Entrepreneurial Skills - IV

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After studying this unit, students
will be able to:
tig Learn more about Entrepreneur
ship development.
1 @ Learn more about the qualities of an entrepreneur.
= Know more about the role and functions of an entrepreneur
.
. pes more pee Hi rae of an entrepreneur.
earn more about the barrierst i
e Know more about startups. ETRE a
e Learn more about entrepreneurial competencies. |!
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4.1 MEANING OF ENTREPRENEURSHIP

The word ‘entrepreneur’ is derived from the French word entreprendre, which means ‘to undertake’. An
entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most
of the rewards. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods,
services, and business/or procedures.
Joseph Alois Schumpeter is regarded as the father of entrepreneurship. He introduced the concept of
entrepreneurship. Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most prominent example
of entrepreneurship is the starting of new businesses. Entrepreneurship is defined as “an economic
process, where an idea is generated or an opportunity is created, refined, developed and implemented,
while being exposed to uncertainty to realise a profit by effective utilisation of resources’.
Entrepreneurship development refers to the process of enhancing entrepreneurial skills and knowledge
through structured training and institution building programmes. This entrepreneur development pos
helps new firms or ventures get better in achieving their goals, improve business and the nation’s
and
economy. Another essential factor of this process is to improve the capacity to manage, develop,
make better
build a business enterprise keeping in mind the risks related to it. It encourages them to
It focusses on an individual, who
judgments and make sensible decisions for all business activities.
needs to include oc
wishes to start or expand a business. Training in entrepreneurship development
(knowledge,
for — (a) entrepreneurship orientation and awareness, (b) development of competencies
to meet it,
skills and attitudes) necessary to recognise a market opportunity and organise resources
and (c) improvement of business performance for growth and competitiveness.
49

LAE ce
 The National Institute for Entrepreneurship and Small Business Development isa premier Organisation
of the Ministry of Skill Development and Entrepreneurship, Government of India, engaged in trainin
consultancy and research to promote entrepreneurship and skill development. The major activities of
the Institute include training of trainers, management development programmes, entrepreneurship-cum,.
skill development programmes, entrepreneurship development programmes and Cluster intervention,

4.2 CHARACTERISTICS OF ENTREPRENEURSHIP

The following are some of the characteristics of entrepreneurship:
e It is an economic activity done to create, develop and maintain a profit-oriented organisation.
e It begins with identifying an opportunity as a potential to sell and make profit in the market.
e It deals with optimisation in utilisation of resources.
e It is the ability of an enterprise and an entrepreneur to take risks.

4.5 ENTREPRENEURSHIP — ART AND SCIENCE

Entrepreneurship is considered to be both an art and a science. For a subject to be considered ag
science, there are steps that need to be followed to attain a specific result. On the other hand, some
subjects are categorised as art, where no specific way to attain a result is required and the skill of using
the subject matter is of prime importance. An example of art is music. A musician can play music notes
in any combination to create soothing and soulful music. Entrepreneurship is the perfect combination
of art and science as it requires specific progression and procedures to be followed and also the skill
to digress when required, and yet make the entire activity profitable and growth oriented.
No one is born an entrepreneur, and everyone is a potential candidate for embarking on an entrepreneurial
adventure. That being said, an entrepreneur's personality is often seen as a key element in their
success or failure.

4.4 QUALITIES OF AN ENTREPRENEUR

1. Hard Work : Without working hard, no entrepreneur can be successful. On an average, successful entre-
preneurs are found to be working anywhere between 60 to 90 hours per week, which is much higher than
40 hours per week. Entrepreneurs use alot of trial and error and keep putting in work till they succeed. The
person cannot afford to say: “The office hours are over now and | will not work any longer.”

2. Willingness to Take Risks : If you decide to launch your own business, there's a high likelihood early
times will be tough and profits will be low. In order to set out on this new adventure, you must be prepared
to take that risk and step outside your comfort zone.

