EDC PDF UNIT 1.pdf
- 1. Introduction The word entrepreneur is derived from the French word ‘enterprendre’ it means “to undertake” and literally translated means “between-taker” or “go-between”. Entrepreneur is an individual who takes risk and starts something new. Who Are Entrepreneurs? 1. Entrepreneur is another name of Risk Taker. 2. An entrepreneur is an individual who takes moderate risks and brings innovation. 3. Entrepreneur is a person who organizes/ manages the risks in his/her enterprise. 4. “Entrepreneur is a individual who takes risks and starts something new”
- 2. Meaning of Entrepreneur An Entrepreneur is a person who perceives a need and then brings together manpower, material and capital required to meet that need. In other words an entrepreneur is an individual or team that identifies the opportunity, gathers the necessary resources, creates and ultimately responsible for the performance of the organization.
- 3. Meaning of Entrepreneur An Entrepreneur is a person who perceives a need and then brings together manpower, material and capital required to meet that need. In other words an entrepreneur is an individual or team that identifies the opportunity, gathers the necessary resources, creates and ultimately responsible for the performance of the organization. Concept of Entrepreneurship : Concept of entrepreneurship can be explained with the help of following diagram Entrepreneur Entrepreneurship Enterprise Person Process of Action Object
- 4. E:xamine needs, wants, and problems to see how they can improve the way needs and wants are met and problems overcome. N :arrow the possible opportunities to one specific "best" opportunity. T:hink of innovative ideas and narrow them to the "best" idea. R:esearch the opportunity and idea thoroughly. E:nlist the best sources of advice and assistance that they can find. P:lan their ventures and look for possible problems that might arise. R:ank the risks and the possible rewards. E:valuate the risks and possible rewards and make their decision to act or not to act. N:ever hang on to an idea, no matter how much they may love it, if research shows it won't work. E:mploy the resources necessary for the venture to succeed. U:nderstand that they will have to work long and hard to make their venture succeed. R:ealize a sense of accomplishment from their successful ventures and learn from their failures to help them achieve success in the future.
- 5. Definition of Entrepreneur According to Harbison "An entrepreneur is not an innovation but an organization builder or one who has the skill to build an organization and who must be able to harness the new ideas of different innovators to the best of the organization.“ Meaning of Entrepreneurship Entrepreneurship refers to a process of action an entrepreneur undertakes to establish his enterprise. It is a creative and innovative response to the environment. In other words entrepreneurship can be defined as an ability to discover, create or invent opportunities and exploit them to the benefit of the society, which in turn brings prosperity to the innovator and his organization.
- 6. Entrepreneur and Entrepreneurship Entrepreneur Entrepreneurship Person Process Visualizer Vision Organizer Organization Decision maker Decision Making Innovator Innovation Risk bearer Risk bearing Motivator Motivation Creator Creation Leader Leadership Manager Management Initiator Initiation Planner Planning Technician Technology Communicator Communication Administrator Administration
- 7. Characteristics of an Entrepreneur Vision entrepreneur works hard to fulfill his dream in process to achieve his objective, he visualizes market scenario, socio economic, and technological environment based on these information he predicts future situation and accordingly plans his vision and ways to achieve desired objective. Knowledge as entrepreneur is soul of organization he is required to have knowledge about all the operations carried in organization so that he can direct and regulate activities of his employees from time to time. Desire to succeed entrepreneur are recognized in society because of their varied mindset and high dreams which motivates them to bring in invention and innovation in are of their business. Independence : An entrepreneur needs independence in work and decision-making. They don't follow the rules of thumb but make their own rules and destiny.
- 8. Optimistic entrepreneurs are optimistic about achieving their objective as they intend to take risk to any extent to accomplish desired goals Value addition entrepreneurs are known for bringing new things in market. They create, innovate, add value to existing products in market. Leadership entrepreneur exhibits qualities of good leader. They are good planners, organizers, decision makers and are empathetic towards employees at workplace. Hardworking entrepreneur are know to be workaholic. They put in continuous efforts to achieve success and know that their is no substitute for hard work. Risk taking ability is one of the major trait of successful entrepreneur .
- 9. qualities and functions of the entrepreneurs Qualities of An Entrepreneur : An entrepreneur is a person who takes risk of setting up his own venture for perceived reward. He is a person who initiates the idea, formulates the plan, organizes resources and puts the plan into action to achieve his goals. The entrepreneur must have following qualities:- Planner : Entrepreneur has a strong desire to achieve a higher goal and make their dreams come true. So the entrepreneur must have these quality to achieve the target an entrepreneur cannot achieve the target. Technician : An entrepreneur must have the technical knowledge. He should know that how to use the resources and achieve the target. Risk Bearing Ability : Risk is very important element. An entrepreneur must have capacity to bearing risk an entrepreneur cannot success.
