Entrepreneurial Mindset and

Entrepreneurial Method

Submitted By:
Upama Shrestha
Mba Evening
6th Trimester
Submitted To:
Sohan Babu Khatri
Entrepreneurship
Entrepreneurship is all about the propensity to take risks, plan, organize, streamline and manage a
new business idea in a dynamic global marketplace. Entrepreneurship is marked by job creation
rather than job seeking. Entrepreneurs are independent-minded, innovative people who are on a
quest to create unique products and services. Entrepreneurship might be difficult, but it is a
rewarding journey.
Only a generation ago, People solely focused on well-defined, tried and tested career paths.
Young adults usually followed in the footsteps of their parents and opted for a secure career.
Today, entrepreneurship has become one of the significant career choices being pursued by the
youth because of the following reasons:

•The ambition to create and execute a business plan from scratch.

•The desire to be their own boss and master of their fate.
•The motivation to take risks in a changing global economy where several opportunities lie
unexplored.
• The aim to be financially prosperous and take their growth trajectory to unprecedented, new
heights.

Being an entrepreneur teaches life skills, generates creativity and problem-solving skills, provides
a better understanding of markets and economics, and enhances teamwork, communication,
networking and brings about a never-say-die attitude. Failing at entrepreneurship is a learning
experience in itself. It will not be apt to think that every entrepreneur gets rich although if one
learns to persevere and counter failure, entrepreneurship could be the gateway to limitless earning
potential. Most jobs have a capped salary – entrepreneurship is just the opposite.
The entrepreneurial skill set that one develops isn’t only limited to business but entrepreneurial
skills are transferable to almost all spheres of life and careers. Entrepreneurs become adept at like-
skills like time management, delegation, perseverance, critical analysis and much more.
Today, developed economies are moving from ‘managerial’ to ‘entrepreneurial’ economies. As an
emerging economy, World is witnessing the growth of entrepreneurship like never before and is
therefore ensuring that entrepreneurship is embraced as a career choice by youth. Entrepreneurial
careers could be varied from being a first-time entrepreneur to a serial entrepreneur, an angel
investor, a partner in a VC or PE firm, a corporate entrepreneur, an educator or a mentor.
Multiple initiatives have been launched to encourage the creation and growth of new ventures. The
current government has formed a ministry of skill development and entrepreneurship; several
educational institutes provide entrepreneurship courses. Many business accelerators and
incubators have been set up by both the private sector and universities to mentor and coach
entrepreneurs. Support in ideation and innovation competitions held by the industry helps too.
College alumni are now returning to their campuses and actively involving themselves through
mentoring and creating angel funds.
The current ecosystem for entrepreneurship is vibrant. Entrepreneurship is, therefore, a great way
for the young generation to explore their areas of interest and career orientation.