3. Motivation : There has never been a success story without setbacks, failure, effort, a hunt for solutions
and other surprises. So if you tend to fear failure and throw up your hands without a fight, entrepreneut
ship might not be for you. Failure happens all the time, and what's important is drawing out the lessons that
will help you forge ahead. So motivation is what is required to be successful in business.

4. Initiative : In the world of business, opportunities come and go. An entrepreneur must be able to initi-
ate action and take advantage of an opportunity.

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 a ee 4 ee.
ye

5. Optimism : Positivity and belief j :

preneUrs dundee oe What they do is what takes entrepreneurs far in their journey. Entre-
optimistic is about learning from 'y or be afraid of adverse situations. For an entrepreneur, part of being
mistakes and failures and finding alternative ways to do things

. Energetic
pooctlee : Drive andea
Tepe ipa iahi
high In successful entrepreneurs which makes them extremely
y taking actions to try multiple approaches and execute things.

. Decision making ability : :

to take a number of decisions.
pete the eu ne : running an enterprise, an entrepreneur has
: st be capable of making suitable and timely decisions.
. Self-c onfident : Belief i ‘ “is s
Si h ae iP Ones own vision and abilities and passion for the goal makes successful
: ntrepreneurs are able to transfer this passion and vision to investors, employ-
ees, customers etc. to sell their idea to every stakeholder

inki i :
ee t : A way of thinking
3 . Pe Perseverant that helps to accept failure, learn from mistakes, not give up, con-
tinuously experiment etc. is crucial for an entrepreneur. Hence, entrepreneurs need to be persever-
ant in their pursuit.

4.5 TYPES OF ENTREPRENEURS

There are many types of entrepreneurs, which include the following:
1. Social Entrepreneurs : Individuals, who focus on developing solutions that benefit the society, are
called social entrepreneurs. They develop, fund and implement solutions that are directed towards
society, culture and environment. The term ‘social innovator’ is used interchangeably with social
entrepreneurs.

an existing suc-
2. Imitating Entrepreneurs : These are often referred to as ‘Copy cats’. They observe
original business model are
cessful system and replicate it ina manner where all the deficiencies of the
addressed and all its efficiencies are retained.

runs a business successfully and

3. Family Business Entrepreneurs : When a family or an individual business
is, generally, termed as family
passes it onto the next generation, then such an entrepreneur
s or the functioning of an enterprise, is not the
entrepreneur. The person, who is handed over the busines
first generation entrepreneur.
any
tion entrepreneurs are those who do not have
4. First Generation Entrepreneurs : First genera An indivi dual, who
different age groups and backgrounds.
entrepreneurship background. They can be of tion entre-
preneurship background, is also a first genera
starts at the age of 50 years without any entre
preneur.
and cau-
epren eurs that are very Cccareful in their approaches
5. Fabian Entrepreneurs : These are entr from any In-
prone to sudden decisions and try to shy away
tious in adopting any changes. They are not
their narrative.
novations or change that doesn't fit
,
neur indu stri al ent rep ren eur is, essentially, a product oriented manufacturer
6. Industrial Entr epre s : An
serve them.
an d creates products 0 r services to
who identifies the needs of customers
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a
 7. Agricultural Entrepreneurs : Agriculturists have now introduced new and innovative technology to
maximise the yield, giving birth to agriculture entrepreneurship.

8. Technical Entrepreneurs : The Industrial Revolution gave birth to technical entrepreneurs, who use
their technical expertise to innovate, create and offer machines, tools and methods.
, . . . . . .

_ 9. Non-technical Entrepreneurs : These entrepreneurs use their expertise in providing services to

create a market for technical entrepreneurs. Their expertise is in non-technical aspects of a product or
service, they have more to do with before and after the manufacturing process.

10. Drone Entrepreneurs : These are entrepreneurs who do not like change. They are considered ‘old
school’. They want to do business in their own traditional or orthodox methods of production and sys-
tems. Such people attach pride and tradition to even outdated methods of doing business.