- 10. Decision Maker : Decision making is the process of choosing best alternative among various alternatives. An entrepreneur must have these qualities because decision making affect the profitability and reputation of the enterprise. Ability to Find and Explore Opportunities : Entrepreneurial persons are quick to see and seize opportunities. They show an innovative turn of mind and convert difficulties into opportunities. Motivator : An entrepreneur must have a motivator. He inspires the employees to achieving the target. Without motivation an entrepreneur cannot achieve the target. So motivation is very necessary for achieving the target Future Oriented : Entrepreneur shows a high level of future orientation. They do not allow the past to obsess them. They are oriented towards present and future. Interpersonal Skills : An entrepreneur is a person who during the course of his activities he should be a person who likes working with people and who has skills of dealing with people.
- 11. Facing Uncertainty : An entrepreneur is a person who faces uncertainty. The future is uncertain. So the decision of entrepreneur affects the profitability and reputation of the enterprise. Coordination : An entrepreneur must have a coordinator. He allocates the resources and utilizes the resources for achieving the target. Without coordination an entrepreneur cannot achieve the target. Functions of Entrepreneur An entrepreneur has to perform the following function: Risk taking and Uncertainty Bearing : The future is unpredictable. The entrepreneur has to take risks in these circumstances. If the venture succeeds, the entrepreneur profits; if it doe not, losses occur. Thus, taking risks forms an important entrepreneurial function. Taking Business Decisions : All decision concerning business are taken by the entrepreneur. He has to formulate an action plan regarding the product and quality of the product to be produced. He has to evolve the best possible method of production which would earn him a sizeable profit.
- 12. Managerial Functions : The entrepreneur performs various managerial functions. The entrepreneur arranges finance, purchase raw materials, provides the necessary infrastructure for production. The entrepreneur has a multifaceted personality when he undertakes managerial functions. Innovation : The most important function of an entrepreneur is innovation. He introduces far-reaching improvements in the quantity and quality of production line. He considers the economic viability and technical feasibility of an invention. Coordination : The entrepreneur coordinates the other factors of production. Coordination involves selection of the right type of factors, employment of each factor in the right quantity, use of the best technical devices, division of labour, reduction of waste etc.
- 13. Maintain Good-Relations : An entrepreneur must have good relations with his customer to earn profit and win their confidence in his product. He must also maintain good relations with his employees. Analysis the Environment : An entrepreneur analysis the environment. Environment are those factor which affect the business. There are two type of environment: Internal Environment : Internal environment are controllable External Environment : External environment are beyond the control of the business. Planning : Planning is the first function of the management. Planning is deciding in advance what is to be done, how is to be done, which is to be done, by whom is to be done. It is very necessary function of entrepreneur. Without planning an entrepreneur cannot achieve the target.
- 14. Attitude attributes can put you in the right mindset for achieving entrepreneurial success Have passion for your business. Work should be fun. Your passion will help you overcome difficult moments and persuade people to work for you and want to do business with you. Passion can't be taught Set an example of trustworthiness. People have confidence in trustworthy individuals and want to work for them in a culture of integrity. The same is true for customers. Be flexible, except with core values. It's a given that your plans and strategies will change as time goes on. This flexibility for rapid change is an inherent advantage of small over large business. However, no matter the pressure for immediate profits, do not compromise on core values. Don't let fear of failure hold you back. Failure is an opportunity to learn. All things being equal, venture capitalists would rather invest money in an individual who tried and failed founding a company than in someone who never tried.
- 15. Make timely decisions. It's okay to use your intuition. Planning and thought are good. But procrastination leads to missed opportunity. The major company asset is you. Take care of yourself. Your health is more valuable than the most expensive machinery or computer software for the company. You don't have to choose between your family or your company, play or work. Maintain your health for balance and energy, which will, in turn, enhance your mental outlook. Keep your ego under control. Don't take profits and spend them on expensive toys to impress others. Build a war chest for unexpected needs or opportunities. This also means hearing out new ideas and suggestions no matter how crazy they sound. Believe. You need to believe in yourself, in your company, and that you will be successful. This confidence is contagious with your employees, customers, stakeholders, suppliers and everyone you deal with.
- 16. Encourage and accept criticism graciously. Admit your mistakes. You need to constantly work on convincing your employees that it's okay--even necessary-- to state their honest opinions even it if conflicts with the boss's opinion. Maintain a strong work ethic. Your employees will follow your lead. It will also help you beat your competition by outworking them, particularly when your product or service is very similar. Rebound quickly from setbacks. There surely will be plenty of ups and downs as you build the business. Learn from the setbacks and move on. You can't change the past. Periodically get out of your comfort zone to pursue something important. Many times you will feel uncomfortable in implementing a needed change in technology, people, mission, competing, etc. For the company and you to grow personally, you sometimes have to step out of your comfort zone.
