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MEANING Entrepreneur is an organizer of a business firm central to its distributive and productive function. Entrepreneur are specialized group of persons who bear risk and deal with uncertainties Entrepreneur is an economic man who tries to maximize his profits by innovations. Innovation involves problem solving and entrepreneur gets satisfaction from using capabilities in attacking problems.
EVOLUTION OF ENTREPRENEURSHIP
1. Earliest period : Marco polo is an early example of an entrepreneur who attempted to establish trade route to far east. Marco polo would sign contract with money person to sell his goods. A common contract for taking loan stated that trader had to pay interest of 22.5 % for the loan. Which includes insurance. When the merchant adventurer would successfully sell the goods and complete the trip profit were divided into two parts of which capitalist would gain 75% of profit and trader would end up getting 25 % of income. 2. Middle ages : in middle ages entrepreneur were more described as actor, person, manager. His job was to manage large production projects. He was merely managing the business while the risk was borne by the government of the country and not the entrepreneur. A typical entrepreneur in middle ages were the clerk in charge of great architecture.
Evolution of entrepreneurship
profit or loss incurred through the business had to be borne by entrepreneur. 17th century manager : emerging connection of risk with entrepreneurship developed with 17th century.3. In this stage entrepreneur entered in contract with government were payment to be made to capitalist was fixed and after fixed payment. ENTREPRENEUR 6 .
He was the first person to recognize the role of entrepreneur in economic theory. He developed one of the early theories of the entrepreneur and is regarded some as the founder of the term. He viewed entrepreneur as risk taker.g. Richard Cantillon a noted economist and author in 1700 understood laws mistake. He stressed on the entrepreneur and not his personality. ENTREPRENEUR 7 . E.
E. ENTREPRENEUR 8 . J B Say broadened the concept of entrepreneur and included the concept of combining the factors of production. Many inventions developed during the period were reactions to the changing world.g. During this period entrepreneur were divided into two persons a.4. Edison raised capital from private sources to develop and experiment in the field of electricity and chemistry. Person with capital b. Therefore both were entrepreneur looking for venture capitalist to finance their inventions. Similarly Whitney had to finance his invention of cotton gin from expropriated British crown property. Person who needed capital Major reason for such differentiation was due to the industrialization occurring throughout the world.
He pays current prices for the materials consumed in the business. d.5. b. 19th and 20th century : during this period entrepreneur were not distinguished from mangers and were viewed mostly from managers and from economic perspective in following manner : a. skill. He contributes his own initiative. He assumes the chance of loss and gain consequent to uncontrollable factors. ENTREPRENEUR 9 . c. He organizes and operates the enterprise for his personal gains. in planning. organizing and administering things in company.
He was the one who came up the unique concept in the market. Opening new source of supply of raw materials or new change outlet of products Performing these functions by organizing new industry. During the period of 20th century entrepreneur was seen as innovator in the economy. d.. c. b. a.. Cont. ENTREPRENEUR 10 . He performed following functions as entrepreneur : To revolutionize the pattern of production by exploiting inventions. To perform pattern of production by exploiting technological method of producing new commodity or old commodity in new patter..
b. Concept of innovation and newness is the integral part of entrepreneur which not only requires the ability to create and conceptualize but ability to understand forces at work environment. d. ENTREPRENEUR 11 . The newness in the concept can be in the following ways : Introduction of new or quality goods Introducing new method of production Utilization of new source of raw material Carrying out new organizational form of industry. c. a.
Creativity is the ability to bring some thing new into existence. Action oriented and searching for new ideas b. Learning from failures e. Following principles of innovation have emerged leading to success of entrepreneur : a. Making the product service simple and understandable c. 21st century : during the present century two characteristics are associated with the entrepreneur they are innovation and creativity. Hard work is the key to success ENTREPRENEUR 12 . testing and revising d. Trying.6. While innovators are practical people and create from the opportunities available in reality .
