The document provides information on entrepreneurship and entrepreneurs. It defines entrepreneurship as the act of being an entrepreneur who starts an economic activity to be self-employed. An entrepreneur is defined as someone who effectively controls a commercial undertaking and takes on the risk of a business venture. The document discusses the characteristics, qualities, functions, and types of entrepreneurs. It also covers factors influencing entrepreneurship growth and the role of entrepreneurs in economic development.

1. Entrepreneurship Development
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• Derived from French word ‘Entreprendre’ means “to undertake”.
• Richard Carleton: “a person who buys factors of production at
certain prices in order to combine them into a product with a view
to sell them at uncertain prices.”
• Considered as a risk bearer. Ex. Farmer pays definite price for seeds,
fertilizers, pesticides, labours, etc but not certain at which price he
could sell his produce.
• Y.J.B. Say, “one who combines the land of one, labour of another &
capital of yet another & thus produces a product; by the selling
product pays rent, wages and interest.´

3. Entrepreneurship is the act of being an entrepreneur, who
starts any economic activity for being self-employed.
Entrepreneurship is the “process of the entrepreneur”. It is
an attempt to create value through recognition of business
opportunity. It is basically communicative and management
functions to mobilize financial and material resources.
The entrepreneurial activity is governed by varying
combination of socio-economic, psychological, cultural and
other factors: Caste/religion, Family background, Level of
education, Level of perception, Occupational background,
Migratory character, Entry into entrepreneurship, Nature of
enterprise, Investment capacity and Ambition/moderation.
Entrepreneurship

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WHAT IS ENTREPRENEURSHIP?
B. HIGGINS: The function of seeing investment &
production opportunities; organising an enterprise to
undertake a new production process; raising capital;
hiring labour, arranging for raw material, finding a
site & combining these factors of production into a
going concern; introducing new techniques, new
commodities, discovering new sources of natural
resources & selecting top-managers for day-to-day
operations.´
SCHUMPETER: Entrepreneurship is based on
purposeful & systematic innovation. It includes not
only the independent businessman but also
company directions &managers who actually
carryout innovative functions.´

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• AMERICAN CONFERENCE ON ENTREPRENUERSHIP:
Entrepreneurship is an attempt to create value through
recognition of business opportunity, the management
of risk taking appropriate to the opportunity &through
the communicative & management skills to mobilise
human, financial & material resources, necessary to
bring a project to fruition.´
• Thus, ‘Entrepreneurship’ is a combination of various
qualities like organisation skills, innovativeness, risk-
bearing, managing uncertainty, ability to bring
together & use factors of production, analysing market
opportunities, observing the change taking place in the
market, methods &technologies & studying the tastes
& preferences of consumers.

6. Who is an Entrepreneur............

7. Entrepreneur
An entrepreneur is defined as “person in effective control of
commercial undertaking; one who undertakes a business or an
enterprise”.
Entrepreneur is an innovative person who maximizes his profits by
following new strategies or venturing into new products or services.
Peter F. Drucker , “One who considers the changes that take place in
market as an opportunity to do business. Innovation is his tool.”
Y. Joseph Schumpeter ,“Individuals who introduce something new in
the market or economy”.
New encyclopedia, “An individual who bears the risk of operating
business in the face of uncertainty about the future conditions”.

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Entrepreneurial Characteristics
Being an entrepreneur requires specific characteristics and
skills that are often achieved through education, hard work, and
planning.
Risk Taker
Businesses face risk. Entrepreneurs minimize risk through
research, planning, and skill development.
Perceptive
Entrepreneurs view problems as opportunities and challenges.
Curious
Entrepreneurs like to know how things work. They take the time
and initiative to pursue the unknown.

