Intuitive Calculative

Driving force Creativity and Innovation Preserving status quo

Risk orientation Risk taker Risk averse

3 What is Entrepreneurial Culture

1. It can be defined as the values, beliefs, attitudes and behavior of individuals within a society. These
factors facilitate or obstruct the creation and management of enterprises and can be considered as
the basic of a socio-cultural environment.
2. An entrepreneurial culture is an environment where someone is motivated to innovate, create and
take risks. In a business, an entrepreneurial culture means that employees are encouraged to
brainstorm new ideas or products. When work time is dedicated to these activities, it is called
intrapreneurship.

4 Concept of entrepreneurship:
Entrepreneurs are seen as national assets to be motivated, cultivated, and remunerated to the greatest degree
possible. Entrepreneurs develop innovative ideas that provide civilization with a large number of products and
services which change the way we work and live. The importance of entrepreneurship can be understood by
what it does for society. The benefits they offer are by creating job opportunities, improving standards of
living, and contributing to the overall growth of the economy (GDP).

5 CLASSIFICATION OF ENTREPRENEURS
I. According to the Type of Business
Entrepreneurs are found in various types of business coronations of varying size. We may broadly
classify them as follows:
Business Entrepreneur:
Business entrepreneurs are individuals who conceive an idea for a new product or service and-then
creates a business to materialize their idea into reality. They tap both production and marketing’ resources in
their search to develop a new business opportunity. They may set up a big establishment or a small business
unit. They are called small business entrepreneurs when found in small business units such as printing press,
textile processing house, advertising agency; readymade garments, or confectionery. In a majority of cases,
entrepreneurs are found in small trading and manufacturing business and entrepreneurship flourishes when
the size of the business is small.
Trading Entrepreneur:
Trading entrepreneur is one who undertakes trading activities and is not concerned with the
manufacturing work. He identifies potential markets, stimulates demand for his product line and creates a
desire and interest among buyers to go in for his product. He is engaged in both domestic and overseas trade.
Britain, due to geographical limitations, has developed trade through trading entrepreneurs. These
entrepreneurs demonstrate their ability in pushing many ideas ahead to promote their business.
Industrial Entrepreneur:
Industrial entrepreneur is essentially a manufacturer, who identifies the potential needs of customers
and tailors a product or service to meet the marketing needs. He is a product-oriented man who starts in an
industrial unit because of the possibility of making some new product. The entrepreneur has the ability to
convert economic resources and technology into a considerably profitable venture. He is found in industrial
units as the electronic industry, textile units, machine tools or videocassette tape factory and the like.
Corporate Entrepreneur:
Corporate entrepreneur is a person who demonstrates his innovative skill in organizing and managing
corporate undertaking. A corporate undertaking is a form of business’ organization, which is registered under
some statute or Act, which gives it a separate legal entity. A trust registered under the Trust Act, or companies
registered under the Companies Act are example of corporate undertakings. A corporate entrepreneur is thus
an individual who plans, develops and manages a corporate body.
Agricultural Entrepreneur:
Agricultural entrepreneurs are those entrepreneurs who undertake agricultural activities as raising
and marketing of crops, fertilizers and other inputs of agriculture. They are motivated to raise agriculture
through mechanization, irrigation and application of technologies for dry land agriculture products . They cover
a broad spectrum of the agricultural sector and include its allied occupations.

II. According to the Technology use

The application of new technology in various succors of the national economy is essential for the
future growth of business. We may broadly classify these. entrepreneurs on the basis of the use of technology
as follows:
Technical Entrepreneur:
A technical entrepreneur is essentially compared to a “craftsman.” He develops improved quality of
goods because of his craftsmanship. He concentrates more on production than marketing. On not much sales
generation by and does not do various sales promotional techniques. He demonstrates his innovative
capabilities in matter of production of goods and rendering of services. The greatest strength, which the
technical entrepreneur has, is his skill in production techniques.
Non-technical Entrepreneur:
Non-technical entrepreneurs are those who are not concerned with the technical aspects of the
product in which they deal. They are concerned only with developing alternative marketing and distribution
strategies to promote their business.
Professional Entrepreneur:
Professional entrepreneur is a person who is interested in establishing a business, but does not have
interest in managing or operating it once it is established. A professional entrepreneur sells out the running
business and starts another venture with the sales proceeds. Such an entrepreneur is dynamic and he
conceives new ideas to develop alternative projects.

