Entrepreneurship & Entreprenurs Unit I

Unit I Entrepreneurship
Business Intelligence
Business Intelligence refers to the tools and technologies which is used to collect,
segregate, analyze, and present data of companies as raw data which was initially in
unstructured form. This is done in order to create meaningful and actionable business
information
Entrepreneur
An entrepreneur is a person who is action oriented, highly motivated, takes risks to
achieve goals
An entrepreneur is a person who establishes his own business with the intention of
making proﬁts
An entrepreneur is a person who only provides capital without taking active part in the
leading role in an enterprise.
An entrepreneur is a one who innovates, raise money, assemble input, choose managers
and set the organization growing.
Characteristics of Entrepreneur
Vision (identifying emerging opportunities)�.
Innovation (creating new business or new ways of doing
something)
�.
Risk bearing (taking risk and facing uncertainty)�.
Organizing (collection and coordination of the necessary
resources)
�.
Entrepreneurship
Entrepreneur is a person while entrepreneurship is a process.
"Entrepreneurship is a process under taken by an entrepreneur to create incremental
value and wealth by discovering investment opportunities, organizing enterprises,
undertaking risks and economic uncertainty and there by contributing to economic
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growth"
Entrepreneurship and Economic Developement
Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest
their own/borrowed resources and attract capital (in the form of debt, equity, etc.) from
investors, lenders and the public. This mobilizes public wealth and allows people to
benefit from the success of entrepreneurs and growing businesses. This kind of pooled
capital that results in wealth creation and distribution is one of the basic imperatives and
goals of economic development.
�.
Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job
seekers. The simple translation is that when you become an entrepreneur, there is one
less job seeker in the economy, and then you provide employment for multiple other job
seekers. This kind of job creation by new and existing businesses is again is one of the
basic goals of economic development. This is why the Govt. of India has launched
initiatives such as Start up India to promote and support new startups, and also others
like the Make in India initiative to attract foreign companies and their FDI into the Indian
economy. All this in turn creates a lot of job opportunities, and is helping in augmenting
our standards to a global level.
�.
Balanced Regional Development: Entrepreneurs setting up new businesses and
industrial units help with regional development by locating in less developed and
backward areas. The growth of industries and business in these areas leads to
infrastructure improvements like better roads and rail links, airports, stable electricity
and water supply, schools, hospitals, shopping malls and other public and private
services that would not otherwise be available.
Every new business that locates in a less developed area will create both direct and
indirect jobs, helping lift regional economies in many di�erent ways. The combined
spending by all the new employees of the new businesses and the supporting jobs in
other businesses adds to the local and regional economic output. Both central and state
governments promote this kind of regional development by providing registered MSME
businesses various benefits and concessions.
�.
GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that
provide employment for more than 80 million people, now accounts for over 37% of the
country’s GDP. Each new addition to these 36 million units makes use of even more
resources like land, labor and capital to develop products and services that add to the
national income, national product and per capita income of the country. This growth in
�.

GDP and per capita income is again one of the essential goals of economic development.
Standard of Living: Increase in the standard of living of people in a community is yet
another key goal of economic development. Entrepreneurs again play a key role in
increasing the standard of living in a community. They do this not just by creating jobs,
but also by developing and adopting innovations that lead to improvements in the quality
of life of their employees, customers, and other stakeholders in the community. For
example, automation that reduces production costs and enables faster production will
make a business unit more productive, while also providing its customers with the same
goods at lower prices.
�.
Exports: Any growing business will eventually want to get started with exports to expand
their business to foreign markets. This is an important ingredient of economic
development since it provides access to bigger markets, and leads to currency inflows
and access to the latest cutting-edge technologies and processes being used in more
developed foreign markets. Another key benefit is that this expansion that leads to more
stable business revenue during economic downturns in the local economy.
�.
Community Development: Economic development doesn’t always translate into
community development. Community development requires infrastructure for education
and training, healthcare, and other public services. For example, you need highly
educated and skilled workers in a community to attract new businesses. If there are
educational institutions, technical training schools and internship opportunities, that will
help build the pool of educated and skilled workers.
A good example of how this kind of community development can be promoted is Azim
Hashim Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for
promoting education through the Azim Premji Foundation. This foundation works with
more than 350,000 schools in eight states across India.
�.
Classification and Types of Entrepreneurs
The entrepreneurs have been broadly classified according to the type of business, use
of professional skill, motivation, growth and stages of development. The various type of
entrepreneur is as follows
Entrepreneurs according to the type of business.
Business entrepreneur: Business entrepreneurs are individuals who conceive an

