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Entrepreneurship-meaning-types-qualities of an entrepreneur-factors influencing
entrepreneurship-functions of entrepreneur.

Entrepreneurship introduction
The term entrepreneurship denotes the process of setting up one's own business venture as
distinct from pursuing any other economic activity or any employment or practicing some
profession. The person who establishes business is termed as entrepreneur. The output of an
entrepreneurial process ends up in establishing an enterprise.
Meaning
Entrepreneurship generates employment opportunities to many people besides providing
self-employment to the entrepreneur. Any business venture started triggers a variety of
economic activities like purchasing raw material, creating employment opportunities and
so on. Thus, entrepreneurship become crucial for overall economic development of a
nation.
Entrepreneurship can be regarded as one of the four major factors of production besides the
other three namely land, labour and capital.
Definition
According to J.A. Schumpeter Joseph A. Schumpeter, "Entrepreneurship is essentially a
creative activity. It consists of doing such things as are generally not done in ordinary course
of business. An entrepreneur is one who innovates, i.e. carries out new combination or
enterprise.
As per Mary Coulter, "Entrepreneurship is the process whereby an individual or group of
individuals use organised efforts to pursue opportunities to create value and grow by
fulfilling wants and needs through innovation and uniqueness, no matter what resources the
entrepreneur currently has."
Entrepreneurship plays a pivotal role in the economic development of a country.
Characteristics of Entrepreneur
The following points highlight the characteristics of entrepreneurship.
1. Spirit of Enterprise
Entrepreneur should be bold enough to encounter risk arising from the venture undertaken.
Entrepreneur should not get discouraged by setbacks or frustrations emerging during the
course of entrepreneurial journey.

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2. Self Confidence Entrepreneur should have a self confidence in order to achieve high
goals in the business. The negativities like inconvenience, discomfort, disappointments,
rejections, frustrations and so on should not weaken his steely resolve to make the venture
a grand success.
3. Flexibility
Entrepreneur should not doggedly stick to decisions in a rigid fashion. Entrepreneur should
change the decisions made already in the light of ever-changing business environment.
4. Innovation
Entrepreneur should contribute something new or something unique to meet the changing
requirements of customers namely new product, new method of production or distribution,
adding new features to the existing product, uncovering a new territory for business,
innovating new raw material etc.,
5. Resource Mobilisation
Entrepreneur should have the capability to mobilise both tangible inputs like manpower,
money materials, technology, market, method etc., which are scattered over a wide area and
certain intangible inputs like motivation, morale and innovativeness cannot be purchased in
the market outright. Entrepreneur has to marshal all these tangible and intangible inputs to
produce a product successfully. Thus entrepreneurship is a function Of gap filling and input
completion.
6. Hard work
Entrepreneur should put in strenuous efforts and constant endeavours to accomplish the
goals of the venture successfully. They have to courageously face uncertainties, risks and
constraints. They should not blame the uncontrollable factors for the misfortunes
experienced during the course of their entrepreneurial venture. They should spend their
energy in addressing the issues to stay successful.
7. Leadership
Entrepreneur should be able to influence team members by showing sympathy and empathy
so as to enable them to contribute positively towards the goals of the venture. Entrepreneur
should lead others from the front and by personal example and should walk the talk and
effectively take all the followers to activate the goals of the venture.
8. Foresight
Entrepreneur should have a foresight to visualise future business environment. In other
words, Entrepreneur should foresee the likely changes to take place in market, consumer
attitude, technological developments etc., and take timely actions accordingly.
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9. Analytical Ability
Entrepreneurs should not make decisions on the basis of own prejudice or personal likes and
dislikes. Entrepreneur should be able to objectively analyse the situation and act
accordingly.They should abstain from taking emotional or hasty decisions when they are
overwhelmed by emotions. Entrepreneur should take rational decisions after examining the
various aspects of a problem.
10. Decision Making
Entrepreneur has to take timely and correct decision with regard to nature and type of
product to be produced, type of technology to be adopted, type of human assets to be
employed, location of the enterprise, size of the unit, and volume of production and so on.
The very success of any enterprise hinges on prompt, correct and relevant decisions made by
the entrepreneur.

