Professional Documents
Culture Documents
UNIT-I
INTRODUCTION- CONCEPT
Entrepreneur is a person who creates an enterprise. The
process of creation is called as “entrepreneurship”.
The word “entrepreneur” is derived from the French
Verb enterprendre, means ‘to undertake’. This refers to
those who “ undertook” the risk of new enterprises.
Entrepreneurship can be defined as a process of action an
entrepreneur undertakes to establish his enterprise.
DEFINITIONS OF AN ENTREPRENEUR
An individual who bears the risk of operating a
business in the face of uncertainty about the
future conditions.- Encyclopedia Britannica
He searches for change, responds to it and
exploits opportunities. Innovation is the specific
tool of an entrepreneur.- Peter F. Drucker
He is the one who innovates, and introduces
something new in the economy- Joseph A.
Schumpeter
SKILLS REQUIRED IN ENTREPRENEURSHIP
I Technical Skills
Writing
Oral Communication
Monitoring Environment
Technology
Ability to organize
Coaching
CONTD…
II Business Management skills
Planning and goal setting
Decision making
Human relations
Marketing
Finance
Accounting
Control
Management
Venture Launch
Negotiation
CONTD…
III Personal Entrepreneurial skills
Inner control/ disciplined
Risk taker
Innovative
Change oriented
Visionary leader
Organisation building
EMERGENCE OF ENTREPRENEURIAL CLASS
Nishant
Fabian entrepreneurs: such entrepreneurs are very
conscious and afraid of adopting any change. They are
very lazy and shy and lack the will to adopt new
techniques and methods.
Drone entrepreneurs: drone entrepreneurs are
characterized by refusal to adopt and use opportunities
to make changes in production. They stick to
conventional ideas and products. When their product
loses marketability and their operations become
uneconomical, they are pushed out of the market.
Nishant
BENEFITS OF ENTREPRENEURSHIP
1. Opportunity to get control.
Owning a firm or a business endows the
entrepreneurs with the independence and opportunity
to control their own business. They can aim to achieve
targets that are important to them. Entrepreneurship
provides entrepreneurs a chance to take decisions
according to their own wishes.
2. Offers a chance to make a difference
Some people begin and put a lot of effort just to make
a difference in society. This has given rise to the
concept of social entrepreneurship, which is a recent
phenomenon. Such people search for opportunities to
serve a cause that is significant to them and try to
find pioneering solutions to some of the most pressing
and challenging problems of society.
3. To reap high Profits
Reaping high profits by being an entrepreneur is one of the
most important factors that motivate people to become one
and take up all the challenges associated with it. The profits
their companies and businesses make play a vital role in any
decision made by entrepreneurs. Owning a business or a
firm is the best way towards accumulation of wealth.
4. Helps people work to their full potential
Many entrepreneurs find their work to be extremely
enjoyable. They consider their business as an instrument of
self-actualization and self-expression. Owning a firm or a
business acts as a test for the creativity skills, abilities, and
determination of an entrepreneur and is taken up as a
challenge towards success.
5. Offers a chance to pursue their interests.
Most entrepreneurs don’t believe their work to be actual
work. Most of them establish businesses closely associated
with their interests. As such, there is no particular age for
retirement of entrepreneurs.
With all these benefits people now consider the alternative
of running their own small businesses rather than doing jobs
for others.
POTENTIAL DRAWBACKS OF ENTREPRENEURSHIP
Uncertainty of Income
There are no guarantees that an entrepreneur will make
enough money to survive. Some small businesses barely
make enough to pay the owner-manager with adequate
income.
Risk of Losing Invested Capital
When a business fails it can be financially and emotionally
devastating. People contemplating entrepreneurship
should decide how much they are willing to risk.
Long Hours and Hard Work
The average small business owner works 52 hours per
week. In many start-up business, 10 - 12 hour work days on
6 - 7 days of the week with no paid vacations is the norm.
