Entrepreneurs

Entrepreneurs should be able to do this:

 Recognize opportunities where others see chaos or confusion

 Are aggressive & catalysts for change within the marketplace
 Challenge the unknown & continuously create the future

An Entrepreneurs should have a high creativity so they can create new innovation every day,
and they should have to up to date about development every day because if the products or
service they had made is too old, they can insolvent.

To be a successful entrepreneur, we can "Start from The End" because if we start from the
end, we must think about how to be like we want at the end.

Example: I want to be the leader of a company when I'm young, and when I'm 50
years old, I'll retire and spend all of my time with my family.

If we want to be like that, we must think what should I do to make me to reach my target, and
then work hard to reach my target.

Misconceptions About Entrepreneurship:

 Successful entrepreneurship needs only a great idea

 Entrepreneurship easy
 Entrepreneurship a risky gamble
 Entrepreneurship is found only in small businesses
 Entrepreneurship ventures & small businesses are the same thing

Evolution of Entrepreneurship

Entrepreneurship is the process of identifying opportunities in the market place, arranging the
resources required to pursue these opportunities and investing the resources to exploit the
opportunities for long term gains. It involves creating wealth by bringing together resources in
new ways to start and operate an enterprise.

Trade – Nearly 20,000 years ago, entrepreneurship started with trade. Goods were exchanged
between humans for an overall benefit of tribe.
Agricultural revolution – With time, people learned to domesticate plants and animals. Group
of people cultivate food and exchanged it with people who provided valuable goods.

New areas of specialization began to emerge such as Pottery, Carpentry, Wool-making and
Masonry.

Expansion of trade routes – Cities started to appear from 2000 BCE. As population increased,
people developed an idea that they can earn profits by trading between cities and cultures.
Popular trade at that time was of salt, fruits, rice and paper making by China.

Invention of money – The key development in the history of entrepreneurship was shift from
barter system to currency. Paper money acted as medium of exchange and provided a way to
store value.

Beginning of the marketplace – Larger marketplaces became more popular to cater large
population. Banking regulation became more advanced for small businesses and entrepreneurs
could purchase goods from abroad.

Innovation, Mercantilism and Explorers was on the rise at that time. Luca Pacioli formulated
standardized principles to keep track of a company’s accounts.

Machines and Industrial revolution – Shift from small scale to large scale production gave rise
to some of the world’s great entrepreneurs such as J. Morgan and John D. Rockefeller.

Modern Entrepreneurship – Now-a-days entrepreneurship serves as lifeblood of all economies

of the world. Entrepreneurs are encouraging to innovate and are valued for their contribution in
the economy.

ENTREPRENEURSHIP: CONCEPT
The concept of entrepreneurship has been around for a very long time. In the last decades it has
resurged. The concept of entrepreneurship is an age-old phenomenon that relates to the vision of
an entrepreneur as well as its implementation by him. Entrepreneurship is a creative and
innovative response to the environment. It is also the process of setting up a new venture.

Entrepreneurship is a composite skill that is a mixture of many qualities and traits such as
imagination, risk, taking, ability to harness factors of production, i.e. land, labour, technology
and various intangible factors.
Usually anyone who runs a business is called an entrepreneur. The more precise meaning of
entrepreneur is on who creates his own business i.e., a person who organizes, operates and
assumes the risk of a business venture. An entrepreneur is a person who perceives a need and
then brings together manpower, material and capital required to meet the need.

Entrepreneur implies a set of values norms and traits that are conducive to the growth of a
business enterprise. It is the organizational culture that focuses on new opportunities and creation
of an organization where these opportunities can be perused earnestly. An entrepreneur seeks the
opportunities looks for ways and means to capitalize on the newer opportunities by organizing
the structure and the resources and gaining control on them. And against this, manager is
primarily concerned with the resources under his control, the structure of his organization and its
relations to the market. He is also concerned with matching the opportunities with organizational
abilities.

The entrepreneurs are driven by the perception of opportunities. They seek changes in the
political rules, social values, consumer preferences, technology etc. On the other hand, resources
like money, manpower and material they control, drive the managers. Entrepreneurship is an
elusive concept that cannot he defined precisely. However, people having different interests have
defined ‘entrepreneurship’ in a number of ways.

