INTRODUCTION TO ENTREPRENEURSHIP

Learning Objective:
After reading this MODULE, you should be able:
1. To understand the concept and process of entrepreneurship, including identifying business
opportunities, evaluating their feasibility, and developing a business plan.
2. To learn about different types of entrepreneurs, such as lifestyle entrepreneurs, serial
entrepreneurs, and social entrepreneurs, and the characteristics that distinguish them from one
another.
3. To examine the challenges faced by entrepreneurs, such as financing, marketing, and
managing growth, and strategies for overcoming these challenges.
4.To encourage students to think creatively and critically about how they can use their own
ideas and talents to create value and make a positive impact on society through entrepreneurial.

INTRODUCING ENTREPRENEURSHIP

ENTREPRENEURSHIP
Entrepreneurship is the creation or extraction of economic value in ways that generally entail
beyond the minimal amount of risk, and potentially involving values besides simply economic
ones.

ROLE OF ENTREPRENEURSHIP

Standard of living
-Raises Standard of Living. A significant role of entrepreneurship in economic development.

Innovation
-Entrepreneurship is the ability to innovate, whether in an established company, a government
agency or a new business.

Community development
-Promotes community development. Entrepreneurs can help bring unity and build goodwill
among individuals who have common goals and interests.

Exports
-Expanding Exports. As businesses grow, they eventually want to start exporting to expand
their businesses to foreign markets.

Balanced regional development

-Enable Balanced Regional Development. Entrepreneur generally looks for places that are
cheap to set up business which are usually the least develop region .

Create a strategy
-Create a strategy. Preparing a business strategy is a crucial role of an entrepreneur.

Innovator
-Innovator. The entrepreneur plays the role of innovator to drive progress and create a
competitive edge.

Creation of goals
-Develop goals and objectives ... An entrepreneur's responsibility is to determine the goals. An
action plan requires developing to realize the goals.

Financial Manager
-Entrepreneurs must have a firm grasp of financial management.
Improvements in Industry
-Entrepreneurship leads to the development of more industries, especially in rural areas or
regions where there are very few .

Capital formation
-is the process of accumulating resources, such as savings and investments, to fund new
business ventures

Economic Independence
-Entrepreneurship can be a path to economic independence for both the country and the
entrepreneur. It reduces the nation's dependence.

Forecasting business changes

-Most businesses face some kind of uncertainty as they develop.

EXPECTATIONS
It will deal with business, management and financial matters that would be of great help for
each person in the future, no matter what field they may be in. It would also cultivate business-
mindedness, and will help people understand the principles of entrepreneurship in a way that is
simple and can be applied in our lives.

THEORIES OF ENTREPRENEURSHIP

1.Innovation Theory of Schumpeter.

entrepreneur activates the economy to a new level of development.

2.Anthropological entrepreneurship theory.

Anthropologists study people, social groups, their narratives and practices as products and
producers of culture .

3.Entrepreneurial group theory ...

Frank W. Young propounded this theory. It is based on the assumption that expansion of
entrepreneurial activities is possible .

4.Achievement Motivation Theory.

This concept maintains that entrepreneurs are propelled by an ardent ambition for success.

5.Risk Bearing Theory of Knight.

because he undertakes risks. proposes that the more risky the nature of business, the
greater must be the profit earned by it .

6. The creation theory.

suggests that entrepreneurs create opportunities and act on them after estimating the
probability of their success.

7.Attribution Theory.
The notion of this theory is that people would be inspired to look for reasons behind their
triumphs and defeats, as well as the actions .

8.Cultural theory.
Thomas Cochran argued that entrepreneurs are influenced by their own attitudes toward
their occupation, the expectations of groups .
9.Social capital theory
The theory of Cocharn is a sociological theory of entrepreneurial supply.

10.Status withdrawal theory.

This theory argues that entrepreneurial aggressiveness can be created when people of a
certain class lose the prestige

11.Alfred Marshalls Theory of Entrepreneurship.