Supervise and control Risk taking Innovate Direct activities of firm Analyze opportunity Functions of entreprene ur Develop venture Strategies to start venture Start venture Acquire resources ENTREPRENEUR Develop business plan 13 .
Principal function of the entrepreneur is to carry out new combinations of means of production. 2. Risk are not only related to success or failure of business but also involve personal and professional career forgone for the sake of opportunity. FUNCTIONS OF ENTREPRENEUR Risk measurement and risk taking : risk taking and risk measurement is the primary function of entrepreneur.1. ENTREPRENEUR 14 . Innovate/ create/ discover : entrepreneurship is innovativeness of individual and does not involve ownership. Analyze opportunities : entrepreneur has to have opportunity seeking style where he has to evaluate credibility of various alternatives and choose suitable alternative which will prove to be profitable in future. 3.
It provides roadmap to employees working in company to attain objectives and is capable of convincing potential customers they are share holders and investors of company. material. money. Strategies for venture : entrepreneur has to strategize long term plan for starting venture. 6. machinery to start venture.4. Entrepreneur has to have suitable skills to line up required resources for the company. Develop business plan : business plan is written document containing details about every aspect of proposed business venture. 5. Acquire resources : entrepreneur has to acquire various types of resources such as men. ENTREPRENEUR 15 . He has to analyze the market and devise effective strategies to face present and future competition.
Organize and start venture : entrepreneur should be a good organizer. Develop and grow venture : it is not only important to start a venture but also company should be able to respond to changes happening in the business market which is crucial factor deciding existence of company. 8.7. he should deploy suitable resources at right place in right time required to for the company to ensure effective working of organization. ENTREPRENEUR 16 .
9. direct and lead the plan : during the growth stage of the company entrepreneur should provide required resources for the company and during later stage entrepreneur should come up with effective strategies to face competition and guide employees in company performing role of leader. ENTREPRENEUR 17 . 10. Delegate. Supervise and control : for success of business it is important to have suitable mechanism in place so that entrepreneur can track overall success of the company.
CHARACTERISTICS OF ENTREPRENEURS ENTREPRENEUR 18 .
socio economic. ENTREPRENEUR 19 . Knowledge as entrepreneur is soul of organization he is required to have knowledge about all the operations carried in organization so that he can direct and regulate activities of his employees from time to time. and technological environment based on these information he predicts future situation and accordingly plans his vision and ways to achieve desired objective. FEATURES OF ENTREPRENEUR Vision entrepreneur works hard to fulfil his dream in process to achieve his objective. Desire to succeed entrepreneur are recognized in society because of their varied mindset and high dreams which motivates them to bring in invention and innovation in are of their business. he visualizes market scenario.
organizers. add value to existing products in market. ENTREPRENEUR 20 . They create.Independence entrepreneur needs independence in his work area as they are not know to follow their rule of thumb. Optimistic entrepreneurs are optimistic about achieving their objective as they intend to take risk to any extent to accomplish desired goals. decision makers and are empathetic towards employees at workplace. Value addition entrepreneurs are known for bringing new things in market. Leadership entrepreneur exhibits qualities of good leader. innovate. They are good planners.
They put in continuous efforts to achieve success and know that their is no substitute for hard work.Hardworking entrepreneur are know to be workaholic. ENTREPRENEUR 21 . Risk taking ability is one of the major trait of successful entrepreneur .
