An Essay

On

“Entrepreneurial Mindset and Entrepreneurial Method”

Submitted By:

Ansu Bijukchhe

MBA, 4th Trimester

Section-B

Submitted To:

Mr. Sohan Babu Khatri

Entrepreneurship and Innovation

Ace Institute of Management

Pokhara University

June 10, 2022

 “Entrepreneurial Mindset and Entrepreneurial Method”

An entrepreneur is someone who has the capacity and drive to build, manage, and succeed in a
startup enterprise, as well as the risk that comes with it, in order to generate money. Entrepreneurs
are commonly referred to as "sources of new ideas" or "innovators," as they introduce new ideas
to the market by replacing old ones with novel inventions. In a nutshell, an entrepreneur is someone
who has the will and determination to start a new business and manage all of the risks that come
with it.

Explanation of Entrepreneurship as a career, lifestyle and though process.

Entrepreneurship is defined as the capacity and willingness to create, manage, and run a business
enterprise, including all of its risks, in order to turn a profit. For two reasons, entrepreneurship is
crucial. One, it promotes innovation in order to develop innovative answers to current and future
demands. Two, it provides considerably more chances for self- and societal wealth generation than
anything else.

There can be a various of reasons to take up entrepreneurship as a career such as frustration with
his or her current job, inability to obtain a career of his or her choice, and so on. When an
organization is on the verge of closing, a person may see that his or her employment is in risk a
long time in advance. Gilad and Levine (1986) had proposed two closely-related explanations of
entrepreneurial motivation, the “push” and the “pull” theory. The “push” theory argues that
individuals are pushed into entrepreneurship by negative external forces, such as job
dissatisfaction, difficulty in finding employment, insufficient salary, or inflexible work
schedule. The “pull” theory contends that individuals are attracted into entrepreneurial activities
seeking independence, self-fulfillment, wealth, and other desirable outcomes. (Keeble et at., 1992;
Orhan and Scott, 2001) indicates that individuals become entrepreneurs primarily due to “pull”
factors rather than “push” factors. Some of the prominent pull factors that attract individuals
towards entrepreneurship as a career option are: High Desire for Independence: Some people want
to be able to choose who they work with, when they deal with them, and under what conditions
they do business with them. This instinct drives such people to start their own businesses.

A lifestyle entrepreneur is someone who starts a company with the goal of changing their own
lifestyle. The decision isn't just about making money. In fact, for the first few years, many lifestyle
entrepreneurs make less money than they did working in a "traditional" job. A lifestyle
entrepreneur is more concerned with the life rewards rather than monetary rewards that are
delivered to those who have a genuine passion for their business and like what they do. A lifestyle
entrepreneur chooses the type of lifestyle they want to live and then establishes a business to
support it. People used to find a job and then build their lives around it. The lifestyle entrepreneur,
on the other hand, creates a career that revolves around their personal life. Their enterprises
generate revenue, but that revenue is used to fund their passions, hobbies, interests, and objectives.

An entrepreneurial mindset is required to flourish and thrive from all experiences, whether positive
or negative. Many successful ventures are made feasible by an entrepreneurial attitude, which is
frequently a unique combination of technical expertise, problem-solving creativity, and risk-taking
Personal qualities and business skills. To cultivate a growth mindset, you must believe that you
can improve. It is possible to achieve one's vision and objectives. enhancing motivation,
performance, and development earning others' support and establishing trust and commitment. A
growth mindset is difficult to cultivate since it takes time and effort. In order to grow quickly,
startups frequently require assistance from friends, investors, mentors, colleagues, and suppliers.
The entrepreneurial mindset requires the entrepreneur's leadership abilities. It does, however, need
members' willingness to take risks, believe in their product or service, and clearly convey their
ideas to others.