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Imaginative
Entrepreneurs are creative. They imagine solutions to problems that
encourage them to create new products and generate ideas.
Persistent
True entrepreneurs face bureaucracy, make mistakes, receive
criticism, and deal with money, family, or stress problems. But they
still stick to their dreams of seeing the venture succeed.
Goal-setting
Entrepreneurs are motivated by the excitement of staring a new
business. Once achieved, they seek out new goals or ventures to
try.
Hardworking
Entrepreneurs need a great deal of energy to see a venture start
and succeed. Yet they are not deterred by the long hours to achieve
their goal.
Entrepreneurial Characteristics

10. Self-confident
Entrepreneurs believe in themselves. Their self-confidence takes care
of any doubts they may have.
• Sir Richard Branson, the founder of Virgin Records, went out of his
comfort zone and started Virgin Airlines.
Flexible
Entrepreneurs must be flexible in order to adapt to changing trends,
markets, technologies, rules, and economic environments.
•Video rental businesses demonstrated flexibility buy quickly adapting
to the change from video format to DVD format.
Independent
An entrepreneur’s desire for control and the ability to make decisions
often makes it difficult for them to work in a controlled environment.
Each venture is a reflection of the independent entrepreneur who
started it.
Entrepreneurial Characteristics

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• Positive aspects of entrepreneurship:
Unlimited powers More satisfaction
Commands respect Self-development
Generates employment Develops the country
Great achiever
Rewards commensurate with capacity and capability
• Negative aspects of entrepreneurship:
Constrained by various people
Long and hard work & loss of energy and time
Suffers frustrations and tension
Entrepreneurship as a Career

12.  Increases national production
 Balanced area development
 Dispersal of economic power
 Reinvestment of profit for the welfare of the area of profit
generation
 Development is a function of motivation and human resource
 Entrepreneurial awareness
Need for entrepreneurship

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QUALITIES OF ENTREPRENUERS:
• Mental ability: intelligent person.
• Organising ability: Good organising capacity
• Hard work: ready to work for long hours.
• Discipline: highly disciplined-everything to be in order for
them.
• Clear objectives: regarding nature of business & products
to be produced.
• Need for High achievement: they have a strong desire for
achieving something great.
• Optimistic: highly optimistic - not disturbed by present
problems - hopes for a favorable future.
• Risk taking: they like challenges.
• HR ability: maintain good relations with other people
(employee, vendors, customers, bankers).

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• Emotional stability: have considerable amount of self-
control-business pressure can be handled.
• Communication ability: good communication.
• Self-confidence: tackle problems immediately with self-
confidence.
• Adaptability: highly flexible-adapt themselves for any
conditions.
• Positive attitude: always think positively, they do not give up
hope even under difficult conditions.
• Pro active: They are also good managers, pro-active, realistic,
have comprehensive awareness & conceptual ability.

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FUNCTIONS OF ENTREPRENUERS:
• Market Research
• Idea Generation
• Product / Service Analysis
• Choice of Form of Business: individual, partnership,
joint stock company, etc.
• Determination of business objectives: main
objectives, secondary objectives - short term & long
term.
• Promotional formality: getting license, clearance of
govt. formalities.
• Raising Capital: Own capital / Issue of shares/
Borrowing loan.
• Organising Infrastructure: Buying plant, Machinery,
Land.

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• Selection of human resources: right people at
right place.
• Carrying out the Operations: where to purchase,
scale of production, fixing price, advertisement etc.
• Risk Bearing
• Organization of the resources: combining various
factors of production.
• Innovation
• Exploration of new opportunities
• Providing Leadership & Motivating the people

17. Factors affecting Entrepreneurship growth:
1. Economic Factors
• Lack of adequate basic facilities
• Non- availability of capital
• Non- availability of raw materials and finished goods
• Greater risk involved in business
• Non- availability of skilled labor
2. Social factors
• Customs and traditions
• Rationality of the society
• Social system
3. Personality Factors
• Suspect personality
• Emergence of planning
4. Cultural factors
5. Psychological factors

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ENTREPRENEURS & ECONOMIC DEVELOPMENT :
• OPTIMUM UTILISATION OF RESOURCES - Resources are
put to proper use by Entrepreneurs. They combine
various resources Land, Labor, Capital, and organization
to produce goods.
• GENERATION OF EMPLOYMENT - provide employment,
reducing unemployment problem.
• IMPROVEMENT IN STANDARD OF LIVING OF PEOPLE -
by providing quality goods & services.
• BALANCED REGIONAL DEVELOPMENT –
Government incentives encourage entrepreneurs to
establish industrial units in rural & backward areas;
creates employment opportunities in industrially
backward areas.
• NEW / IMPROVED GOODS &SERVICES - for the
benefit of customers by conducting market research.