Alfred Marshall in his Principles of Economics (1890) held land, labor, capital, and
organization as the four factors of production.

12.Hubris Theory.
This theory postulates that entrepreneurs have a higher level of confidence, enabling them to
be more resilient when executing their ideas.

13.Max Webers Sociological Theory.

The sociological theory entrepreneurship holds social cultures as the driving force of
entrepreneurship.

14.Need for achievement.

This theory suggests that people strive for personal achievement to satisfy their inner sense
of accomplishment.

PRINCIPLES OF ENTREPNEURSHIP

1.Choose the Right Team.

When assembling your team, it is imperative to gather a team of individuals with the same
mindset and attitude towards achieving.

2.Have a vision.
As Steve Jobs once put it, “if you are working on something exciting that you really care
about, you don't have to be pushed.

3. Accountability.
As an entrepreneur, you are accountable to the success or failure of your business, not your
employees, investors or advisors.

4.Know Your Customer.

Your customer base determines the life of your business. If you provide solution to better the
world, your customers will increase.

5.Never Give Up.

The never give up attitude is one quality an entrepreneur must possess. Successful
entrepreneurs are goal-getters.

6.Be a Solution Provider.

At first, entrepreneurship is about making more and more money but it is highly associated
with providing perfect solutions

7.Growth and Marketing.

Every successful business grew over the years. Most big companies started small. It was all
a process.
8.Respect for your customers
means also having a passion to help them achieve their goals, whether personal or
business.

9. Capital.
Investors can be easily drawn through good business plans.

10.Imagine a vision of excellence

Using the vision to motivate and challenge yourself and your team · Imagining a vision of
excellence as a source of satisfaction and enjoyment ·

11.Keep learning.
There's always more to learn. The competition doesn't stop learning about new opportunities,
new applications, new technologies, new.

12.Passion
Bounce back with passion. Character is revealed in tough times. Resilience and grit aren't
changeable qualities.

13.Priorities.
In order of importance, you must categorize things for business success. Never deviate and
set priorities according to your goals.

14.Viable Products or Services.

Let the product or services that you are providing must fulfill all the needs and stay
innovative as well as the approach.

FACTORS AFFECTING ENTREPRENEURSHIP

PERSONAL FACTORS
Personality traits such as inner desire for control of their activities, tolerance for risk, high
level of tolerance to function in adverse situations and background experiences such as the
family environment, level of education, age and work history tolerance for ambiguity are
important personal characteristics that affect entrepreneurship.

PERSONAL FACTORS, BECOMING CORE COMPETENCIES OF ENTREPRENEURS,

INCLUDE:

(a) Initiative (does things before being asked for)

(b) Proactive (identification and utilization of opportunities)
(c) Perseverance (working against all odds to overcome obstacles and never complacent with
success) (d) Problem-solver (conceives new ideas and achieves innovative solutions)
(e) Persuasion (to customers and financiers for patronization of his business and develops &
maintains relationships)
(f) Self-confidence (takes and sticks to his decisions)
(g) Self-critical (learning from his mistakes and experiences of others)
(h) A Planner (collects information, prepares a plan, and monitors performance)
(i) Risk-taker (the basic quality).

ENVIRONMENTAL FACTORS
These factors relate to the conditions in which an entrepreneur has to work. If the
environment that a individual is working in is unsatisfactory, that is, not conducive to his growth
needs, it is likely that the individual will quit his job and start his own business as an
entrepreneur. Unsatisfied personal needs for growth and achievement in employment conditions
results in successful entrepreneurship.

POLITICAL
Some researchers felt that the growth of entrepreneurship cannot be explained fully unless
the political set-up of a country is taken into consideration. Political stability in a country is
absolutely essential for smooth economic activity. Frequent political protests, strikes, etc. hinder
economic activity and entrepreneurship. Unfair trade practices, irrational monetary and fiscal
policies, etc. are a roadblock to the growth of entrepreneurship.

