Introduction to Entrepreneurship

ENTREPRENEURIAL MANAGEMENT
PROF. SYED BILAL IRFAN

Overview
 Introduction to Entrepreneurship, Entrepreneur &
Enterprise
 Role of Entrepreneur in Economic Development
 Factors influencing Entrepreneurship - Pros and Cons
of being an Entrepreneur
 Differences between Manager and Entrepreneur
 Qualities of an Entrepreneur
 Types of Entrepreneurs
 Problems faced by Entrepreneurs
 National & State Institutions in Aid of
Entrepreneurship Development

WHAT IS “ENTREPRENEURSHIP”?
 Entrepreneurship is the ABILITY and
READINESS to develop, ORGANIZE and RUN
A BUSINESS ENTERPRISE, along with any of
its uncertainties in order to make a profit.
 The most prominent example of entrepreneurship
is the starting of new businesses.

WHO IS AN “ENTREPRENEUR”?
 An Entrepreneur is an individual who creates a
New Business, Bearing Most Of The Risks
And Enjoying Most Of The Rewards
 The Entrepreneur is commonly seen as an
innovator, a source of new ideas, goods, services,
and business/or procedures.

WHAT IS AN “ENTREPRISE”?
 Enterprise simple means an
ECONOMIC ORGANISATION
engaged in BUSINESS ACTIVITY.

Concept of Entrepreneurship
ENTREPRENEUR
• Person
ENTREPRENEURSHIP
• Process
ENTERPRISE
• Outcome

Comparison
BASIS FOR
COMPARISON
ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE
MEANING An entrepreneur is an
individual or a team
thereof, having an
innovative idea, and takes
every step to turn the idea
into reality, while bearing
the risks.
Entrepreneurship is a risky
activity of commencing a
business usually a start up
company, offering distinct
products and services to the
target customers, which may or
may not get success.
A business or
company.
WHAT IS IT? Person who has an idea
and gives shape to it.
Process which gives shape to the
idea.
It is the outcome of
entrepreneurship.
REPRESENTS An innovator, who chased
the dream, till it becomes
true.
A procedure through which an
innovation is done.
A business enterprise
BUSINESS VENTURE Hershel is the one who sets
up the business venture, to
turn a concept into reality.
It is the activity, which an
entrepreneur undertakes to set up
the business venture.
It is the business
venture.

Role of Entrepreneur in
Economic Development
 1. Improvement in Per Capita Income:
Entrepreneurs locate and exploit opportunities. They convert
the latent and idle resources like land, labour and capital into
national income and wealth in the form of goods and services.
They help increase Net National Product and Per Capita
Income in the country.
 2. Generation of Employment:
Entrepreneur generate employment both directly and indirectly.
By starting their business they present an opportunity to others
for work by offering jobs.

Economic Development (Cont.)
 3. Balanced Regional Development:
Entrepreneurs help to remove the regional disparities in the
economic development of areas. They set up industries in
backward areas to avail various substitutes and bring up the
development of that region.
 4. Improvement in Living Standards:
Entrepreneur set up industry which introduce new products
on a mass scale. They are at lower costs and this helps to
improve the standard of life of a common man.

Economic Development (Cont.)
 5. Economic Independence:
Entrepreneurship is essential for national self-reliance.
Industrialists help to manufacture substitutes of imported
products thereby reducing dependence on foreign countries.
These businessmen also export products thereby earning
foreign exchange for the country.

Pro’s of being an Entrepreneur
 FREEDOM
There’s no denying that one of the best parts of being an entrepreneur is
the complete freedom you have to do your own thing. No more bosses to
report to, or managers peering over your shoulder – now you’ve gone
from the bottom all the way to the top. You are the boss.
 FLEXIBILITY
And with all that extra responsibility comes flexibility. Many people are
excited to work for themselves because it means they can work when
they want and where they want. Your commute could be as simple as
walking to the couch or taking a stroll to the local coffee shop.

Pro’s of being an Entrepreneur
 PROFITS
Instead of making others richer, now your profits can slide right into your
own pocket. This means each business success becomes your success,
and as your business grows, so does your potential income. This can be
incredibly motivating for many new entrepreneurs on the path to success.
 CONTROL
Many budding entrepreneurs value control. Getting your own venture off
the ground requires heavy lifting but at the end of the day, it’s your
dream and you are in control of making it happen. Having influence over
the direction of the company is one of the most exciting parts of being an
entrepreneur.

Con’s of being an Entrepreneur
 RESPONSIBILITY
Not only is the future of your business in your hands but so is your next
paycheck. Moving away from a salaried job to an unstable income is
hard. There is great sacrifice that comes from starting your own
business, and while the pay-off may be worth it, carrying the weight of
responsibility can be difficult at first.
 RISK
As the business owner, you will take on much of the risk associated with
starting a new venture. This means, instead of your employer taking the
fall, you’re often risking your savings, time and effort to get your
business off the ground.