TYPES OF ENTERPRENEUR
Founders or “Pure Entrepreneurs”: As the term suggests, they are those individuals who
are the Founders or “Pure Entrepreneurs”: founders of the business. They are the ones who
conceptualize a business plan and then put in efforts to make the plan a success. For
example, Dhirubhai Ambani of the Reliance Group.
Second-generation operators of family-owned businesses: They are the individuals who
have inherited the business from their fathers and forefathers. Like Mukesh Ambani and Anil
Ambani sons of Dhirubhai Ambani of the Reliance Group now split into two: Reliance –
Reliance Industries Limited and Reliance – Anil Dhirubhai Ambani Group.
Franchisees: Franchisee has been derived from a French word which means free. It is a
method of doing business wherein the parent owner (the franchiser) licenses his trademarks
and tried and proven methods of doing business to a franchisee in exchange for a recurring
payment. Here, the franchisee has not conceptualized the business but has invested his
money and time in the business.
Owner-Managers: When a person buys a business from the founder and then invests his
time and resources in it he is called the owner-manager. Like Sabeer Bhatia is the founder
entrepreneur of Hotmail, whereas Microsoft’s Bill Gates became its owner-manager after
buying it for $400 million.
The Induced Entrepreneur: These types of entrepreneurs are induced by some external
factors to start a business. The external factors could be like supporting government policies,
unemployment, family support, facilitating institutional support, etc. These types of
entrepreneur turn out to be more realistic in their approach.

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The Idea Generator: These kinds of entrepreneurs are highly creative people who are
always in search of innovative ideas for setting up new business ventures. They have the
ability to sense the demand much ahead of others.
The Real Manager: The real managers run the business in a systematic manner. They
analyse business situations, assess the demands of future, both in terms of opportunities and
threats and then take actions based on the above assessments. They believe in incremental
changes rather than radical transformations. The Real Achievers: The real achievers are full
of life. They are looking for the achievement of not even their own goals but also of people
associated with themselves like employees, suppliers and distributors.
Industrial Entrepreneur: Industrial entrepreneur is an entrepreneur who is into
manufacturing of a product. He identifies the needs and wants of customers and accordingly
manufactures products to satisfy these needs and wants. It would include all the
entrepreneurs essentially into manufacturing.
Trading Entrepreneurs: Trading entrepreneur is one who undertakes trading activities
(buying and selling of goods and services) and is not concerned with the manufacturing of
products. He identifies potential markets, stimulates demands and generates interests among
buyers to purchase a product.
Corporate Entrepreneur: Corporate entrepreneur is a person who demonstrates his
innovative skill in organizing and managing a corporate undertaking (which is registered
under some statute or act that gives it a separate legal entity).
Agricultural Entrepreneur: Agricultural entrepreneurs are those entrepreneurs who
undertake business related to agricultural activities. Like farm equipment’s, fertilizers and
other inputs of agriculture. They provide supportive products that can increase the
agricultural production through biotechnologies, mechanization and improvement in
agricultural yield.
Innovative Entrepreneurs: Innovative entrepreneurs are the forbearers of change in the
business. They are full of creative ideas and offer innovate products to the society. It is
because of these innovative entrepreneurs that many important changes occur in our society.
They experiment and conduct permutations and combinations of ideas to yield new products
and services.
Imitative Entrepreneurs: Imitative entrepreneurs adapt a successful innovation. They are
risk aversive and so they do not try out new ideas or products, but if a new idea is accepted
by the market, they imitate the new idea and hence join in the competition.
Fabian Entrepreneurs: Fabian entrepreneurs are highly cautious and sceptic in their
approach. They are not readily interested in introducing any change in their organization and
when they do so it is because unless they the change they would be out of the market.
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Drone Entrepreneurs: Drone entrepreneurs are not open to creativity and change. They do
not like changing the working of organizations with the changing times.
Women Entrepreneurs: In 1988, for the first time, the definition of Women Entrepreneurs’
Enterprise was evolved that termed an SSI unit/industry-related service or business
enterprise, managed by one or more women entrepreneurs in propriety concerns, or in which
she/they individually or jointly have a share capital of not less than 51 per cent as company/
members of a cooperative society, as a Women’s Enterprise.
Copreneurs: When both husband and wife together start and run a business venture then
they are called copreneurs. Emergence of copreneurs in the present times is a reflection
of the fact that women’s role in business is increasing.