SOCIO-ECONOMIC FACTORS
The entrepreneurial activity at any time and place is governed by varying combination of
socio-economic factors. The empirical studies have identified the following socio economic
factors: • Cast/religion Family background • Level of Education • Level of perception Legitimacy
of Entrepreneurship • Migratory character • Social Mobility Social Security Investment capacity •
Ambition/motivation.

ECONOMIC FACTORS
Factors such as availability of finance, labor, land, accessibility of customers, suppliers are
the factors that stimulate entrepreneurship. Capital is one of the most important prerequisites to
establish an enterprise. Availability of sufficient capital affects the introduction, survival and
growth of a business enterprise. Capital is regarded as lubricant to the process of production. If
we increase in capital investment, capital output ratio also tends to increases. This results in
increase in profit, which ultimately goes to capital formation. Due to this capital supply increase,
entrepreneurship also increases.

OTHER FACTORS
• Entrepreneurial Education
• Impact of Services Sector
• Increasing Demand for Variety
• Impact of Ethical Value System
• Internal Control System

1. Entrepreneurship education seeks to provide students with the knowledge, skills and
motivation to encourage entrepreneurial success in a variety of settings.

2.The service sector produces intangible goods, more precisely services instead of goods.

3.When quantity demanded of a commodity increase as a result of the change in other factors
(other than own price of the commodity).

4.help individuals understand the consequences of their actions and provide a framework for
ethical decision-making. When ethical values are integrated into an individual's life, they
promote a sense of accountability and responsibility, encouraging them to act in the best
interests of themselves and others.

5.process, effected by an entity's board of directors, management and other personnel,

designed to provide reasonable assurance: That information is reliable, accurate and timely. Of
compliance with applicable laws, regulations, contracts, policies and procedures.
ENTREPRENEURSHIP AND ECONOMIC DEVELOPTMENT

INTRODUCTION

Entrepreneurship is the practice of setting up a business or setting yourself up as self-

employed in one of the creative industries. The focus of the creative entrepreneur differs from
that of the typical business entrepreneur or, indeed, the social entrepreneur in that she/he is
concerned first and foremost with the creation and exploitation of creative or intellectual capital.
Essentially, creative entrepreneurs are investors in talent of their own or other people's.

Conference of Entrepreneurship, U.S.A: "Entrepreneurship is the attempt to create Value

reate Value through recognition of business oppo opportunity, the management of risk-taking
appropriate toe the opportunity, opportunity and and t through the communicative and
management skills to mobilize human financial and material resources necessary to bring a
project to fruition.

"Robert Hisrich & Michael Peters (2002): "Entrepreneurship is the process of creating
something new with value by devoting the necessary time and effort, assuming the
accompanying financial, psychic, and social risks, and receiving rewards of monetary and
personal satisfaction and independence".

ROLE OF ENTREPRENEUR IN THE ECONOMIC DEVELOPMENT:

• Promotes Capital Formation:

Entrepreneurs promote capital formation by mobilizing the idle savings of public. They
employ their own as well as borrowed resources for setting up their enterprises. Such type of
entrepreneurial activities leads to value addition and creation of wealth, which is very essential
for the industrial and economic development of the country.

• Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale employment to the unemployed which is a

chronic problem of underdeveloped nations. With the setting up of more and more units by
entrepreneurs, both on small and large-scale numerous job opportunities are created for others.
As time passes, these enterprises grow, providing direct and indirect employment opportunities
to many more. In this way, entrepreneurs play an effective role in reducing the problem of
unemployment in the country which in turn clears the path towards economic development of
the nation.

• Promotes Balanced Regional Development:

Entrepreneurs help to remove regional disparities through setting up of industries in less

developed and backward areas. The growth of industries and business in these areas lead to a
large number of public benefits like road transport, health, education, entertainment, etc. Setting
up of more industries leads to more development of backward regions and thereby promotes
balanced regional development.