III. According to the Entrepreneur and Motivation

Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives. An
entrepreneur is motivated to achieve or prove his excellence in job performance. He is also motivated to
influence others by demonstrating his business acumen.
Pure Entrepreneur
A pure entrepreneur is an individual who is motivated by psychological and economic rewards. He
undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status.
Induced Entrepreneur
Induced entrepreneur is one who is induced to take up an entrepreneurial task due to the policy
measures of the government that provides assistance, Incentives, concessions and necessary overhead,
facilities to start a venture. Most of the induced entrepreneurs enter business due to financial, technical and
several other facilities provided to them by the state agencies to promote entrepreneurship. A person with a
sound project is provided package assistance to his project. Today, import restriction and allocation to
production quotas to mall units have induced many people to start a small-scale industry.
Motivated Entrepreneur
New entrepreneurs are motivated by the desire for self-fulfillment. They come into being because of
the possibility of making and marketing some new product for the use of consumers. If the product is
developed to a saleable stage, the entrepreneur is further motivated by reward in terms of profit.
Spontaneous Entrepreneur
These entrepreneurs start their business their by Entrepreneur. They are persons with initiative,
boldness and confidence in their_- ability, which activate, them, underage entrepreneurial activity. Such
entrepreneurs have a strong conviction and confidence in their inborn ability.

IV. According to the Growth and Entrepreneurs

The development of a new venture has a greater chance of success. The entrepreneurs a new and
open field of business. The customer’s approval to the new product gives them psychological satisfaction and
enormous profit. The industrial units are identified as units of high growth, medium growth and low growth
industries and as such we have “Growth Entrepreneur” and “Super-Growth Entrepreneur.”
Growth Entrepreneur:
Growth entrepreneurs are those who necessarily take up a high growth industry, which has
substantial growth prospects.
Super-Growth Entrepreneur:
Super-growth entrepreneurs are those who have shown enormous growth of performance in their
venture. The growth performance is identified by the liquidity of funds, profitability and gearing.

V. According to the Entrepreneur and Stages of Development

Entrepreneurs may also be classified as the first generation entrepreneur, modern entrepreneur and
classical entrepreneur depending upon the stage of development.
They are explained below:
First-Generation Entrepreneur:
A first-generation entrepreneur is one who starts an. industrial unit by innovative skill. He is
essentially an innovator, combining different technologies to produce a marketable product or service. .
Modern Entrepreneur:
A modern entrepreneur is one who undertakes those ventures, which go well along with the changing
demand in the market. They undertake those ventures, which suit the current marketing needs.
Classical Entrepreneur:
A classical entrepreneur is one who is concerned with the customers and marketing needs through
the development of a self-supporting venture. He is a stereotype entrepreneur whose aim is to maximise his
economic returns at a level consistent with the survival of the firm with or without an element of growth.

VI. Others
 Innovating entrepreneurship is characterized by aggressive assemblage in information and analysis of
results, deriving from a novel combination of factors. Men / women in this group

are generally aggressive in experimentation who exhibit cleverness in putting attractive

possibilities into practice. One need not invent but convert even old established products or
services by changing their utility, their value, and their economic characteristics into something
new, attractive and utilitarian. Therein lies the key to their phenomenal success. Such an
entrepreneur is one who sees the opportunity for introducing a new technique of production
process or a new commodity or a new market or a new service or even the reorganization of an
existing enterprise.

6 Theory of Need of Achievement

The need for achievement theory was propounded by McClelland. His assumption is that the Desire of high
achievements obtaining specific achievements, making the best performance, touching the heights of
excellence, developed Entrepreneurial tendencies in the individuals. But, for that, the entrepreneur should
have adequate capacity of imaginations, thinking and developing new combinations. For that, the feelings for
achievements are inculcated in him, from the very beginning and thereafter it is especially attempted that he
may become a successful entrepreneur. McClelland has recognized the desire to achieve the major factor in
entrepreneurship development. He has suggested conducting motivational training programmes for
development of the entrepreneurs.

