Unit-2

Entrepreneurship
Entrepreneurship is the pursuit of creating, managing, and scaling a business by taking calculated risks, and
being innovative. Entrepreneurship involves combining resources, skills, and vision to bring forth new products,
services, or solutions that meet market demands and create value.
Concept of 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.
Meaning of Entrepreneur
The entrepreneur is defined as someone who has the ability and desire to establish, administer and succeed in a
startup venture along with risk entitled to it, to make profits. The best example of entrepreneurship is the starting of a
new business venture. The entrepreneurs are often known as a source of new ideas or innovators, and bring new
ideas in the market by replacing old with a new invention.
What are the 4 Types of Entrepreneurship?
It is classified into the following types:
Small Business Entrepreneurship-
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber, electrician, etc. These
people run or own their own business and hire family members or local employee. For them, the profit would be
able to feed their family and not making 100 million business or taking over an industry. They fund their business by
taking small business loans or loans from friends and family.
Scalable Startup Entrepreneurship-
This start-up entrepreneur starts a business knowing that their vision can change the world. They attract investors
who think and encourage people who think out of the box. The research focuses on a scalable business and
experimental models, so, they hire the best and the brightest employees. They require more venture capital to fuel
and back their project or business.
Large Company Entrepreneurship-
These huge companies have defined life-cycle. Most of these companies grow and sustain by offering new and
innovative products that revolve around their main products. The change in technology, customer preferences, new
competition, etc., build pressure for large companies to create an innovative product and sell it to the new set of
customers in the new market. To cope with the rapid technological changes, the existing organisations either buy
innovation enterprises or attempt to construct the product internally.
Social Entrepreneurship-
This type of entrepreneurship focuses on producing product and services that resolve social needs and problems.
Their only motto and goal is to work for society and not make any profits.
Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make entrepreneurship successful. A few
of them are mentioned below:
 Ability to take a risk- Starting any new venture involves a considerable amount of failure risk. Therefore, an
entrepreneur needs to be courageous and able to evaluate and take risks, which is an essential part of being an
entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company and earn profits out of it.
Change can be the launching of a new product that is new to the market or a process that does the same thing
but in a more efficient and economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have a clear vision of his new
venture. However, to turn the idea into reality, a lot of resources and employees are required. Here,
leadership quality is paramount because leaders impart and guide their employees towards the right path of
success.
 Open-Minded- In a business, every circumstance can be an opportunity and used for the benefit of a
company. For example, Paytm recognised the gravity of demonetization and acknowledged the need for
online transactions would be more, so it utilised the situation and expanded massively during this time.
 Flexible- An entrepreneur should be flexible and open to change according to the situation. To be on the top,
a businessperson should be equipped to embrace change in a product and service, as and when needed.
  Know your Product-A company owner should know the product offerings and also be aware of the latest
trend in the market. It is essential to know if the available product or service meets the demands of the
current market, or whether it is time to tweak it a little. Being able to be accountable and then alter as needed
is a vital part of entrepreneurship.
Importance of Entrepreneurship:
 Creation of Employment- Entrepreneurship generates employment. It provides an entry-level job, required
for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market, technology and quality
of goods, etc., and increases the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the employment base is
large and diversified. It brings about changes in society and promotes facilities like higher expenditure on
education, better sanitation, fewer slums, a higher level of homeownership. Therefore, entrepreneurship
assists the organization towards a more stable and high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of living of a person by
increasing the income. The standard of living means, increase in the consumption of various goods and
services by a household for a particular period.
 Supports research and development- New products and services need to be researched and tested before
launching in the market. Therefore, an entrepreneur also dispenses finance for research and development
with research institutions and universities. This promotes research, general construction, and development in
the economy.