idea for a new product or service and then create a business to materialize their idea
into reality. They may set up a big establishment or a small business unit. They are
called small business entrepreneurs when found in small business units such as
printing press, textile processing house, advertising agency, readymade garments or
confectionery.
Trading Entrepreneur: The trading entrepreneur is one who undertakes trading
activities and is not concerned with the manufacturing work. He identifies potential
markets, stimulates demand for his product line and creates a desire and interest
among buyers to go in for his product. He is engaged in both domestic and overseas
trade. Britain, due to geographical limitations has developed trade through trading
entrepreneurs.
Industrial Entrepreneurs: Industrial entrepreneur is essentially a manufacturer who
identifies the potential needs of customers and tailors a product or service to meet the
marketing needs. He is product- oriented man who starts in an industrial unit because
of the possibility of some new product.
Corporate Entrepreneur: Corporate entrepreneur is a person who demonstrates his
innovative skill in organizing and managing corporate undertaking. A corporate
undertaking is is a form of business organization which is registered under some
statue or act which gives it a separate legal entity. A trust registered under Trust act or
company registered under the companies act is examples of corporate undertakings.
A corporate entrepreneur is thus an individual who plans, develops and manages a
corporate body.
Agricultural Entrepreneur: Agricultural entrepreneur are those entrepreneurs who
undertake agricultural activities as raising and marketing of crops, fertilizers and other
inputs of agriculture. They are motivated to raise agricultural through mechanization,
irrigation and application of technologies for dry land agriculture products.
Entrepreneurs in technology
Technical entrepreneur: A technical entrepreneur is essentially compared to a crafts
man. He develops improved quality of goods because of the craftsmanship. He
concentrates more on production than marketing.
Non technical entrepreneur: These are people who are not concerned with the
technical aspects of the product in which they deal. They are concerned only with
developing alternative marketing and distribution strategies to promote their business.
Professional entrepreneurs: Professional entrepreneurs are a person who is
interested in establishing a business but does not have interest in managing or

operating it once it is established. A professional entrepreneur sells out the running
business and starts another venture with the sales proceeds
Entrepreneurs and motivation
Pure entrepreneur: A pure entrepreneur is an individual who is motivated by
psychological and economic rewards. He undertakes an entrepreneurial activity for his
personal satisfaction in work, ego, and status.
Induced Entrepreneur: He is the person who is induced to take up an entrepreneurial
task due to the policy measures of the government that provides assistance,
incentives, concessions, and necessary overhead facilities to start the venture. Most of
the induced entrepreneurs enter entrepreneurship due to financial, technical and
several other facilities provided to them by the state agencies to promote
entrepreneurship.
Motivated entrepreneur: New entrepreneurs are motivated by the desire for
fulfillment. They come into being because of the possibility of making and marketing
some new product for the use of customers. If the product is developed to saleable
stage, the entrepreneur is further motivated by reward in terms of profit.
Spontaneous Entrepreneur: These entrepreneurs start their business because of
their natural talents. They are persons with initiative, boldness and confidence in their
ability which motivate them to undertake entrepreneurial activity. Such entrepreneurs
have a strong conviction and confidence in their inborn ability.
Growth and Entrepreneurs
Growth Entrepreneur: Growth entrepreneurs are those who necessarily take up high
growth industry which has substantial growth prospects.
Super Growth Entrepreneurs: Super growth entrepreneurs are those who have
shown enormous growth of performance in their venture. The growth performance is
identified by the liquidity of funds, profitability and gearing.
Entrepreneurs and stages of Development
First-generation entrepreneur: A first generation entrepreneur is one who starts an
industrial unit by innovative skills. He is essentially an innovator, combining different
technologies to produce a marketable product or service.
Modern entrepreneur: A modern entrepreneur is one 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.

Classical entrepreneur: A classical entrepreneur is one who is concerned with the
customers and marketing needs through the development of the self supporting
venture. He is a stereotype entrepreneur whose aim is to maximize his economic
returns at a level consistent with the survival of the firm with or without an element of
growth.
Others
Innovating Entrepreneurs: Men and women in this group are generally
aggressive in experimentation who exhibit cleverness in putting attractive
possibilities into practice. One need not invent but convert even old established
products or services by changing their utility, their value, and their economic
characteristics into something new, attractive and utilitarian. This is the secret of
these people.
Imitative entrepreneurs: These people are characterized by readiness to adopt
successful innovations by entrepreneurs. They imitate techniques and technology
innovated by others. They are adoptive and more flexible.
By western standards, an imitative entrepreneur may be a pedestrian ﬁgure, an
adopter an imitator rather than a true innovator. He is more an organizer of factors
of production than a creator. But in a poor country attempting to industrialize, he is
nevertheless a potent change producing ﬁgure. He can set in motion the chain
reaction which leads to cumulative progress.
Entreprenuerial Comptencies
Entrepreneurial competencies are the skills necessary for an entrepreneur to
venture into an enterprise1.
organize and manage an enterprise ably and competently2.
realize the goal for which the enterprise is established3.
These competencies help and entrepreneur to successfully venture into an enterprise

Personal Entrepreneurial competencies
It is the personal characteristics of an individual who possess to perform the task
effectively and efficiently.Personal entrepreneurial competencies include the following:
Initiative
The entrepreneur should be able to take actions that go beyond his job
requirements and to act faster. He is always ahead of others and able to become a
leader in the field of business.He Does things before being asked or compelled by
the situation and acts to extend the business into new areas, products or services.
Sees and acts on opportunities
An entrepreneur always looks for and takes action on opportunities. He Sees and
acts on new business opportunities and Seizes unusual opportunities to obtain

financing, equipment, land, work space or assistance.
Persistence
An entrepreneur is able to make repeated efforts or to take different actions to
overcome an obstacle that get in the way of reaching goals. An entrepreneur takes
repeated or different actions to overcome an obstacle and Takes action in the face
of a significant obstacle.
Information Seeking
An entrepreneur is able to take action on how to seek information to help achieve
business objectives or clarify business problems.They do personal research on
how to provide a product or service.They seek information or ask questions to
clarify what is wanted or needed.They personally undertake research and use
contacts or information networks to obtain useful information.
Concern for High Quality of Work
An entrepreneur acts to do things that meet certain standards of excellence that
gives him greater satisfaction. An entrepreneur states a desire to produce or sell a
top or better quality product or service. They compare own work or own
company’s work favourably to that of others.
Commitment to Work Contract
An entrepreneur places the highest priority on getting a job completed.They make
a personal sacrifice or take extraordinary effort to complete a job.They accept full
responsibility for problems in completing a job for others and express concern for
satisfying the customer.
Efficiency Orientation
A successful entrepreneur always finds ways to do things faster or with fewer
resources or at a lower cost.They look for or finds ways to do things faster or at
less cost.An entrepreneur uses information or business tools to improve efficiency.
He expresses concern about costs vs. benefits of some improvement, change, or
course of action.
Systematic Planning
An entrepreneur develops and uses logical, step-by-step plans to reach
goals.They plan by breaking a large task into subtask and develop plans,then
anticipate obstacles and evaluate alternatives.They take a logical and systematic