Upama Shrestha, Mba 6th trimester

Evolution of Entrepreneurship
Basically, the concept entrepreneur is derived from the French concept “entreprendre” which
literarily is equivalent to the English concept “to undertake”. From the business point of view, to
undertake simply means to start a business (QuickMBA, 2010). From the historical point of view,
Schumpeter (1951) opined that the French economist Richard Cantillon, was the first to introduce
the concept "entrepreneur" in his work in 1755. He viewed the entrepreneur as a risk taker (Burnett,
2000). However, some scholars contend that it was an economist, Jean- Baptiste Say, who analysed
the concept in an advanced way in his work in 1821 where he identified entrepreneur as new
economic phenomenon (Wikipedia, 2010). Given the foregoing, we can infer that the concept
“entrepreneur” is almost as old as the formal discipline of economics itself (Schumpeter, 1951)
especially given the fact that it was economists such as Adam Smith, David Ricardo, and John
Stuart Mill who have written extensively on it, albeit referring to it as "business management”.
However, unlike Smith and Ricardo, Mill stressed the significance of entrepreneurship for
economic growth. Another renowned economist, Alfred Marshall buttressed Mill’s view by
formally recognizing entrepreneurship as an important factor of production in 1890; he viewed
entrepreneurship as organization creation and believed that entrepreneurship is the driving element
behind organization (Schumpeter, 1951; Burnett, 2000).
Entrepreneurship has traditionally been defined as the process of designing, launching and running
a new business, which typically begins as a small business, such as a startup company, offering a
product, process or service for sale or hire. It has been defined as the "...capacity and willingness
to develop, organize, and manage a business venture along with any of its risks in order to make a
profit. “While definitions of entrepreneurship typically focus on the launching and running of
businesses, due to the high risks involved in launching a start-up, a significant proportion of
businesses have to close, due to a "...lack of funding, bad business decisions, an economic crisis -
- or a combination of all of these" or due to lack of market demand. In the 2000s, the definition of
"entrepreneurship" has been expanded to explain how and why individuals (or teams) identify
opportunities, evaluate them as viable, and then decide to exploit them. We can summarize by
concluding that entrepreneurship is a function which involves the exploitation of opportunities
which exist within a market.
Entrepreneurship and Small businesses’ or SMEs
Entrepreneurship is a word that has many definitions because different experts have different
opinions on it. Some say that entrepreneurship is a business undertaking in which individuals work
for themselves. However, this has been disputed by some experts because they say that an
individual can’t work independently. This is because business requires innovation and leadership.
The common factor in all the definitions of entrepreneurship is that it involves taking an idea,
developing a business around it and managing the business around it while assuming its risk.
A small business, on the other hand, is not so different from entrepreneurship. Experts define it as
a business that is owned or controlled by one person or a few individuals. The decision-making
process is also directly influenced by the owner and its shares in the market are relatively small. It
also has few employees mostly less than 50.
Entrepreneurs and small business owners are both self-employed, but their behaviors are different.
Entrepreneurs often want to change and develop things. They are happy in creating energy as

Upama Shrestha, Mba 6th trimester

opposed to being comfortable with their current situation. Small business owners, on the other
hand, are content as long as they are successful. They will rarely try to do more.
Entrepreneurs are known to invent and develop things. Their minds are technical as opposed to
small business owners who often do what entrepreneurs are doing already. Whereas entrepreneurs
are proactive, small business owners are reactive.
Most entrepreneurs will start up a business because they are passionate about it. They will do what
they love without thinking about the risks or even profits in the case that the business is successful.
On the other hand, small businesses set up their businesses with the main motive of earning profits.
That is why when the risks become too much, they will shut down the business to avoid losses.
Entrepreneurs often have the vision of helping the world. Therefore, their businesses will have an
impact on many people. For instance, Microsoft is serving almost everybody in the world. They,
therefore, have a significant market share. For small business owners, they have a small market
share because they serve people around them. They put their communities first and their needs.
This brings about a gap in the market shares of entrepreneurs and small businesses.
Entrepreneurs and small business owners have different mindsets. While entrepreneurs will look
for the next big venture when their companies are good, small business owners will retain their
business. They are sentimental, and they believe that their business is for their community,
Both small business owners and entrepreneurs are self-employed, and they have much more in
common. As we have seen above, some of the largest corporations in the world like Apple began
as home-based businesses. Therefore, most entrepreneurs begin from humble beginnings as small
businesses but they bloom because they are always hungry for more success.
Both small businesses and entrepreneurial projects are imperative because they lead to the
development of the economy. In addition to that, they aid in eradicating the high levels of
unemployment which has become a major issue all over the world. The projects have also assisted
in the utilization of local resources and development of technology. Therefore, both are useful for
the economy to prosper.
Entrepreneurial Mindset and its characteristics
An entrepreneurial mindset is a set of skills that enable people to identify and make the most of
opportunities, overcome and learn from setbacks, and succeed in a variety of settings.

1. A Positive Mental Attitude

A positive attitude and outlook is a must for successful entrepreneurs. The mindset of the head of
the company sets the tone for the rest of the company and influences corporate culture.
Negative thoughts undermine forward motion and the progress of the company, not to mention the
management’s ability to lead staff and motivate employees. Part of what gives entrepreneurs the
fortitude to weather the business downturns is positivity.
Cultivating a positive attitude is not about sticking your head in the sand and ignoring things that
could go wrong, but about learning how to mentally reframe your response. There is no point in
wallowing in mistakes.