• Reduces Concentration of Economic Power:

 Economic power is the natural outcome of industrial and business activity. Industrial
development normally leads to concentration of economic power in the hands of a few
individuals which results in the growth of monopolies. In order to redress this problem a large
number of entrepreneurs need to be developed, which will help reduce the concentration of
economic power amongst the population.

• Wealth Creation and Distribution:

It stimulates equitable redistribution of wealth and income in the interest of the country to
more people and geographic areas, thus giving benefit to larger sections of the society.
Entrepreneurial activities also generate more activities and give a multiplier effect in the
economy

• Increasing Gross National Product and Per Capita Income:

Entrepreneurs are always on the lookout for opportunities. They explore and exploit
opportunities, encourage effective resource mobilization of capital and skill, bring in new
products and services and develop markets for growth of the economy. In this way, they help
increasing gross national product as well as per capita income of the people in a country.
Increase in gross national product and per capita income of the people in a country, is a sign of
economic growth.

• Improvement in the Standard of Living:

Increase in the standard of living of the people is a characteristic feature of economic

development of the country. Entrepreneurs play a key role in increasing the standard of living of
the people by adopting latest innovations in the production of wide variety of goods and services
in large scale that too at a lower cost. This enables the people to avail better quality goods at
lower prices which results in the improvement of their standard of living.

• Promotes Country's Export Trade:

Entrepreneurs help in promoting a country's export-trade, which is an important ingredient of

economic development. They produce goods and services in large scale for the purpose
earning huge amount of foreign exchange from export in order to combat the import dues
requirement. Hence import substitution and export promotion ensure economic independence
and development.

• Induces Backward and Forward Linkages:

Entrepreneurs like to work in an environment of change and try to maximize profits by

innovation. When an enterprise is established in accordance with the changing technology, it
induces backward and forward linkages which stimulate the process of economic development
in the country.

• Facilitates Overall Development:

Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an
enterprise is established, the process of industrialization is set in motion. This unit will generate
demand for various types of units required by it and there will be so many other units which
require the output of this unit. This leads to overall development of an area due to increase in
demand and setting up of more and more units. In this way, the entrepreneurs multiply their
entrepreneurial activities, thus creating an environment of enthusiasm and conveying an
impetus for overall development of the area.

CONCLUSION:

Development of entrepreneurship is not always spontaneous. It is very often affected by

environment factors like economic, social, political, psychological, legal and cultural etc. These
or factors may have both positive and negative influences on the emergence and development
of entrepreneurship. A positive influence constitutes facilitative and conducive conditions for the
development of entrepreneurship. In most of the developed countries, the educational system is
designed in such a way that it creates more jobs creators. Type of education prevailing in the
country is also an important factor for entrepreneurship development.
The entrepreneurship is motivated and affected by the following factor i.e. Economic
environment, Social environment, Type of political and technical knowledge, Family
background, Religious and cultural affiliation, Financial condition, Availability of supporting
facilities, Psychological, Government policy and Political environment.

BARRIERS TO ENTREPRENEURSHIP IN 'TANZANIA'

In the early 1990s, Tanzania began implementing structural adjustment programs

recommended by international financial institutions such as the World Bank and IMF, leading to
increased liberalization of markets and privatization of state-owned enterprises. These reforms
created new opportunities for entrepreneurship, particularly in sectors such as agriculture,
manufacturing, and services.

However, progress was slow, and challenges remained, including limited access to
financing, inadequate infrastructure, bureaucratic red tape, and a weak legal system.
Nonetheless, there have been success stories of Tanzanian entrepreneurs who have managed
to overcome these obstacles and build thriving businesses. For example, Said Salim Awadh,
founder of Azam TV, built one of Tanzania's largest media companies, while Ally Edmond
Khana, founder of Mufindi Paper Mills, established one of Africa's first pulp and paper mills.

1. Limited access to finance:

Many entrepreneurs in Tanzania struggle to secure funding for their businesses due to a lack
of collateral, high interest rates, and limited credit history.