Factors Affecting Entrepreneurship

Five factors will be key to entrepreneurial success: creativity, tolerance for risk, responsiveness to opportunities,
leadership and the ability to take advantage of the rights afforded to you.
Creativity and Accumulation of Ideas
Do not be dissuaded by the challenge to be creative. You need not be the original wheel creator to improve upon a
stone cylinder. By standing on the shoulders of giants, you can take existing ideas and make small improvements
upon them. Your best ideas may come to you as you are falling asleep or while you are taking a shower. Recognize
when you have a fresh idea and do not let them get away from you. Write them down! Not every idea has to be a
home run. By accumulating your ideas, you will be able to distill the great ones from the rest and be ready to run
with the best.
Risk Tolerance and Taking Advantage of Opportunity
Rewards rarely come without risk. Your ability to take advantage of an opportunity will depend, in part, on your
tolerance for risk. As the founder of a start-up, investors will expect you to have a vested interest in your business. If
you will not bet on your idea, why should anybody else?
If you cannot afford the risk, financially or emotionally, then you might make decisions that are too tepid to be
successful. To do well, an entrepreneur needs the strong sense of self-efficacy to believe the risk will be
surmountable.
Responsiveness to Opportunity
Opportunity can leave quickly. With the internet, the spread of information and ideas has led to deeper, faster
competition to be the first mover. The ability to respond to the market and new business opportunities can be the
difference between a successful entrepreneur and a failed business model.
To be responsive, an entrepreneur must have the flexibility of mind and resources necessary to see and take
advantage of new and upcoming possibilities. Learning from your mistakes and those of others to implement change
can keep businesses afloat. Calcifying rigidity, on the other hand, can turn a start-up into dust.
Leadership and Inspiring Others
It is up to the entrepreneur to marshal assets. Leaders are challenged with taking possibilities and turning them into
inspiring visions for others. You will inevitably have to sell either your idea or your product to begin your
entrepreneurship. It will be up to the entrepreneur to take the idea and turn it into actions and products to capitalize
on the opportunity. Leadership can come in many forms, but it is nevertheless essential to entrepreneurship. You
must take the lead for your ideas to come to fruition.
Intellectual Property Rights
Intellectual property laws can provide you with exclusive business rights to your ideas. If you do not protect your
ideas, they may be copied – cheaply. Once an idea is in the public domain, it may no longer be possible to use that
idea as a competitive advantage. Society values ideas being shared.
In exchange for sharing ideas, governments provide limited monopolies that will allow you to capitalize on them for
a period, making up in part for the costs you have incurred in research and development. Intellectual property
professionals can aid you in seeking such rights.