Social Change Theory

This theory of entrepreneurship development has been propounded by Max Weber. For the first time, he
stated that the emergence and development of the entrepreneurs depend upon ethical values system of
society. He is of the view that religion in which a person survives and the religious values and faiths which he
accepts, substantially affect his business life, occupation, Entrepreneurial enthusiasm, and energy . He had
linked entrepreneurship development with protein (that sect of Christianity who does not accept the total
authority of pope) and with various religious communities. His observes that those religious communities
which lay emphasis on capitalism, materialism, and currency rationalization have been successful in
the emergence of entrepreneurs, wealth, technology, capital formation, and economic development.

7 Problems of Women Entrepreneurs

basic problem of a woman entrepreneur is that she is a woman. Women entrepreneurs face two sets of
problems specific to women entrepreneurs. These are summarized as follows.

 Shortage of Finance: Women and small entrepreneurs always suffer from inadequate fixed and
working capital. Owing to lack of confidence in women’s ability, male members in the family do not like to
risk their capital in ventures run by women. Banks have also taken negative attitude while lending to
women entrepreneurs. Thus women entrepreneurs rely often on personal saving and loans from family
and friends.
 Shortage of Raw Material: Women entrepreneurs find it difficult to procure material and other
necessary inputs. The prices of many raw materials are quite high.

 Inadequate Marketing Facilities: Most of the women entrepreneurs depend on intermediaries for
marketing their products. It is very difficult for the women entrepreneurs to explore the market and to
make their product popular. For women, market is a ‘chakravyuh’.

 Keen Competition: Women entrepreneurs face tough competition from male entrepreneurs and also
from organized industries. They cannot afford to spend large sums of advertisement.

 High Cost of Production: High prices of material, low productivity. Under utilisation of capacity etc.
account for high cost of production. The government assistance and subsidies would not be sufficient for
the survival.

 Family Responsibilities: Management of family may be more complicated than the management of
the business. Hence she cannot put her full involvement in the business . Occupational backgrounds of the
family and education level of husband has a direct impact on the development of women
entrepreneurship.

 Low Mobility: One of the biggest handicaps for women entrepreneur is her inability to travel from
one place to another for business purposes. A single women asking for room is looked upon with suspicion.
Sometimes licensing authorities, labour officials and sales tax officials may harass them.

 Lack of Education: About 60% of women are still illiterate in India. There exists a belief that investing
in woman’s education is a liability, not an asset. Lack of knowledge and experience creates further
problems in the setting up and operation of business.

 Low Capacity to Bear Risks: Women lead a protected life dominated by the family members. She is
not economically independent. She may not have confidence to bear the risk alone. If she cannot bear
risks, she can never be an entrepreneur.

 Social Attitudes: Women do not get equal treatment in a male-dominated society. Wherever she
goes, she faces discrimination. The male ego stands in the way of success of women entrepreneurs. Thus,
the rigid social attitudes prevent a woman from becoming a successful entrepreneur.

 Low Need for Achievement: Generally, a woman will not have strong need for achievement. Every
women suffers from the painful feeling that she is forced to depend on others in her life. Her preconceived
notions about her role in life inhibit achievement and independence.

 Lack of Training: A women entrepreneur from middle class starts her first entrepreneurial venture in
her late thirties or early forties due to her commitments towards children. Her biggest problem is the lack
of sufficient business training.

Lack of Information: Women entrepreneurs sometimes are not aware of technological developments and
other information on subsidies and concessions available to them. They may not know how to get loans,
industrial estates, raw materials, etc.

