ENTEREPRENEURSHIP DEVELOPMENT

MODULE 1
CONCEPT OF ENTREPRENUR

Meaning and Definition of an Entrepreneur

An entrepreneur is ordinarily called a businessman. He is a person who combines
capital and labour for the purpose of production. He organizes and manages a business unit
assuming the risk for profit.
Definition
“An entrepreneur is one who brings together the factors of production and combines them
into a product”. J.B. Say
“An entrepreneur is an innovator playing the role of a dynamic businessman
adding material growth to economic development”. Schumpeter

Characteristics of Entrepreneur
An entrepreneur is a highly achievement oriented, enthusiastic and energetic individual. He
has the following characteristic:
1) An entrepreneur brings about change in the society.
2) Entrepreneur is action-oriented, highly motivated to takes risk to achieve goals.
3) Entrepreneur accepts responsibilities with enthusiasm..
4) Entrepreneur is thinker and doer, planner and worker.
5) Entrepreneur can foresee the future of the market with a salesman’s persuasiveness,
6) Entrepreneur undertakes venture not for his personal gain alone but for the benefit of
consumers, government and the society.
7) Entrepreneur builds new enterprises with a desire to overcome hurdles and solves the
problem and completes the job.
8) Entrepreneur finds the resources required to exploit opportunities.
9) Entrepreneur does extraordinary things as a vision, hard work, and passion.

Classification of entrepreneur-
Entrepreneurs may be classified in a number of ways.
A. ON THE BASIS OF TYPE OF BUSINESS
1) Business Entrepreneur: He is an individual who discovers an idea to start a business
and then builds a business to give birth to his idea.
2) Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e., buying
and selling manufactured goods.
3) Industrial Entrepreneur: He is an entrepreneur who undertakes manufacturing activities.
4) Corporate Entrepreneur: He is a person who demonstrates his innovative skill in
organizing and managing a corporate undertaking.
5) Agricultural Entrepreneur: They are entrepreneurs who undertake agricultural
activities such as raising and marketing of crops. They are called agripreneurs.

B. ON THE BASIS OF USE OF TECHNOLOGY:

1) Technical Entrepreneur: They are extremely task oriented. They develop new and
improved quality goods because of their craftsmanship. They concentrate more on production
than on marketing.
2) Non-Technical Entrepreneur: They are not concerned with the technical aspects of the
product. They develop marketing techniques and distribution strategies to promote their
business.
3) Professional Entrepreneur: An entrepreneur who starts a business unit but does
not carry on the business for long period. He sells out the running business and starts
another venture.

C. ON THE BASIS OF MOTIVATION:

1) Pure Entrepreneur: They believe in their own performance and undertake business
ventures for their personal satisfaction and status. They are guided by the motive of profit.
2) Induced Entrepreneur: He is induced to take up an entrepreneurial activity with a
view to avail some benefits from the government in the form of assistance, incentives,
subsidies etc..
3) Motivated Entrepreneur: These entrepreneurs are motivated by the desire to make
use of their technical and professional skills. They are motivated by the desire for self-
fulfillment.
4) Spontaneous Entrepreneur: They are motivated by their desire for self-employment
and to achieve excellence in job performance. They are natural entrepreneurs.

D. ON THE BASIS OF STAGES OF DEVELOPMENT:

1) First Generation Entrepreneur: One who starts an industrial unit by means of
his own innovative ideas and skills. He is also called new entrepreneur.
2) Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which
suit the modern marketing needs.
3) Classical Entrepreneur: He is one who develops a self supporting venture for the
satisfaction of customers’ needs. He is a stereo type or traditional entrepreneur.

E. CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY:

1) Novice: A novice is someone who has started his/her first entrepreneurial venture.
2) Serial Entrepreneur: A serial entrepreneur is someone who is devoted to one venture
at a time but ultimately starts many
3) Portfolio Entrepreneurs: A portfolio entrepreneur starts a number of businesses at the
same time. It may be a strategy of spreading risk and simultaneously excited by a variety of
opportunities.

F. CLASSIFICATION BY CLARENCE DANHOF:

Clarence Danhof, an American agriculturist, classified entrepreneurs in the following
categories:
1) Innovative Entrepreneurs: An innovative entrepreneur introduces new goods,
inaugurates new methods of production, discovers new markets and reorganizes the
enterprise. Innovative entrepreneurs bring about a transformation in lifestyle and are always
interested in introducing innovations.
2) Adoptive or Imitative Entrepreneurs: They imitate techniques and technology
innovated by others. While innovating entrepreneurs are creative, imitative entrepreneurs are
adoptive.
3) Fabian Entrepreneurs: They neither introduce new changes nor adopt new methods
others.
They try to follow the footsteps of their predecessors and follow old customs and traditions.
so.
4) Drone Entrepreneurs: Drone entrepreneurs are those who refuse to use opportunities to
make changes in production. They would not change the method of production already
introduced.

