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.

Upama Shrestha, Mba 6th trimester

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 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.

Upama Shrestha, Mba 6th trimester

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.
“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

Upama Shrestha, Mba 6th trimester

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 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.

Upama Shrestha, Mba 6th trimester

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.
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.

Upama Shrestha, Mba 6th trimester

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.
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

Upama Shrestha, Mba 6th trimester

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 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

Upama Shrestha, Mba 6th trimester

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
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