Upama Shrestha, Mba 6th trimester

“When everything seems to be going against you, remember that the airplane takes off against the
wind, not with it.” – Henry Ford, founder of Ford Motor Company.
2. A Creative Mindset
Never has the adage “Creativity is the mother of invention” been truer than in the world of
entrepreneurship. Think of Steve Jobs and the iPhone. Edison and the light bulb. The Wright
Brothers and the airplane. Each of these ground-breaking inventions would not have come to
fruition were it not for healthy doses of creative gumption.
Even if you’re not in a “creative” industry, creativity is needed for entrepreneurial success. The
mind of an entrepreneur is always looking for novel ideas and innovations. The basic life cycle of
any entrepreneurial product stems from the conception of an idea followed by turning that idea
into a viable product or service.
“Creativity is just connecting things. When you ask creative people how they did something, they
feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to
them after a while. That’s because they were able to connect experiences they’ve had and
synthesize new things.” – Steve Jobs
3. Persuasive Communication Ability
The best entrepreneurs are persuasive individuals. The power of persuasion can help you negotiate,
close a sale, or score a lower price on your inventory. Not to mention, persuasive people tend to
be inspiring leaders, ergo they tend to be stellar bosses.
“If you would persuade, you must appeal to interest rather than intellect.”– Benjamin Franklin
4. Intrinsic Motivation and Drive
One of the top entrepreneurial characteristics is intrinsic motivation, meaning you are self-
motivated as opposed to looking to others to push you to do things or hold you accountable.
Broadly speaking, those who own their own businesses are incredibly motivated to succeed.
They’ve poured blood, sweat, and tears into their company, and may have literally mortgaged their
future to first open their businesses’ doors. Having a lot at stake personally fuels the motivational
drive.
“The secret of change is to focus all your energy not on fighting the old but on building the new.”
– Socrates
5. Tenacity and an Ability to Learn from Failure
When you’re starting a business, you hope that your business will be a wild success. It’s true that
success is wonderful, but failure is where growth and change happen. The key to learning from
failure is to actually learn and embrace your mistakes so they make your better, not break you.
“Every failure is a step to success.” – Malcolm Forbes

Upama Shrestha, Mba 6th trimester

Themes surrounding the concept of entrepreneurship
The seven major themes that characterize entrepreneurs are commitment and determination,
courage, leadership, opportunity obsession, tolerance of risk, ambiguity, and uncertainty,
creativity, self-reliance, and adaptability, and motivation to excel (Spinelli & Adams, 2012).
Commitment and determination is one of the seven major themes that characterize an entrepreneur.
One must be always prepared to make personal sacrifices to get the result. If you want to start your
own venture, you must be prepared and ready to leave behind all the comfort (be of job security,
personal life and all the other). The person should also be fully committed to the mission of getting
it all done. He/she must never shy away from experimenting and have a strong moral strength. The
person must always do the right things (ethically). Not being afraid of failure and conflicts that
can arise in the business are some of the traits under courage.
Without leadership, no one can be a successful entrepreneur. One doesn’t need to be a perfectionist
but certainly have to have high standards and an ability to start things oneself (Chrysostome, 2010).
He/she must be able to inspire that fire in others to join the vision and an ability to build a strong
team chemistry. The person should also have the right amount of patience when it comes to things
but also show urgency for things that matter. One must not be like a lone wolf and thus share the
learning he/she has while also being open for what others in the team have to share and learn from
it. Obsession for opportunity is another theme that characterizes entrepreneurs. Having knowledge
about the customer desires and need while being market driven and not just sticking to what you
feel is a skill not many have. The behavior under this also includes of being able to think of creating
value and enhancement of the services or product you offer intensely.
Tolerance of risk, ambiguity, and uncertainty involves behaviors like the ability to take a risk in a
calculated way, minimize risk and share them with the team or other collaborators. Other behavior
like tolerating unknown outcomes and unstructured work plan is part of it as well. He/she also
tolerate conflict and stress in a better way. Another theme would be creativity, self-reliance, and
adaptability under which one doesn’t have any fear of failure but adapt to whatever situation that
comes around while creatively solving the problems (Karp, 2006). Behaviors like learning things
quickly, open-minded, and the ability to conceptualize are also part of it.
Motivation to excel is the last theme but of equal importance which characterizes entrepreneurs.
Behaviors like strong orientation towards the high but realistic goals, drive to achieve all the
milestones and grow, not care much of the status or power, and awareness of the strengths and
weakness are part of it.
People may have their own take on which of the above seven themes best characterize the
entrepreneur. But for me, I believe each of the seven has equal importance and are necessary to
define an entrepreneur. One must have one or the other behavior of all the seven themes presented
above. A person who is a calculated risk taker, has a strong moral strength, shows the ability to
learn quickly and adapt in the hardest of situation decides to be an entrepreneur. The person lacks
the passion - the commitment and sheer determination of doing something, which would obviously
present itself as a hurdle and if unable to enhance those skills, the venture might crumble or even
collapse.
Those skills are something which one with an entrepreneurial mindset or aspiration should realize
and not something that someone else should encourage. However, at times a small push for