5 Skills Every Entrepreneur Should Have

1. Communication
Every entrepreneur needs to be an effective communicator. Whether a person is a solo entrepreneur or runs a
Fortune 500 company, they need to understand how to communicate effectively to all stakeholders and potential
stakeholders that touch the business.
They also need to master all forms of communication, including one-on-one and in-person conversations, group
conversations, written communication, and email or online messages.
2. Sales
The soft skill of sales goes hand-in-hand with the communication necessary to be successful. As an entrepreneur,
this person needs to be able to sell anything and everything. An entrepreneur needs to sell the business idea to
potential investors, the product or service to customers, and themselves to employees.
If an entrepreneur is able to communicate effectively, they are better equipped to sell their ideas and physical
products.
3. Focus
The path to successful entrepreneurship is riddled with ups and downs. There are the highs of successes and the
despairs of setbacks. A successful entrepreneur needs to be able to focus so they can stay the course when the going
gets tough.
4. Ability to Learn
The ability to learn is one of the most important skills to have in life, let alone in entrepreneurship. If someone is
building a business, however, the ability to learn is required for success.
The ups and downs an entrepreneur goes through are unavoidable. An entrepreneur needs a high ability to learn—
and a desire to learn. If a person is able to learn in any situation, even failure, they have the skills necessary to
become a successful entrepreneur. Failure can help expand one's knowledge and understanding of business.
5. Business Strategy
While a successful entrepreneur has, by definition, built a successful company, the skill of business strategy is
actually the fifth most important skill that an entrepreneur needs. Often, entrepreneurs achieve success in their
businesses through their own sheer strength of will.
Entrepreneur vs. Manager:
Who is an Entrepreneur?
Very basically speaking, an entrepreneur is a one-man show that runs entrepreneurship. However, such a person
usually has some unique attributes that allow him to be successful in his endeavors. He is essentially an initiator and
a leader. He brings business ideas to fruition thus starting off his venture. A successful entrepreneur is usually a
responsible person. He is accountable for the success or the failure of his venture, and he takes this responsibility
very seriously.
Who is a Manager?
A manager, on the other hand, is not an owner of an enterprise. Instead, he is the one that is responsible for the
management and administration of a group of people or a department of the organization. His day to day job is to
manage his employees and ensure the organization runs smoothly.
Types of entrepreneurs:
Innovative Entrepreneur
An innovative entrepreneur is visionary and seeks new opportunities to create and develop groundbreaking ideas,
products, or services. They are known for their ability to think creatively, take calculated risks, and disrupt
traditional business models.
Examples of innovative entrepreneurs include Elon Musk, the CEO of Tesla and SpaceX, who revolutionized the
electric vehicle and space exploration industries, and Mark Zuckerberg, the co-founder of Facebook, who
transformed how people connect and communicate globally.
Imitative Entrepreneur
An imitative entrepreneur is an individual who focuses on replicating existing business ideas, products, or services
with minor modifications or adaptations. They are skilled at identifying and duplicating successful business models
in different markets or contexts. While imitative entrepreneurs may lack novelty, they can still succeed by
capitalizing on proven concepts.
Example: Franchise owners who replicate established brand concepts and operate multiple outlets.
Fabian Entrepreneur
A Fabian entrepreneur adopts a cautious and incremental approach to entrepreneurship. They tend to proceed
gradually, making calculated decisions and mitigating risks as they progress. Fabian entrepreneurs prioritize stability
and long-term sustainability over rapid growth. They carefully analyze market conditions, customer demands, and
resource availability before making strategic moves.
Example: A small business owner who gradually expands their operations, carefully considering market
trends and customer feedback.
Drone Entrepreneurs
The another type of entrepreneur is Drone. These individuals resist embracing new opportunities and fail to
capitalize on them. They adhere to conventional methods and are unwilling to adapt their production processes, even
if it results in losses. Their resistance to change earns them the label of “laggards.”
On the Basis of Business Type
Business Entrepreneur
Business entrepreneurs start and manage businesses in various sectors. They identify market opportunities, develop
business plans, and create sustainable enterprises.
