Lec 2: Concept, importance of

Enterpreneurship and Enterprise

Copyright@Ashis Kumar Pradhan

 Who is an Enterpreneur
• An entrepreneur is capable to express and execute the urge, skill, motivation and
innovative ability to establish a business or industry of his own, either alone or in
collaboration with someone else.
• His motive is to earn profit through the production or distribution of goods or services.
Adventurism, willingness to face risks, innovative urge and creative power are the
inborn qualities of entrepreneurship. Entrepreneurship can also be
explained as a process of executing a work in a new and better way.
• Definition: Peter F. Drucker defines an entrepreneur as one who always
searches for change, responds to it and exploits it as an opportunity.
Innovation is the specific tool of entrepreneurs, the means by which they
exploit change as an opportunity for a different business or service.
Flow Diagram of an Entrepreneur
 Characteristics of an Entrepreneur
• Vision : An entrepreneur has a dream and he visualizes the ways and means to achieve dream. In doing so he visualizes :
– Market Demands
– Socio-Economic
– Technological Environment
• And then based on these dynamic, he visualizes a future for his business venture.
• Knowledge : An entrepreneur has full knowledge about all the technicalities of his business- be it technological, operational, financial or market dynamic.
• Desire to succeed : An entrepreneur has a strong desire to succeed in life. Their dreams are not just limited to achieving one single goal but they
constantly work to achieve higher goals.
• Independence : An entrepreneur needs independence in work and decision-making. They don't follow the rules of thumb but make their own rules and
destiny.
• Optimism : Entrepreneurs are highly optimistic about achieving their vision.
• Value Addition : Entrepreneurs do not follow the conventional rules of thumb. They have a constant desire to introduce something new to the existing
business. They create, innovate or even add value to the existing products/services.
• Leadership : An entrepreneur exhibits the qualities of leader. They are good planner, organizers, have good communication skill, good decision makers,
take initiative to implement plans and are result-oriented.
• Hardworking : At times they are called workaholics. Work is worship for then. They put in continuous efforts to achieve success and know that there is no
substitute for hark work.
• Risk-Taking Ability : Risk is an inherent and inseparable element of entrepreneurship. He assumes the uncertainty of future. An entrepreneur guarantees
rent to the landlord, wages to employees and interest to the investor in the hope of earning more than the expenses.
Traits of an Entrepreneur
 Types of Enterpreneur
• Classification on the Basis of Ownership :
• Founder or "Pure Entrepreneurs" : Those individuals who are the founder of the business. They are the ones who
conceptualize a business plan and then put in efforts to make the plan a success.
• Example : Dhirubhai Ambani of the Reliance Group.
• Second-generation operators of family-owned business : They are individuals who have inherited the business from their
fathers and forefathers.
• Example : Like Mukesh Ambani and Anil Ambani sons of Dhirubhai Ambani of the Reliance Group now split into two:
Reliance Industries Limited and Reliance-Anil Dhirubhai Ambani Group.
• Franchisees : It is a method of doing business wherein the parent owner licenses his trademarks and tried and proves methods
of doing business to a franchisee in exchange for a recurring payment.
• Example : NIIT has given its franchisee operations to local players after thorough scrutiny and proper training.
• Owner-Manager : When a person buys a business from the founder and then invests his time and resources in it he is called
the owner-manager.
• Example : Like Sabeer Bhatia is the founder entrepreneur of Hotmail.
 Types of Enterpreneur
• Classification on the basis of Personality Traits and their style of running the business :
• The Achiever : These types of entrepreneurs have personal desires to excel. The only drive that pushes them is the desire
to achieve something in life, the desire to make a mark in society, the desire to prove their excellence. They do not need
any external stimulus but are self-driven.
• The Induced Entrepreneur : These types of entrepreneurs are induced by some external factors to start a business. The
external factors could be like:
• Government Policies
• Unemployment
• Family Support
• Facilitating Institutional Support etc.
• The Idea Generator : These kinds of entrepreneurs are highly creative people who are always in search of innovative
ideas for setting up new business ventures. They enjoy the First Movers' Advantage and are able to skim higher profits
from the market.
• The Real Manager : The real managers run the business in a systematic manner. They analyse business situation, assess
the demands of future, both in terms of opportunities and threats and then take actions based on the above assessments.
• The Real Achievers : The real achievers are full of life. They are looking for the achievement of not even their goals but
also of people associated with themselves like employees, suppliers and distributors
 Types of Enterpreneur
• Classification based on the type of Business :
• Industrial Entrepreneur : Industrial entrepreneur is an entrepreneur who is into manufacturing of a product. He identifies
the needs and wants of customers and accordingly manufactures products to satisfy these needs and wants.
• Trading Entrepreneurs : Trading entrepreneur is one who undertakes trading activities and is not concerned with the
manufacturing of products. He identifies potential markets, stimulates demands and generates interest among buyers to
purchase a product.
• Corporate Entrepreneur : Corporate entrepreneur is a person who demonstrates his innovative skill in organizing and
managing a corporate undertaking which is registered under some act that given it a separate legal entity.
• Agricultural Entrepreneur : Agricultural entrepreneurs are those entrepreneurs who undertake business related to
agricultural activities. Like farm equipment, fertilizers and other inputs of agriculture.
 Types of Enterpreneur
• Classification on the Stages of Development :
• First Generation Entrepreneur : A first-generation entrepreneur is one who starts an industrial unit by means of an
innovative skill. He is essentially an innovator combining different technologies to produce a marketable product or service.
• Modern Entrepreneur : A modern entrepreneur is one who undertakes business to satisfy the contemporary demands of the
market. They undertake those ventures which suit the current socio-cultural trends.
• Classical Entrepreneur : A classical entrepreneur a stereo-type entrepreneur is one whose aim is to maximize the economic
returns at a level consistent with the survival of the firm, with or without element of growth.
 Types of Enterpreneur
• Other types of Enterpreneur:
• Innovative Entrepreneur : Innovative entrepreneurs are full of creative ideas and offer innovate products to the
society. It is because of these innovative entrepreneurs that many important changes occur in our society.
• Imitative Entrepreneurs : Imitative entrepreneur adapt a successful innovation. They are risk-aversive and so they
do not try out new ideas or products.
• Drone Entrepreneurs : Drone entrepreneurs are not open to creativity and change. They do not like changing the
working of organizations with the changing times.
• Copreneurs : When both husband and wife together start and run a business venture then they are called copreneurs.
• Thanks