Upama Shrestha, Mba 6th trimester

someone you know or someone you admire or just a random person can ignite the desire in you to
make a difference. These skills can be developed through practice, experimentation and by failing
while attempting. It can also be enhanced through mentorship programs, talks with different people
who have some knowledge about the domain, and looking at other related business cases. Having
said that, it all depends on the person in question. If the person doesn’t have the desire, commitment
and attitude to learning, no one can make him/her learn. So, it first starts with oneself and continues
to secondary sources to show some path and finally back to oneself to make better sense of it and
take it further.
Entrepreneurial Method/ Process and logics/ principles
There are many characteristics of entrepreneurship, but one of the most important is dedication.
Becoming an entrepreneur requires hard work and commitment to a well-defined, yet flexible,
process. You won’t become a success overnight. Planning the early stages of entrepreneurship to
help see your vision through is essential for all aspiring creators and business owners.
Whether you have a new product idea designed to disrupt the marketplace or see a new need your
business can fill, you’ll have to follow a set entrepreneurial process in order to turn your concepts
into reality. Keep in mind that while these stages of entrepreneurship are often sequential, their
time spans might overlap. In some cases, it might even make sense to jump ahead as long as every
stage is eventually completed.
Here are the 6 stages of the entrepreneurial process:
1. Brainstorm and explore
2. Get organized
3. Build your network
4. Form your business
5. Find investors and partners
6. Market and launch
1. Brainstorm and explore
This is typically the starting point for all entrepreneurs. Businesses are usually founded on one
idea or solution that sparks an entrepreneur into action. This entrepreneurial concept might be the
reason you decided to form your own business in the first place. However, this isn’t the only way
business ideas are born.
Many entrepreneurs might know they want to start their own company, but they struggle to decide
what service or product they can offer the marketplace. If this is the case for you, you’ll want to
begin brainstorming right away.
Start by identifying different industries and narrowing them down based on your interests or
expertise. From there, you can begin generating ideas as they come to you or start researching
common industry problems to solve.
However you tackle this step in the process, it’s important to schedule time each workday to spend
on ideation. Once you have your idea, you’ll want to nail down some specifics and begin
prospecting. Whom is this product/service for? Who is your target audience or demographic? How
much will this cost your prospects? Nail down as many specifics as you can before moving
forward.