Example: Mark Zuckerberg, the co-founder of Facebook, is a prominent business entrepreneur who revolutionized
social networking and built one of the most successful technology companies in the world.
Trading Entrepreneur
Trading entrepreneurs are involved in buying and selling goods or services. They operate in the realm of trade and
play a crucial role in connecting producers and consumers.
Example: Jeff Bezos, the founder of Amazon, started as a trading entrepreneur by establishing an online bookstore.
His venture eventually grew into a global e-commerce platform that offers a wide range of products and services.
Industrial Entrepreneur
Industrial entrepreneurs are involved in manufacturing and industrial sectors. They set up factories, developed
production processes, and produced goods on a large scale.
Example: Elon Musk, the CEO of Tesla and SpaceX, is an industrial entrepreneur who has significantly contributed
to the electric vehicle and space exploration industries. He has built advanced manufacturing facilities and developed
innovative technologies.
Corporate Entrepreneur
Corporate or intrapreneurs exhibit entrepreneurial characteristics within existing organizations. They drive
innovation, develop new products or services, and identify growth opportunities for the company.
Example: Google’s “20% time” policy allows employees to work on personal projects, fostering a culture of
corporate entrepreneurship. This initiative has led to the creation of products like Gmail and Google News.
Agricultural Entrepreneur
Agricultural entrepreneurs are involved in agricultural activities, including farming, livestock production, and
agribusiness. They focus on optimizing agricultural practices and finding innovative solutions to meet the needs of
the farming industry.
Example: Joel Salatin, a sustainable farmer and advocate for regenerative agriculture, is an agricultural entrepreneur
known for his innovative farming methods. He has developed practices that prioritize soil health and animal
welfare.
On the Basis of Technology
Technical Entrepreneurs
Technical entrepreneurs possess specialized technical knowledge or skills in a specific field or industry. They
leverage their expertise to develop innovative products, services, or solutions.
Example: Bill Gates, the co-founder of Microsoft, is a technical entrepreneur with a deep understanding of
computer programming and software development. He used his technical expertise to revolutionize the personal
computer industry.
Non-Technical Entrepreneur
Non-technical entrepreneurs may not possess specialized technical knowledge but excel in other areas such as
business management, marketing, finance, or leadership. They focus on identifying market opportunities, building
teams, and creating successful businesses.
Example: Oprah Winfrey is a non-technical entrepreneur who built a media empire. While she did not have a
technical background, she excelled in media production, hosting talk shows, and connecting with audiences, which
led to her success in various ventures, including television, film, and publishing.
On the Basis of Motivation
Spontaneous Entrepreneur
A spontaneous entrepreneur is an individual who starts a business or engages in entrepreneurial activities based on
initiative and personal motivation rather than being prompted or influenced by external factors. These entrepreneurs
have an inherent drive and desire to create and innovate, often pursuing their passions or identifying opportunities
independently.
Example: Mark Zuckerberg, the co-founder of Facebook, can be considered a spontaneous entrepreneur. He started
Facebook while he was a student at Harvard University, driven by his passion for connecting people and creating a
social networking platform.
Induced Entrepreneur
An induced entrepreneur enters entrepreneurial activities due to external factors or influences. These factors could
include government policies, incentives, market conditions, or economic circumstances. Induced entrepreneurship
often arises in response to specific opportunities or external stimuli.
Example: In response to government initiatives and incentives promoting renewable energy, an individual starts a
solar panel installation company. The entrepreneur was induced to enter the industry due to favourable policies and
the growing demand for renewable energy solutions.
Motivated Entrepreneur
A motivated entrepreneur is an individual who is driven by a specific motive or purpose to start and run a business.
This motive could be financial gain, personal fulfilment, social impact, or a combination of factors. Motivated
entrepreneurs are deeply committed to achieving their goals and are willing to put in the necessary effort and
resources.
Example: Anita Roddick, the founder of The Body Shop, was a motivated entrepreneur driven by her strong
commitment to ethical and sustainable business practices. Her motivation was to provide high-quality beauty
products while promoting environmental and social responsibility.
Functions of Entrepreneur:

The entrepreneur needs to follow the steps of the entrepreneurship decision process.
1. Identification of problem or opportunity.
2. Generate alternative solutions.
3. Analyse the alternative solutions.
4. Selection of the best alternative.
5. Implementation of the alternative.
6. Review the performance.
1. Identification of problem or opportunity (Entrepreneurship decision process)

In entrepreneurship the first process of identifying opportunities or problems. The entrepreneurial decision process
Both are equal to arising opportunity and Problem if you are firm under various arising problems then you identify a
particular problem and opportunities as same.

Step by step make decision problems and find opportunity following are the steps to follow.

Problem Opportunity

 Identify of the problem  Listen to your potential clients and past leads

 Search for alternatives way  Listen to your customers

 Weighing of alternatives  Look at your competitors

  Decide a choice  Look at industry trends and insights

 Evaluate of the all results

# 2. Generate alternative solutions

Identify opportunities and problems. These first process are completed then the second decision
process generates alternative solutions. You must be innovative to choose alternative ideas. That’s
why we call this step an innovative step to make entrepreneurs’ decisions for particular taking
decisions.
# 3 Analyse The Alternative Solutions
The second step is to generate ideas then analyze those ideas alternatively you choose for your
particular purpose. You must analysis all areas of these ideas for beneficial in your organisation.
# 4. Selection of the best alternative
When you generate alternative solutions and analysis, Then Fourth steps of entrepreneurship in
deciding the best alternative decision.
When you choose the best alternative per requirement, it definitely benefits you.
# 5. Implementation of the alternative(Entrepreneurship decision process)
Selection of the best alternative in the entrepreneurship decision process then the fifth process
implements these alternatives in your purpose for getting more benefits.
# 6. Review the performance.
In the entrepreneurship decision last process review the performance means that all reviews of you
are choosing these alternatives. Look At the actual performance and previous performance what are
differences between them.
Challenges Faced by entrepreneurs:
1. Lack of Access to Capital:
Access to capital remains a persistent challenge for entrepreneurs in India. Limited funding options, especially for early-stage
startups, restrict their ability to scale their businesses and explore new opportunities.
2. Regulatory Hurdles:
Cumbersome and complex regulatory processes pose a significant challenge for entrepreneurs. Navigating through legal
procedures, obtaining licenses, and dealing with bureaucratic red tape can be time-consuming and frustrating.
3. Inadequate Infrastructure:
Entrepreneurs often struggle with inadequate physical and digital infrastructure, such as a lack of reliable power supply, poor
internet connectivity, and transportation limitations. These infrastructure gaps impede business operations and hinder growth.
4. Talent Crunch:
Finding skilled and qualified talent continues to be a significant challenge for entrepreneurs. The demand for specialized
professionals often exceeds the available supply, making recruitment and talent retention a daunting task.
5. Limited Market Access:
While India presents a massive market potential, reaching customers across diverse geographical locations and socioeconomic
backgrounds is challenging. Entrepreneurs face hurdles in establishing distribution networks and building effective marketing
strategies to tap into the vast consumer base.
6. Intense Competition:
Entrepreneurial ecosystems in India have become highly competitive. Startups often find themselves competing against
established players and other startups in crowded markets. This intensifies the need for differentiation and sustainable business
models.
7. Complex Tax Structure:
India’s tax system is complex and dynamic, making it challenging for entrepreneurs to navigate. Understanding and complying
with various tax laws, including GST (Goods and Services Tax), can be overwhelming and time-consuming for startups.
8. Inefficient Government Support:
While the Indian government has initiated several programs and policies to support entrepreneurship, the implementation and
accessibility of these schemes are often ineffective. Entrepreneurs face difficulties in availing benefits and assistance due to
bureaucratic inefficiencies.
9. Limited Intellectual Property Protection:
Protecting intellectual property (IP) remains a significant concern for entrepreneurs. India’s IP laws and enforcement
mechanisms are perceived as inadequate, making startups vulnerable to infringement and theft of their innovative ideas and
products.
10. Cultural Mindset:
The prevailing cultural mindset that favors stable jobs and traditional career paths often discourages risk-taking and
entrepreneurial ventures. Convincing family and society about the viability of entrepreneurship can be a daunting task for
aspiring entrepreneurs.
11. Lack of Mentorship:
Entrepreneurs often lack access to experienced mentors who can guide them through the intricacies of business and provide
valuable insights. The absence of a robust mentorship ecosystem hampers the growth and development of startups.
12. Limited Support for Research and Development:
Investments in research and development (R&D) are crucial for innovation-driven startups. However, limited support and
funding for R&D activities restrict entrepreneurs from exploring new technologies and developing cutting-edge solutions.
13. Inadequate Exit Opportunities:
Entrepreneurs face challenges when it comes to exiting their ventures. Limited options for mergers, acquisitions, or initial
public offerings (IPOs) make it difficult for them to realize returns on their investments and attract investors.
14. Inefficient Supply Chain Management:
Efficient supply chain management is critical for startups to ensure timely delivery of products and services. However,
entrepreneurs in India often encounter challenges in streamlining their supply chains, leading to delays and customer
dissatisfaction.
15. Mindset Shift Towards Entrepreneurship:
Lastly, a significant challenge lies in fostering a mindset shift among aspiring
entrepreneurs. Encouraging an entrepreneurial mindset from an early age,
promoting entrepreneurship in educational institutions, and inspiring innovation
can help create a more conducive environment for startups.