There is another classification they are commercial entrepreneurs and social

entrepreneurs.
Commercial Entrepreneurs: They start business enterprises for their personal gain. They
undertake business ventures for the purpose of generating sales and profits. Most of the
entrepreneurs belong to this category.
Social Entrepreneurs: They identify and exploit opportunities that create social values.
Social entrepreneurs starts ventures not for making profits but for providing social welfare.

TRAITS AND QUALITIES OF A SUCCESFUL ENTREPRENEUR

A successful entrepreneur has the following qualities and traits:
1. Passion for business: One of the important characteristics of a successful entrepreneur
is passion for business. This passion stems from the entrepreneur's belief that the business
will positively influence people's lives.
2. Creativity: Creativity refers to the ability of an entrepreneur to bring out new ways to
run a business. Successful entrepreneurs think of new ways to market their business. They
are always looking for new solutions to problems. Anita Roddick (founder of The Body
Shop) says, "It is a critical job of any entrepreneur to maximise creativity, and to build the
kind of atmosphere around you that encourages people to have ideas".

3. Willingness to make sacrifices and assume risks: A new venture is full of difficulties
and unanticipated problems. In order to be a successful entrepreneur he/she has to be
prepared to sacrifice his time, energy and resources in order to carry out the venture and
make it success. Risk and reward are inseparable. To earn higher gains, one has to bear
heavy risks.
4. Hard work: Willingness to work hard distinguishes a successful entrepreneur from an
unsuccessful one. For example, Assim Premji,Chairman of Wipro worked in his office
fourteen hours every day. He is a successful entrepreneur because of his hard work.
5. Desire for high achievement: Only those entrepreneurs who can dream big can become
successful entrepreneurs. Eleanor Roosevelt once said, "The future belongs to those who
believe in the beauty of their dreams". Walt Disney said, "If you can dream it, you can do it".
6. Optimism: Successful entrepreneurs are not worried by the present problems that they
face. They are optimistic about the future. This enhances their confidence and drives them
towards success. Some of the world's greatest entrepreneurs failed before they finally
succeeded.
7. Foresight: Entrepreneurs should have good foresight. They should know about the future
environment. They should be able to take timely actions. Entrepreneurs see potential where
most people see only problems or nothing at all.
8. Self confidence: This is the greatest asset of a successful entrepreneur. He must have the
confidence to make choices alone and bounce back when he fails.
9. Innovative ability: The tastes of customers change from time to time. To produce goods
according to the tastes of customers, the entrepreneur should initiate innovative activities.
10. Communication skill: An entrepreneur who can effectively communicate with
customers, employees, suppliers and creditors is more likely to succeed than the entrepreneur
who does not
11. Technical knowledge and willingness to change: The success of entrepreneur depends
largely upon their ability to adopt new technology. Technical knowledge implies the ability
to devise new products, find new uses for the existing products and also to find better ways
of producing and marketing goods and services.
12. Determination, courage and perseverance: The entrepreneur must have qualities like
will-power and determination to succeed. There will be ups and downs in a business. He
must have courage and perseverance to face them. Courage is described as 'grace under
pressure.
13. Leadership: Successful entrepreneur generally has strong leadership qualities. He must
be able to select, train and develop persons who can properly manage and control the labour
force. He is able to inspire ordinary persons to accomplish great feats. A true entrepreneur
must be able to inspire loyalty and hardwork to raise productivity and efficiency.
14. Team spirit: Successful entrepreneurs build teams and work with teammates. Working
in teams creates synergy and achieves success in its endeavours.

Functions of Entrepreneur
Following are the important functions of an entrepreneur:
1 Planning the project: Before starting a business enterprise, the entrepreneur has to take
valuable decisions regarding nature and type of goods to be produced, the form of business
organisation, amount of capital needed, selection of the location, the type of market and
market strategies to be adopted etc. The entrepreneur has to prepare a blue-print of the
proposed project including the afforesaid details. .

2. Organising: Organising and managing of the enterprise are the main functions of an
entrepreneur. It is the entrepreneur who brings together the various factors of production.
Land, Labour and Capital must be organised in such a way as to maximise production or to
minimise costs. He has to take all efforts to make an optimum utilisation of the resources
3. Risk taking and uncertainty bearing: Risks are inherent in all forms of business
activity. There may be change in demand and fashion, change in market conditions, change
in consumers' tastes etc. These risks are not insurable and an entrepreneur has to bear all
the losses and risks himself.
4. Management: An entrepreneur has to perform managerial functions also. He looks after
the day to day working of the business. He plans, directs and controls every business
activities and formulates production plan. He prepares marketing plans and strategies,
organises sales, assumes the task of personnel management etc.
5. Decision making: As a decision maker the entrepreneur has to take various decisions
regarding: (a) determination of the business objectives (b)Procurement of machine,
materials, men, money and market (c) acquisition of efficiency, technology and new
equipments (d) maintenance of good relationship with public authorities and with society at
large.
6. Search for market: After the product is produced, the entrepreneur has to explore
markets for his produce. He has to foresee the trends in the market and ascertain the
nature of demand for his product. He has to appoint efficient salesmen and arrange for
proper advertisements for his products through newspapers, TV, radio etc.
7. Distribution of income: The entrepreneur determines the reward for the various factors
of production. He makes payment to the landlord, laborer and capitalist in the form of rent,
and interest.
8. Innovation: According to Schumpeter, innovation is the most important function of a
modern entrepreneur. To innovate means to introduce something new. Entrepreneur has
to introduce new combinations of means of production. As an innovator, entrepreneur
identifies opportunities and tries to exploit them.
Schumpeter (1961) states that as an innovator, the entrepreneur carries out the following
activities: (i) Introduction of new goods, (ii) Introduction of new methods of production, (iii)
Opening of new markets, (iv) Opening of new sources of supply, and (v) Industrial
reorganisation.