approach to activities.
Problem Solving
Entrepreneurs identify new and potentially unique ideas to achieve his goals.They
generate new ideas or innovative solutions to solve problems and they take
alternative strategies to solve the problems.
Self-Confidence
Entrepreneur with this competency will have a strong belief in self and own
abilities.They express confidence in their own ability to complete a task or meet a
challenge.They stick to their own judgment while taking decision.
Assertiveness
An entrepreneur confronts problems and issues with others directly.Entrepreneur
with this competency vindicate the claim to asset their own rights on others.They
demand recognition and disciplines those failing to perform as expected.They
asset own competence,reliability or other personal or company’s qualities.They
also assert strong confidence in own company’s or organization’s products or
service.
Persuasion
Entrepreneurs with this competency successfully pursue others to perform the
activities effectively and efficiently.An entrepreneur can persuade or influence
others for mobilizing resources, obtaining inputs, organizing productions and
selling his products or services.
Use of Influence Strategies
An entrepreneur is able to make use of influential people to reach his business
goals.Entrepreneurs with this competency influence the environment
(Individuals/Institution) for mobilizing resources organizing production and selling
goods and services to develop business contacts.
Monitoring
Entrepreneurs with this competency normally monitor or surprise all the activities
of the concern to ensure that the work is completed by maintaining good quality.
Concern for Employee Welfare
Entrepreneurs with this competency take action to improve the welfare of

employees and take positive action in response of employee’s personal concerns.
Enterprise launching competencies
Competency to understand the nature of business
To analyse the personal advantage of owning a small business.
To analyse the personal risks of owning a small business.
To analyse how to maximize the opportunities and minimize the risks of
owning a business.
Competency to determine the potential as an entrepreneur
To consider the personal qualification and abilities needed to manage own
business.
To evaluate the own potentials for decision-making,problem solving and
creativity.
To determine own potential for management,planning,operations,personnel
and public relations.
Competency to develop a business plan
To identify how a business plan helps the entrepreneur.
To recognize how a business plan should be organized.
To identify and use the mechanisms for developing a business plan.
Competency to obtain technical assistance
To prepare for using technical assistance.
To select professional consultants.
To work effectively with consultants.
Competency to a choose the type of ownership
To analyze the type of ownership of business.
To follow the steps necessary to file for ownership of the business.
To define politics and procedures for a successful multi-owner.

Competency to plan the market strategy
To use goods classification and life cycle analysis as planning tools for
marketing.
To develop and modify marketing mixes for a business.
To use decision making tools and aid in evaluating marketing activities.
To evaluate operations to improve decision making about marketing.
Competency to locate the business
To analyze customer transportation,access,parking and so forth. i.e. relative
to alternative site locations.
To complete a location feasibility study for the business.
To determine the cost of renovating or improving a site for the business.
To prepare an occupancy contrast for the business.
Competency to finance the business
To describe the source of information available to help in estimating the
financing necessary to start a new business.
To determine the finance necessary to start a new business.
To prepare a project profit and loss statement and a projected cash flow
statement for the new business.
To prepare a loan application package.
Competency to deal with the business
To determine the need for legal assistance.
To select the provisions that is desired in the lease.
To prepare sales contract(such a s credit sales or long term sales) that may
be utilized in the contracts
To evaluate contracts.
To determine the need for protection of ideas and intentions.

Competency to comply with government regulations
To appraise the effects of various regulations on the business operations.
To acquire the information necessary to comply with the various rules and
regulations affecting the business.
To develop policies for the business to comply with the Government rules
and regulations.
Enterprise Management Competencies
Competency to manage the business
To plan goals and objectives for the business.
To develop a diagram showing the organizational structure for the business.
To establish control practices and procedures for the business
Competency to manage human resources
To plan goals and objectives for the business.
To develop a diagram showing the organizational structure for the business.
To establish control practices and procedures for the business.
Competency to manage human resources
To write a job description for a position in the business.
To develop a training programme online for employees.
To develop a list of personnel for employees in the business.
To develop an outline for an employee evaluation system.
To plan a corrective interview with an employee concerning a selected
problem.
Competency to promote the business
To create a long-term promotional plan.
To describe the techniques used to prepare advertising and promotion
To analyse competitive promotional activities.
To evaluate promotional effectiveness.
To plan a community relations programme.
Competency to manage sales efforts.
To develop a sales plan for the business.
To develop policies and procedures for serving the customers.
To develop a plan for training and motivating sales people.