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• Helps agricultural sector -providing high yielding variety
of seeds, fertilizer, pesticides, agricultural implements
etc., many entrepreneurs buy agricultural produce for
further processing.
• Promotes international trade - exporting goods
manufactured by them. help govt. to earn Foreign
Exchange.
• Help community at large - by providing welfare
activities-adopting villages, schools, starting educational
institutes, healthcare services, sports.
• Capital formation - pooling the savings of people by
issuing shares/ debentures-offering more returns
comparatively.
• Distribution of Income & Wealth - by establishing in
rural / backward areas; not only balanced regional
development , but also redistribution of income &
wealth.

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INTRAPRENEURSHIP
There are people working in big organizations,
holding key positions. They are quite innovative &
bring many changes in products & methods of
production. They possess all qualities of an
entrepreneur. Top managements in big
organizations encourage people holding key
positions to come out with new ideas so that they
can bring some changes in products & services.
They are also known as enter corporate
entrepreneurs or intraprenuers. They serve as
champions to others in the organisation.

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Entrepreneur Vs Intrapreneur
Entrepreneur Intraprenuer
1 Entrepreneur is employer Intrapreneur is employee
2 Independent in operation Depends on the organization
to implement his ideas.
3 Bears all the risk involved in
enterprise.
Does not bear all the risk.
4 Exhibits higher need
for achievement.
May not have high need for
achievement
5 Profit is the reward. Attractive salary, promotion
&incentives are the reward.
6 May not have formal
qualification.
Should have some
professional or technical
qualification.
7 Do not have any boundary
for operations.
He has to operate within the
organisational policies.

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CLASSIFICATION OF ENTREPRENUERS
• Innovative Entrepreneur: He is the one who introduces a new
product or a new method of production or opens a new market or
explores new source of supply of raw material or carry out a new
type of organization. According to Schumpeter these, are real
entrepreneurs.
• Imitative / Adoptive Entrepreneur: Adoptive entrepreneurs are
those who imitate the successful entrepreneurs in techniques
innovated by others.
• Fabian Entrepreneurs : Always cautious & low risk takers. They
follow old customs, old method of production, techniques. They
neither introduce new changes nor adopt new methods invented by
others, unless they realise the threat of loss if not changed.
• Drone Entrepreneur / Laggards : They are those who never allow
any change in their production & style of functioning, even if they
suffer loss, due to absence of change. They never explore anything.
They are lazy. They are pushed out of market when product loses its

23. Other Classifications are
• :
• Trading Entrepreneur: Trading entrepreneur is one who undertakes trading
activities and is not concerned with the manufacturing work.
• Agricultural Entrepreneur: An entrepreneur who undertakes agricultural activities
as raising meeting of crops, fertilizers and other inputs of agriculture; also include
agriculture and allied occupations. They raise productivity of agriculture through
mechanization, irrigation, and application of technologies for dry agriculture.
• First generation Entrepreneur: An entrepreneur 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.
• Women Entrepreneur: A woman who runs and manages an enterprise.
• Modern Entrepreneur: An entrepreneur who undertakes those ventures which go
well along with the changing demand in the market. They undertake those
ventures which suit the current marketing needs.
• Urban Entrepreneur: A person who establishes an enterprise in the urban area to
enjoy the location benefits.
• Technical Entrepreneur: They are entrepreneurs of ‘craftsman type’. They develop
new and improved quality of goods because of their craftsmanship. They
concentrate more on production rather than on marketing, by demonstrating
innovative capabilities.
• Industrial Entrepreneur: He is essentially a manufacturer who identifies the
potential need of customers and tailors product or service to meet the marketing
needs. He starts an unit because of the possibility of making some new product.