6. Helping in the growth of Infrastructural Facilities: Entrepreneurs help in the growth of

infrastructural facilities such as roads, bridges, buildings, factories, etc. Establishment of
factories and industries in a particular locality presupposes the growth of infrastructural
facilities.
7. Improving Economic Independence: Entrepreneurship helps the country in achieving
economic independence. In other words, national self-reliance can be ensured due to the
growth of entrepreneurship Entrepreneurs can also export their goods and commodities
and thereby earn the scarce foreign exchange for the country
8. Backward and Forward Linkages: Setting up of an enterprise has several backward and
forward linkages. For example, the establishment of a steel plant generates several ancillary
units and expands the demand for iron ore, coal, etc. These are backward linkages. By
increasing the supply of steel, the plant facilitates the growth of machine building, tube
making, utensil manufacturing and such other units. These are forward linkages. In this way,
the entrepreneur supplements the economic growth.
9. Effective utilisation of Resources: Entrepreneurship is all about putting to better use of
the resources which are considered to be of low value with an aim of earning income. An
entrepreneur comes up with ideas of how to use what others may consider waste.
10. Export of Handicraft Items: Entrepreneurs play a significant role in producing and
exporting handicraft items. They generally use the local traditional skill, traditional
technology, local knowledge and experience for producing traditional art and craft and
handicraft items. They are both exported to foreign markets and sold locally at markets.
11. Balanced regional development: They set up industries particularly in backward areas
to avail the various concessions and subsidies offered by the Central and the State
Governments. The growth of industries and business in these areas leads to infrastructure
improvements like better roads and rail links, airports, stable electricity and water supply,
schools, hospitals, shopping malls and other public and private services that would not
otherwise be available:

Role of Entrepreneurs in the Economic Development

1. Employment opportunities: Entrepreneurs provides employment opportunities to a large
number of people. They remove unemployment problem.
2. Balanced Regional Development: They remove regional disparities and bring balanced
regional development.
3. Mobilization of Local Resources: Entrepreneurs help to mobilize and utilize local
resources like small savings and talents of relatives and friends.
4. Optimization of Capital: Entrepreneurs aim to get quick return on investment. They act
as a stabilizing force by providing high output capital ratio.
5. Promotion of Exports: Entrepreneurs exporting their goods they earn valuable foreign
exchange through exports.
6. Consumer Demands: They meet the demand of the consumers without creating a
shortage for goods.
7. Increase Per Capita Income: Entrepreneurs increase the per capita income in various
ways and facilitate development of backward areas and weaker sections.
8. Capital formation: They channelize own savings and savings of the public to productive
resources by establishing enterprises.
9. Growth of capital market: Entrepreneurs raises money for running their business through
shares and debentures. .
10. Economic Integration: Entrepreneur reduces the concentration of power in a few hands
by creating employment opportunities and through equitable distribution of income.

Factors Affecting Entrepreneurial Growth

Entrepreneurship is a function of several factors. These factors can be broadly
classified into five: (1)Psychological factors, (2) Cultural factors, (3) Social factors, (4)
Economic factors, and (5) Personality factors.

1. Psychological Factors: An entrepreneur is hungry not only for money but also
for achieving goals and prestige. The important psychological factors influencing
entrepreneurial growth may be outlined as below:
(a) Need for achievement: Need for achievement means the drive to achieve a goal. If an
individual has need for achievement, he will become a successful entrepreneur.
(b) Personal motives are expectations: These have been found to be one of the crucial
factors responsible for entrepreneurship amongst individuals.
(c) Recognition: Many people are motivated by recognition. For getting recognition
individuals shall perform independently. Many people become successful entrepreneurs
just for getting recognition from others.
(d) Need of authority (authority motivation): Need of authority will inspire men to work.
Those who want authority like to become entrepreneurs. When they become
entrepreneurs, they can exercise authority over managers, employees etc.

2. Cultural Factors: Cultural factors have an important role in shaping human behaviour
and attitude. The important cultural factors influencing entrepreneurial growth are:
(a) Culture: Culture is associated with goal set by men. Culture is closely related with
accepted values and human bahaviour. It is believed that because of the Hindu culture
capitalism has not developed in India as it is developed in western countries.
(b) Religious belief: According to Max Weber, entrepreneurism is a function of religious
belief and the impact of religion shapes the entrepreneurial culture.
(c) Minority groups: Culturally minority groups are the spark plugs of entrepreneurial and
economic development. In many countries, entrepreneurs have emerged from a particular
socio-economic class. Examples are Jews and Greeks in Medieval Europe, the Lebanese in
West Africa, the Chinese in South Africa etc.
(d) Spirit of capitalism: Spirit of capitalism is the guiding factor, which guides the
entrepreneur to engage in activities that can bring more and more profit.
3. Social Factors: Social factors have a tremendous influence on the growth of
entrepreneurship. The social factors include (a) Legitimacy of entrepreneurship, (b) Social
marginality, (c) Family background (d) Caste system (e) Occupation and (f) Educational and
technical qualification (g) Social Status, and (h) Social responsibility.
(a) Legitimacy of entrepreneurship: Some scholars are of the view that the system of norms
and values within a socio-cultural setting is responsible for the emergence of
entrepreneurship
(b) Social marginality: Social marginality promotes entrepreneurship. They may be drawn
from religious, cultural, ethnic, or migrant minority groups, and their marginal social
positions is generally believed to have psychological effects which make entrepreneurship
particularly attractive for them.
(c) Family, role models and association with similar type of individuals: If an individual has
role models who have been successful in entrepreneurship, certainly, he may be motivated
to start ventures. Family's level, standard, formation, beliefs, profession, relation etc. are
the matters directly affect entrepreneurship. Currently many big industries depend upon
family. Reliance, Tata, Birla, Mafatlal, Bajaj etc. are the industries depend upon family based
inheritance.
(d) Caste system Religion and caste play a vital role in entrepreneurial development.
Certain religions and caste encourage the growth of entrepreneurial talent. Some religious
communities like the Parsees, Marwaris and Sindhees seem to have an affinity for
entrepreneurial activity.
(e) Occupation: The environment of the family prepares its members for certain types of
business, profession or occupations. Majority of the entrepreneurs come from the
mercantile background. It is generally believed that persons with trading and business
experience are better equipped to enter into entrepreneurship.
(f) Education and technical qualifications: Education is the best means of developing man's
resourcefulness which different dimensions of entrepreneurship. It may be expected that
the high level of education may enable the entrepreneurs to exercise their entrepreneurial
talent more efficiently and effectively. The person receiving management education and
training becomes entrepreneur.
(g) Social status: Every human being aspires for a high social status and once he achieves a
reasonable level, he desires for it start getting multiplied. People work hard to maintain
their status as it also contributes to their entrepreneurial growth.
(h) Social responsibility: An entrepreneur generates employment for others besides
helping himself. Entrepreneur who are responsive to the needs of the community become
successful.

4. Economic factors: The important economic factors are: (a) Infrastructural facilities,
(b) Financial resources, (c) Availability of materials and know-how, (d) Labour conditions
(e) Market, (f) Support system and (g) Government policies.
(a) Infrastructural facilities: Land and factory sheds at concessional rates, adequate supply
of power, water, coal and other sources of energy, transport facilities and other facilities
should be provided to encourage entrepreneurs to set up new enterprises.
(b) Availability of Capital: Capital is regarded as lubricant to the process of production.
Long term finance is required to acquire fixed assets. Short term capital is required to
provide as working capital. The lack of financial resources discourages the youth and
potential entrepreneurs to start new ventures.
(c) Availability of material and know-how: Easy availability of any particular material in
any area gives specific support to certain entrepreneurs to establish and develop industries.
Technical know-how is essential for innovation. Availability of material and know-how
influences the entrepreneurial growth.
d) Labour conditions: The quality rather than quantity of labour is another factor which
influences the emergence and growth of entrepreneurship. The availability of cheep labour
positively affects entrepreneurship.
(e) Market: The size and composition of market influence entrepreneurship in their own
ways. Monopoly in a particular product in a market becomes more influential for
entrepreneurship than a competitive market.
(f) Support system: Support systems include financial and commercial institutions,
research, training, consultancy services, ancillary industry etc.
(g) Government policy: The socio-political and economic policies of the government inhibit
or foster entrepreneurial growth. Since independence, the Government laid emphasis on
the growth of small scale industries in cities, small towns and villages and providing many
institutional supports

5. Personality Factors: An entrepreneur should have some inborn qualities along with
acquired qualities. According to McClelland, people with need for achievement would
become entrepreneurs.
The following personality factors contribute to the entrepreneurial development:
(a) Personality: The entrepreneurial personality comprises of the person, his skills, styles
and motives. Impressive personality and individual skill help to develop entrepreneurship.
These qualities are required for entrepreneurs to work with officers managers, engineers,
labourers, customers, investors, govt. officers, ministers etc.
(b) Independence: An entrepreneur works out plans on his own, searches and explores
resources and experiences and uses inner urge to make the enterprise a success instead of
waiting for suggestions from others.
(c) Compulsion: Certain compelling reasons also force the people to become entrepreneurs
These include: (a) unemployment or dissatisfaction with existing job or occupation, (b) to
use technical or professional knowledge and skills, (c) to put the idle funds to use.