Upama Shrestha, Mba 6th trimester

2. Get organized
Now that you know what you’re looking to build, you’ll want to get to work right away. You’re
going to want to come up with a business plan detailing your business goals and projected revenue
and may decide to craft a mission statement.
The next phase of your entrepreneurial plan should involve researching the market to be sure no
competitors are offering the same product or service. If they are, make sure your offering has a
compelling differentiator or key advantage over the competition.
You can also begin building out some of your brand messaging to show customers how your
product or service works and why it's worth their time and money. You’ll need to know how to
market yourself, which is one of the key entrepreneurial skills, before you move on to the next
stage.
3. Build your network
To become an entrepreneur, you’re going to need a wide network of connections. It’s important to
connect with other professionals and experts in your industry, particularly if you’re looking for
partners, mentors, or just associates to keep in touch with. It can be essential to interact with like-
minded individuals who share your business interest or perhaps experience the problems your
company will be setting out to solve.
You’ll also want to begin branching out and networking with other professionals, such as lawyers,
financial advisors, and entrepreneurs in other industries. Consider what types of vendors you’ll
need and begin connecting with them as early as possible. You can also use this time to scope out
potential employees.
4. Form your business
You’ve got the idea, you’re armed with research, and you have the connections. Now it’s time to
legitimize your dreams by building your business. You’ll want to form an official company or
startup and register your new business with the government. Before filing your paperwork, create
a list of potential company names. You can check the availability of these names when you begin
the business creation process.
Whether you’re starting an online business or seeking a more traditional business model, you’ll
need to decide the type of business entity you want to form (LLC, corporation, partnership,
nonprofit, etc.) and file the required paperwork with your secretary of state. You should also obtain
an Employer Identification Number (EIN) and open a business bank account.
At this point, you can also get your business ready for marketing by ordering business cards,
reserving a website domain, and creating business email addresses to make sure your company
looks polished and professional. You should also decide if you want to hire an accountant or tax
specialist.
5. Find investors and partners
A million-dollar idea remains just that unless you have someone to fund it. Now that your business
is formed and recognized by the government, it’s time to begin finding the financing you need to
launch your big idea.

Upama Shrestha, Mba 6th trimester

There are many different approaches you can take during this stage. You can reach out to the
professional connections you’ve made to form partnerships or offer shares in your company. You
can also contact any wealthy individuals you may be personally connected with to gauge their
interest in investing in your idea.
Another recent method for raising startup money is crowdfunding. Using platforms such as
Kickstarter, entrepreneurs are able to raise awareness of their product or service while also
promoting their brand. In exchange for capital, you can offer patrons exclusive access to your
products and additional gifts, rewards, and discounts.
When crowdfunding, it’s important to create a compelling story that resonates with your audience.
This might mean manufacturing a product demo and shooting a video promotion, or it could be
you telling the story of your marketplace solution.
Other ways to raise funds include applying for small business grants or loans, taking advantage of
0% APR credit cards, or pitching to angel investors or venture capitalists.
6. Market and launch
Now that you have capital, it’s time to get your startup ready for the product or service launch.
This could involve hiring employees, contractors, or vendors, working on initial manufacturing
and development, and running your products through tests and quality assurance processes. You
may also need to secure office or manufacturing space.
If you’re crowd funding or still raising money during this period, offering glimpses and updates
of your progress along the way can lead to even more investment.
As your product or service is being developed, you’ll also want to start marketing to prospects.
This could involve building a website or e-commerce site, creating social media hype, launching
digital ads, or using traditional media to start attracting customers.
Difficulties and challenges of entrepreneurship in Nepal.
Achieving high level of income and prosperity is not possible without new investments and
businesses coming into the market. Higher level of investments is positively correlated with higher
level of income and employment generation. Hence, it is clear that facilitating new businesses
which are trying to enter into the market is very important. But, if we look into the World Bank’s
Doing Business Index, Nepal’s performance in ‘Starting a Business’ category is in dismal
situation. Nepal ranks 107 out of 190 countries in Starting a Business. This shows that
entrepreneurs face various difficulties while registering a new business.
1. Difficult to prepare Memorandum and Articles of Association
Currently, the entrepreneurs are not able to prepare Memorandum and Articles of Association
(MoA and AoA) without professional help. Even though formats of MoA and AoA are available
and provided by the government, entrepreneurs cannot use it themselves without any professional
help from lawyers. As per the World Bank, entrepreneurs find it difficult to avoid mistake while
preparing these documents themselves. It requires NPR 10,000 and takes 5 days for the preparation
of these documents, which is a huge percentage of the total time and cost involved. Hence it is
highly recommended that MoA and AoA is to be substituted with a single document which only

