UNIT 1

ENTREPRENEUR

Objectives

A er going through this unit, you will be able to:

· Understand who Entrepreneur's are ;

· What are their characteris cs?
· Understand the role of women Entrepreneur.

Structure
1.1 Introduc on
1.2 The Entrepreneur: Defini ons and Concept
1.3 Entrepreneurial Traits
1.4 Characteris cs and Skills
1.5 Entrepreneur vs. Professional Managers
1.6 Successful Entrepreneurs
1.7 Women Entrepreneurs
1.8 Summary
1.9 Self-Assessment Ques ons
1.10 Model Answers

1.1 INTRODUCTION

No sector of the economy is as vital, dynamic, and crea ve as entrepreneurship. For

the past thirty years, the impact of entrepreneurs and small- business owners in the
crea on of new ventures has been felt in virtually all the world's mature as well as
developing economies. The startling growth of entrepreneurial ventures forms the
heart of our changing economic system as more employees work for these owners
than for any other sector of the economy. In the Indian economy today, the number
of employees in small and entrepreneurial ventures is growing faster than in any
other sector of the labor force, and there is no sign of a reversal in this trend. The
Global Entrepreneurship Monitor states that as much as one-third of the differences
in economic growth among na ons may be due to differences in entrepreneurial
ac vity. A key factor affec ng the Indian economy is the annual crea on of 600,000
to 800,000 new companies, which produces many new jobs.

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Entrepreneurship—the process of planning, organizing, opera ng, and assuming the

risk of a business venture—is now a mainstream ac vity. Star ng a business is never
easy; it requires a special blend of courage, self-confidence, and skills—all of which
determine the success or failure of an enterprise. The Internet has fundamentally
changed the way entrepreneurs can flourish. It not only provides up-to-date market
and technology informa on but also offers many useful support networks to
entrepreneurs. Business schools everywhere teach the fundamentals of
entrepreneurship, which were not even part of the curriculum un l the 1990s.
Throughout this text, you'll read about entrepreneurs from many types of businesses.
Their stories will help you explore possible paths for building your own successful
career. You'll also have the opportunity to assess your present career profile and
strategy and contrast them with the approaches these entrepreneurs have
developed. The career choices and paths you take are deeply embedded not only in
rela onships but also in individual.

1.2 THE ENTREPRENEUR: DEFINITIONS AND CONCEPT

The word entrepreneur came into English use in the seventeenth century from the
French word entreprendre, which refers to individuals who “undertook” the risk of
new enterprise. Early entrepreneurs were also “contractors” who bore the risks of
profit or loss, and many were soldiers of fortune, adventurers, builders, and
m e r c h a n t s . E a r l y r e f e r e n c e s t o t h e e n t r e p r e n d e u r s p o ke o f t a x
contractors—individuals who paid a fixed sum of money to a government for the
license to collect taxes in their region. Tax entreprendeurs bore the risk of collec ng
individual taxes. If they

collected more than the sum paid for their licenses, they made a profit; if not, they lost
money. Today the defini on of entrepreneurship includes more than the mere
crea on of a business; it also includes the genera on and implementa on of an idea.
Understanding this team concept is cri cal if you wish to be a successful entrepreneur.
The idea of a sole individual being able to take on enormous risks, a empt
innova ons, leap without the appropriate background research, and succeed by
working long hours and persevering at all costs is no longer relevant in today's global
economy. Entrepreneurs also communicate effec vely not only to their teams but also
to external “stakeholders” such as investors, bankers, and corporate partners, who are
necessary components of their growth path.

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• Mark Casson – “ An entrepreneur is a person who specializes in taking

judgmental decision about the coordina on of scarce resources”.

• Peter Drucker – “An entrepreneur is one who always searches for change,
responds to it & exploits it as an opportunity”.

In short, an entrepreneur is a person who has possession of a new enterprise, venture

or idea and assumes significant accountability for the inherent risks & the outcome.
They are ambi ous leader who combines land, labour and capital to o en create &
market new goods or services.