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ENTREPRENEURIAL PERSONALITY:
1. The Improver: Improvers have an unwavering ability to run their
business with high integrity and ethics.
2. The Advisor: Advisor’s motto is - the customer is right & provides
high level of assistance and advice to customers.
3. The Superstar: The business is centered here on the charisma and
high energy of the superstar CEO.
4. The Artist: He builds business around the unique talents and
creativities he has.
5. The Visionary: A business built by a visionary will often be based on
the future vision and thoughts of the founder.
6. The Analyst: Analysts Company excels at problem solving.
7. The Fireball: The company is life-energising and makes customers
feel the company has a “get it done attitude” in a fun playful
manner.
8. The Hero: He has an incredible will and ability to lead the world
and business through any challenge.
9. The Healer: Healer provides nurturing and harmony to business
and has uncanny ability to survive and persist with an inner calm.

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KNOWLEDGE OF AN ENTREPRENEUR:
1. Knowledge of Academic Technical
2. Knowledge of Financial Management
3. Knowledge of Operations Management
4. Knowledge of Law
5. Knowledge of Finance mobilisation
SKILLS OF AN ENTREPRENEUR:
1. Risk 2. Active
3. Persistence 4. Cautiously Optimistic
5. Goal oriented 6. Flexible
7. Customer oriented 8. Passion
9. Relationship skills 10. Research Skills
11. Management Skills

26. WOMEN ENTREPRENEURS
• They are a woman or group of women who initiate, organize &
operate a business enterprise.
• According to Marshal, any woman or group of woman who
innovates, initiates, or adopts an economic activity may be called a
woman entrepreneur.
• According to Government of India, it is an enterprise owned &
controlled by a woman or a woman having a minimum financial
interest of 51% of the capital in the enterprise.
 Problems faced by woman entrepreneurs:
• Economic independence & autonomy are absent
• Less risk bearing capacity (because of more dependency)
• Family involvement

27. ESTABLISHMENT OF AN ENTERPRISE
1. IDENTIFICATION OF OPPORTUNITIES: The product to be produced
or service to be provided should be carefully selected. Thus the
idea to select such a product may originate from different sources.
The important sources of business idea are as follows:
a) Market observation: analysis of demand &supply for goods,
availability of raw materials, profit range, likely change in future
demand.
b) Consumer survey: taste & preferences of consumers,
considerable no of consumers.
c) Competing alternative product: No. of manufacturers, Degree
of competition, to manufacture either better quality goods at
same price or even to provide same quality goods at a cheaper
rate
d) Development in countries: gain business ideas by attending
trade fairs in foreign countries through trade delegation
sponsored by Chambers of commerce/ government or
collaboration/ joint venture with foreign producer.

28. e)Product profiles: Various government & non-government
agencies prepare & publish product profiles which can be a basis
for business idea generation.
f) Trade fairs and Exhibitions:
g) Government policies: Announcement of concession, grants to
manufacture certain products.
h) Research institutes: Many research Institutes like private
government help in borrowing patents from them (private
government) and produce the product.
i) Research & development: In case of big companies , to develop
new products, or to modify existing products.
j) Brain storming sessions: In case of large and multinational
companies to come out with new ideas-by forming groups
of employees of different levels and allowing them to deliberate &
suggest some new ideas.

29. 2. PROCESSING & SELECTION OF IDEA:
a) Technical feasibility: the product chosen should be technically
feasible, i.e, should be capable of being manufactured using some
accessible technology.
b) Commercial viability: refers to cost benefit analysis to know
whether the product would yield expected rate of return.
c) Financial & managerial considerations: amount of finance
required, sources of finance to be worked out & managerial
sources, its availability & its cost.
d)Final selection: products which pass through all the tests(be
technically feasible, commercially viable) are considered for final
selection. some points may be allotted for each test and that
product which gains highest points may be selected for production.
3. DECIDING THE LOCATION: many factors influence the location of
the unit: 1) Availability of raw materials. 2) Market accessibility 3)
Human resource 4) Supply of power 5) Fuel &
water 6)Transportation. 7) Government policies-subsidies
&incentives. 8)Climate. 9) Scope for further expansion.