FACTORS AFFECTING ENTREPRENEURIAL GROWTH

There are large number of varied factors which contribute to the growth of entrepreneurship.
These factors can be broadly classified into five.
PSYCHOLOGICAL FACTORS: - Inspiration for achievement prepares an entrepreneur to
set higher goals and achieve them. The important psychological factors influencing
entrepreneurial growth may be outlined as below:
 Need for Achievement
 Personal Motives
 Recognition
 Need of Authority
CULTURAL FACTORS: - Culture consists of Tangible man – made objects like furniture,
buildings etc . Intangible concepts like Laws, morals, knowledge etc .Values and behaviour
acceptable within the society.
 Culture
 Religious Belief
 Minority Groups
 Spirit of Capitalism
SOCIAL FACTORS: - What mould a man into an entrepreneur is the sociological and
environmental factors during childhood, and at the school, personal experience in adult life
at the college and job environments, the mobility, occupation and support from parents. The
social factors include:
 Legitimacy of Entrepreneurship
 Social Marginality
 Family, Role Models and Association with Similar Type of Individuals

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 Caste System
 Occupation
 Education and Technical Qualifications: - Education
 Social Status
 Social Responsibility
ECONOMIC FACTORS: - Economic factors also influence the growth of
entrepreneurship. The important economic factors are:
 Infrastructural Facilities
 Financial Resources
 Availability of Material and Know – How

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 Labour Conditions
 Market
 Support System
 Government Policy
PERSONALITY FACTORS: - The supply of entrepreneurship in a society is largely
influenced by the presence of individuals with the imitativeness, foresightedness and
organizing and managerial competence. The following personality factors contribute to the
entrepreneurial development:
 Personality
 Independence
 Compulsion

QUALITIES OF A SUCCESSFUL ENTREPRENEUR

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FUNCTIONS OF AN ENTREPRENEUR
Entrepreneur is a lead player in the drama of business. According to Kilbt, an entrepreneur

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has to perform four groups of functions:

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EXCHANGE RELATIONSHIP:
 Perceiving market opportunities
 Gaining command over scare resources.
 Purchasing inputs.
 Marketing of the products and responding to competition.
POLITICAL ADMINISTRATION:
 Dealing with public bureaucracy (concession, licences and taxes)
 Managing the human relation within the firm.
 Managing customer and supplier relations.
MANAGEMENT CONTROL:
 Managing finance.
 Managing production.
TECHNOLOGY:
 Acquiring and overseeing assembly of the factory
 Industrial engineering.
 Upgrading process and product quality.
 Introducing new products
According to Arther H. Cole, an entrepreneur performs the following functions:
 Determining the objectives of the enterprise and revising the objectives in the light of
changed circumstances.
 Developing an organization including efficient relations with subordinates and all
employees.
 Securing adequate finance.
 The requisition of efficient technological equipment
 Developing a market for the products and devising new products to meet customers
demand.
 Maintaining good relations with public authorities and with society.

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History of Entrepreneurship

Do you believe that the entrepreneurs started from around 20, 000 years back? Believe it or not but the first
trading took place in Guinea in 17, 000 BCE to exchange Obsidians for required goods. 
Agricultural Revolution: About a millennium ago, trade was done by hunters and gatherers to provide
benefits to their tribes. Moreover, during the Agricultural revolution, the entrepreneurship took a first big shift
as the people started doing farming about 12, 000 years ago and they produce food more than they required to
sell the remaining in the market. 
However, there are some other areas of specialization such as Fishing, Cooking, Tool-making, Shelter-making
and Clothes-making. The expertise increased at a high pace and tricks of the trade was becoming better and
better. It was observed that the town and cities grew and there was an establishment of religious centres,
marketplaces and courts. It gave an opportunity of entrepreneurship to experts in growing their business.
In the early times of entrepreneurship, people would work in the field of Pottery, Carpentry, Wool-making and
Masonry and the innovation increased in all areas. 
The trade expansion: Apart from the Agricultural revolution, the cities started existence nearby rivers such as
the Nile, the Tigris and Euphrates, the Indus, and the Yellow and Yangtze in 2000BCE. Another important