Definition: According to A.H. Cole, “Entrepreneurship is the purposeful activities of an

individual or a group of associated individuals undertaken to initiate, maintain or organize a
profit oriented business unit for the production or distribution of economic goods and
services”.
Meaning:
All activities undertaken by an entrepreneur to bring a business unit into existence are
collectively known as entrepreneurship. It is the process of changing ideas into commercial
opportunities and creating values. In short, entrepreneurship is the process of creating a
business enterprise.

Entrepreneur vs Intrapreneur
Entrepreneur is a person who takes a considerable amount of risk to own and operate
the business, with an aim of earning returns from that business. He is the most important
person who envisions new opportunities, products, techniques and business to make them
real.
 On the contrary, an Intrapreneur is an employee of the organization who is paid
remuneration according to the success of the business unit, for which he/she is hired or
responsible.
Comparison between Entrepreneur Intrapreneur
Basis Entrepreneur Intrapreneur
Meaning: Entrepreneur refers to a person who Intrapreneur is an employee of the
set up his own business with a new organization who is in charge of
idea or concept. production, service, process etc.
Approach: Intuitive Restorative
Resources: Uses own resources. Use resources provided by the company.
Capital: Raised by him Financed by the company.
Enterprise: Newly established An existing one
Dependency: Independent Dependent
Risk: Borne by the entrepreneur Taken by the company.
himself.

Women Entrepreneurs
Women entrepreneurs may be defined as the woman or a group of women who
initiate, organize and operate a business enterprise. Any women or group of women which
innovates, initiates or adapts an economic activity may be called women entrepreneurship.

Scope of Women Entrepreneurship

In rural areas where agriculture is the prominent activity, agro-based industries like
foodpreservation, bakery, dairy, poultry can be taken up by women. They have been helping
men in all these activities without getting any credit or money with a little training they could
do it on their own in a business like manner. In districts where industries are located, spare
parts and ancillary units can be managed by women. Apart from traditional industry, women
should also be encouraged in mechanical and electrical activities. They can be trained in
maintenance and repairs of all small machineries and they can be encouraged to start small
workshops. Technical institutes can train girls and encourage them towards self-employment.

Recent Developments in Women Entrepreneurship (Empowerment)

Women empowerment should be one of the primary goals of a society. Women should be
given equality, right of decision-making and entitlements in terms of dignity. They should
attain economic independence. Govt. of India has taken a number of measures to assist them.
Some of the important measures are outlined as follows:

1. TRYSEM: Training of Rural Youth for Self Employment was launched on 15th
August 1979 which is still continuing. The objective of TRYSEM is to provide technical
skills to youth between 18 and 35 years of age from families below the poverty line to enable
them to take up self employment in agriculture and allied activities, industries, services and
business activities. This is a sub scheme of IRDP. Training given through ITIs, Polytechnics,
Krishi Vigyan Kendra, Nehru Yuva Kendras etc

2. BANKS: Banks particularly commercial banks have formulated several schemes to

benefit women entrepreneurs. These includes Rural Entrepreneurship Development
Programmes and other Training programmes, promotion of rural non-farm enterprise,
women ventures etc.

3. NABARD: National Bank for Agriculture and Rural Development act as an apex
institution guides and assists commercial banks in paying special attention to women
beneficiaries while financing. It has also been providing refinance to commercial banks so as
to help the latter institutions to supplement their resources which could be deployed for the
purpose of financing women.

4. INDUSTRIAL POLICY: The new Industrial policy of Government has specially

highlighted the need for conducting special entrepreneurship programme for women.

5. INSTITUTIONS AND VOLUNTARY ASSOCIATION: Several voluntary

agencies like FICCI Ladies Organization (FLO), National Alliance of Young
Entrepreneurs (NAYE) and others assist women entrepreneurs. NAYE has been a leading
institution engaged in the promotion and development of entrepreneurship among women. It
assists the women entrepreneurs in following ways:
(a) Getting better access to capital, infrastructure and markets.
(b) Identifying investment opportunities.
(c) Developing managerial and productive capabilities.
(d) Attending to problems by taking up individual cases with appropriate authorities.
(e) Sponsoring participation in trade fairs, exhibitions, special conference etc.