 Psychologists and sociologists are interested in why entrepreneurs act.

 Economists focus on “what happens when entrepreneurs act.
 Management experts focus on how the entrepreneurs act, in the characteristics of
entrepreneurs and the manner in which they achieve their goals.

Richard Cantillon
The word Entrepreneur is
derived from a French word
entrependre, i.e., individuals
who
were ‘undertakers’ meaning
those who undertook the risk of
new enterprise. The word
entrepreneur was first used in
the writings of French
economist, Richard Cantillon.
He described
an entrepreneur as a person who
pays a certain price for a
product to resell it at an
uncertain price
thereby making decision about
obtaining and using resources
while assuming “the risk of
enterprise”. As per Richard
Cantillon entrepreneur’s
function is to combine factors
of production
into a producing organism.
Entrepreneurs consciously make
decisions about resource
allocation.
Smart entrepreneurs always
look for the best opportunity of
using resources for high
commercial
gain.
Adam Smith
As per Adam Smith, the father
of political economy, the
entrepreneur: has a role of an
industrialist. In his book,
Wealth of Nations, he describe
the entrepreneur as an
individual who
forms an organization for
commercial purpose. 1-Te is a
proprietary capitalist, a
supplier of
capital and at the same time a
manager who intervenes
between the labour and the
consumer.
Adam Smith also treated him as
an employer, master, merchant
but explicitly considered him a
capitalist.
Entrepreneur is one who has
unusual foresight to recognize
potential demand of goods and
services. lt is a change agent
who transforms demand into
supply. He is one who possesses
certain arts and skills of
creating new economic
enterprises. He is a person with
exceptional
insight into the society’s needs
and possesses abilities to fulfill
them. He is “Economic Risk
Taker” of Cantillon and
“Industrial Manager” of Adam
Smith. The British economist
John Stuart
Mill had described
entrepreneurs as business
founders and thus become
fourth economic factor
with land, labour and capital.
Carl Menger
Carl Menger of Austria was of
the view that economic changes
do not arise from the
circumstances hut from the
individual’s awareness and
understanding of these
circumstances.
The entrepreneur, therefore,
becomes a change agent who
transforms resources into useful
goods
and services, thus, creates
the circumstances leading
to industrial growth. As
per Menger’s
classic theory of production,
resources having no direct use
in terms of fulfilling human
needs
were transformed into highly
valuable products that directly
fulfilled human needs. He saw
the
entrepreneur as an astute
individual who could envision
this transformation and create
the means
to implement it. He adds value
to the original resource and this
value through profits.
Joseph Schumpeter
Joseph Schumpeter, an
economist described
entrepreneur as one who seeks
to reform or
revolutionize the pattern of
production by exploiting an
innovation or, more generally,
an untried
technological possibility for
producing a new commodity or
producing an old one ii a new
way,
by opening up a new source of
supply of material or a new
outlet of products.
Entrepreneurship,
as defined, essentially consists
of (10mg things that are not
generally done in ordinary
course of
business routine. An
entrepreneur is one who
innovates, raises, money,
collects, inputs, organizes
talent, provides leadership and
sets the organization.
Richard Cantillon

The word Entrepreneur is derived from a French word entrependre, i.e., individuals who were
‘undertakers’ meaning those who undertook the risk of new enterprise. The word entrepreneur
was first used in the writings of French economist, Richard Cantillon. He described an
entrepreneur as a person who pays a certain price for a product to resell it at an uncertain price
thereby making decision about obtaining and using resources while assuming “the risk of
enterprise”. As per Richard Cantillon entrepreneur’s function is to combine factors of production
into a producing organism. Entrepreneurs consciously make decisions about resource allocation.
Smart entrepreneurs always look for the best opportunity of using resources for high commercial
gain.

Adam Smith

As per Adam Smith, the father of political economy, the entrepreneur: has a role of an
industrialist. In his book, Wealth of Nations, he describes the entrepreneur as an individual who
forms an organization for commercial purpose. 1-Te is a proprietary capitalist, a supplier of`
capital and at the same time a manager who intervenes between the labor and the consumer.
Adam Smith also treated him as an employer, master, merchant but explicitly considered him a
capitalist.