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turn took place in Entrepreneurship here as they started trade between cities and cultures such as the trade of
salt, Chinese paper-making, rice, coffee, lemon, oranges, gunpowder, etc. The trading of weapons became
popular at that time and it was the most successful trade of 2000BCE in the field of entrepreneurship. 
Introduction of money in the world of Entrepreneurship: During that time, trading took place based on the
barter system and the invention of money is another key element of Entrepreneurship. With the development
of currency in the form of paper money and coinage, it facilitated entrepreneurs to do long-distance trade, fair
exchange and store value. 
As the marketplaces grew, people started purchasing food, clothes and other things. So, there a huge
development happened because of Entrepreneurship as the small business owners need financial help and then,
there was the establishment of banks and guild system too. 
The beginning of Capitalism: Now, there was a revolution of innovation in Entrepreneurship as the period
gave rise to the paper mill, windmill, mechanical clock, the printing press and the map. Then, the
entrepreneurs started using innovate technologies for the innovation of their business. But here the theory of
mercantilisms introduced and the Entrepreneurs were known as merchants as well as explorers in 1492. These
entrepreneurs of that time were similar to today’s as they raise capital, took risks and stabilize the economic
growth. 
Here, capitalism has begun and the gold and silver were introduced. Moreover, the accounting advancement of
accounting advances by Luca Pacioli which created a standard track record for the firm’s account.
Machines and Markets in the 1800s: These years were fueled by “Machines and markets”. It paved the way
to Capitalism and the theory of Mercantilism destroyed in the field of entrepreneurship. 
The Industrial Revolution: There was another astounding shift in the history of entrepreneurship as the
people started migrating from the small cities to the big cities for large-scale production in the 18th century.
The fundamental changes in Entrepreneurship were the availability of energy and labour. 
Entrepreneurship after World War 2: As the economies changed over the globe, so it paved the way for the
entrepreneurs to sell their products and services worldwide through the shipping across the world. During this
period, few companies prospered such as general Electric and aircraft like Lockheed, Holiday Inns and IBM.
Japan became the largest economies in the world. 
Today’s Entrepreneurship: In these days, Entrepreneurship is of paramount importance around the world
and has a great contribution to any nation. The modern infrastructure and communication have made a new
competition in the world of Entrepreneurship.
Four types of entrepreneurship. Or approaches of entrepreneurs
 Small Businesses Entrepreneurship
 Scalable Start-up Entrepreneurship
 Social Entrepreneurship
 Large Company Entrepreneurship

 
SMALL BUSINESS ENTREPRENEURSHIP
Think about your local hardware store, coffee shop, garden centre.  These are all examples of small business
entrepreneurship.  This category doesn’t mean that you don’t have a large team and great revenue, but your
path forward is likely different than the other categories below.  Some small businesses do scale up – think of
a chain of coffee shops, where they decide to adopt a franchise model (Tim Horton’s for example), and this
can mean that your business can move between categories, but the category you fall into is based on where
your business is right now.
SCALABLE STARTUP ENTREPRENEURSHIP
A scalable start-up is often a business that is using technology or creating technology in the business.  Think of
a SAAS (Software As A Service) company that creates a Customer Relationship Management (CRM)
software.  They are going to sign on subscribers for a monthly or annual fee.  The business falls into a space
with a large market size and the potential for them to grow quickly and exponentially exists.
SOCIAL ENTREPRENEURSHIP
Social entrepreneurship is mission-driven work.  Think of an entrepreneur who develops an assistive device,
or someone who is working on making clean water more accessible to people living in rural, remote locations