ENTREPRENEUR 22 .TYPES OF ENTREPRENEURS 1. Entrepreneurs of this trait are reactive in nature and are ready to adopt to innovation happening around. Imitative or adoptive entrepreneur : these people imitate techniques and technology innovated by others. Innovative entrepreneur : such entrepreneurs introduce new goods or new methods of production or discover new markets or new organise their enterprise. Entrepreneurs in this groups are characterized by aggressive assembly of information for trying new combination of factors. b. Based on functional characteristics : a.
c. Fabian entrepreneur : accept change only when they feel threatened that failure to do so would result in losses. ENTREPRENEUR 23 . Drone entrepreneur : these are entrepreneur who refuse to accept to adopt to changes adopted by the competitors. d. When competition increases they are pushed out of the market as it becomes uneconomical for them to carry their business further due to financial crisis. They are imitative by nature but not determinant and also lack in power.
expansion and diversification of business. e. Manager : these kind of entrepreneur do not initiate expansion or innovation but believe in utilizing available resource in organization and performing assigned activities to them. Prime mover : he is a person who moves in powerful sequence of development. c. ENTREPRENEUR 24 . b. Minor innovator : these set of entrepreneurs contribute to economic progress by finding better use for existing resources. Based on development : a. d.2. Local trading : these entrepreneur limit their products or service to local market. Satellite : these are set of suppliers who provide business with required resources and then move towards productive enterprise.
3. textile products. d. Service : these are set of qualified entrepreneurs who are specialized in particular field and render service to customers ENTREPRENEUR 25 . Based on entrepreneur business : a. b. c. Manufacturing : these are set of entrepreneurs who are into production of products that will be sold in market using resources and suppliers.g. E. Retailing : he is kind of entrepreneur one who sells goods produced by companies directly to consumers. Whole selling : these are set of entrepreneur who prove to be supporting hand for producers they sell in goods produced in production centre to middlemen in market. Apparel.
Superstar : he is kind of person who tends to attract attention through his charismatic features example CEO. Improver : when entrepreneur continuously focuses on development of business then he tends to improve overall economy through development in business process. MD of organization.4. b. Advisor : these are entrepreneurs who provide high level assistance to customers in market. d. c. Main motto of these entrepreneur is to provide vale addition information required by customers.Based on nine personality types of entrepreneurs a. ENTREPRENEUR 26 . Artist : these kind of entrepreneurs are reserve by nature but are suitable for the jobs which require creativity such as web designer.
Visionary : visionary entrepreneur are futuristic in nature. g. Aid agency. Healer : these are entrepreneur one who believe harmony in healing and bring in harmony to business. h. Fireball : entrepreneur running business which is composed of life. optimism and one who believes in bringing change by changing mindset of customers. Analyst : analyst entrepreneur is a person one who believes in analyzing the existing and tries to maintain status quo and bring improvement. ENTREPRENEUR 27 . E.e. They prefer taking initiative and like to be in line with competitive environment. Hero : these are kind of entrepreneurs who have ability to lead and run their business through challenges. they will have high degree of curiosity to understand changes happening in world. energy.g. f. i.
5. ENTREPRENEUR 28 . Technical entrepreneur : strength of technical entrepreneur is the technical knowledge of person. He possesses craftsmen skill in him which he develops to apply and implements to develop technical aspect of product. Professional entrepreneurs : are the one who are interested in floating a business rather then managing or operating the same. c. Non technical entrepreneur : these entrepreneurs believe in coming up with new strategies rather then concentrating technical aspect of the product. His target is not to change the technology related to the product but rather increase demand for product with effective strategies by attracting customers. b. According to use of technology : a.
According to stages of development : a. They start industrial unit by the means of their own innovative skill. First generation entrepreneur : are those who do not possess any entrepreneurial background.6. b. ENTREPRENEUR 29 . Second generation entrepreneur : are those entrepreneur who inherit family business firm and pass it from one generation to other. Classical entrepreneur : is a stereotype entrepreneur who aims to maximize his economic returns at every level consistent with the survival of the unit but with or without element of growth. c.
c. Joint entrepreneur : refers to combination of private and state enterprise running the business by sharing resources with each other. According to capital ownership : a. Private entrepreneur : when an individual or group of people together set up enterprise collectively bear profit and loss of company. b. and adopting latest techniques in business are known as private entrepreneur.7. ENTREPRENEUR 30 . State entrepreneur : refers to trading or industrial venture undertaken by the state or the government.