Entrepreneur is one who has unusual foresight to recognize potential demand of goods and
services. It is a change agent who transforms demand into supply. He is one who possesses
certain arts and skills of creating new economic enterprises. He is a person with exceptional
insight into the society’s needs and possesses abilities to fulfill them. He is “Economic Risk
Taker” of Cantillon and “Industrial Manager” of Adam Smith. The British economist John Stuart
Mill had described entrepreneurs as business founders and thus become fourth economic factor
with land, labour and capital.

Carl Menger

Carl Menger of Austria was of the view that economic changes do not arise from the
circumstances hut from the individual’s awareness and understanding of these circumstances.
The entrepreneur, therefore, becomes a change agent who transforms resources into useful goods
and services, thus, creates the circumstances leading to industrial growth. As per
Menger’s classic theory of production, resources having no direct use in terms of fulfilling
human needs were transformed into highly valuable products that directly fulfilled human needs.
He saw the entrepreneur as an astute individual who could envision this transformation and
create the means to implement it. He adds value to the original resource and this value through
profits.

Joseph Schumpeter
Joseph Schumpeter, an economist described entrepreneur as one who seeks to reform or
revolutionize the pattern of production by exploiting an innovation or, more generally, an untried
technological possibility for producing a new commodity or producing an old one ii a new way,
by opening up a new source of supply of material or a new outlet of products. Entrepreneurship,
as defined, essentially consists of (10mg things that are not generally done in ordinary course of
business routine. An entrepreneur is one who innovates, raises, money, collects, inputs, organizes
talent, provides leadership and sets the organization.

Peter Drucker

As per Peter Drucker, the management guru, entrepreneurial role is one of getting and using
resources. The difference is that in an entrepreneurial role the resources must be allocated to the
opportunities, whereas, in the managerial role the resources are allocated to solve the problems.
Entrepreneurship occurs when resources are redirected towards progressive opportunities, and
are not used for ensuring administrative efficiency. This redirection of resources distinguishes
between the entrepreneurial and managerial role.

According to Peter Drucker an entrepreneur is on who always searches for changes, responds to
it and exploits it as an opportunity. Innovation is an instrument of entrepreneurship. An
entrepreneur innovates and creates resources because there is no such thing as resource until
someone finds a use for something and endows economic value to it. Drucker considers
increasing the value and consumer satisfaction of a resource is an entrepreneurial activity.

FIVE CORE ELEMENTS OF ENTREPRENEURSHIP

From various definitions referred to in previous pages it emerges that entrepreneurship primarily
consists of five main elements:

1. Key part of entrepreneurship is to identify opportunities that no one has earlier noticed.
Such opportunities need not be large; these can even be small ones. Creativity and
innovation from the core of entrepreneurship that enables the entrepreneur to think
entirely new ways of working. Creative people are receptive to new ideas generated by
other.
2. The entrepreneurs have an ability to apply the creativity to business problems. They
understand the people and environment around them. They can effectively material
 resources for the same. It is not enough to think creatively to think creatively, successful
entrepreneurship demands that thoughts be translated into action and result. They need an
ability of getting thing done.
3. Entrepreneur always takes rise. Their main task is evaluating rise for cutting across
accepted boundaries, breaking rules and doing things in a different manner.
4. Thus entrepreneur focus on creating value by doing things in a cheaper, better and faster
manner.
5. They have a sound belief in their ability to change the status quo- the way the things are
being done presently. With their drive and passion to achieve success they change the
way things are being performed.

Thus, entrepreneurship can be defined as “creating of value by people working together to

implement an idea through the application of drive and a willingness to take risk”. In brief, the
concept of entrepreneurship includes three phases namely:

 Initial entrepreneurial phase or inception phase which is related to perception of an

opportunity to establish the business.
 Operational phase which includes the theory and practice of management functions in the
organization of a business unit.
 Managerial phase which includes the profitable application of the mental executive health
in taking relevant managerial decisions to run the business unit as a profitable, going and
growing concern.