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requires entrepreneurs to fill basic information about the company, its shareholders and objectives.
This could reduce the cost and time of starting a business significantly.
2. Redundancy in Application Procedure
Secondly, online filing of the documents and again having to present physical copy of the original
documents is redundant. This procedure could be reduced to a single step by making the
registration at the Office of the Company Registrar (OCR) completely electronic. However, due
to the lack of implementation of digital signature and electronic transaction, making the
registration process completely digital has not been possible. If electronic registration cannot be
immediately brought into implementation, the process of having to submit documents online
should be entirely removed.
3. High incorporation fees
According to the World Bank, the incorporation fees is more than 10 percent of the per capital
income of Nepal. Again, if we take World Bank’s figure, the total cost of company registration is
NPR 19,780. The data obtained from Central Bureau of Statistics (CBS) shows that Gross
Domestic Savings (GDS) per capital of Nepal is about NPR 15510. These figures show that an
entrepreneur has to save for 14 months just to register a new company.
4. Excessive bureaucracy
One of the difficulties in registration of a business is bureaucratic hurdles. Excessive bureaucracy
has led to increase in the time of business registration. Currently, multiple layers of tasks have to
be conducted under the same government agencies. Entrepreneurs themselves have to move from
one desk to another to get services from different government officials (like getting signatures and
approvals). This has created a maze within the regulatory office. The service delivery mechanism
is such that the entrepreneurs have to seek services from individual bureaucrats within the same
government agency and not from the agency as a whole. As bureaucrats are responsible for
providing services, this has created room for corruption as well.
5. Centralized Regulation
Centralized regulation is an important factor that has led to increase in overall cost of starting a
business. Government agencies like OCR and DoI are centrally located and they do not have other
offices operating outside of Kathmandu, and therefore, entrepreneurs outside Kathmandu have to
come all the way to the capital city just for business registration. The cost incurred in travelling to
and from Kathmandu and the cost of lodging during their stay in Kathmandu also adds up to the
cost of starting a business. These costs sums up to be more than the fees payable for business
registration.
6. Cumbersome post registration compliances
Businesses, especially micro and small ones are reluctant to register and are instead operating their
businesses informally, not only because of the hassles faced by them while registering their
business but also because of the various compliances to be met while operating the business. For
example, there are regulations related to taxes which are very difficult to comply with. There are
three different types of system of income tax under which income tax can be paid. The particular
system to be followed depends upon the size of the business. The existence of multiple systems
may create confusion, especially among the micro entrepreneurs because neither are they able to

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understand the category they fall into and the tax systems that they have to follow, nor are they
financially capable to spend money on hiring an expert who could deal with these matters.
7. Lack of skilled human resource
The infrastructure for the implementation of digital signature which is the most important factor
for electronic registration of businesses are in place at the government agencies responsible for
business registration. But, these agencies lack skilled human resource for effective implementation
of digital signature for full implementation of electronic registration.
There are several challenges that come in the journey of being an entrepreneur or developing a
startup in Nepal. Whether personal, financial, or governmental there are plenty of problems that
are ready to join you in the entrepreneurship journey. Some of the challenges are:
1. Funding
Entrepreneurs are frustrated by the apathy of the Nepali Government towards entrepreneurship.
Starts ups have to struggle with problems related to funding. The banking sector has been the main
source of funding for enterprises. There haven’t been any cases where SMEs have used the capital
market to collect the initial funding. SMEs have to pay around a 12 % interest rate to banks for
loan money and a 1% service charge in addition. Getting loans from banks and financial
institutions is a very inconvenient process, also high-interest rate and lack of collateral is another
major problem.
2. Lack of Good Governance
Another big challenge in entrepreneurship is the lack of good governance in Nepal. The unstable
government, load-shedding, Nepal Bandas, Corruption, etc makes the situation even worse.
Despite, Nepal not having a business-friendly environment, Youths are still coming up with
dynamic entrepreneurial ideas.
Except for these problems there exists many other problems like lack of good policy, lack of
suitable education and training, social judgment, etc are becoming a barrier in entrepreneurial
development

Upama Shrestha, Mba 6th trimester