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The Concept Entrepreneur

Objectives:
After studying this unit, you should be able to ;
1. Understand the meaning of entrepreneur
2. Describe the different types of entrepreneur
3. Explain the functions of entrepreneur
4. State the qualities of a successful entrepreneur
5. Outline the reasons for entrepreneur failure.
DEFINITION OF ENTREPRENEUR

Entrepreneur defined as the innovative individual who


perceives business opportunities and organizes the
required resources to initiate a successful business
activity for profit. Drucker (1985)
An entrepreneur is one who creates a new business in
the face of risk and uncertainty for the purpose of
achieving profit and growth by identifying significant
opportunities and assembling the necessary resources
to capitalize on them.
TYPES OF ENTREPRENEURS

Innovative Entrepreneur
Innovative entrepreneurs are motivated by the idea of
doing something new. They welcome the advancements in
science, technology and research fields.
Imitative Entrepreneurs
They do not innovate but imitate the products and policies
of innovative entrepreneurs functioning in developed
country.
Fabian Entrepreneurs
These entrepreneurs take great precaution and are of
suspicious mind in experimenting any change in their
enterprises.
They do not welcome the changes.
They are lazy and indifferent towards the enterprise.
They have moderate ambitions.
They are happy in carrying on their family business in a
traditional manner.
Drone Entrepreneurs
 These entrepreneurs stick up to the old values, customs and
traditions.
 They are not willing to effect changes in their enterprise,
rather they oppose such changes.
 They blindly follow the traditional methods of business even
when it causes loss to them.
First generation Entrepreneurs
 These entrepreneurs have no entrepreneurial background.
 They do not inherit entrepreneurship from their earlier
generation.
 They are first generation entrepreneurs in their family.
Rural Entrepreneurs
 These entrepreneurs are having their enterprises in rural area.
 They are engaged mostly in traditional businesses, agriculture
and village industries.
 They utilize the natural resources available in local place and
manufacture the goods required by the society.
Individual Entrepreneurs
These entrepreneurs start an enterprise by investing own funds
and manage it themselves. If required, they employ a few
employees.
They are sole operators. These entrepreneurs are found on a
large scale in small business, small industries, village and
cottage industries.
QUALITIES OF SUCCESSFUL ENTREPRENEURS

Ambition
Successful entrepreneurs have high ambitions about their
venture. They want to achieve high goals in business.
They are able to overcome the obstacles in their business and
find out new ways and means.
Creativity
Successful entrepreneurs are creative or innovative in their
task.
They do new things, manufacture new goods, find new sources
of materials, use new methods of production, and search new
markets and so on.
Self-confidence
Successful entrepreneurs have confidence in their skills and
abilities.
They are sure about success in their business.
They do not hesitate to launch new products, expand and
diversify their business.
They are confident of overcoming any unanticipated
problem and survive in the adverse conditions
Motivational ability
The successful entrepreneurs have ability to motivate the
employees. Motivational ability is also required for getting the
expected response from the customers, vendors and the
government.
Foresight
They forecast the future business environment.
Foresight helps them to cope up with future environment
effectively and stay ahead of others in the industry.
Decision-making ability
The successful entrepreneurs have a good decision making
ability.
They make decisions promptly and accurately.
The decision making ability helps them to solve the
business problems satisfactorily and exploit the
opportunities.
Courtesy
The successful entrepreneurs deal with the customers,
vendors, employees, government officials and the general
public in a courteous manner. Courtesy and modesty leads
them to success.
Communication skill
With good communication skill entrepreneurs are able to
convince effectively their ideas, thoughts and job
requirements to the employees and get the work done in a
better manner
FUNCTIONS OF ENTREPRENEURS

The entrepreneurs have to perform a number of functions


while starting and running an enterprise
Innovation
Innovative entrepreneurs usually comes up with introduction
of new products, adopting new technology, opening a new
market or discovering a new source of raw materials, creating
a monopoly in the industry or breaking the existing monopoly.
Decision making
The entrepreneur has to take decision as to selection of site,
nature of product, technology to be used, raising of capital,
expansion of business etc
Idea Generation
Entrepreneurs have to generate as many ideas as he can for the
purpose of selecting the best business opportunities which can
subsequently be taken up by him as a viable business venture.
Organizing and Management
An entrepreneur brings together various resources of production,
organizes them properly and converts them into a productive unit
with a view to achieve the business goals
Risk Assumption
 Risk bearing is second important function of an
entrepreneur. There is a risk in every enterprise.
 The risk may arise due to natural calamities, changing
government policy, changing tastes of customers,
increasing competition etc.
 The entrepreneur has to bear all these risks and
uncertainties in business. The entrepreneur should take a
calculated risk.
THE CAUSES OF ENTREPRENEUR FAILURE

Many entrepreneurs fail due to several problems


Inadequate Management of Finance: Sometimes
entrepreneurs are more concerned about raising the fund,
they are less concerned about utilization of funds.
Lack of Appropriate Information: Quality information is
always have some cost and small ventures may not be able to
invest so much in getting the high-quality information.
Shortage Trained or Experienced Manpower: Lack of
experienced and skilled manpower can lead to a general drop
in productivity and quality of output.
Weak Promotional Efforts: Entrepreneurial firms are very
reluctant to spend on promotional activities.
Improper Price Management: Improper management of
price creates a lot problem to entrepreneur as price is directly
associated with the volume of sales.
Lack of Strong Business Relationship: Relationships with
vendors, creditor, venture capitalist, customers, and others is a
huge advantage to established businesses, poor relationship
cause the venture to decline.