8 What are entrepreneurial traits? 

Entrepreneurial traits are the typical characteristics, abilities and thought patterns associated with successful
entrepreneurs. While some entrepreneurs are born with these traits, others can develop them. These include:
 1. Being a good leader
2. Being optimistic 
3. Being confident
4. Being passionate 
5. Being disciplined
6. Being proactive
7. Keeping an open mind
8. Being competitive
9. Being kind

1. Being a good leader

An entrepreneur is expected to manage a business and most professionals in this position are responsible for its
start-up as well. Typically, entrepreneurship involves finding and building relationships with investors,
overseeing employees and monitoring operations. To perform these activities well, you need to be an effective
leader. 

Leadership is the ability to lead others. An effective leader mobilizes people to achieve goals and is perceived as
a leader by their followers. There are ways in which you can cultivate this trait, such as: 

Learning from your experiences

While it is normal to make mistakes when managing a team, you can identify the pros and cons of your
leadership style while you work and use your findings to improve how you lead others. 

Researching the different leadership styles

For example, the democratic style of leadership, which involves more collaboration between leaders and
followers in the process of decision making, can be effective during the initial stage of setting up a business. It
can give an employer better insights for decision making when hiring a large staff of experts is not possible. 

Learning about the leaders in your industry

You can learn how industry leaders manage their key stakeholders and use the leadership tactics that work for
your own business. 

Developing an approach to leadership that works for you

By considering new styles of leadership and evaluating your leadership style, you can find a leadership style that
suits you and your business. 

2. Being optimistic

Optimism can be described as focusing on the positives and being emotionally resilient to the negatives. An
entrepreneur who organizes, manages and operates a business is likely to face many setbacks over time. For
example, as you start your business, you will need to complete a lot of paperwork concerning licenses, tax
forms, business plans and bank accounts. In the process of getting these documents ready, there could be many
issues that check your progress, such as delays in getting a license or structural issues in your business plan.

Being optimistic can help you to overcome these problems quickly instead of becoming demotivated by them.
Like the other important entrepreneurial traits, optimism is a quality that you will need to develop and maintain
in your career. There are ways in which you can cultivate optimism, such as:

 Surrounding yourself with optimism by hiring optimistic workers, including inspirational quotes into
your interior design or listening to upbeat music
  Developing an optimistic outlook that influences the way you do things in your business and impacts
your decision-making process

 Starting to look at everyday events as business opportunities

 Identifying the positives in a problematic situation and focusing on them while you troubleshoot

 Finding a career coach who can help you to develop your optimism

 Catching yourself being negative and reframing your mindset. For example, you can start looking at
issues that check your progress as learning experiences that can prepare you for greater success in the
future.

3. Being confident

Confidence is a subjective belief that you have what is needed for something. Entrepreneurs ask banks for loans,
hire workers, motivate teams and build relationships with clients and suppliers, so it is important for an
entrepreneur to be confident in their ability to do all these things well. 

Being confident can help your business. Key stakeholders are more likely to respond favorably to your
proposals if you project your confidence. You can use several tactics to become more confident, such as: 

 Cultivate a belief in yourself and your abilities. Make a list of your successes and remind yourself of
them in times of doubt. For example, remind yourself that you are producing something that people
want to buy or remind yourself of the things that you have already done to make your business more
profitable. 

 Plan and perform your daily activities with the mindset that you will successfully complete them even
if there are setbacks.  

 Research how confidence can be communicated through body language and verbal communication and
use these techniques to improve how you project yourself.

 Role-play situations such as negotiations with key suppliers or discussions with investors by practicing
your message delivery, learning to answer typical questions and handling feedback professionally. 

 Hire a career coach who can help you to develop your confidence. 

 Spend time with friends who have a positive impact on the way that you feel about yourself.  These
social experiences can amp up your confidence.

 Learn new hard and soft skills to improve your work performance. This will help you become more
self-assured at work.

 Make changes that can improve your appearance such as dressing well, exercising regularly and eating
healthily to boost your confidence. 

4. Being passionate

Being passionate about building and running your business can make it easier to put in the effort needed for a
successful enterprise. If you need to boost your professional passion, consider these tips: 

 Try to think of your job as more than just a livelihood and cultivate a genuine love for what you do.
You can remind yourself of why you decided to start your own business or think of the positive
impacts that your business has on yourself, your employees, your clients or your community. 
  Start each business day by reminding yourself of all the things that you look forward to doing such as
closing a deal or hiring a new employee. 