11. Service Entrepreneurs : Service-based businesses allow you the freedom to leverage your skills and
earn a profit. These entrepreneurs either create a new market for their services or provide
a service in an
existing market. They spot an idea and convert it into a service, which is unprecedented or not available
in the market.

12. Business Entrepreneurs : These are entrepreneurs, who undertake business and
trading activi-
ties and are not concerned with the manufacturing work. A business entrepreneur
identifies the
potential of a product in a market. From that point onwards, the business
and trading entrepreneur
is responsible for stimulating demand for the product
.
13. Professional Entrepreneurs : Such an entrepreneur starts a business, nurtures it and makes
it reach
a point of self-sustainance. Once the project reaches that point, the entrepreneur sells the business
and
starts a new one, and then, follows the same cycle.

14. IT Entrepreneurs : People who take up entrepreneurship in the field of Information Technology (IT)
are called IT entrepreneurs. The IT entrepreneurs are confined to innovation in the field of Information
Technology.

15. Women Entrepreneurs : A number of women entrepreneurs are taking initiatives in starting entre-
preneurial activities and many of them have even made it to the top.

4.6 ROLES AND FUNCTIONS OF AN ENTREPRENEUR

Some of the major functions performed by an entrepreneur are as follows:
e A person, who wants to become an entrepreneur, requires imagination, creativity and innovativeness.
He/She has to sense the opportunity and act on it. Entrepreneurs must be capable of turning ideas
into reality. They should be able to collect information regarding ideas, products and practices to
meet the market demand.
e Entrepreneurs conduct studies to assess the market feasibility of a proposed product or service.
They anticipate problems and assess quantity, quality, cost and sources of inputs required to run
the enterprise. Such a blueprint of all activities is termed as a ‘business plan’ or ‘project report.
¢ One of the important functions of an entrepreneur is to run the enterprise. The person has to
manage the workforce, material, finance and organise the production of goods and services. The
person has to market each product and service, after ensuring appropriate returns (profits) of the
investment.

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 . a ee ting. ries ante a leader because an entrepreneur may need to
his peopte-managuriere ate leaderotsiy alge (eee
bring Beole q
as a team. So, he needs to be good with
and motivating his resources as and when neue ot aoe Cee eee
° See te eed mone ae the mediator and bring people with dissenting
fo feds GOnecaneataaetE. oo thoughts to the
ork together. He needs to handle all confl
icts and get the team
° Goal fF Is Grouch AIO eee results, the entrepreneur has to explore
another higher
but constantly strives for achieving
exdaliensn CT Sun aoe ao eA ten
* SiGsacateeetee out, in Entrepreneur, “Entrepreneurs are not risk-t
akers. They are
e apenavernin ; repreneurs face multiple risks such as bankruptcy,
financial risk,
S, environmental risks, reputational risks, and
political and economic risks.
Successful entrepreneurs tend to take risks in ways
that limit their potential losses.

4.7 STARTUPS
According to startup guru Steve Blank, a startup is a “temporary organization designed to search
for a repeatable and scalable business model”, while the small business runs according to the fixed
business model. A startup is “a temporary organization designed to look for a business model that
is repeatable and scalable.” While a company is “a permanent organization designed to execute a
business model that is repeatable and scalable.” Therefore the difference is that startups look for
an attractive business model, while companies already have such a business model and are focused
on successfully executing it.
Examples of Startups: Zomato, Paytm etc.
A startup is a young company founded by one or more entrepreneurs to develop a unique product or
service and bring it to market. By its nature, the typical startup tends to be a shoestring operation,
with initial funding from the founders or their friends and families. A startup is a company that is
in the first stage of its operations. Startups can be in the field of technology, health care, food,
virtual reality, etc.
Startups can be started with minimum investment and rely on capital that comes via angel investors
or venture capital firms. Startups come up with an innovative idea. At the same time, they like to get
guidance and mentoring from an expert.
India’s largest online entrepreneurship platform allows startups to network, access free tools & resources
and participate in programs & challenges. ‘Startup India’, a flagship initiative of the Government of
India, is intended to build an ecosystem for the growth of startup business. Startup policies have been
formulated by the States. Under this scheme, new startups in India can avail regulatory and tax benefits,
capital gain exemption, as well as, access to government funding, if they fulfil the criteria.