1.3 ENTREPRENEURIAL TRAITS

Common traits of successful entrepreneurs:

1. Vision
Successful entrepreneurs have a clear vision of what their business will be and
can concisely ar culate its purpose, goals and market posi on. They have
iden fied (and can succinctly describe) the who, what, where, when and why
of their business.

2. Passion
A successful entrepreneur is passionate about their business. It is hard work,
and pu ng in long hours will be tough if you don't love what you are doing.
People with passion know what it is that drives them to keep working to
achieve their vision.

3. Tenacity
Entrepreneurs remain tough when the going gets rough. They don't give up
easily. They can accept rejec on and are willing to learn from their mistakes.
They are willing and able to adapt and modify their plan in order to be
successful the next me around.

4. Willingness to work hard

Being an entrepreneur is harder than being an employee. To be successful, the
entrepreneur must be willing to put in the me and effort required, o en for
li le or no pay at the beginning. Successful entrepreneurs recognize the risk
and necessary work that achieving their goals will entail.

5. Confidence
Successful entrepreneurs have confidence in themselves and in their business.
They must believe in their ability and in their idea. Every entrepreneur will face
rejec on along the way and successful entrepreneurs are those with the
confidence to keep going and bounce back a er a setback.

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6. Flexibility
Things do not always go as planned. A successful entrepreneur is flexible. They
learn from their mistakes and are willing to adapt and change as they go along.
They take advice from others and are open to trying new approaches.

7. Can sell
An entrepreneur must be comfortable selling. Even with a sales team, the
leader must be an expert at networking and be able to promote themselves
and their business to bankers, customers, suppliers and staff.

8. Prudent with money

Successful entrepreneurs are good money managers. They prudently invest in
overhead and always keep track of the money and manage their cash flow.

9. Willing to ask for and accept help

An entrepreneur needs to be a jack of all trades but the most successful
entrepreneurs know their limita ons, realize they can't do everything and are
willing to delegate to others. They are willing to ask for help. They seek out and
pay for expert advice when needed.

10. Resilience
No ma er how successful your business, there will be bumps along the road. A
successful entrepreneur is resilient and can bounce back from a setback. They
use setbacks as an opportunity to learn and grow. They understand that failure
is part of the game.

1.4 ENTREPRENEURIAL CHARACTERISTICS AND SKILLS

A)Importance of Entrepreneurs

• Develop new markets: Entrepreneurs are resourceful & crea ve. They can
create customers or buyers.

• Discover new sources of materials: Entrepreneurs are never sa sfied with

exis ng sources of materials. Due to this, they persist on discovering new
sources of materials to improve their enterprise.

• Mobilize Capital Resources: Entrepreneurs are the organizers and

coordinators of major factors of produc on i.e. land, labor & capital. They
properly mix these factors of produc on to create goods & services.

• Introduce new technologies: Apart from being innovators & reasonable

risk takers, they take advance of business opportuni es & transform into
profits.

• Create Employment: The biggest employer is the private business sector.

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Millions of jobs are provided by the factories, service industries, agricultural

enterprises.

B) Func on of Entrepreneurs

Primary Func on of Entrepreneurs

• Planning: It is the first step in the direc on of se ng up of an enterprise.

It involves following steps:

• Scanning of the best suitable idea.

• Selec on of product line.
• Determina on of type of business organiza on – individual,
partnership or corporate
• Es ma on of the capital needed
• Selec on of capital resources
• Selec on of loca on

• Organiza on: An entrepreneur coordinates, assembles & supervises

land, labor & capital during promo on stage & at the performance
stage, for op mum u liza on of the resources.

• Management: It includes future expansion & policies in the long run.

Direc on of men, machine, material, money for the enterprise.

• Decision-Making: As a decision maker they takes various decisions e.g.