 Learn how to communicate your passion when you engage with employees, suppliers or investors.
Your enthusiasm for what you do can make your major stakeholders feel more enthusiastic too, which
could help your business.

5. Being disciplined  

Being disciplined can help you to achieve success as an entrepreneur. Entrepreneurs are expected to work
independently, set their own goals and overcome setbacks. To do these things well, being disciplined is
essential. You can use the following advice to become more disciplined: 

 Train yourself to be a self-starter who initiates and completes tasks without the need for oversight. 

 Give yourself a small reward each time you meet a goal. This will motivate you to reach your targets
without getting distracted.

 Develop a work ethic that fuels your determination to work hard to achieve your professional goals.
Keep in mind that many entrepreneurs who have built successful startups have spent more time at work
than most of their employees.  

6. Being proactive

A proactive person anticipates opportunities and threats and tries to address them while a reactive person simply
reacts to situations. As an entrepreneur, it is always better to be proactive instead of being reactive. Here are
some ways in which you can become more proactive:

 Combine research with active listening to understand the needs of key stakeholders (your customers,
employers and business partners). 

 Identify threats in events and develop solutions before these issues become more severe.  

 Analyze your business operations regularly. Identify the areas that can be improved and improve these
areas. 

 Try to develop long-term solutions to address the main causes of issues instead of developing short-
term solutions that are ineffective.

 Use verbal and written communication to show employees that you welcome their feedback. This will
help you to identify areas that need to be improved or policies that need to be explained more clearly to
workers. 

7. Keeping an open mind

Keeping an open mind involves the willingness to listen to the opinions and ideas of others. Typically,
entrepreneurs start businesses in competitive industries that have already established market leaders. To succeed
in this position, it is necessary to see business opportunities in everyday events and look for ways to improve
business offerings. Consider the following tips to develop this trait: 

 Be willing to listen to others instead of refusing to accept that someone else could have a valuable
opinion. This can increase your pool of ideas and insights. 

 Encourage coworkers or customers to provide feedback and consider their opinions to make a product
or service better. 
  Use new ideas or insights about workflows, customer service or employee engagement to improve a
product or service offering. 

8. Being competitive

Competitiveness is a key trait among successful entrepreneurs. With globalization and virtualization, industries
are growing more competitive. To maintain a lucrative business, it is essential to develop a competitive attitude.
Consider the following advice to develop your competitiveness: 

 Keep track of what your competitors are doing with market research and market-monitoring services,
and ensure that you do not fall behind in terms of development. 

 Identify the business tactics that work for your competitors as well as the ones that do not work, and
use these tactics to improve your business. 

 Use product improvements, pricing, marketing and distribution to make your products more
competitive in the market. For example, you can price a new product in a market with several
established brands at a relatively low price and invest in creative advertising to motivate customers to
switch brands and try your product. 

 Develop customer analyses and use your findings to keep improving your products or services by
making them more adapted to customer needs. 

 Use employee analyses to develop incentives such as benefits, severance packages and performance-
based rewards to attract the best talent to your team. 

9. Being kind

While kindness is not usually considered an important trait in entrepreneurs, it can help you in maintaining
success. For example, while it is easy to focus on meeting your KPIs on sales, failing to consider the well-being
of your employees or overlooking the impact that a production process has on your community could cause you
problems over time or allow your competitors to gain an advantage. You can use the following tips to develop
kindness: 

 Assess the working conditions of your full-time employees regularly and ensure that they have the
basics they need to perform well.

 Reevaluate your employee benefits periodically to make sure that you are providing a package that can
actually help workers as well as attract the best talent. 

 Be proactive in improving your manufacturing or distribution processes to make them less damaging to
the environment and more sustainable. 

 Foster a supportive, healthy company culture through strong policies that discourage bullying, sexual
harassment or gender-based discrimination.