Con’s of being an Entrepreneur
 WORKLOAD
It takes serious hustle to get a new business up and running, and for the
most part, you’ll be doing all the grunt work – especially in the early
stages. All the heavy lifting can be hard for one person to manage. While
it can be an exciting time, full of possibility, it can also be exhausting.
 LIMITATIONS
The idea of running your own business can be very different to the reality.
From late nights to lonely weekends, being an entrepreneur is not without
its challenges. You can also find it quite limiting in the early stages,
without the funding of a big name or well-established business behind
you.

Factors That Influence
Entrepreneurship
 Creativity and Accumulation of
Ideas
 Risk Tolerance and Taking
Advantage of Opportunity
 Responsiveness to Opportunity
 Leadership and Inspiring Others
 Intellectual Property Rights

Key difference b/w
Entrepreneur and Manager
BASIS FOR COMPARISON ENTREPRENEUR MANAGER
Meaning Entrepreneur refers to a person who
creates an enterprise, by taking
financial risk in order to get profit.
Manager is an individual who takes
the responsibility of controlling and
administering the organization.
Focus Business startup Ongoing operations
Primary motivation Achievement Power
Status Owner Employee
Reward Profit Salary
Decision making Intuitive(Acts from his instinct) Calculative
Driving force Creativity and Innovation Preserving status quo(Acts according
to present scenario)
Risk orientation Risk taker Risk averse

Types of Entrepreneurs
BASED ON TYPE OF BUSINESS
TRADING
ENTREPRENEUR
MANUFACTURING
ENTREPRENEUR
AGRICULTURAL
ENTREPRENEUR
• As the name itself suggests,
the trading entrepreneur
undertake the trading
activities.
• They procure the finished
products from the
manufacturers and sell these
to the customers directly or
through a retailer.
• These serve as the middlemen
as wholesalers, dealers, and
retailers between the
manufacturers and customers.
• The manufacturing
entrepreneurs manufacture
products.
• They identify the needs of the
customers and, then, explore
the resources and technology
to be used to manufacture the
products to satisfy the
customers’ needs.
• In other words, the
manufacturing entrepreneurs
convert raw materials into
finished products.
• The entrepreneurs who
undertake agricultural pursuits
are called agricultural
entrepreneurs.
• They cover a wide spectrum
of agricultural activities like
cultivation, marketing of
agricultural produce,
irrigation, mechanization, and
technology.

Types of Entrepreneurs (Contd.)
BASED ON THE USE OF TECHNOLOGY
TECHNICAL ENTREPRENEUR NON-TECHNICAL ENTREPRENEUR
• The entrepreneurs who establish and run
science and technology-based industries
are called ‘technical entrepreneurs.’
• Speaking alternatively, these are the
entrepreneurs who make use of science
and technology in their enterprises.
• Expectedly, they use new and innovative
methods of production in their enterprises.
• Based on the use of technology, the
entrepreneurs who are not technical
entrepreneurs are non-technical
entrepreneurs.
• The forte of their enterprises is not science
and technology.
• They are concerned with the use of
alternative and imitative methods of
marketing and distribution strategies to
make their business survive and thrive in
the competitive market.

BASED ON OWNERSHIP
PRIVATE ENTREPRENEUR STATE ENTREPRENEUR JOINT ENTREPRENEURS
• A private entrepreneur is
one who as an individual
sets up a business
enterprise.
• He / she it’s the sole
owner of the enterprise
and bears the entire risk
involved in it.
• When the trading or
industrial venture is
undertaken by the State
or the Government, it is
called ‘state entrepreneur.’
• When a private
entrepreneur and the
Government jointly run a
business enterprise, it is
called ‘joint
entrepreneurs.’

BASED ON GENDER
MEN ENTREPRENEURS WOMEN ENTREPRENEURS
When business enterprises are owned,
managed, and controlled by men, these
are called ‘men entrepreneurs.’
Women entrepreneurs are defined as the
enterprises owned and controlled by a
woman or women having a minimum
financial interest of 51 per cent of the
capital and giving at least 51 per cent of
employment generated in the enterprises
to women.

BASED ON THE SIZE OF ENTERPRISE
SMALL-SCALE
ENTREPRENEUR
MEDIUM-SCALE
ENTREPRENEUR
LARGE-SCALE
ENTREPRENEUR
• An entrepreneur who has
made investment in plant
and machinery up to Rs
1.00 crore is called ‘small-
scale entrepreneur.’
• The entrepreneur who has
and machinery above Rs
1.00 crore but below Rs
5.00 crore is called
‘medium-scale
entrepreneur.’
• The entrepreneur who has
and machinery more than
Rs 5.00 crore is called
‘large-scale entrepreneur.’