For Example :
Flyrobe
This company allows you to rent designer clothing. Unique, right? This startup was founded in 2015. The idea
was loved so much by investors that they have raised over 7 million since then. They have offices in Mumbai,
Maharashtra.

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 CureFit operates a platform to a healthy power lifestyle and So hoee-ad’osa aa fo hb
mental well-being. The Company offers both digital and offline ved eri mini Thay Nutrition, ang is
Psychological well-being through its three products: cult.fit, eat. Y have Officgs pitti
Bengaluru, Karnataka. n is 2

4.8 BARRIERS TO BECOME AN ENTREPRENEUR os ptt|

ai
A business venture is; a lo ;
race, It, usually, involves isks.
risks. SO, So, W while running 9 th the rac
entrepreneur, many 5.8 (Ota ee : me in way. These things can .° Sa (
hurdles, such as financial constraints may CO an Stop the |
person from achieving success. These are called ‘barriers.
(
Some barriers to entrepreneurship are explained below:
1. Non-availability of Required Finance : A major barrier to entrepreneurship is the NON-availability
of Al
required capital finance.
: nes i:a
2. Lack of Risk Taking Capacity : Lack of risk taking capacity acts asa major barrier
in entrepreneur. A
ship. To be an entrepreneur, one should have the capacity to take all kinds of risks
related to the business
and its environment.
1
3. Market Entry Regulations : Taxation, governmental rules, licensing mandates, environmental regula-
tions, lending needs can all be barriers towards venture creation.

4. Environmental Barriers : They include the following.

e Lack of adequate resources or raw material
e Non-availability of skilled labour
Lack of requisite machinery and other infrastructure
Unavailability of monetary resources on time These barriers can be easily overcome by studying
the market well enough before taking a decision about the venture. Research, market surveys and
mentor guidance can help overcome such barriers.
5. Lack of a Good Business Plan : A major barrier to entrepreneurship is lack of proper planning and
strategy in place. If a person does not make an action plan, it may lead to a chaotic situation. Havinga
plan to reach the goal helps the person in knowing one's role in running a successful business and pushes
everyone associated with it to work harder.

6. Personal Barriers : |t is easy to get discouraged when something goes wrong in a business. One starts
doubting oneself and may even feel like giving up. One of the best ways to deal with self-doubt is to work
towards one’s goals. Believing in ourselves is the first step towards crushing the fear of failure.
Finding suitable people and training them to put in their best for the business is a tedious and difficult
exercise. As an entrepreneur, one must find people, who think and feel like the rest of the team. When
new people fit into the culture of the team, work can happen better and faster.
So, if you have decided to be an entrepreneur, prepare yourself mentally for surprises and problems
that you may have to handle throughout the entrepreneurial process.
Such mental preparation helps entrepreneurs to handle hard times and to persevere in the realization
of the project all the way to success.

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 4.9 ENTREPRENEURIAL
ATTITUDES
jt is said that “Attitudes det
ermine altitudes” - Do you
agree?
ce jitudes form
way, ot THe the nucl
_ fecting eee and development profile of an individual. An
attitudes provide attitude
something. It can be positive or negative, good or bad.

(i) the necessary motivation (ii) the drive, initiative

(iii) a sense of perseverance
(iv) Commitment
(v) confidence (vi) decisiveness
(vii)ji) organ
org izational Skills
Ski
|
(viii)
iii) iinterpersonal skills

All of these attitudes help a person in facing problems and decision-making. They also help them to
stay optimistic under tough conditions. Thus, by imbibing optimistic behaviour in a
person, the positive
attitudes help them to exhibit the drive and energy to progress towards the
realization of their goal.
Apart from this, attitude also provide the development of the necessary competencies.