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in poverty.  These are social missions, sometimes based on the UN’s Sustainable Development Goals. A social
entrepreneurship entity can be any size.
LARGE COMPANY ENTREPRENEURSHIP
This is where a larger company spins off a new division.  Though isn’t the type of entrepreneurship we often
engage with, it’s an exciting category, where we see disruptive innovation started by a company with the
funding to move quickly and make a difference.
Concept of Entrepreneurship – Modern Concept: With Views on Entrepreneurship
Modern Concept:
Entrepreneurship is a capacity which is used for establishing a venture, controlling the venture, directing the
venture as well as improving and changing the venture.
Features of Modern Concept:
(i) Capacity of establishing a venture.
(ii) Capacity of controlling a venture.
(iii) Capacity of directing a venture.
(iv) Capacity of improving a venture.
(v) Capacity of changing a venture.
Various Views of Entrepreneurship:
The various views of entrepreneurship by different authors are as following:
1. Risk Bearing Capacity:
Richard Cantillion, “It is a function of bearing non insurable risk.”
According to him, risk bearing forms a unique constitutive function of entrepreneurship. E.g., the farmer pays
out contractual incomes which are certain to the landlords and labourers and sells at prices that are certain.
Investment → Transformation → Profit or losses
Frank H. Knight, “It is a risk bearing capacity which is incalculable and cannot be insured as well.”
According to him, he distinguishes between risk and uncertainty. Farmer can be insured and calculated while
latter can neither be insured nor can be calculated.
2. Function of Organisation and Coordination:
J.B. Say, “Entrepreneurship is a function of organising and collecting the production factor.”
Here, entrepreneur is an organiser and collector. He says that entrepreneurship is an economic factor which
includes all production factors.
Alfred Marshall, “Entrepreneurship is an economic factor which collects all production factors.”
3. Managerial Skill:
B. F. Hoeslitz, “Financial ability is not the prime factor in entrepreneurship. Managerial skill is an important
factor of venture.”
J. S. Mill, “Superintendence, control and direction are the abilities of entrepreneurship.”
J. S. Mill, “Entrepreneurship is a capacity of risk bearing as well as direction.”
4. Innovation Activity:
Joseph Schumpeter, “Entrepreneurship is a creation and innovative activity.”
According to him, it is extraordinarily powerful like converting the crude oil into an energy source, whereby
established ways of doing things are destroyed by the creation of new and better ways to get things done.
5. Groups Level Reactiveness:
F.W. Young, “Entrepreneurship is a group level reactiveness. It is not related to any individual.
Entrepreneurship is a cause of social and cultural changes.”
6. Organisation Building Ability:
Fedric Harbison, “Organisation building ability is an important base of industrial development, human
development and coordination between new views in venture.”
7. Capacity of High Achievement:
Mc Clelland, “There are two features in any entrepreneurship i.e.,
(1) Ability to do any function with new & skilled manner;
(2) Capacity to take any decision at the time of uncertain time period.”
They think that entrepreneurship is not a causal behaviour, it is fully related to psychological activity.
Conclusion:
Thus, we can divide the concepts of entrepreneurship in three categories:

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1. Classical concept
2. Neo classical concept
3. Modern concept
1. Classical Concept:
Richard Cantillon, Frank H. Knight, Adam Smith, J.B. Say, J.S. Mill, David Ricardo are included in classical
ideology.
Elements:
(i) Capacity of bearing uncertainty and risk.
(ii) Ability of collecting and organising various production factor.
(iii) Ability of collecting production factors and their control and superintendence. (It can be applied on
undeveloped economy)
2. Neo Classical Concept:
Waltus Alfred Marshall, Joseph Schumpeter are the supporters of neo-classical concept.
Elements:
(i) Various managerial functions regarding business such as preparing plan, organising the production factor,
their control and direction ability.
(ii) The changing ability or innovative ability.
(iii) It is applied on all developing countries.
3. Modern Concept:
J.E. Stepnek, George Evens, Peter Kilby, Higgins, Peter F. Drucker, H.W. Johnson, Robert Lamb are the
supporter of modern concept.
Elements:
(i) Wider coverage area of commercial and industrial activities.
(ii) Risk bearing & promotion of new venture are the basic of modern ideology.
(iii) Searching new opportunities, new innovation, social innovation, dynamic leadership are the result of
modern concept.

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