6. NATIONAL POLICY FOR THE EMPOWERMENT OF WOMEN, 2001 : As

to the commitments made by India during the Fourth World Conference on women held in
Beijing during September, 1995, the Department of women and children has drafted a
national policy for the empowerment of women. This is meant to enhance the status of
women in all walks of life at par with men.

Assistance to Women Entrepreneurs

A number of facilities and assistance are offered to the entrepreneurs are discussed as
follows.
1. SMALL INDUSTRIAL DEVELOPMENT ORGANISATION (SIDO): SIDO
Through a network of SISI (Small Industries Service Institute) conduct the EDPs exclusively
for women entrepreneurs. The aim is to develop entrepreneurial traits and qualities among
women and enable them to identify entrepreneurial opportunities etc.
2. NATIONAL SMALL INDUSTRIES CORPORATION (NSIC): The Hire Purchase and
Equipment Leasing scheme of NSIC provides preferential treatment to women entrepreneurs.
It also conducts Entrepreneurs and Enterprise Building programmes for women.
3. INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) : The schemes of IDBI
for women are Mahila Udyan Nidhi (MUN) and Mahila Vikas Nidhi (MVN) schemes to
help women entrepreneurs. IDBI conduct programmes of training and extension services
through designated approved agencies and association.
5. COMMERCIAL BANKS: The “Sthree Shakthi Package Scheme” of SBI provides
a package of assistance to women entrepreneurs. The consultancy wings of SBI give
guidance on project identification and project viability. The Bank Of India has introduced a
scheme known as ‘Priyadarshini Yojana’ to help women entrepreneurs.
6. KUDUMBASREE UNITS: With the objectives of poverty eradication and women
empowerment Kudumbasree has been introduced in Kerala in 1997. The poor women are
organised into community- based organisations (CBO). They start and operate micro
enterprise. They earn income through self-employment.

Problems of Women Entrepreneurs

These are summarized as follows.
1) Shortage of Finance: Women and small entrepreneurs always suffer from inadequate
fixed and working capital. Banks have also taken negative attitude while lending to women
entrepreneurs. Thus women entrepreneurs rely often on personal saving and loans from
family and friends.
2) Shortage of Raw Material: They find difficult to procure material and other necessary
inputs. The prices of many raw materials are quite high.
3) Inadequate Marketing Facilities: Most of the women entrepreneurs depend on
intermediaries for marketing their products. It is very difficult to them to explore the market
and to make their product popular.
4) Keen Competition: Women entrepreneurs face tough competition from male
entrepreneurs and organized industries. They cannot afford to spend large sums of
advertisement.
5) High Cost of Production: High prices of material, low productivity, Under utilisation of
capacity etc. account for high cost of production.
6) Family Responsibilities: Management of family may be more complicated than the
management of the business. Hence she cannot put her full involvement in the business.
7) Low Mobility: One of the biggest handicaps for women entrepreneur is her inability to
travel from one place to another for business purposes.
8) Lack of Education: About 60% of women are still illiterate in India. Lack of knowledge
and experience creates further problems in the setting up and operation of business.
9) Low Capacity to Bear Risks: They are not economically independent. It causes not to
bear the risk alone. If she cannot bear risks, she can never be an entrepreneur.
10) Social Attitudes: Women do not get equal treatment in a male dominated society.
Wherever she goes, she faces discrimination. Thus, the rigid social attitudes prevent a
woman from becoming a successful entrepreneur.
12) Lack of Training .
13) Lack of Information:
Remedial Measures
To overcome all such problem efforts are being taken by all the agencies on the following
lines:
Promotional Help: To formulate project in a proper form and also in drafting project
report, getting concurrences from various authorities for different purposes.
Training: Achievement of motivation and training in the particular industry are also
being imparted.
Selection of Machinery and Technology: Suitable assistance in the choice of
appropriate machinery and equipment must be provided.
Finance: Banks and other institutions agencies are adopting special schemes for
rendering assistance women entrepreneurs.
Marketing Assistance: Providing information relating to the market condition, price
level competition and other things to women entrepreneurs.

Entrepreneurial Development Programmes – EDP

Introduction
Entrepreneurship development depends upon the prevailing economic system. The economic
system differs from country to country and hence the process of entrepreneurship
development differs. Under this system both the Government and individual entrepreneurs
play an equal role in the entrepreneurship development.
Objectives / Importance of Entrepreneurship Development
According to Schumpeter, the rate of economic growth depends upon the number of
innovations introduced by the entrepreneurs and the extent with which the financial
institutions come forward to finance the new venture businesses which are associated with
high risks.
The entrepreneurship development is needed on the following grounds:
1. Optimum Utilisation of Resources
Some of the resources are almost scarce and it is the responsibility of the entrepreneurs to
identify the alternative sources of supply of resources and also to make use of the existing
resources without doing much harm to the environment.
2. Improved Standard of Living
Entrepreneurs use the latest technology and manufacture those products which are essential
to all people at the lowest cost and thereby try to improve their living standards.
3. Ensure Industrialisation
A country is said to be advanced if there is an existence of adequate industrial units of big
and small in size. Entrepreneurship development programmes creates good atmosphere for
the aspiring and young entrepreneurs to come forward to set up industrial units especially in
the industrially backward regions.
4. Innovation is the gateway
The application of innovative technologies like computers enable businessmen and
Government to accelerate their business activities. Marked improvement has been taken
place in the filed of communication due to the application of innovative technology.
5. Allow Global Market Entry
Entrepreneurship’ development enables the manufactures to manufacture products of
international quality and thereby try to enter into the global market.