Evolution of the concept of ‘Entrepreneurship’ and how is it different from

‘small businesses or SMEs.
The origins of entrepreneurship have been thoroughly researched by a number of academics.
Entrepreneurship is thought to have originated around 1709. It was derived from the French word
"entrepredre", which translated meaning as “between-taker” or “go-between”. Marco Polo is an
example of an entrepreneur as a go-between. He used to sign contracts with persons, who have a
large sum of money, to sell his goods. In an earlier period, based on a contract, a loan is provided
to the merchant-adventurer who only gets 25% of the profit and the capitalist was the passive risk-
bearer who used to keep 75% of the profit. Later on, in middle age, the entrepreneur was used to
describe both actor and person who involve in managing large production projects. During this
period, the entrepreneur had to sign a contract with the government to perform services or to supply
a specific product. Here, the entrepreneurs need to pay a fixed amount of contract price to the
government and the resulting profit and loss were the entrepreneurs. Likewise, Richard Cantillon
developed one of the early theories of the entrepreneur in the 17th century, in which he viewed the
entrepreneur as a risk-taker, observing that merchants, craftsmen, farmers and other sole
proprietors “buy at a certain price and sell at an uncertain price, therefore operating at a risk.” In
the 18th century, industrialization occurred throughout the world. Many people came with the
innovations; however, they cannot finance themselves. As a result, the entrepreneur was
distinguished from the capital provider. In other words, the person with capital was differentiated
from the one who need the capital. Later on, in the 19 th and 20th centuries, entrepreneurs were
viewed from an economic perspective. It means that entrepreneur organizes and operate an
organization for their personal gain. Though entrepreneurs were viewed from an economic
perspective, they were not distinguished from the manager. In the 20th century, entrepreneurs were
referred to as innovators. The function of the entrepreneur is to reform or revolutionize the
production pattern by utilizing an invention or, more broadly, an unproven technological method
of producing a new commodity or an old one in a new way, by establishing a new source of
materials or a new outlet for products, or by forming a new industry. Finally, it is important to note
that the paradigm of entrepreneurship development for the 21st century may differ from that of the
previous century. The nature of entrepreneurs has evolved, as have their objectives, duties, and
concerns. Growth limitations, major ecological and environmental degradation, increasing
worldwide imbalances, jobless growth, and rising financial, economic, and political instability
have all made it important to consider more sustainable, less resource-intensive, and less
destructive ways of development. Unlike in the past, entrepreneurs in the 21st century are more
expected to contribute to unique business growth paradigms.

Small business and entrepreneurship are two concepts that are sometimes misinterpreted and used
interchangeably; therefore, it is critical to understand the differences between the two. Despite the
fact that both entrepreneurs and small business owners are self-employed, their lifestyles are very
different. Entrepreneurs are always seeking for new and better methods to improve and change
things. Rather than being satisfied with their current situation, they prefer to create energy. On the
other hand, small business owners are satisfied as long as their company is profitable. They'll
hardly never try to do more. Entrepreneurs are known for coming up with fresh ideas and
generating new products. Small business owners, on the other hand, often do what entrepreneurs
do, but their brains are technical. On the other side, small business owners are reactive rather than
proactive. The vast majority of entrepreneurs begin a business because they are passionate about
it. They will do what they love regardless of the risks or potential rewards if the company succeeds.
Small businesses, on the other hand, are established with the primary purpose of profit. As a result,
if the risks grow too severe, the company will be shut down to prevent losing money. The ambition
of many entrepreneurs is to make the world a better place. As a result, their businesses will have a
huge impact on a large number of people. Microsoft, for example, offers to almost every person
on the planet. As a result, they control a significant portion of the market. Small business owners
have a small market share since they serve people in their near area. They put the needs of their
communities and themselves first. As a result, there is a market share gap between small businesses
and entrepreneurs. Small business owners and entrepreneurs have quite different perspectives.
Entrepreneurs may go for the next big thing when their enterprises are doing well, while small
business owners will keep theirs. They are sentimental and believe that their business exists to help
the community. Entrepreneurs and small business owners are both self-employed, and they have a
lot of similarities. Some of the world's most successful companies, such as Apple, began as home-
based businesses, as we've seen. As a result, most entrepreneurs begin as small businesses that
quickly expand due to their desire for greater success.

Entrepreneurial Mindset and its characteristics

Entrepreneurs contribute to economic progress, employment creation, and the invention of
products and services that improve the world. And becoming a successful business necessitates
unconventional thinking. The entrepreneurial mindset is distinct as it requires individuals to be
innovative, extremely motivated to achieve, communicative, and willing to take risks and fail. An
entrepreneurial mindset is a set of skills that enable people to see and seize opportunities, overcome
and learn from setbacks, and thrive in a variety of circumstances.