Changing role of entrepreneur

10 roles of an entrepreneur
Here are 10 entrepreneurial roles to familiarize yourself with before you set up a business:
1. Initiating and leading business activities
Initiating and growing a business to its maturity is a traditional role for entrepreneurs. As societies progress, people
regularly develop new needs that an entrepreneur can satisfy with their business ideas. This business idea can
provide either services or products that would benefit the community.
Identifying a gap and planning how to address it helps entrepreneurs initiate new business ventures at any
opportunity. They must understand every aspect of the business, including making critical decisions, setting a good
example for employees and resolving conflicts.
2. Allocating employees' duties
From the onset of a business, an entrepreneur needs to allocate their employees' responsibilities effectively. Hiring
qualified and competent staff requires a great deal of care, especially for small businesses. An entrepreneur is also
responsible for organizing a business structure and environment that helps each employee maximize their potential.
The success of a business venture often relies on its employees' contributions.
Therefore, defining your team's role and responsibilities is a vital entrepreneurial role to exercise for maximum
business productivity. Allocation of duties also minimizes team conflicts, maximizes production and helps boost
employee morale.
3. Forecasting business changes
Most businesses face some kind of uncertainty as they develop. An entrepreneur's role in this aspect is to anticipate
any challenges and address them as quickly as possible. Forecasting is important because it helps the entrepreneur
make decisions such as reducing or increasing stock for a product, procuring updated software or making credit
acquisition decisions.
4. Creating jobs
When an entrepreneur sets up or expands a business, they decide which employees they need to hire. Entrepreneurs
consider factors such as who oversees processes and who can fulfill administrative tasks. Even when an entrepreneur
does not directly employ staff to work in a physical location, they may still need to consider people who can work as
a service provider, a software salesperson or a programmer.
5. Identifying business opportunities
Entrepreneurs regularly seek out opportunities that can grow or boost sales for their business. They identify which
product to add and which market to expand to. An entrepreneur should listen to their potential clients and find
6. Creating and sharing wealth
Starting a business involves a network of activities. Whether an entrepreneur runs a small business operator or an
established company, many spend money from savings and gain capital from family, friends or banks when they
start out. Investors often look forward to investing in small but potentially viable businesses, while lenders grow
their own businesses by earning interest from capital extended to entrepreneurs. The cycle of such fund mobilization
can help the local economy build wealth.
7. Improving the standard of living
Economies are used to measure living standards. These living standards can improve through the developments or
services that an entrepreneur brings through their business.
Innovations that can reduce the cost of creating a product also reduces the product's price while allowing the
business to maintain the same profits, which allows customers' to spend less money. When people save money by
acquiring a product at a cheaper price, they can use the savings for other purposes. This is an indication of an
improved standard of living.
8. Taking up and reducing business risk
When entrepreneurs start a business, they spend time analyzing and researching to make sure their ideas succeed. An
entrepreneur's role is to eliminate the risk of business failure by taking measures to reduce as much risk as possible.
Such measures include bringing competent and committed employees in the company, obtaining insurance coverage
for the most risk-prone segments of the business and getting more investors motivated to grow the business.
09. Digitalizing business operations
Because technology evolves so quickly, a business product or service can be rendered obsolete due to new
technology's entry. An entrepreneur is responsible for continuously updating the technology they use in their
business processes or activities. Entrepreneur roles regarding technology include:

Changing role of entrepreneurs may be summed up as follows:

In the era of liberalization, privatization and globalization, an entrepreneur will have to
 Explore and exploit opportunities for trade in the world economy
 Discover, utilize, and develop the core strength of the economy.
 Conduct R&D activities to meet the global standards
 Improve the quality of technology and quality of manufacture to be able to complete well with
foreign competition.
 Reduction of cost of production to make the product/service available at a competitive price.
 Undertake advertising, sales promotion, marketing, packaging effectively for capturing foreign
markets.
 Develop new products, new areas of production for widening the countries trade.
 Search new markets and capture more and more markets.
 Expanding the geographical base of the marketing.
 Increase production to accelerate economic growth rate
 Come up with innovative ideas to solve financial, economic and other problems of the
countries.
 Play the role of imitating entrepreneurs i.e. study the latest changes in the advanced
countries- and use them gainfully.
 Utilize the underutilized/ unutilized capacity so that full benefits can be enjoyed e.g.
Hydropower capacities are still unutilized.

What do you mean by women enterprise?

“An enterprise owned and controlled by woman having a minimum financial interest of 51% of
the capital and giving at least 51% employment generated to women”

Problems Faced in rural entrepreneurship: