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Entrepreneur
Topics Covered
- Module
- 1.1 Meaning of Entrepreneur& Entrepreneurship 1 Entrepreneur
- 1.2 Characteristics of Entrepreneurs
- 1.3 Functions of Entrepreneurs
- 1.4 Importance of Entrepreneurs
- 1.5 Classification and Types of Entrepreneurs
- 1.6 Various stages in Entrepreneurial process
- 1.7 Role of Entrepreneurs in Economic Development
- 1.8 Entrepreneurship in India
- 1.9 Barriers to Entrepreneurship
- 1.10 Identification of Business opportunities
- 1.10.1 Market feasibility study
- 1.10.2 Technical feasibility study
- 1.10.3 Financial feasibility study
- 1.10.4 Social feasibility study
- 1.11 Intrapreneur
- 1.12 Traditional Manager, Entrepreneur & Intrapreneur
1. Entrepreneur
1.1 Meaning of Entrepreneur & Entrepreneurship
Entrepreneur
The spirit of enterprise makes a person is entrepreneur. Entrepreneur thus is an innovator who carries out new combinations in ever changing environment to initiate & accelerate the process of economics social & technological development. The person having a dynamic activity to prime changes in the process of production, innovations in business, new ideas & usages of resources, establishing new markets.
Entrepreneurship
Refers to the functions performed by an entrepreneur in establishing an enterprise Is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain profit by production or distribution of economic goods & services.
1.2 Characteristics of an Entrepreneurs
- Hard Work & Disciplined Dedication
- Independence
- Good Organizer
- Foresight
- Technically competent
- Innovative
- Creative
- Highly optimistic
- Desire for high achievement 1. Hard working & Disciplined Dedication: Entrepreneurs believe in themselves and are confident and dedicated to their project.
Entrepreneur Entrepreneurship Enterprise
Person (^) Process of Action Object
9. Desire for high achievement: The entrepreneurs have a strong desire to achieve high goals in business. This high achievement motive strengthens them to surmount the obstacles, suppress anxieties, repair misfortunes, and devise expedients and set up and run a successful business.
1.3 Functions of Entrepreneurs
- Determination of the business objectives.
- Recruitment of men.
- Determination form of ownership/organization.
- Raising necessary funds.
- Undertaking the business operation.
- Product analysis & market research.
- Producing machine and material
- Idea generation and scanning of the best suitable idea.
- Completion of promotional formalities.
1.4 Importance of Entrepreneurs
- Development of managerial capabilities
- Creation of organizations
- Improving standards of living
- Means of economic development 1. Development of Managerial Capabilities: The biggest significance of entrepreneurship lies in the fact that it helps in identifying and developing managerial capabilities of entrepreneurs. An entrepreneur studies a problem, identifies its alternatives, compares the alternatives in terms of cost and benefits implications, and finally chooses the best alternative. 2. Creation of Organizations: Entrepreneurship results into creation of organizations when entrepreneurs assemble and coordinate physical, human and financial resources and direct them towards achievement of objectives through managerial skills. 3. Improving Standards of Living: By creating productive organizations, entrepreneurship helps in making a wide variety of goods and services available to the society which results into higher standards of living for the people. 4. Means of Economic Development: Entrepreneurship involves creation and use of innovative ideas, maximization of output from given resources,
development of managerial skills, etc., and all these factors are so essential for the economic development of a country.
1.5 Classification and Types of Entrepreneurs
According to the type of business:
- Business entrepreneur
- Trading
- Industrial
- Corporate
- Agricultural
- Retail
- Service
According to the use of technology:
- Technical entrepreneur
- Non technical entrepreneur
- Professional entrepreneur
- Low technology
- High technology entrepreneurs
According to Motivation:
- Pure entrepreneur
- Induced entrepreneur
- Motivated entrepreneur
- Spontaneous entrepreneur Pure entrepreneur - not for economic rewards awn satisfy by psychological Induced entrepreneur - Polices measures provides assistance, incentives by the support of government & institutions Motivated entrepreneur - self fulfillment for making & marketing same things new Spontaneous entrepreneur - inherent national talent by boldness initiative in any enterprise self confident.