The characteristics that makeup the entrepreneurial mindset are as follows:

1. A positive mental attitude

Successful entrepreneurs must have a positive attitude and mindset. The CEO's perspective
influences corporate culture and sets the tone for the rest of the organization. Negative
attitudes hinder forward growth and the company's progress, as well as management's
capacity to lead and motivate personnel. Optimism is part of what gives entrepreneurs the
stamina to weather company downturns.
2. A creative mindset
Even if you're not in a "creative" business, you'll need creativity to succeed as an
entrepreneur. An entrepreneur's mind is constantly on the search for potential ideas and
breakthroughs. Any entrepreneurial product's basic life cycle begins with the creation of
an idea and ends with the transformation of that idea into a viable product or service.
3. Persuasive communication ability
Entrepreneurs who are able to persuade others are the most successful. Persuasion is a
powerful tool that can help you bargain, complete a sale, or get a better deal on your goods.
Not to mention, persuasive people are excellent employers because they are inspiring
leaders.
4. Intrinsic motivation and drive
Intrinsic motivation is one of the most important entrepreneurial attributes, which means
you are self-motivated rather than relying on others to encourage you or hold you
accountable. Those who operate their own enterprises are, in general, extremely
determined to succeed. They've invested their blood, sweat, and tears into their business,
and they may have even put their future on the line to get it off the ground. The motivating
drive is fueled by the fact that there is a lot at risk for the individual.
5. Independence
Although networking is important for sharing ideas and obtaining perspective,
entrepreneurs are more than willing to take issues into their own hands. One of the reasons
why someone with a long experience in business may decide to walk away from their
employer and start their own business is the desire for independence.
6. Risk takers
Successful entrepreneurs are better at seeing prospective business possibilities than the
average person. They concentrate on possibilities rather than problems, and they attempt
to learn from their mistakes.
7. Sense of limits
Entrepreneurs that are successful are action-oriented. They are driven by a great desire to
achieve, which motivates them to act on their ideas.
8. Locus of control
 Successful entrepreneurs have a deep understanding of the critical factors that lead to their
success, as well as the physical endurance to devote their life to their profession.
9. Control of their future
Successful businesses seek outside help to supplement their skills, knowledge, and
abilities. Because of their enthusiasm, they are able to attract important investors, partners,
creditors, and employees.

Themes surrounding the concept of entrepreneurship

Spinelli and Adams (2012), there are seven major themes that categorize entrepreneurs i.e.
commitment and determination, courage, leadership, obsession for opportunity, tolerance of risk,
ambiguity and uncertainty, creativity, self-reliance and adaptability and motivation to excel.