30. 4. DECIDING THE FORM OF OWNERSHIP whether under sole
proprietorship or partnership or joint venture. Factors affecting
ownership forms are:
• 1 ) Ease of formation - sole proprietorship is easy to form.
• 2) Capital required – for small business where less capital is
required, then sole proprietorship is applied. If the business
requires high capital, joint venture is applied.
• 3) Extent of liability - unlimited liability in case of sole
proprietorship &partnership, limited liability in case of joint stock
company and cooperatives.
• 4) Control - The complete control lies with the proprietor in case of
sole proprietor. In case of partnership control is as per partnership
deal. Incase of joint companies &cooperatives, control is different
from ownership.
• 5) Continuity of business: Joint stock companies enjoy continuity
of business because ownership is different from management.
• 6) Flexibility: sole proprietorship is more flexible
• 7) Maintenance of secrecy: secrecy can be maintained by sole
proprietorship.
• 8) Tax liability: the tax structure of the government is to be
considered to decide the type of organization.

31. • 9)Government regulations: sole proprietorship is subject to
minimum regulations & interference. Partnership comes under
partnership act, societies under cooperative societies act
&companies under company act.
5. REGISTRATION & LICENSING: It is necessary in case of starting
industrial units. Certificate of registration will be issued in two
stages.
• 1) Provisional Registration Certificate: It is the initial registration to
start a small scale industry. It is issued for 1 year which can be
extended for another 6 months. This certificate is useful -
– To get license from local administration.
– To avail bank loan.
– To get water & power supply.
– For procuring plant machinery & raw materials.
– To get an industrial plot or industrial shade.
– T o get NOC from Pollution Control board.

32. • 2) Permanent Registration Certificate: It is issued when all the
formality of establishing the unit is over. This certificate will be useful
for:
– To apply for subsidies & incentives
– To avail bank loan
– To get income tax & sales tax concession
– To avoid central excise duty concession
6. SPECIFIC CLEARANCES
• 1) Conversion of agricultural land: through an application to concerned
local authority.
• 2)Urban Land Ceiling clearance: taking permission to hold vacant land
beyond the limit, through special permission.
• 3) Building plan approval: to be approved by local authority.
• 4)Factories Act: obtain permission from authorities ex-permission from
inspectorate of factories to start factory.
• 5) Trade license: from local authority ex-certificate from local
municipality for a hotel industry.

33. • 6) Pollution control Board clearance: getting NOC from PC board.
• 7) Sales tax registration: from the state &centre authorities to sell
& purchase goods.
• 8) Central Excise Registration: to get registration from central
excise authorities if the goods are excisable.
• 9)Bureau of Indian Standard (BIS) certificate
• 10)Fruit product Order 1955 : license through ministry of food
processing
• 11) Food Adulteration Act: that can be got from local authorities in
case of sale of food & food articles.
• 12)Power Loom Registration:
• 13) Drugs & cosmetics license: incase of manufacturing drugs
&cosmetics.
• 14)Approval for Hotels: from department of tourism in case of big
hotels.
• 15) 100% Export oriented units: to get permission from the
concerned export council.

34. 7. ASSEMBLING NECESSARY RESOURCES
• 1) Finance - getting finance from Banks/financial institutions.
• 2)Building - to be constructed in case no industrial shade is
allotted.
• 3) Plant & machinery- placing purchasing order for plant &
machinery.
• 4)Raw materials- get the raw materials through private party or
through government.
• 5) Human resources- appointment of workers & management
personnel.
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• Harland David Sanders, better known as Colonel Sanders started
his famous Kentucky Fried Chicken (KFC) business quite late in his
varied career.