Competency to keep business records
To determine who will keep the books for the business and how they will be
maintained.
To describe double-entry bookkeeping.
Select the types of journals and ledges that you will use in the business.
To identify the types of records that will be used in the business to record
sales,cash receipts,cash disbursements,accounts receivable,accounts
payable,payroll,petty cash,inventory,budgets and other items.
To evaluate the business records.
To identify how a micro-computer may be used to keep he business
records.
Competency to manage the finances
To explain the importance of cash flow management.
To identify financial control procedures.
To describe how to find cash flow patterns.
To analyse trouble spots in financial management.
To describe how to prepare an owner’s equity financial statement.
To analyse financial management ratios applicable to a small business.
To identify the components of break even point problem.
To review microcomputer application for financial management.
Competency to manage customer credit and collection
To analyse the legal rights and resource of credit guarantors.
To develop a series of credit collection reminders and the follow up
activities.
To develop various credit and collection policies.
To prepare a credit promotion plan.
To discuss information resources and systems that apply to credit and
collection procedures.
Competency to protect the business
To prepare policies for the firm that will help minimize losses due to
employee theft, vendor theft, bad cheques, shoplifting, robbery, injury or
product liability.
To determine the kinds,amounts and costs of insurance needed by the firm.

Factors affection Entrepreneurial growth
Economic Factors
Capital
Capital is weatlth in form of money or any assests avilable for purpose such as
starting a company. Increase in capital investment in viable projects results in
increase in profits which help in accelerating the process of capital formation.
Entrepreneurship activity too gets a boost with the easy availability of funds for
investment.
Availability of capital facilitates for the entrepreneur to bring together the land of
one, machine of another and raw material of yet another to combine them to
produce goods. Capital is therefore, regarded as lubricant to the process of
production
Labor
Entrepreneurs, therefore, often find difficulty to secure sufficient labor. The quality
rather than quantity of labor influences the emergence and growth of
entrepreneurship. The problem of labor immobility can be solved by providing
infrastructural facilities including efficient transportation.
Most less developed countries are labor rich nations owing to a dense and even
increasing population. But entrepreneurship is encouraged if there is a mobile and
flexible labor force. And, the potential advantages of low-cost labor are regulated
by the deleterious effects of labor immobility. The considerations of economic and
emotional security inhibit labor mobility.
Raw material
In the absence of raw materials, neither any enterprise can be established nor can
an entrepreneur be emerged
It is one of the basic ingredients required for production. Shortage of raw material
can adversely affect entrepreneurial environment. Without adequate supply of raw
materials no industry can function properly and emergence of entrepreneurship to

is adversely affected.
In fact, the supply of raw materials is not influenced by themselves but becomes
influential depending upon other opportunity conditions. The more favorable these
conditions are, the more likely is the raw material to have its influence of
entrepreneurial emergence.
Market
The fact remains that the potential of the market constitutes the major determinant
of probable rewards from entrepreneurial function. Frankly speaking, if the proof of
pudding lies in eating, the proof of all production lies in consumption, i.e.,
marketing.
The size and composition of market both influence entrepreneurship in their own
ways. Practically, monopoly in a particular product in a market becomes more
influential for entrepreneurship than a competitive market. However, the
disadvantage of a competitive market can be cancelled to some extent by
improvement in transportation system facilitating the movement of raw material
and finished goods, and increasing the demand for producer goods.
Infrastructure
Expansion of entrepreneurship requires properly developed communication and
transportation facilities. It not only helps to enlarge the market, but expand the
horizons of business too. Take for instance, the establishment of post and
telegraph system and construction of roads and highways in India. It helped
considerable entrepreneurial activities which took place in the 1850s.
Apart from the above factors, institutions like trade/ business associations,
business schools, libraries, etc. also make valuable contribution towards
promoting and sustaining entrepreneurship’ in the economy. You can gather all the
information you want from these bodies. They also act as a forum for
communication and joint action.
Non Economic Factors
Education