 Commitment and determination

One of the seven primary elements that characterizes an entrepreneur is commitment and
determination. To achieve the desired objective, one must constantly be willing to make
personal sacrifices. If you want to establish your own business, you must be prepared to
give up all of your comforts (be of job security, personal life and all the other). The worker
should also be completely dedicated to completing the task. He or she must never be afraid
to try new things and have a strong moral compass. The individual must always act in the
best interests of others (ethically). Some of the attributes that fall under the category of
courage include not being frightened of failure and dealing with problems that may emerge
in the workplace.
 Courage
The entrepreneurial mindset has been described as requiring a high level of courage. There
are at least three fundamental elements of courage: first, moral strength and principles. This
requires the character and personal integrity to identify right from wrong, as well as the
will and desire to act accordingly. The second is to take risks and not be scared to attempt
new things. This is not the same as calculating risk and reward, upside and downside, and
one's level of comfort with a certain level of risk and uncertainty.
 Leadership
Successful entrepreneurs have a lot of experience, a lot of domain expertise in the market
they're going to compete in, solid general management skills, and a track record. Three key
 pillars support a successful new endeavor: the lead entrepreneur, the venture team, and
external environmental influences. Successful businesses have a well-developed ability to
control influence even when they lack official power. These people are adept at resolving
problems. They know when to persuade and when to argue, when to propose a compromise
and when to demand one.
 Obsession for opportunity
Another trait that distinguishes entrepreneurs is their obsession with opportunity. Knowing
what customers want and need while remaining market-driven and not just doing what you
want is a skill that few people possess. Being able to think of ways to add value and
improve the services or products you provide falls under this category of behavior.
 Tolerance of risk, ambiguity and uncertainty
Entrepreneurs are confident in the face of risk, ambiguity, and uncertainty. Successful
entrepreneurs do not gamble; instead, they take calculated risks. Partners' and investors'
reputations are on the line. Successful entrepreneurs maximize the beneficial 'higher-
performance' consequences of stress while reducing the negative consequences of stress
and unhappiness.
 Creativity, self-reliance and adaptability
New enterprises are defined by high levels of uncertainty and rapid rates of change, which
necessitate flexible and adaptive organizational structures that can respond quickly and
efficiently. The most successful entrepreneurial teams are able to concentrate on a single
purpose and carry it out flawlessly while being adaptable enough to change as the market
and circumstances demand.
 Motivation to excel
The last but equally important theme that distinguishes entrepreneurs is their motivation to
excel. It includes behaviors such as a strong orientation toward lofty but attainable
objectives, a desire to achieve all milestones and improve, a lack of concern about status
or power, and awareness of one's own talents and weaknesses.
Entrepreneurial Method/ Process and logics/ principles
The entrepreneurial process entails creating and managing new enterprises. It has five distinct
phases starting from discovering, developing a business plan, resourcing, managing the company
and harvesting.

1. Discovering
The stage in which the entrepreneur comes up with ideas, sees opportunities, and researches
the market. They think about their hobbies and interests, run polls and questionnaires, think
about the requirements and wants of customers, and research demographics.
2. Concept development
Create a business plan that includes a full description of the business idea, a site selection,
and a determination of whether a patent or trademark is required.
3. Resourcing
The stage during which the entrepreneur determines and obtains the financial, personnel,
and capital resources required for the venture startup, and so on. Make a loan, grant, or
assistance application. Hire workers and look for potential investors.
4. Actualization
The stage during which the entrepreneur runs the business and allocates resources to meet
the company's goals and objectives. The grand opening as well as day-to-day operations
are covered.
5. Harvesting
The stage at which the entrepreneur determines whether the venture will continue to grow,
develop, or die. Consider growth, locations, products and services, and whether or not
you'll go public.

Sarasvathy derived five working principles of effectual logic i.e., Bird-in-the hand principle,
affordable-loss principle, lemonade principle, patchwork-quilt principle and pilot-in-the plane
principle

1. Bird-in-the hand principle-start with your means

Rather than starting with a predefined goal in mind, the Bird-in-Hand notion of effectuation
says that effective entrepreneurs examine the existing resources to discover the many
 possibilities they can create. To put it another way, entrepreneurs create value using
whatever resources they have at the time, no matter how insufficient. When it comes to
exploring chances, expert entrepreneurs examine who they are, what they know, and who
they know. Rather than selecting opportunities based on market size or expected earnings,
they anticipate possibilities based on their talent, knowledge, and network. Husk Power
Systems for electricity micro-grids in Bihar communities, where power is created from rice
husks, is one of the best examples of bird-in-hand.
2. Affordable-loss principle-focus on the downside risk
Entrepreneurs are often stereotyped as risk takers, although they don't see themselves that
way. They claim to control or reduce risk. Expert entrepreneurs achieve this by investing
just the time, energy, and resources they can afford to lose at each stage of the
entrepreneurial journey. They select activities and goals to discover particular details about
their business potential, then pivot, adjust, or cut bait based on what they learn. They see
the positive side of their trials, even if they don't turn into profitable businesses.
3. Lemonade principle-leverage contingencies
The lemonade concept asserts that while mistakes and surprises are unavoidable, they may
be used to create fresh opportunities. To put it another way, rather than avoiding shocks,
embrace them and use them to your advantage. Entrepreneurs perceive opportunity where
others see distraction or even disaster. They understand that even the most well-planned
business strategy rarely survives the first customer contract, so they can take advantage of
unforeseen occurrences.
4. Patchwork-quilt principle-form partnerships
When it comes to bringing truly unique products to market, entrepreneurs face a lot of nos.
Expert entrepreneurs seek for people who believe in their idea and gather them into a self-
selected network of stakeholders who cocreate an opportunity, rather than attempting to
convert the nos to yeses. This could even include collaborations with groups who, from a
traditional standpoint, would be considered competitors.
5. Pilot-in-the plane principle
Expert entrepreneurs do not view the market as an unstoppable tide in which they must
catch the wave perfectly or risk being washed up on the beach. Rather, they believe that
individuals make the future and that they have a basic belief in their ability to control it.
Difficulties and challenges of entrepreneurship in Nepal.
Nepal is positioned to grow because it is a young, energetic country that is ready to participate in
the global economy. In this sector, there are a variety of investing choices. Nepal's future also
cannot rely solely on international assistance and remittances. We must give appropriate support
and a conducive environment for new entrepreneurship and innovation if we are to achieve long-
term economic growth. Entrepreneurship is critical since it not only creates jobs but also has a
positive impact on youth. Every day, Nepal's young and vibrant population flees for better
opportunities. In Nepal, entrepreneurship must grow in order to create optimism, dignity, self-
esteem, and a positive culture that motivates people to stay and succeed.