Pre-requisites for Entrepreneurship Development

1. Incubator Facilities
‘Incubators’ have been used to develop entrepreneurs for small scale industries. It enables
them to translate their research and ideas into commercial products and thereby help
consumers to enjoy the benefits of innovative technology and national development.
2. Linkage of Research and Development
Entrepreneurship development depends upon a perfect linkage between the entrepreneurs and
Research and Development institutions. The very objective of setting up of Science Park is to
enable the entrepreneurs’ to acquaint themselves with the latest research developments.
3. Cultural Behaviours
The existing cultural values is such that entrepreneurs find it difficult to change the living
style of the people. There is a wide gap between the educated and the uneducated rural
masses. Because of these variation the entrepreneurship development is said to be sluggish.
4. Cumbersome Formalities
Entrepreneurial growth is affected by Strict Government’s control on establishment and
prices, Foreign competitions, Poor infrastructure and Inadequate training facilities
including education and skill developments.
5. Other Obstacles
 Inadequate marketing information.
 Frequent change of Government and its economic policies.
  Inadequate monetary incentives that commensurate with the risks.
 Absence of data bank.

Phases or Process of EDP

The task of developing entrepreneurs consists of the following activities:
Identifying and selecting those who could be trained as entrepreneurs.
Developing their entrepreneurial capabilities
Ensuring that each potential entrepreneur has a viable industrial project
Equipping the entrepreneurs with basic managerial understanding.
Helping them to secure necessary financial and infrastructural assistance.

Identification & Selection

An integrated approach of entrepreneurial identification and selection involves several
functions at different stages.
Stage 1
Contacts with local agencies
Defining the target area, resource and business.
Development of application bank and media planning.
Stage 2
Written Test
Group Test
Interview
Stage 3:Training design and its stratification.
This multi-stage identification process helps to discriminate the potential person from the
universe against the non-potential candidates. The total activities to be adopted under this
integrated approach are given below:
Stage 1
1. Definition of target area: who will be the potential entrepreneur? what are their
background education, level of income etc?
2. Study of predominant skills - what are technical background, traditional skills of people,
and inherited professional occupation etc?
3. Studying Existing Resources - what kind of raw materials, institutional support and
infrastructure support are available in that region? Can they really facilitate the subsequent
training and follow up entrepreneurs in the particular state or region?
4. Study of potential demand – what are the consumer demands and what people really
need to purchase, export or import, what is the marketability of the product within or outside
the locality?
Stage 2
1. Structuring application blank and releasing advertisement for the programme.
2.Developing appropriate text and media mix, leaflets, posters etc. for growing awareness
and interest in the target group.
3. Exploring further linkage to foster the identification process at the local level
Stage 3
1. Strengthen the linkage agencies to enable them effectively measure pre-programme
operation.
2. Involve the local collaborating institution in the pre programme operation.
3. If possible, obtain their commitment on critical issues of support, viz., on finance, raw
material, land etc.
4. Finalise the selection tools and techniques.
 Selection of Entrepreneurs
After identifying the basic requisites of entrepreneurs in terms of their qualities and skills, it
is essential to adopt a selection process for choosing right persons who are having real
entrepreneurial aptitude.
The selection process usually consists of three stages, viz,,
Preliminary screening of applications
Assessment of candidates’ entrepreneurial abilities
Ascertainment of the need for training.
In this selection process, persons possessing a minimum level of entrepreneurial traits
and having experience with commercial or industrial activity could be getting the opportunity
of being selected. Technically qualified candidates having no experience may be selected if
their entrepreneurial capacity is adequate and if they are ready to undertake enterprises.
Interview Process
Interviewing procedure necessarily aim at confirming the personality data indicated by the
candidate during the pre-selection and selection stage. Interview can also include certain
simulation games and activities test to understand the candidates better. Thus in the selection
process, persons possessing a minimum level of entrepreneurial traits and having
experience can be selected. Those candidate who needed strengthening of entrepreneurial and
managerial capabilities may be admitted into training programme