9 Role of Entrepreneurs in Economic Development

Role of Entrepreneurs in economic development of a country are discussed under the following heading.

1. Employment opportunities
Entrepreneurs employ labour for managing their business activities and provides employment opportunities to a
large number of people. They remove unemployment problem.
2. Balanced Regional Development
Government promotes decentralized development of industries as most of the incentives are granted for
establishing industries in backward and rural areas. Thus, the entrepreneurs to avail the benefits establish
industries in backward and rural areas.

They remove regional disparities and bring balanced regional development. They also help to reduce the
problems of congestion, slums, sanitation and pollution in cities by providing employment and income to people
living in rural areas. They help in improving the standard of living of the people residing in suburban and rural
areas.

3. Mobilization Of Local Resources

Entrepreneurs help to mobilize and utilize local resources like small savings and talents of relatives and friends,
which might otherwise remain idle and unutilized. Thus they help in effective utilization of resources.

4. Optimization Of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by providing high output
capital ratio as well as high employment capital ratio.

5. Promotion of Exports
Entrepreneurs reduce the pressure on the country’s balance of payments by exporting their goods they earn
valuable foreign exchange through exports.

6. Consumer Demands
Entrepreneurs produce a wide range of products required by consumers. They meet the demand of the
consumers without creating a shortage for goods.

7. Social Advantage
Entrepreneurs help in the development of the society by providing employment to people and paves for
independent living They encourage democracy and self-governance. They are adept in distributing national
income in more efficient and equitable manner among the various participants of the society.

8. Increase per capita income

Entrepreneurs help to increase the per capita income of the country in various ways and facilitate development
of backward areas and weaker sections of the society.

9. Capital formation
A country can attain economic development only when there is more amount of investment and production.
Entrepreneurs help in channelizing their savings and savings of the public to productive resources by
establishing enterprises. They promote capital formation by channelizing the savings of public to productive
resources.

10. Growth of capital market

Entrepreneurs raises money for running their business through shares and debentures. Trading of shares and
debentures by the public with the help of financial services sector leads to capital market growth.

11. Growth of infrastructure

The infrastructure development of any country determines the economic development of a country,
Entrepreneurs by establishing their enterprises in rural and backward areas influence the government to develop
the infrastructure of those areas.

12. Development of Trader

Entrepreneurs play an important role in the promotion of domestic trade and foreign trade. They avail assistance
from various financial institutions in the form of cash credit, trade credit, overdraft, short term loans, secured
loans and unsecured loans and lead to the development of the trade in the country.
 13. Economic Integration
Entrepreneur reduces the concentration of power in a few hands by creating employment opportunities and
through equitable distribution of income. Entrepreneurs promote economic integration in the country by
adopting certain economic policies and laws framed by the government. They help in removing the disparity
between the rich and the poor by adopting the rules and regulation framed by the government for the effective
functioning of business in the country.

14. Inflow of Foreign Capital

Entrepreneurs help to attract funds from individuals and institutions residing in foreign countries for their
businesses.

10 Problems of Rural Entrepreneurship

As we know that the development of entrepreneurship in rural areas is not as easy as in urban areas. As there are
a number of problems which needs to be catered. Some of them are listed as under:

● Paucity of Funds
● Lack of technical know-how
● Lack of training and development
● Non-availability of skilled labours
● Risk Element
● Legal Formalities
● Lack of technical knowledge
● Lack of Quality Control
● Lack of communication and market insights
● Lack of storage and transportation facilities
● Old and obsolete technology, machinery and equipment
● Lack of promotional strategy
● Lack of infrastructural facilities
● Poor quality standards
Besides the above challenges, one major problem encountered at the time of entrepreneurship development in
rural areas is the lack of knowledge and awareness in people with regard to the significance of developing
industries in the rural areas. Moreover, the rural population does not show much interest in choosing
entrepreneur, as their career.

The rural population generally go for employment due to a fixed and regular income, limited working hours, no
investment and less degree of responsibility. This is due to the status given to the salaried people by society than
to the self-employed ones.