OTHER TYPE OF ENTREPRENEURS
INNOVATING
ENTREPRENEURS
IMITATIVE
ENTREPRENEURS
FABIAN
ENTREPRENEURS
DRONE ENTREPRENEURS
• Innovating
entrepreneurs are one
who introduce new
goods, inaugurate new
method of production,
discover new market
and reorganize the
enterprise.
• It is important to note
that such entrepreneurs
can work only when a
certain level of
development is already
achieved, and people
look forward to change
and improvement.
• These are characterized
by readiness to adopt
successful innovations
inaugurated by
innovating
entrepreneurs.
• Imitative entrepreneurs
do not innovate the
changes themselves,
they only imitate
techniques and
technology innovated by
others.
• Fabian entrepreneurs
are characterized by
very great caution and
skepticism in
experimenting any
change in their
enterprises.
• They imitate only when
it becomes perfectly
clear that failure to do
so would result in a loss
of the relative position in
the enterprise.
• These are characterized
by a refusal to adopt
opportunities to make
changes in production
formulae even at the
cost of severely reduced
returns relative to other
like producers.
• Such entrepreneurs may
even suffer from losses
but they are not ready
to make changes in their
existing production
methods.

 Entrepreneurship development is the
means of enhancing the knowledge and
skill of entrepreneurs through several
classroom coaching and programs, and
training.
 The main point of the development
process is to strengthen and increase
the number of entrepreneurs.

 Creation of Employment
Opportunities
 Innovation
 Capital Formation
 Balanced Regional
Development
 Use of Local Resources
 Improvement in Per Capita
Income
 Improvement in the Standard
of Living
 Economic Independence
 Promotes R&D
 Development of Managerial
capabilities
Importance of

Problems of Entrepreneurship
Development
 Frequent changes of government
and its policy
 Lack of priority of
entrepreneurship development in
industrial policy
 Lack of co-ordination among
institutions
 Problems related to
entrepreneurship development
training
 Lack of training facilities for
trainers
 Lack of awareness about facilities
and support services
 Lack of adequate credit support
 Lack of appropriate institutional
set up for entrepreneurship
development training
 Crisis of confidence among the
parties involved in
entrepreneurship development

National & State Institutions in Aid
of Entrepreneurship Development
SMALL INDUSTRIES DEVELOPMENT
ORGANIZATION
 Est. 1954
 Functions: Formulating policy for the development of
Small Scale Industries in the country. Provides extended
support through Comprehensive plan for promotion of
rural entrepreneurship Institutions set up by Central
Government

MANAGEMENT DEVELOPMENT INSTITUTE(MDI)
 Est. 1973
 Sponsored by: Industrial Finance Corporation Of India
 Objectives - Improving managerial effectiveness in the
industry , Conducts management development
programs in various fields, It also includes programs
for Public Sector Undertakings such as IAS, IES, BHEL
and etc…

ENTREPRENEURSHIP DEVELOPMENT INSTITUTE
OF INDIA (EDI)
 Est. 1983
 Sponsored by - Apex financial institutions i.e, the IDBI
Bank Ltd., IFCI Ltd., ICICI Bank Ltd. & SBI
 EDI has helped set up twelve state-level exclusive
entrepreneurship development centers and institutes
across the country

ALL INDIA SMALL SCALE INDUSTRIES BOARD(AISSIB)
 It's an Apex advisory body constituted to render advise to the
Government on all issues pertaining to the small scale sector,
with a Central Government Minister as its president and the
representatives of various organization i.e. Central
Government, State Government, National Small Industries
Corporations, State Financial Corporation , RBI,SBI, Small
Industries Board and NGOs such as Public Service
Commission, Trade and Industries Members.

NATIONAL INSTITUTION OF ENTREPRENEURSHIP AND
SMALL BUSINESS DEVELOPMENT(NIESBUD)
 Est. 1983
 Objectives - To accelerate the process of entrepreneurship
development.
 To help and support agencies in carrying out activities relating to
entrepreneurship development with greater success.
 To evolve standardized process of selection, training, support and
sustenance to potential entrepreneurs.
 To provide functional forums for interaction and exchange of
experience.

INDIAN INSTITUTE OF ENTREPRENEURSHIP(IIE)
 Est. 1953
 It is an autonomous organization by the Department
of Small Scale Industries and Agro and Rural
Industries Its main objective is to undertake research,
training and consultancy activities in the field of small
industry and entrepreneurship.

RISK CAPITAL AND TECHNOLOGY FINANCE
CORPORATION LTD.(RCTFC)
 Est. 1988 with an authorized capital of 15 crores
Rupees
 Objectives - Provision of risk capital for the extension
and expansion of entrepreneurial development.
 Provision of Venture capital for the projects with high
techniques for technology development and transfer.

Introduction to Entrepreneurship

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