Phases of EDP
An EDP consists of three broad phases. They are:
1. Initial or Pre-training Phase: It includes the activities and preparation required to launch the
training programmes such as: (1) Creation of infrastructure for training, (2) Preparation of training
syllabus, (3) Arrangement for inauguration of the programme, (4) programme, and (6)
Development of application form etc.
2. Training Phase: At this stage the training programme is implemented to develop motivation and
skills among the participants. They are given practical exposures in areas like market surveys,
preparation of project and its feasibility report, marketing of products
and services etc.
3. Post-Training or Follow-up Phase: The success of EDPs depends upon the extent up to which the
objectives of EDPs have been achieved. Through follow up we can understand about our past
performance, weaknesses, if any and draw up plans for removing these bottlenecks in future.
Course Content and Curriculum of EDP
The main EDP training inputs are summarised as below:
1. Technical Knowledge and Skills: A prospective entrepreneur must have a deep knowledge of the
technical aspects of the trade he chosen. He has to be well-conversant with the manufacturing
process and theories.
2. Achievement Motivation Training The purpose of achievement motivation training is to induce
and increase the need for achievement among the participants. Motivational inputs also include
psychological games, tests, goal setting exercises, role playing etc. This kind of training creates self-
awareness and self-confidence among the participants.
3. Project Management Training: Project inputs are required to help potential entrepreneurs to
develop their project ideas into viable projects. Prospective entrepreneurs should be instructed
about the importance of timely implementation of project. They should be given proper training
about scheduling of various activities, provision for effective supervision and need for avoiding
delay and consequent cost escalation.
4. Support Systems and Procedures: Prospective entrepreneurs should be given a detailed
information with regard to facilities provided by the government and other agencies and also the
formalities and procedures required to avail such facilities.
5. Market Survey: The participants should be given opportunities to actually conduct market
surveys. This would help them to assess the marketing avenues available and to study the methods
of dealing in the different markets.
6. Managerial Skill: Knowledge of various aspects of management of finance, production and
marketing should be inculcated among the participants. It should include all aspects of financial
management.
7. Industrial Visits/In-plant Training: Depending upon their products, the entrepreneurs need to
gain more knowledge about the production process, factory layout etc. For this purpose, factory
visits and in-plant training have to be arranged.
8. Project Preparation: During the course of training to identify appropriate business
opportunities, information and councelling on various feasible business opportunities is provided.
Necessary experience is provided in market surveys, project preparation, sources of finance etc.
Methods of EDP Training
Important methods may be discussed here.
1. Lecture Method : Under this method, a trainer delivers lectures to a group of entrepreneurs,
Facts, concepts, attitudes, theories and problem solving abilities are taught. This method can be
used for very large groups which are to be trained within a short time.
Advantages
Lecture method has the following advantages:
(a) It is suitable for a large group.
(b) The cost of training is less.
(c) It is more suitable for imparting the theoretical knowledge.
(d) It reduces anxiety about upcoming training programmes.
Limitations
(a) The learners are passive instead of active participants.
(b) Lack of active participation on the part of the trainees.
(c) It does not lay stress on the application of knowledge.

2. Conference Method
Conference is a formed meeting, conducted in accordance with an organised plan. Here the
leader speaks to develop knowledge and understanding by obtaining a considerable amount of oral
participation of the trainees. The purpose of the conference is to pool the thinking and experience
of the group.
Advantages
(a) It provides opportunity for two-way communication.
(b) It is suited for analysing problems and examining different viewpoints.
(c) It is an excellent method for the development of conceptual knowledge.
(d) The participants can be made active.
Limitations
(a) It is limited to a small group of participants.
(b) If the leader is not able, this method will not bring the desired result.
(c) If the participants are not active, the training will produce no impact.

3. Individual Instruction Method

Under this method, a single individual (potential entrepreneur) is selected for training After
the completion of training, he extends his knowledge to other prospective entrepreneurs. This
method is adopted when a complicated skill is to be taught.
Advantages
(a) This method is applicable in case of complicated skills to be acquired.
(b) It is easy to convey.
Limitations
(a) It is costly.
(b) It is time consuming.
(c) It is not always applicable.

4. Group Instruction Method

In this method, group of prospective entrepreneurs are selected and trained and gener instruction
is given. For similar type of work and programmes, a group is trained.
Advantages
(a) It is an economical method.
(b) It is a less time consuming method.
(c) Group of individuals are trained at a time.
Limitations
(a) Individual care is not possible.
(b) It is a one way communication.

5. Role Playing
Under this method, trainee entrepreneurs are assigned certain roles to play. For example, a
participant or a small group of participants is assigned the role of a marketing manager who is to
communicate the unique features of his product.
Advantages
(a) It helps trainees to experience a situation emotionally.
(b) It makes trainees more self-conscious.
(c) Develop leadership skill and decision making skill.
Limitations
(a) Role playing used alone is difficult and very often meaningless.
(b) It is not suitable for more sophisticated groups.

6. Meetings
This is a method involving a group of people to discuss the various problems being faced by them.
The participants exchange their ideas and views, coming to a conclusion based on the various
proposals and alternatives.

7. Other Methods: Other methods are small business mentoring, entrepreneurship tutoring,
networking, interviewing successful entrepreneurs, visiting enterprises etc.