● In addition to this, rural people also do not have much knowledge and awareness about the entrepreneurial
opportunities which is open to them. And they are also not aware of the support organizations, government
schemes and programmes and all the necessary information which is needed for its commencement

11 Need for Rural Entrepreneurship

 The reasons for the rural entrepreneurship are discussed as under:

1. As the rural industries are labor-intensive, they tend to have a high possibility of generating employment,
which acts as a corrective measure to a number of problems causing due to unemployment stemming in the rural
areas.
2. Rural industries have a comparatively high potential of generating income, which reduces the disparities
amidst income earned by people living in urban and rural areas.
3. Rural entrepreneurship stimulates the dissemination of economic activities in the village areas, which
ultimately results in balanced regional development.
4. It does not just protect but also promotes the art, culture and creativity, i.e. the varied heritage of that
particular region.
5. When industries are set up in rural areas, it advances economic development which reduces migration of the
villagers to urban areas.
6. Curtails unequal growth in the urban areas, decreases the development of slums, environment pollution etc.
When industries which are environment friendly are established in rural areas, it results in development without
causing harm to nature and biodiversity.

12 Economic Theory
This theory has been propounded by Pepuek and Hassis.

Their assumption is that physiological motivation for economic gains or increase in real income exists in every
society.

In addition, he has also stated that economic motivations are sufficient conditions for individual  industrial
entrepreneurship.

But, if in spite of that, entrepreneurial response lacks in the individuals, it is the result of various  types of
market imperfections and propositions of policy determination.
This theory is based on the assumption that entrepreneurial development is the result of various economic
motivations.

Hence, the individuals enter into the industrial field with the aim of maximum utilization of economic
opportunities available within the economy and the market.

Entre Environment : economic-social – political-technological-legal-cultural

‘Is important for these reasons: By making effective use of PEST Analysis, you ensure that what you are doing
is aligned positively with the forces of change that are affecting our world. By taking advantage of change, you
are much more likely to be successful than if your activities oppose it.

Good use of PEST Analysis helps you avoid taking action that is condemned to failure for reasons beyond your
control.

PEST is useful when you start operating in a new country or region. Use of PEST Analysis helps you break free
of unconscious assumptions, and helps you quickly adapt to the realities of the new environment.

13 Functions of woman entrepreneurs

1. Planning

Planning is the basic managerial function of a woman entrepreneur. It helps in determining the course of action

for achieving various entrepreneurial objectives like what to do when to do, how to do and who will do a

particular task.
2. Organizing

Every woman entrepreneur needs personnel to look at the different aspects of the enterprise. She sets up the

objectives, goals to be achieved by its personnel. The function of organizing is to arrange, guide, coordinate,

direct and control the activities of other factors of production i.e. men, materials, money, and machines so as to

accomplish the objectives of the enterprise.

3. Staffing:

Every woman entrepreneur has to perform the function of staffing which includes manpower planning,

recruitment, selection, and training, placement of manpower, development, promotion, transfer, and appraisal,

and determination of employee remuneration.

4. Directing

Directing is concerned with carrying out the desired plans. It initiates organized and planned activities and

ensures effective performance by subordinates towards the accomplishment of group activities.

5. Leadership

A woman entrepreneur has to issue various orders, instructions and guide her subordinates in their work to

improve their performance and achieve enterprise objectives. It is the ability to build up confidence and zeal

among people and to create an urge in them to be a successful leader, she must possess the qualities of foresight,

drive, initiative, self-confidence, and personal integrity.

6. Motivation

A woman entrepreneur has to provide some personal incentive to the subordinates to motivate, persuade and

inspire them for contributing their best towards the achievement of enterprise objectives.

7. Supervision:
After giving instructions, the woman entrepreneur has to see that the given instructions are carried by

subordinates at work to get the required and directed work done and to correct the subordinates whenever they

go wrong.

8. Coordination

Coordination is one of the most important functions. It creates a team spirit and helps in achieving goals through

collective efforts to provide unity of action in the pursuit of common objectives.

9. Controlling

Controlling is the process that enables to get its policies implemented and take corrective actions if the

performance is not according to the pre-determined standards.