1. Entrepreneurial Competencies
Entrepreneurial behavior requires certain knowledge, skills or personality profile. Generally, it is called
entrepreneurial competence or traits. Competency is the ability to do something well. Entrepreneurial
competencies are defined as underlying characteristics possessed by a person, which result in new
venture creation. These characteristics include generic and specific knowledge, motives, traits, self-
images, social roles, and skills that may or may not be known to the person. A competence may be defined
as underlying characteristics of a person which results in effective and/or superior performance in a job.
Entrepreneurial competencies play a key role in the success of an entrepreneur and in achievement of
entrepreneurial goals.
Decisiveness is one of the most important qualities entrepreneurs need. Being decisive means being
able to make decisions firmly and relatively quickly, rather than sitting on them indefinitely or changing
your mind later. It includes making and taking responsibility for, and demonstrating commitment to
appropriate decisions in a timely manner. Ensuring that decisions are made based on policies, rules
and organizational directives and solving the emerging problems.
Initiative is the ability to see and do what is necessary without waiting for somebody to tell you. The
entrepreneur should be able to take actions to go beyond his job requirements and to act faster. He
should be able to be ahead of others and able to become a leader in the field of his business. He should
be able to do things before being asked or compelled by the situation and act to extend the business
into new areas, products or services.
Interpersonal skills are the behaviours and tactics a person uses to interact with others effectively.
In the business world, the term refers to an employee's ability to work well with others. Interpersonal
skills range from communication and listening to attitude and deportment. Interpersonal skills include
interaction with others, good communication skills, active listening skills, teamwork, body language,
responsibility, leadership, patience and attitude.
j
Perseverance is the ability to continue to do something, even when it is difficult. Perseverance can be
summed up to mean you're committed to your goal. Additionally, it enhances the goal’s value for you fi
and intensifies your motivation level.
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 ae ' ee

Organisational skills refers to the ability of making optimal use of one’s time, energy and resources tg
achieve one’s goals. It includes
e Time management is the process of planning and following a conscious control of time spent on
specific activities. It is the ability to use one’s time well.
e Goal makes us work harder, motivates us to complete what we start and achieve the target. |r
gives us direction, and usually, makes us put in more effort.
e Efficiency is the ability to do things well, successfully, without wasting time.
¢ Managing quality in a business means setting and maintaining a standard of excellence for products
or services being provided to customers
Negotiation skills skills for entrepreneurs are critically important to business success. There are a
number of scenarios where an entrepreneur's negotiation skills come into play such as supplier
relations,
customer sales, employee hiring, securing investors etc.
In risk taking entrepreneurs take enough risk but it is a calculated risk. They use risk management
principles to assess the loss and return of the risk.
Team building is any action or method that brings a group of individuals together and motivates them
to work cooperatively as a team.

SUMMARY
An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most
of the rewards.
@ Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise, along
with any of its uncertainties in order to make a profit.
@ Entrepreneurship development refers to the process of enhancing entrepreneurial skills and knowledge
through structured training and institution building programmes.
@ A startup is a young company founded by one or more entrepreneurs to develop a unique product or
service and bring it to market.
@ |mitating Entrepreneurs observe an existing successful system and replicate it in a manner where all the
deficiencies of the original business model are addressed and all its efficiencies are retained.
@ Fabian Entrepreneurs are entrepreneurs that are very careful in their approaches and cautious in adopting
any changes. They are not prone to sudden decisions and try to shy away from any innovations or change
that doesn’t fit their narrative.
@ Drone Entrepreneurs are entrepreneurs who do not like change. They are considered ‘old school’, They
want to do business in their own traditional or orthodox methods of production and systems.