2. Inadequate infrastructure:
Poor roads, unreliable electricity, and limited access to technology can make it difficult for
entrepreneurs to operate efficiently and effectively.

3. Bureaucratic red tape:

Starting and running a business in Tanzania often involves navigating complex regulations
and dealing with corruption. This can be time-consuming and expensive, discouraging many
would-be entrepreneurs.

4. Lack of education and skills training:

Many people in Tanzania lack the formal education and technical skills needed to start and
run a successful business.

5. Limited market opportunities:

The domestic market in Tanzania is relatively small, and exporting goods and services can
be challenging due to transportation costs and trade barriers.

6. Cultural attitudes towards entrepreneurship:

 In some parts of Tanzania, starting a business is not seen as a prestigious or desirable
career path, which can deter potential entrepreneurs.

7. Intellectual property rights protection:

Enforcing intellectual property rights in Tanzania can be difficult, making it harder for
entrepreneurs to protect their ideas and inventions from being copied by competitors.

8. Political instability and economic volatility:

Uncertainty surrounding elections and changes in government policies can create an
unstable environment for entrepreneurs, making it difficult to plan for the future and invest in
their businesses.

ENTREPRENEURSHIP PROCESS

-The Entrepreneur is an change agent that arts as an industrialish and undertakes the risk
associated with forming the business of commercial use.

-The entrepreneurship is a continuous process that needs to be followed by an

entreprenuer to plain and launch that new ventures more efficiently.

1.DISCOVERY:

-Process begins with the idea generation,wherein the entrepreneur identifies and
evaluations the business opportunities.

- An entrepreneur seeks inputs from all persons including:

•employees

•sonsumes

•channel partners

•technical people

to reach to an optimum business opportunity.

2.DEVELOPING A BUSINESS PLAN:

-Once the opportunity is ifentified,an entrepreneur needs to create a comprehensive

business plan.

-An entrepeneur must dedicate his sufficient time towarda its creation,the major components
of a business plan are mission and vision statement,goals and objectives,capita requirement,a
description of products and services.

3.RESOURCING:

-The entrepreneur identifies the sources from where the finance and the human resource
cam be arranhed.

4.MANAGING THE COMPANY:

 -Once the funds are raised and the employees are hired,the next step is to iniyiate the
business operations to achieve the set goals.

-First of all,an entrepreneur must decide the management structure or the hierarchy that is
required to solve to solve the operational problems when they arise.

5.HARVESTING:

-The final step in the entrepreneurial process is harvesting wherein,an entrepreneur decides
on the future prospects of the business its growth and development.

-The actual growth is compared against the planned growrth and then the decision
regarding the stability or the expansion of business operations is undertaken accordingly,by ann
entrepreneur.

•The entrepreneurial process is to be followed,again and again,whenever any new venture

is taken up by an entrepreneur, therefore,its an ever ending process

Entrepreneur: Definition and Concept

ENTREPRENEUR

An entrepreneur is an individual who starts their own business based on an idea they have
or a product they have created while assuming most of the risks and reaping most of the
rewards of the business.

CONCEPT OF ENTREPRENEUR
•Risk Bearer
•Organizer
•Innovator

TYPES OF ENTREPRENEUR

《Membership Business Entrepreneur or Creator

There's a new sheriff in town, the membership business entrepreneur, also known as a
creator or founder. This type of entrepreneur is extremely popular because earning monthly
recurring income is one of the most appealing and lucrative types of revenue. Think about it.
Every month, you automatically get paid as long as you consistently deliver quality digital
products. Popular digital products include: Newsletters Paid Podcasts Content Libraries Videos

《Small Business Entrepreneur

You know that local restaurant that you take visitors to when they come to town? Or your
favorite coffee shop that you pop into every morning before work? Those are owned by small
business entrepreneurs. Many of the businesses that you know and love are small businesses,
or at least started out as one.

A small business is independently owned and operated and doesn't have plans to expand
into a large company. According to the U.S. Small Business Administration (SBA), there are
32.5 million small businesses in the US as of 2021.
 One example of a small business is The Social Broker. The Illinois-based small business
empowers real estate agents to build a polished & thriving online brand. They provide monthly
content plans with daily post ideas, images, graphics, and captions. There's a curated library of
photos along with editable templates, all provided via their Social Broker Membership.
Everything The Social Broker does is an independent decision made by a small
businesentrepreneurur.

《Large Business Entrepreneur

The opposite of a small business owner, a large business entrepreneur refers to the leaders
of large companies and corporations such as Microsoft or Disney. These types of entrepreneurs
are often C-level executives like a CEO.

A large company is different from a small business in that its goal is to expand by developing
new products or services buying smaller companies or even to meet consumer demand. The
goal of a large business entrepreneur is to lead the initiatives that will help the company
increase its market value. To be a large business entrepreneur, it helps to be strategic and have
the ability to focus on high-level goals.

《Startup Entrepreneur

While the term 'startup' is often associated with Silicon Valley, you don't need to reside in the
tech hub to be a startup entrepreneur. A startup entrepreneur is the founder of a scalable
company. Startups are often technology focused and are either bootstrapped or rely on funding
from outside investors.

Examples of startups include: Canva, Airbnb, Square, and Uber, to name a few.

Even if you aren't the founder of a tech startup, there are still ways to get involved with this
type of entrepreneurship.

If you want to be a startup entrepreneur or get involved in the startup industry, you have to
have an idea for a scalable solution, be scrappy, and be willing to put in a lot of hard work
before you see results.

《Solo Entrepreneur

A solo entrepreneur, or solopreneur as they're often referred to, is someone who operates a
one-person business. Similar to a small business entrepreneur in that they are independently
owned, a solopreneur doesn't work with partners. These types of entrepreneurs often run
service-based businesses like consulting, coaching, or freelancing. Solopreneurship has grown
tremendously over the last few years as more people desire autonomy in their careers. In fact,
freelancers currently make up 36% of the workforce and the personal coaching industry is
valued at over $1 billion.

A great example of a solopreneur is Inge Hunter, an Instagram marketing specialist. In

addition to offering 1:1 consulting, Hunter has also built a membership hub that offers numerous
social media and content resources and workshops for her community.

Though solopreneurs work independently, there are countless business opportunities for
them to pursue.

CHARACTERISTICS AND SKILLS OF ENTREPRENEUR

1. Communication:

Every entrepreneur needs to be an effective communicator. Whether a person is a solo

entrepreneur or runs a Fortune 500 company, they need to understand how to communicate
effectively to all stakeholders and potential stakeholders that touch the business.

It is imperative for an entrepreneur to be able to communicate with employees, investors,

customers, creditors, peers, and mentors. If an entrepreneur cannot communicate the value of
their company, it's unlikely the company will be successful.

They also need to master all forms of communication, including one-on-one and in-person
conversations, group conversations, written communication, and email or online messages.

2.Sales:

The soft skill of sales goes hand-in-hand with the communication necessary to be
successful. As an entrepreneur, this person needs to be able to sell anything and everything. An
entrepreneur needs to sell the business idea to potential investors, the product or service to
customers, and themselves to employees.

If an entrepreneur is able to communicate effectively, they are better equipped to sell their
ideas and physical products.

In the beginning, it's natural for entrepreneurs to be the first salespeople at their respective
companies. Those sales skills are necessary to demonstrate value for all stakeholders inside
and outside the company.

3.Focus:

The path to successful entrepreneurship is riddled with ups and downs. There are the highs
of successes and the despairs of setbacks. A successful entrepreneur needs to be able to focus
so they can stay the course when the going gets tough.

This skill can also be thought of as thinking with the end in mind. No matter what struggles an
entrepreneur goes through, a successful entrepreneur has the focus necessary to keep an
unwavering eye on the end goal and can push himself to achieve it.

4. Ability to Learn:

The ability to learn is one of the most important skills to have in life, let alone in
entrepreneurship. If someone is building a business, however, the ability to learn is required for
success.

The ups and downs an entrepreneur goes through are unavoidable. An entrepreneur needs
a high ability to learn-and a desire to learn. If a person is able to learn in any situation, even
failure, they have the skills necessary to become a successful entrepreneur. Failure can help
expand one's knowledge and understanding of business.

5.Business Strategy
 While a successful entrepreneur has, by definition, built a successful company, the skill of
business strategy is actually the fifth most important skill that an entrepreneur needs. Often,
entrepreneurs achieve success in their businesses through their own sheer strength of will.

By employing effective communication skills, sales skills, a deep focus, and a high ability to
learn, an entrepreneur can actually learn a business strategy on the fly. When structuring and
growing a business, however, it's important that the structure and growth strategy is based on
sound business sense and skills. A successful entrepreneur needs to have a solid strategy to
take their business from good to great.

FUNCTIONS TO ENTREPRENEUR

Function # 1. Decision Making:

The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is

to determine what to produce, how much to produce, how to produce, where to produce, how to
sell and' so forth. Moreover, he is to decide the scale of production and the proportion in which
he combines the different factors he employs. In brief, he is to make vital business decisions
relating to the purchase of productive factors and to the sale of the finished goods or services.

Function # 2. Management Control:

Earlier writers used to consider the management control one of the chief functions of the
entrepreneur. Management and control of the business are conducted by the entrepreneur
himself. So, the latter must possess a high degree of management ability to select the right type
of persons to work with him. But, the importance of this function has declined, as business
nowadays is managed more and more by paid managers.

Function # 3. Division of Income:

The next major function of the entrepreneur is to make necessary arrangement for the
division of total income among the different factors of production employed by him. Even if there
is a loss in the business, he is to pay rent, interest, wages and other contractual incomes out of
the realised sale proceeds.

Function # 4. Risk-Taking and Uncertainty-Bearing:

Risk-taking is perhaps the most important function of an entrepreneur. Modern production is

very risky as an entrepreneur is required to produce goods or services in anticipation of their
future demand.

Broadly, there are two kinds of risk which he has to face. Firstly, there are some risks, such
as risks of fire, loss of goods in transit, theft, etc., which can be insured against. These are
known as measurable and insurable risks. Secondly, some risks, however, cannot be insured
against because their probability cannot be calculated accurately. These constitute what is
called uncertainty (e.g., competitive risk, technical risk, etc.). The entrepreneur undertakes both
these risks in production.

Function # 5. Innovation:

Another distinguishing function of the entrepreneur, as emphasised by Schumpeter, is to

make frequent inventions invention of new products, new techniques and discovering new
markets to improve his competitive position, and to increase earnings.
ROLE OF ENTREPRENEURS

The role of entrepreneur encompasses a wide range of responsibilities and tasks. Here, we
will delve into the various roles entrepreneurs undertake to achieve their goals and drive their
businesses forward.

1.Innovator

The entrepreneur plays the role of innovator to drive progress and create a competitive edge.
They identify opportunities, generate ideas, and develop new products or services.
Entrepreneurs bring about positive change by introducing unique solutions or disrupting existing
markets. Through their innovative mindset and ability to think outside the box, they challenge
norms, embrace risks, and pioneer advancements. Entrepreneurs play a crucial role in shaping
industries, driving economic growth, and improving lives through innovative endeavours. For
example: An entrepreneur as an innovator could be someone who creates a new mobile app
that revolutionizes the way people connect and communicate.

2.Provide Employment Opportunities

The role of entrepreneur extends beyond just providing goods and services. Successful
entrepreneurs utilize their business strategies and innovative approaches to stimulate economic
development and create employment opportunities. By establishing and growing their
businesses, they contribute to capital formation, attracting investments and mobilizing resources
that lead to further economic growth. For instance, an entrepreneur starting a manufacturing
company may attract investors and secure funding to set up a factory, creating job opportunities
for the local community.