- 17. common entrepreneurial leadership characteristics Communication skills The leader is able to clearly articulate their ideas, and the plan to achieve common goals. They encourage communication between departments and across levels. They avoid ambiguities and generalizations, and are able to avoid conflict and misunderstanding due to poor communication. Vision A successful entrepreneurial leader has a clear vision. He knows exactly where he wants to go and how to get there. They communicate their vision to the team and work with them to make the vision a reality. Supportive An entrepreneurial leader realizes the importance of initiative and reactiveness, and they go out of their way to provide all the support that the team needs to achieve their goals.
- 18. Self-belief The leader has tremendous belief in themselves and has confidence gained from years of experimenting, at times failing, and learning. They are aware of their strengths and weaknesses, and demonstrate their skills without hubris. Shares success When the team or the organization succeeds at something, the leader does not hog the limelight or take all the credit. Involved You will not find an entrepreneurial leader cooped up in the office. Leaders like to spend time among employees, walk around the factory or department, interact with everyone, and see them doing their job. Create an atmosphere conducive to growth With a deep understanding of the importance of other people’s contribution to organizational success, the entrepreneurial leader creates an atmosphere that encourages everyone to share ideas, grow, and thrive
- 19. Honesty Honesty is the most important quality of an exceptional leader. Entrepreneurial leaders who are honest are able to quickly win the trust of their employees Perseverance When the going gets tough, the entrepreneurial leader perseveres. True entrepreneurs simply don’t quit, they keep going till they find what they’re looking for. Learning The leader not only invests significantly in learning and updating their knowledge, but they also create a learning environment in the organization encouraging others to improve their knowledge, widen their experience, and tackle multiple challenges.
- 20. Comparison between Entrepreneur and Manager Entrepreneur Manager Definition A person who sets up a business or businesses, taking on financial risks in the hope of profit A person responsible for controlling or administering an organization or group of staff Business Set up their own business Work in someone else’s business Role Owner Employee Financial Risks Take on the financial risks of the business Does not take on the financial risks of the busines Reward Profit Salary Management Manages the business and the people involved, i.e. staff Manages the business and the people involved, i.e. staff Focus Business startup Ongoing operations Decision making Intuitive Calculative Approach to task Informal Formal
- 21. Role of Entrepreneur in Economic Growth : Modern economic development is closely linked with production. Modern production is higher complex. The entrepreneur directs production and he must do whatever is necessary for its success. His role in modern economic development has at least three aspects: 1. The entrepreneur co-ordinates the other factors of production. This involves not only assembling the factors, but also to see that the best combination of factors is made available for the production process. 2. The entrepreneur takes risks. This is the important function of the entrepreneur and the quantum of profit he receives is directly proportionate to the risks he takes. Risks are generally based on the anticipation of demand. 3. Finally the entrepreneur innovates. Innovation is different from invention. Invention is the work of scientists. Innovation implies the commercial application of an invention. As an innovator the entrepreneur assumes the role of a pioneer and an industrial leader.
- 22. The entrepreneur can undertake anyone type of the following five categories of innovation: 1. The introduction of a new good or a new quality of a good 2. The introduction of a new method of production 3. The opening of a new market 4. The conquest of a new source of supply of raw materials 5. The carrying out of a new organization of any industry. Importance of Entrepreneur in Economic Development : Every country tries to achieve maximum economic development. The economic development of a country to a large extent depends on human resources. But human resource alone will not produce economic development-there must be dynamic entrepreneurs
- 23. Employment Generation : Growing unemployment particularly educated unemployment is an acute problem of the nation. If a hundred persons become entrepreneur they not only create a hundred jobs for themselves but also provide employment to many more. National Income : National Income consists of goods & services produced in the country and those imported. The goods & services produced are for consumption within the country as well as to meet the demand of exports Dispersal of Economic Power : When a society produces a small number of entrepreneurs the enterprise due to lack of competition grow into a few big business houses. This results in concentration of wealth in a few families. This can have a serious social and national implication Balance Regional Development : The growth of industry and business leads to a large number of public benefits like road, transport, health, education, entertainment etc. A rapid development of entrepreneurship ensures a balanced regional development. Economic Independence : Entrepreneurship is essential for national self-reliance. Businessman export goods and services on a large scale and earn the scarce foreign exchange for the country
- 24. Reducing Unrest and Social Tension Amongst Youth : Many problems associated with youth and social tensions are rightly considered to be due to youth not being engaged in productive work. Improvement in Living Standards : Entrepreneurs set up industries which remove scarcity of essential commodities and introduce new products. Production of goods on mass scale and manufacture handicrafts etc. in the small scale sector help to improve the standard of life of a common man Harnessing Locally Available Resources and Entrepreneurship : India is considered to be very rich in natural resources. Innovations in Enterprises : Business enterprises need to be innovative for their survival and better performance. Entrepreneurship development programmes are aimed at accelerating the pace of small firms' growth in India.