ENTREPRENEUR 31 .INTRAPRENEUR Intrapreneur is the person who works within the organization. utilizes the resources available within the organization and tries to accomplish present task in innovative and creative manner by effective utilization of available resources.
2. ENTREPRENEUR 32 .CHARACTERISTICS OF INTRAPRENEUR 1. Innovates products and services : intrapreneur to create effectiveness at workplace has to update organization techniques through implementation of new technology in company. 3. Creates new venture : giving birth to new business within the existing organization is the typical characteristics of intrapreneur. Innovates process : to sustain in market company's strategies should be effective to that of competitors for which intrapreneur should renew company process at regular interval of time.
6. 5. Proactive : intrapreneur attempt to lead rather than follow competitors through their proclivity in terms of advance operations in company. 7. ENTREPRENEUR 33 . Competitively aggressive : intrapreneur is expected to come up with new strategies to stabilize or develop company's brand image in market. Renews organization : intrapreneur is expected to transform the organization through renewal of key ideas. Risk taking : intrapreneur possess risk taking attitude with regard to investment decision and strategic actions under uncertain situations.4.
Government and non government support bodies : government in country has come up with various institution for supporting SSI they are national institute for entrepreneurship and small business development ( NIESBUD ) was established in 1983 by the ministry of micro. Entrepreneurship development institute in India ( EDI ) an autonomous body and non profit institution set up for supporting SSI in country . small and medium enterprise.DEVELOPMENT OF ENTREPRENEURSHIP 1. ENTREPRENEUR 34 .
2. Educational programs : entrepreneurship is be coming popular choice as an elective in MBA programs at business schools in India. 3. In addition to educational programs their are some business school which provide certification programs and training to candidates intending to start up their own business. ENTREPRENEUR 35 . Incubation facility : premiere business schools and technical institution in India have entrepreneurship centres which provide incubation facility to start up small scale unit. Incubator is facility designed to assist start up companies with respect to providing knowledge and technical assistance.
National entrepreneurship network ( NEN ) founded in 2002 is the non profit initiative working to inspire and educate emerging entrepreneurs in company. ENTREPRENEUR 36 . E.4.g. Entrepreneurship networks : refers to association formed by successful entrepreneur where by becoming member of such association fresher's will get some guidance and assistance to start up their own business. TiE : the indus entrepreneurs was founded in silicon valley in 1992 by successful entrepreneurs and professionals in country.
product or market Change/ adapt with time ENTREPRENEUR 37 .STAGES IN ENTREPRENEURIAL PROCESS Identify an opportunity Establish vision Persuade others Gather resources Create new venture.
Identify an opportunity : is an first step towards setting up an enterprise. In the process entrepreneur is required to establish long term vision and accordingly plan in mission which will serve as roadmap to achieve company vision. economic conditions and understand taste preference of customers. Establish vision : is second step towards establishing an enterprise. Objectives established by entrepreneur should be flexible in nature to adjust according to changing situation. ENTREPRENEUR 38 . Entrepreneur before identification of an opportunity should do proper market analysis about market situation.
Entrepreneur is required to convince skilled employees to work on business plan. it requires team effort to covert an idea into reality.Persuade others : even though the idea of entrepreneurship is initiated by individual person. finance through family and friends. Gather resources : next step towards entrepreneurship requires gathering of required resources to start business. raising required finance though other resources such as self investment. make investors and marketers understand credibility of business to enhance status and goodwill of company in business market. ENTREPRENEUR 39 . Resources includes a. raising capital through general public by issue of shares. Finance resources : it refers to getting required capital through financial institutions.
transportation etc. raw material. decision to hire permanent or temporary employees. company image. c. ENTREPRENEUR 40 . Operating resources refers to tangible and intangible resources which includes machinery.b. Human resources refers to skilled labour force in organization and other decision in relation to human resource such as training and development of employees. amount of investment to be made of human resource in organization. operating procedure.