i QUESTIONS
I. Multiple Choice Questions
1. Mary believes that she will not have the ability to work with a team when she starts her business. The barrie! she
iS facinGg, iSSa ole «4heaeee:
(a) getting capital (b) self-doubt (c) risk taking (d) None of these

4 56
 Sayed knows what busine ss he wants to do but does not know what steps he has to take to get
it running. The
barrier stopping him is
(a) building the rightteam (b) lack of plan
. . . Seeder. =

(c) risk taking (d) None of th ese

" es who initiates, creates and manages a new business can be called
2 re (b) A manager (c) An entrepreneur (d) A profession
professiona'alé
Whic corns prOuias an individual with the motivation to start a new business venture?
(a) The financial rewards. eae
(b) Adesire to be independent.
(c) Risk-taking
(d) All these.
p eneurial
Entrepr behavioi r requires
i certaini knowledge, skills or personality profile and it is called as

(a)a) on
Fear of failu ie (b) Entrepreneurial Competence
(c) En ne eee (d) Entrepreneurial Training
aN to continue to do something, even when it is difficult, is called ~~~
__.-_—= == ~~
feat
(a) initiative (b) organisational skills
(c) perseverance (d) None of these
Ruchi decides to sell her company tyres in Sri Lanka. It does not sell and she has a loss. She apologises to the
people who work for her. She says she will plan better next time. She SS
(a) takes responsibility for her mistakes
(b) thinks before making a decision
(c) does not give up
(d) is creative
them to learn about what they’ve
Jyoti has two people who work for her. Every day, she spends one hour with
done that day.
(a) Creates a new product (b) Divides income
(d) None of these
(c) Manages the business
that bulbs are cheaper in Faridab ad. So, she decides
Anuja buys bulbs for her business from Noida. She learns
to start buying bulbs from there.
(b) Divides income
(a) Makes decisions
(d) None of these
(c) Takes risk
:
10. The ability to work with others is
(b) interpersonal skills
(a) organisational skills
(d) None of these
(c) initiative

ll. Short Answer Questions |

neur.
1. Mention some qualities of an Entrepre
2. What is environmental barriers?
2: Who are drone entrepreneurs?
lll. Short Answer Questions II
and science?
1. What is entrepreneurship as an art
2. Define entrepreneurship.
3. Who are fabian entrepreneurs?
57
 1. Explain any two competencies that can be developed through training, experience and guidance in a budding
entrepreneur.
2. Describe a few barriers in entrepreneurship.
3. What do you think are the important functions of an entrepreneur? Write your answer giving suitable examples,
4. Rohan has a successful startup company. According to him ‘Decision Making is considered to be one of the
important entrepreneurial competency’. Do you agree with Rohan’s opinion? Justify.
V. Activity Zone

1. Read any daily newspaper of the last three days and make a list of problems that you think can be solved by
starting a business or through an entrepreneurial project. Which problems did you come up with?
2. What do you think can be the barriers that entrepreneurs may face while running their ventures? Talk to some
entrepreneurs in your area and find out.
3. Read the statements below about different startups of India and how they define themselves. Based on that, and
your own research, enlist the problems that these startups are trying to solve:
(a) Interview Bit is an interview preparation platform, especially designed for software engineers. It provides
support to job candidates via a range of practice questions and on-demand mentors.

(b) Cure.fitis a startup in the fitness and healthcare industry. It has a chain of fitness centres which offer different
types of fitness activities and classes everyday. It also has a part called Eat.fit, where a customer can order
healthy meals everyday.
(c) 1mg is India’s leading consumer health platform by offering an online pharmacy network and generic
medicine engine. It aspires to be the trusted health partner for all Indians and its mission is to make healthcare
accessible, understandable and affordable for all Indians. Users can find information about medicines based
on ailments, class, companies, and brands, and buy them.

(d) EduKartis an online marketplace for education that aims to democratize education and bring more flexibility
into the system. It offers both short certification courses and degree programmes for which it has partnered
with renowned institutions.

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