According to the Growth
- Growth entrepreneur
- Super growth entrepreneur
According to the stages of Development
- First generation entrepreneur
- Produce entrepreneur
Step2: Evaluation of opportunity It involves length of opportunity, its real perceived value its risks & resources, with personal skills goals of entrepreneur & its uniqueness or differential advantages in its competitive environment. The length of opportunity and size & share are two main aspects for deciding the risk & gains or profits. SWOT (Strength, weakness, opportunities & treats) analysis. This plan includes
- Description of product
- Agreement of opportunity
- Assessment of the entrepreneur
- Resources needed
- Amount & sources of capital
- Profit expected Step3: Development of a business plan
- Title of project, table of contents & executive lumserasy
- Description of business & industry.
- Technology plan
- Financial plan
- Organization plan
- Production & operation plan
- Marketing & distribution plan
- Summary Step4: Determination & organizing the resources Begins with assessment of present resources. Organizing the required resources at the appropriate time is another important aspect of entrepreneurial process. Alternative sources of supply, process of manufacture, are to be planned.
Step5: Management of enterprise After resources are acquired, the entrepreneur must use them to implement the business plan
- Increased administrative expenses.
- Some times it could result in heated arguments.
1.7 Role of Entrepreneurs in Economic Development
The role of entrepreneurship in economic development varies from economy to economy depending upon its
material resources, industrial climate and the responsiveness of the political system to the entrepreneurial function. The important role that entrepreneurship plays in the economic development are enumerated below. Entrepreneurship promotes capital formation by mobilizing the idle saving of the public. It provides immediate large-scale employment. Thus, it helps reduce the unemployment problem in the country, i.e., the root of all socio-economic problems. It promotes balanced regional development. It helps reduce the concentration of economic power. It stimulates the equitable redistribution of wealth, income and even political power in the interest of the country. It encourages effective resource mobilization of capital and skill which might otherwise remain unutilized and idle. It also induces backward and forward linkages which stimulate the process of economic development in the country. Last but no means the least; it also promotes country’s export trade i.e., an important ingredient to economic development. Thus, it is clear that entrepreneurship serves as a catalyst of economic development. On the whole, the role of entrepreneurship in economic development of a country can best be put as “an economy is the effect for which entrepreneurship is the cause”
1.8 Entrepreneurship in India
India is second among all nations in Total Entrepreneurship Activity as per the Global Entrepreneurship Monitor Report 2002. Over the years India has concentrated more on the development of the institutions that support private enterprise by building a stronger infrastructure to support it. The Government has encouraged entrepreneurship by providing training and also the facilities to succeed, particularly in the rural areas. Moreover, in India, the post-liberalization and globalization era has brought with it a growing middle class - roughly estimated to be 250 million - and rising disposable incomes. This presents a huge potential, which if tapped can be a veritable gold mine. Entrepreneurs can make the best of this by catering to various demands of this segment. According to the Global Entrepreneurship Monitor (GEM) India Report 2016-17, prepared by Gandhinagar-based Entrepreneurship Development Institute of India (EDI) and its associates, 11 per cent of India's adult population is engaged in "total early-stage entrepreneurial activity (TEA)."
1.10 Identification of Business opportunities
Business opportunities/ideas can be obtained from various Magazines Own idea Trade Fairs/Exhibitions Journals/Research publications Financial institutions/Banks Government agencies Commercial organizations Social & Economic trends Friends Relatives Competitors Choosing of best business opportunity/idea from the information collected requires ingenuity, skill and foresight of entrepreneur. An entrepreneur has to identify and select the most rewarding opportunity from the available ones. For this one has to evaluate the following areas and understand the gap between demand and supply. Study of government rules and regulations Study of investment SWOT analysis Market feasibility study. Technical feasibility study. Financial feasibility study and Social feasibility study
An opportunity can be defined as an attractive and excellent project idea which an entrepreneur searches
for and accepts such idea as a basis for his investment decision.