Education enables one to understand the outside world and equips him with the
basic knowledge and skills to deal with day-to-day problems. In any society, the
system of education has a significant role to play in inculcating entrepreneurial
values.
Attitude of Societites
Certain societies encourage innovations and novelties, and thus approve
entrepreneurs’ actions and rewards like profits. Certain others do not tolerate
changes and in such circumstances, entrepreneurship cannot take root and grow.
Similarly, some societies have an inherent dislike for any money-making activity.
Cultural Value
Motives impel men to action. Entrepreneurial growth requires proper motives like
profit-making, acquisition of prestige and attainment of social status. Ambitious
and talented men would take risks and innovate if these motives are strong. The
strength of these motives depends upon the culture of the society. If the culture is
economically or monetarily oriented, entrepreneurship would be applauded and
praised; wealth accumulation as a way of life would be appreciated. In the less
developed countries, people are not economically motivated.
Entrepreneurial Training
Entrepreneurial Training Programme offer a comprehensive combination of courses to
help young entrepreneurs develop their business ideas and self-confidence. These
training courses are available to start-up ventures or those who want to expand their
businesses. The Entrepreneurial Training Programme offers great resources to help
you develop a solid business and learn what it takes to build a thriving business.
Put your business idea to the test
Build a business plan that will attract investment
Explore real-world possibilities
Reduce costly trial and error and increase your chances of success
Get answers to your tough questions from our experienced facilitators and
instructors
Use case studies, activities and readings to learn how others like you succeeded

Utilize weekly feedback to make your plan work
Learn how to alter your plan early on to increase your chance of success
Traits of an Entrepreneurs
Economic and dynamic activity:
Entrepreneurship is an economic activity because it involves the creation and
operation of an enterprise with a view to creating value or wealth by ensuring
optimum utilisation of scarce resources. Since this value creation activity is
performed continuously in the midst of uncertain business environment, therefore,
entrepreneurship is regarded as a dynamic force.
Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship
compels an individual to continuously evaluate the existing modes of business
operations so that more efficient and effective systems can be evolved and
adopted. In other words, entrepreneurship is a continuous effort for synergy
(optimization of performance) in organizations.
Profit potential:
“Profit potential is the likely level of return or compensation to the entrepreneur for
taking on the risk of developing an idea into an actual business venture.” Without
profit potential, the efforts of entrepreneurs would remain only an abstract and a
theoretical leisure activity.
Risk bearing:
The essence of entrepreneurship is the ‘willingness to assume risk’ arising out of
the creation and implementation of new ideas. New ideas are always tentative and
their results may not be instantaneous and positive.
An entrepreneur has to have patience to see his efforts bear fruit. In the
intervening period (time gap between the conception and implementation of an
idea and its results), an entrepreneur has to assume risk. If an entrepreneur does
not have the willingness to assume risk, entrepreneurship would never succeed.
Difference between Entrepreneur and Manager
The key difference between entrepreneur and a manager is their standing in
the company. An entrepreneur is a visionary that converts an idea into a business.
He is the owner of the business, so he bears all the financial and other risks.

A manager, on the other hand, is an employee, he works for a salary. So he does
not have to bear any risks.
The focus of an entrepreneur lies in starting the business and later expanding the
business.
A manager will focus on the daily smooth functioning of the business.
For an entrepreneur the key motivation is achievements.
But for the managers, the motivation comes from the power that comes with their
position.
The reward for all the efforts of an entrepreneur is the profit he earns from the
enterprise.
The manager is an employee, so his remuneration is the salary he draws from the
company.
The entrepreneur can be informal and casual in his role.
However, a manager’s approach to every problem is very formal.
The entrepreneur by nature is a risk taker. His has to take calculated risks to drive
the company further.
A manager, on the other hand, is risk-averse. His job is to maintain the status quo
of the company. So he cannot afford risks.

Entrepreneurship & Entreprenurs Unit I

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Entrepreneurship & Entreprenurs Unit I