3.Strategic Business Planning

To fulfil their role effectively, entrepreneurs engage in strategic business planning. They are
visionaries with a clear and compelling vision for their business. They develop comprehensive
business plans that outline their vision, goals, and strategies for success. Entrepreneurs also
utilize various marketing channels, such as digital marketing, social media, and traditional
advertising, to reach their audience and build brand awareness.
These plans serve as roadmaps for their entrepreneurial journey, guiding their decisions and
actions. By envisioning a better future, entrepreneurs inspire their teams and stakeholders,
providing a sense of purpose and direction.

For example: an entrepreneur interested in starting an e-commerce business may create a

business plan that includes market analysis, competitive positioning, marketing strategies, and
financial projections.

4.Problem Solver

The ability of entrepreneurs to adapt to changing circumstances and demonstrate resilience

is another important aspect of an entrepreneurial role. They encounter numerous challenges
along their journey. They must be adept problem solvers who identify issues, analyse situations,
and find effective solutions. Challenges and setbacks they may face, such as operational
inefficiencies, conflicts within the team, market changes, etc. Successful entrepreneurs pivot
their strategies, explore new markets, and seize new business opportunities. They approach
problems with a proactive and solution-oriented mindset. This adaptability ensures the long-term
sustainability and growth of their ventures.
 For example: if an entrepreneur's initial business model faces obstacles, they may modify
their product or service offering to align with customer preferences and market demands.

5.Risk Taking

The role of an entrepreneur as a risk-taker is crucial in the business world. Entrepreneurs

willingly embrace uncertainty and make decisions despite potential losses or failures. They
understand that taking risks is inherent in pursuing opportunities and driving innovation.
Entrepreneurs invest their time, resources, and personal capital into their ventures, accepting
the possibility of failure to achieve success. Their willingness to take calculated risks allows
them to challenge the status quo, explore uncharted territories, and seize opportunities others
may shy away from. By embracing risk, entrepreneurs pave the way for growth, innovation, and
the potential for significant rewards.

For example: An entrepreneur as a risk-taker might be someone who quits their stable job to
pursue their passion and start their own business, despite the uncertainty and financial risks
involved.
ENTREPRENEURAL FAILURE

1. Not Having Enough Money

Let's start with the simplest and most straightforward reason any business fails: lack of
money. Whether they self-finance, get a bank loan or take the "Shark Tank" approach and get
partners and investors, many businesses fail before really getting started because they are not
prepared with the capital it takes to operate a new business.

2. Not Knowing Your Market

Who are your clients? Who is your competition? What is your target market willing to pay for
your product or service? Entrepreneurs must be able to answer these and many more questions
about their market in order to run a successful business. If you do not fully understand who your
customers are, what they want and where else they can get it, you will be doomed to fail.

3. Lack Of Vision

The mark of a good leader is not only having a vision but imparting that vision to others in a
way that makes them want to come with you on the journey. Businesses without well-thought-
out, long-term and short-term goals will fail because they don't have clear success benchmarks
along the way.

4. Trying To Be Everything To Everybody

Many new businesses are quick to chase money or a sale by adding products or services
that they do not truly specialize in. Companies that know what they do well (and what they don't)
and stick to that last longer than businesses that try to become a jack-of-all-trades yet master of
none.

5. Not Enough Marketing

You can have the best product or service in the world, but if nobody knows about it, you
won't succeed. You need to get your name out there and let people know about the benefits of
your business. If you cannot reach your audience, you cannot find success.
 One of the most effective forms of marketing is word-of-mouth marketing. It's a form of
advertising that comes directly from satisfied customers. Why does it work so well? Most
consumers will believe a recommendation from a good friend or family member much faster
than any ad or marketing strategy.