Because owners must often do everything themselves, they
experience long, intense, draining work days.
Lower Quality of Life Until the Business is
Established
Long hours and hard work can effect the entrepreneur's
outside life. Business owners often put their role as company
founder ahead of their role as husband, wife, or parent.
High Levels of Stress
Most entrepreneurs make significant investments in their
companies; they leave behind a steady paycheck, and
mortgage everything to get into business. Failure can mean
total financial failure as well as a psychological blow. This
creates high levels of stress and anxiety.
Complete Responsibility
Entrepreneurship is highly rewarding, but many
entrepreneurs find that they must make decisions on issues
they are not very knowledgeable about. When there is no one
to ask for answers, the pressure can build quickly. The
knowledge that these decisions could decide the success or
failure of a business can have a devastating effect on the
business owner.
Discouragement
Launching a business requires much dedication and
discipline. Entrepreneurs may run into many obstacles,
some may even appear to be insurmountable.
7 DISADVANTAGES OF BEING AN ENTREPRENEUR
You will not get a regular monthly salary – how much you
make will depend on how good business is.
You risk losing everything you have worked for – some of the
most successful business owners have failed before. You can
always make a comeback.
Successful business owners have all failed at some time in
their life. Failing is sometimes good for an entrepreneur, as
long as they learn from the experience.
Inexperience – you will have to learn a whole lot of new
skills. You can fast track this by attending business courses
and consulting a mentor or good business advisor.
A change in lifestyle – you will be working long hours
initially. As your business develops and you become more
organised, your lifestyle improves dramatically.
You can’t pass the buck – you are responsible for every
decision you make in your business, good or bad. Bad
decisions can cost a lot of money.
You have to be a Jack or Jill of all trades initially. You have
to understand a little about each section of your business.
THE CULTURAL DIVERSITY OF ENTREPRENEURSHIP
Entrepreneurs are found virtually every walk of
life. This includes:
Young Entrepreneurs
Women Entrepreneurs
Minority Enterprepreneurs
Part–time Entrepreneurs
Family Businesses
Corporate Dropouts
Copreneurs
Corporate Castoffs
Social Entrepreneurs
Retired Baby Boomers
There is not a set “profile” for entrepreneurs. This
is a group that is diverse in every way and
appreciating these types of entrepreneurs
illustrates this variety of people and lifestyles.
Limited investment
Simple technology
Optimization of capital
Exchange earnings
Egalitarian society
Social advantage
SCOPE OF SMALL BUSINESS
Manufacturing
Wholesale Trade
Retail Trade
Services
RATIONALE OF SMALL BUSINESS
Limited Demand
Specialised service
Flexibiltiy
Employee relations
Direct motivation
PROBLEMS OF SMALL BUSINESS
Shortage of Material and Power
Lack of Adequate Finance
Outdated technology
Protective Measures
More than 800 products have been reserved for
exclusive production in small sector (Buckets,
Cotton Ropes, Drawing & Mathematical
Instruments, Pickles & pappad)
Cess has been imposed on certain products of
organized sector
Legislative protection to small scale industries
Promotional Measures
Scarce & imported raw materials provided at
reasonable prices & priority basis (e.g. steel)
Industrial estates: industrial sheds at
concessional rates
Central & state government extends preferences
in the purchase of goods from SSI
Increasing sum of money allocated for SSI
developments in five year plans
Providing assistance in various matters by
National Small Industries Corporation, Central
Small Industries Organisation
SIDBI: Small Industries Development Bank of
India
SIDF: Small Industries Development Fund
Institutional Arrangements
NSIC- National Small Industries Corporation
1. Management mistakes
2. Lack of experience
3.Poor financial control
4.Weak marketing efforts
5. Failure to develop a strategic plan
6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
10.Inability to make the “entrepreneurial transition”
HOW TO AVOID THE PITFALLS
Know their business in depth.
Develop a solid business plan in writing.