UNIT 1- INTRODUCTION

1. UNIT 1- INTRODUCTION

2. Concept of entrepreneurship • The process of starting a business, a start-up company or other organisation. • The entrepreneur develops a business plan, acquire the human and other required resources, and is fully responsible for its success or failure. The process through which the entrepreneur manages to start-up firm is called entrepreneurship.

3. Concept of Entrepreneur • A person who organises and manages any enterprise, especially a business usually with considerable initiative & risk. • A person who sets up a business, taking on financial risks in the hope of profit.

4. Definition of entrepreneurship J. B. Say: “ an entrepreneur is one who brings together the factors of production and combines them into a product’’. Peter Drucker : “an entrepreneur is one who always searches for changes, responds to it, and exploits it as an opportunity”. Evans: “ entrepreneurs are persons who initiate, organize, manage and control the affairs of a business unit that combines the factors of production to supply goods & services whether business pertains to agriculture, industry, trade or profession.

5. Qualities of an entrepreneur Willingness to assume risk-An entrepreneur should capable of handling risk. There is a common saying “ No Risk, No Gain”. Leadership- An entrepreneur must possess the quality of a good leader and influence the group. Decisiveness- A good entrepreneur should be a good decision maker. Future course of business is directly dependent on the decision taken by the owner. He should take decisions without any unnecessary delay so as to ensure efficiency in the business. Creative thinking-Creative thinking is thinking out of the box. It involves innovation and has as approach of continuous development

6. Confidence in project-An entrepreneur must have confidence over his project, upon which he is working. If an entrepreneur is not confident about the project at first place, he cannot be a source of motivation to other employees. Flexibility-An entrepreneur should be adaptable to any adverse situation. He should enable himself and his firm any last moment change in order to avoid future difficulties. Technical knowledge- Having sound knowledge of the phenomenon is one of the most important aspects of entrepreneurship. An entrepreneur must possess sound technical knowledge about his business.

7. Ability to Marshal Resources- The success of an entrepreneur depends on his ability to manage the resources and how he puts them into use & in what composition. Marshalling resources is an art which aims at utilizing the resources at its optimum level. Market Orientation- Understanding the dynamics of the market and knowing its trends are two important traits of an entrepreneur. An entrepreneur must know the market trends and should be in a position to analyse the future/probable impact on the business Determination & Courage-An entrepreneur should be determined and courageous to take his own initiatives and should be in a positon to back/ defend his decisions.

8. Honesty-There is a common saying “ Honesty is the Best Policy.” this is also applicable in the business. He must conduct his business activities in a just and fair manner. Drive to achieve and grow-There should be a consistent approach for growth. This drive to achieve growth can act as a motivator on the part of an entrepreneur for consistent growth and development of a firm. Low need for status and power- An entrepreneur must try to maintain in a simple profile so as to accommodate his employee or any other stake holders.

9. SKILLS REQUIRED FOR ENTREPRENEURSHIP

10. CONCEPTUAL SKILL • Should know the basic concept • Should have thorough knowledge of what he is doing • They identify problem and start working on it • If particular solution is not working they should opt for another solution

11. Technical skill • Should have technical knowledge • Technological change is an important factor in economic development • Should change according to market conditions • Should introduce new ideas, new technology • New methods of production.

12. Human Relation Skill • Have good relations with customers • Should gain their confidence • Maintain good relation with the employees • Direct approach will help to know whether the customer is satisfied or not

13. Communication skills • He should communicate well • Ability to put his point across effectively • Clarity in communication • Communication must be to the point and convincing • Entrepreneur who can effectively communicate is likely to succeed in the business

14. Diagnostic skills • Know Each and everything of the business • Diagnosis is used to measure risk • Two parts – technical diagnosis and commercial diagnosis • Technical diagnosis – risk related to technological environment • Technology used today may not be used tomorrow – may became obsolete – quality will come down

15. Commercial diagnosis – when particular product is going to introduce he should know whether that product is going to make profit or loss • Proper knowledge of competitor, external threat and opportunities available

16. Decision making skill • Running business requires taking no of decisions • Means the ability to choose correct alternative from no of alternative • He should take decision himself without support of the staff • Taking no decision is better then taking wrong decision • Should analyse various aspects of business while arriving at decision

17. Managerial skill • Must have skill to manage men and factors of production • Must have ability to select, train, and maintain • If he is not able to maintain the staff then the expenditure incurred will be waste • He should manage all the resources without wasting. Optimum utilisation is important.

18. Project development skill • Well began is half done • Should select proper, suitable, and appropriate project which will give the profit • If project selected without due care it would not achieve the object

19. Marketing Skill • Success of any business depends on how they sell there product in the market • Marketing is only activity which produces revenue • All other activities incur expenses • The new venture should know better then the customer what the product or service is, • How it should be bought and what it should be used for

20. FUNCTIONS OF AN ENTREPRENEUR • Innovation- introduce new combinations, innovative ideas. • Planning- first step in setting an enterprise • Scanning suitable idea • Selection of product line • Type of business organisations • Estimate financial resources • Selection of location • Studying government policies • Availability of labour force • Studying market .

21. Risk taking and uncertainty bearing- future is uncertain. Use his initiatives, skills to reduce risk level. Procurement and mobilization of resources- arranges finance, raw materials, infrastructure facilities, sales & marketing. Taking business decisions- determining objectives, procurement of machinery, material, men, money, acquire machinery and develop market. Organising- entrepreneur coordinates, assembles, supervise factors of production, makes optimum utilization of resources. Perception of market opportunities- explore markets, find consumers tastes & preferences.

22. Marketing of products and response to competition- produce and sell the goods. Employ marketing personnel, publicity to sell the products. Financial management- business requires money at every stage. Provision of capital whenever required at lowest possible cost. Fulfilling social obligations-steps helpful for the society. Dealing with public bureaucracy- follow government norms. Abide by rules and regulations

23. Importance of entrepreneurship Boost economic activities- personal profit as well as developmental activities. (employment, environment protection) Provides balanced development- services to urban and rural areas. Balanced regional development Contributes to economic development-mixed economy (public & private) Improves standard of living-economic development Ensure high investment- employment and expansion attracts investment Earn foreign exchange- overseas transactions Adds to revenue-higher revenue for government in form o direct & indirect taxes

24. B)Origin and development of entrepreneurship

25. Theories of entrepreneurship Economic theory Sociological theory Psychological theory Integrated theory

26. Sociological theory According to sociologist: entrepreneurship emerge under specific social culture. Social sanctioned cultural values and role expectations leads to emergence of entrepreneurship. Society’s values, religious beliefs. Socio-economic class: marwadis/parsis Entrepreneur is a role performer corresponding to the role expected by the society.

27. Psychological theory According to psychologist: entrepreneurship emerges when a society has supply of individual possessing particular psychological characteristics. They are motivated by a will to power & will to conquer. Capacity to see things in a way which proves correct at later stage. Capacity to withstand social obligations. High need of achievement drives people towards entrepreneurship. They take keen interest in situation of high risk, responsibility and task performance.

28. Economic theory According to economists: entrepreneurship takes place when there are favourable economic conditions. Functions are directed towards materialistic objective of maximisation. Combine the factors of production. Goal oriented activity which directs the organisation towards the desired objectives.

29. Integrated theory No single theory generate entrepreneurship It is the outcome of combination of socio- economic, psychological factors. The political, economic, and legal factors encourage emergence of entrepreneurship.

30. Role of entrepreneur in economic development Capital formation- savings of public are utilised through issue of securities. Employment generation- self employment. Set up business units offering job opportunities. Balanced regional development- small entrepreneurs set up units in backward areas to avail subsidies offered by government. Leads to more income, more employment and overall development. Improvement in per capita income-idle resources are utilised and converted into national income . Net national product and per capita income is increased.

31. Economic independence- entrepreneurs undertake manufacturing of substitute products which reduces dependence on foreign countries. Export of these products helps to gain foreign exchange. This helps to gain economic independence. Improvement in the standard of living- create employment opportunities. Production is on large scale which brings economy of scale & product can be offered at lower cost. Consumer benefit- innovation & creativity on the part of entrepreneur helps in consumer welfare. Innovation leads to emergence of new goods & services.

32. Government revenue- generate revenue for the government through payment of direct tax in the form of personal income tax and indirectly through sales tax, excise duties, custom duties etc. Increase in the productivity- entrepreneur coordinates the various factors of production and select the best combination of factors which increases the productivity.

33. Intrapreneur Intrapreneur may be a creator who finds out how to turn an idea into profitable reality. He is a person within a large organisation who takes direct responsibility for turning an idea into profitable product. self motivated and goal oriented and responds to corporate recognition and rewards. Access to corporate resources is needed.

34. Entrepreneur VS Intrapreneur

35. Types of entrepreneurs Innovative entrepreneur- these entrepreneur are aggressive in experimentation and innovates or converts old established products/ services, by changing the utilities, their value, economic characteristics, into something new & attractive. He sees the opportunity for introducing a new technique of production process or in new commodity or in new market on new service or recognizing existing enterprise.

36. Imitative entrepreneur- Adopts successful innovation made by innovative entrepreneurs. Imitate techniques and technology innovated by others. Important in developing countries because they contribute to the development of countries.

37. Fabian entrepreneur These entrepreneurs have neither the will to introduce new changes nor the desire to adopt new methods innovated by entrepreneurs These are shy and lazy. The dealings are determined by customs, traditions, religion and past practices. They follow footsteps of their predecessors.

38. Drone entrepreneur- These entrepreneurs refuse to adopt and use opportunities to make changes in production. They are satisfied with what they have. They refuse changes in product, change in organisation and change in methods.

39. Rural entrepreneur- Is one who comes from villages. He is not used to urban life & he puts up factory in the rural area only.. His products are also agro- based items, i.e, agricultural products, poultry products, milk products.

40. Professional entrepreneur- Is a person who establishes s business and sells out the running business and starts another ventures with same proceeds. He is not interested in managing and operating business.

41. Recent trends in entrepreneurship Sociopreneur- are individuals with innovative solutions to society’s most pressing issues. Social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create, & manage a venture to make social change. These entrepreneurs assess success by the impact they have on society. They innovate welfare services

42. Edupreneur- An edupreneur brings in new ideas and concepts in the business world in connection to public education. He is related to public education system. He is involved in changing the way things function in public education system. He is the entrepreneur who plans, opens and operate educational services.

43. Ecopreneur- is someone who starts an eco friendly business venture. is one who creates and sells environmental friendly products and services. These people believe that environmental products and services can serve as a synergy of business opportunity & environmental responsibility.

46. AgropreneurIs one who uses agriculture to build a business.Conduct activities relating to agriculture

47. Women entrepreneurs An enterprise owned and controlled by women having a minimum financial interest of 51 per cent of the capital and giving at least 51 percent of the employment generated by enterprise to women.

48. Problems faced by women entrepreneurs in India Family responsibilities Social attitudes Low mobility High cost of production Lack of education Low need for achievement Shortage of finance Shortage of raw materials

49. Strategies for the development of women entrepreneurs Education & awareness Better time management Set up home based business Group entrepreneurship Simplified procedures collateral facility Training facility

50. Self help groups • Self help groups are group of people who choose to come together to find ways to improve their living conditions. • The most important function is • to encourage the group members to save • To persuade them to make a collective effort for generation of additional income. • To create welfare and awareness among people.