However, the journey of being an entrepreneur or building a company in Nepal is not so easy.
There are a variety of challenges waiting to follow you on your entrepreneurial journey, whether
personal, financial, or governmental. The following are some of the difficulties:

1. Limited financial resources

Parents in Nepal lend large sums of money to their children who wish to work overseas,
but none of them will take the risk of investing in entrepreneurship. Due to a lack of funds,
young people with outstanding ideas are unable to launch their businesses. Similarly, banks
and financial institute are not so supportive in lending money to the young people. There
are no business loans available without property collateral, which is a major hindrance for
new businesses.
2. Lack of good governance
Another major barrier to entrepreneurship in Nepal is a lack of strong government. The
unstable administration, Nepal Bandas, corruption, and other factors worsen the condition.
Except for these problems there exists many other problems like lack of good policy, lack
of suitable education and training, social judgment, tax policy, etc are becoming a barrier
in entrepreneurial development.
3. Corruption
The root of corruption in public organizations is so deep that individuals have lost faith in
achieving larger goals that are in any way related to the public sector.
4. Intellectual property rights
In Nepal, there is inadequate legislation to protect intellectual property rights. As a result
of the lack of strong rules covering copyright, trademarks, and patents, innovators and new
enterprises are hesitant to bring their inventions and innovations to market.
5. Covid-19
Many entrepreneurs' aspirations and goals have been smashed by the Covid 19 pandemic.
Many startups couldn’t survive the lockdown. The government, for its part, has shown little
interest in assisting startups in sustaining themselves. Instead, they were forced to pay
costly rent, high taxes, and other obligations, despite the fact that they were already losing
money because to the lockdown. During the shutdown, however, clients realized the
importance of the internet business. Many businesses have upgraded to the internet module
in order to stay in business.
Reference

 Carter, N. M., Gartner, W. B., Shaver, K. G. & Gatewood, E. J. (2003). The career
reasons of nascent entrepreneurs. Journal of Business Venturing, 18, 13-39.
 Edom, S. (2016). The 5 critical stages you go through as an entrepreneur.
 Entrepreneurship | Difference Between. [online] Differencebetween.net.
Available at:
http://www.differencebetween.net/business/difference-between-small-business-and-
entrepreneurship/
 https://qrius.com/effectual-logic-how-entrepreneurs-think/
 Hytti, U. (2010). Contextualizing entrepreneurship in the boundaryless career. An
International Journal , 25(1), 64-81.
 Kapoor, V. (2019). Why entrepreneurship is becoming a career option for millennials?
 Karp, T. (2006). The inner entrepreneur: A constructivistic view of entrepreneurial reality
construction. Journal Of Change Management, 6 (3), 291-294.
 Spinelli, S., & Adams, R. (2012). New venture creation (9th ed., p. 38). New York:
McGraw-Hill/Irwin.