1.10.1 Market Feasibility Study
Feasibility study is a detailed work of collection of data analysis and concludes the feasibility of that operation. Market feasibility study involves the study and analysis of the following aspects. Market feasibility study will assess whether the product has good market. This needs to study the following: Nature of market: The nature of market in terms of monopolistic or perfect competition is to be studied. Cost of production: It is essential to study and control cost of production. Cost of production decides the selling price.
Selling price and profit: Selling price plays a vital role in profit. In price sensitive goods like cosmetics, one should be careful in fixing the price. Demand: Present demand and demand forecast are prepared and studied. This will decide the facility planning. Market share: Estimated market share is to be made. Comparison is made with share of similar products. Target market: Study is made with regard to the target market and market segmentation.
1.10.2 Technical Feasibility Study
In technical feasibility study, the following points are studied. Location of the project: The data regarding the location of project is very important. It may be located in rural, urban or semi- urban areas. Construction of factory, building and its size: The construction details, the nature/type of building and its size for the project are to be analyzed. Availability of raw materials: The study of availability of raw materials, sources of supply, alternate sources, its quality and specifications cost etc., are to be studied. Selection of machinery: The selection of machinery required to produced the intended product is to be carried out. The specifications are capacity, cost sources of supply, technology evaluation of various makes of the machine. Their good and bad etc., are studied. Utilities: The details about availability of utilities like water, gas electricity, petrol, diesel etc. are to be studied. Production capacity: Establishment off production capacity and utilization of production capacity are analyzed. Staff requirement: Study and analysis of requirement of workers, technical staff and officers etc. is to be made. Technical viability: The technical viability of the opportunity is to be studied.
1.10.3 Financial Feasibility Study
Financial feasibility is the most important aspect of a business opportunity. So me of the aspects involved in financial feasibility study are: Total capital cost of project: It is very essential to study the total cost of project. This includes fixed capital, working capital and interest factor. Sources of capital: The study of main sources of capital is to be made. If capital is borrowed, interest burden is to be studied in detail. Subsidiary sources for additional finance: After study of main sources of capital, subsidiary sources of capital are to be identified and studied.
1.12 Manger, Entrepreneur & Entrepreneur
Traditional Manager Entrepreneur Intrapreneur
Primary motive
Aim on getting Promotion and other Traditional corporate rewards such power
Aim on Independence opportunity to create money
Aim on Independence and ability to advance in corporate rewards
Risk Careful, completely avoid risk activities such as risk projects Moderate risk taker
Not fully risk taker, he tends to hide risky projects until there are on lower level of risk Activity Delegates direct involvement^ and^ supervises more thanDirect involvement Direct involvement delegation^ more than
Failure and mistakes Tries to avoid^ mistakes^
Deals with mistakes and failure positively
Attempts to hide risk projects from view until ready Relationship with others Hierarchical^ Transaction^ Transaction with^ hierarchy Decision Usually agrees with management those in upper Follow dreams with decisions
Follow dream but able to get others to agree to help in achieving the dream Operation Involves in functional operations Operates from inside depending on firms size^ or outside^ Operation from within organization^ the
QUESTION BANK
Q. No. Question Marks
- What is entrepreneurship? List the characteristics of entrepreneur? Explain in brief? 10
- Derive the functions & importance of entrepreneurs? 10
- Classify the types of entrepreneurs? Explain in brief? 10
- How entrepreneurship plays an important role in economic development? 10
- Recall the barriers of entrepreneur & explain? 10
- List some of the most commonly used attributed reasons for the lack of entrepreneurship in India?^10
- Describe the steps/stages involved in entrepreneur? 10
- Analyse the Market & Technical feasibility study to be carried out for an organization? 10
- Analyse the Financial & Social feasibility study to be carried out for an organization? 10
- Write a note on: i) Entrepreneurship in India ii)Identification of Entrepreneur 10
- Discuss the myths about entrepreneurship? 10
- Compare traditional manager, intrapreneur & entrepreneur 10