Information resources : it is very important on part of organization to collect information about competitors. customers taste and preference. The company has to maintain valid and accurate management information system in order to suffice to the information needs of company. ENTREPRENEUR 41 .d. recent development in area of business company will be operating.
ENTREPRENEUR 42 . Which requires fulfilment of various legal formalities. next step involves creation and establishment of new venture. So business plan is required to be updated on regular basis to cope up with recent trends or updation in market. Change and adapt with time : initial plan developed by entrepreneur may not be suitable for long run.create new venture : once the entrepreneur has arranged in for resources mentioned above.
As small scale industries are labour intensive in nature they generate more employment opportunities rather then large scale industries in country. Inspire others towards entrepreneurship : team created by entrepreneurship provides opportunity for employee cum tem mates to have first hand experience in process of setting up an venture creating possibility for team mate to come up with his own SSI in future. Create employment opportunities : unemployment is major problem faced by developing and under developing countries around the world. ENTREPRENEUR 43 . 2.ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT 1.
4. ENTREPRENEUR 44 . Create knowledge spill over : entrepreneurship serves as mechanism by which knowledge over to the firm in which it is commercialized.3. Augment the number of enterprise : augment refers to making basic comparison and trying to find out area in which competitors are ahead. New firm gets the benefit by the experience and knowledge gained by the founder in the company. Entrepreneurship not only leads to formation of new business but also brings into picture idea or new concept in market exploring almost all the available areas in market creating tuff competition in market thus leading to supply of quality products in market.
5. Provide diversity in the firms : entrepreneurship activity in particular region often results into creation of variety of firms in country. These firms operates into diverse activities and these diversity fosters economic development in the country. ENTREPRENEUR 45 .
E. Legal and regulatory environment : for entrepreneurship is formed by registration and licence procedure. If the administration procedure and laws are unclear. real estate regulations and laws. instability in government of country which leads to change in legal legislation o continuous basis. commercial and contractual laws.g. 2. time consuming and cumbersome then it proves to be barrier in operation of SSI. Macro economic environment : macroeconomic environment in which SSI operates is dependent on policies of the government in supporting private participation in business. ENTREPRENEUR 46 . Macro means large and it refers to various factors existing in the environment which effect the working of company.ENTREPRENEURSHIP AND ITS BARRIERS 1.
Excessive approvals and regulations and approval from government required by entrepreneurs may make the government officials corrupt they develop attitude to take bribe for quicker completion of work.3. which in turn can become major hurdle to entrepreneurship activity in country. ENTREPRENEUR 47 . 4. Financial obstacles : start up ventures are usually dependent upon capital to be sourced from financial institution. But it is general tendency of financial institution to be reluctant in providing finance to SSI rather then LSI as LSI given in more amount of interest compare to SSI. Corruption and unfair competition : a corrupt can lead to unfair competition.
6. ENTREPRENEUR 48 . It is possible only when company is able to attract efficient employee to join company.5. but candidates these days expect in for higher salary which SSI cannot afford to pay because of the same SSI has to compromise with average candidates in the company. Challenges in attracting talent : to generate improved quality of product in the company human resource in company should be efficient in nature. Tax burden : in many regions government charges tax to SSI at similar rate as to LSI which SSI cannot afford to pay as the revenue generated by SSI is comparatively less.
7. ENTREPRENEUR 49 . but supplier in market give second preference to SSI in market compare to LSI as they order in bulk rather then SSI in market. Expensive to access proprietary technology : as investment amount of SSI is industry is less they cannot afford to do heavy investment in technology which again has adverse effect on quality and quantity of product produced by the company. Difficulty to source raw material : for timely production of product in the market it is important to have proper supply of raw material. 8.
ENTREPRENEUR 50 .
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