• Determina on of the business objec ves of the enterprise.

• Decision regarding procurement of machine, material, men, money
& market.
• Risk bearing: S/He undertakes the responsibility for loss that may arise
due to unforeseen con ngencies in future.

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Entrepreneurs Func on

Entrepreneurs Func on
• Idea Genera on: Most important func on, it can be possible through
vision, observa on, experience, educa on, training & exposure of
the entrepreneur.
• Determina on of objec ves: To determine & lay-down the objec ves
of the business.
• Raising of Funds: It is the most important func on of an
entrepreneur. All the ac vi es of a business depend upon the finance
& its proper management.
• Procurement of Raw Materials.
• Procurement of Machinery.
• Recruitment of Manpower.
• Implementa on of the project.

1.5 ENTREPRENEUR VS. PROFESSIONAL MANAGERS

Difference between Entrepreneur and Manager

· The key difference between an entrepreneur and a manager is their

standing in the company. An entrepreneur is a visionary that converts an
idea into a business. He is the owner of the business, so he bears all the
financial and other risks. A manager, on the other hand, is an employee,
he works for a salary. So he does not have to bear any risks.

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• The focus of an entrepreneur lies in star ng the business and later expanding
the business. A manager will focus on the daily smooth func oning of the
business.
• For an entrepreneur the key mo va on is achievements. But for the managers,
the mo va on comes from the power that comes with their posi on.
• The reward for all the efforts of an entrepreneur is the profit he earns from the
enterprise. The manager is an employee, so his remunera on is the salary he
draws from the company.
• The entrepreneur can be informal and casual in his role. However, a manager's
approach to every problem is very formal.
• The entrepreneur by nature is a risk taker. His has to take calculated risks to
drive the company further. A manager, on the other hand, is risk-averse. His job
is to maintain the status quo of the company. So he cannot afford risks.

1.6 SUCCESSFUL ENTREPRENEURS

Owning your own business gives you a sense of freedom and empowerment. You can
build things and watch them grow.
Entrepreneurs make decisions for themselves, realize their crea ve visions, and
develop las ng rela onships with other entrepreneurs, customers, and vendors.

1. Get gri y
Grit is perseverance. Grit is the go-get-'em a tude that we expect of entrepreneurs.
Grit is the ability to keep working when everyone tells you that you should give up.
If you want to be a successful entrepreneur, you have to be gri y.
Honestly, without hard work and perseverance , you're not going anywhere in the
entrepreneurial world.

2. Challenge yourself
If you want to be a successful entrepreneur, you have to challenge yourself. No one
else is going to push you, so it's up to you to do it.
Challenges keep entrepreneurs nimble and on their toes. If you're constantly looking
for the next challenge, you'll always be prepared for what comes your way.

Consider this example:

You're going to the gym to build your upper body strength. You start doing bicep curls
with a 10-pound weight. It feels pre y heavy at first. But as you build up your
strength, it gets easier.

Would you stop there? No!

Then it's me to do bicep curls with a 20-pound weight. Once you've done bicep curls
with a 20-pound weight, going back to a 10-pound weight will feel easy.

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Challenging yourself with new and difficult tasks will make your other tasks seem
even simpler. Just like the 10-pound weight feels light a er you li a 20-pound weight.
As an entrepreneur, you always have to be looking for the next big challenge.

3. Be passionate
If you don't love what you do, don't do it. I truly believe it's as simple as that.
As an entrepreneur, you're going to have to put in long hours and make sacrifices for
your business.
When you're passionate about what you do, pu ng in the long hours won't feel like a
sacrifice anymore.
If you're not passionate about what you do, you're not going to have the mo va on to
keep going when you're stressed and red.
Have you ever no ced those entrepreneurs who never seem to get red? Those
entrepreneurs who get that gleam in their eye when they talk about what they do?
Forty-four percent of entrepreneurs started their business because they saw an
opportunity to create something great. They are passionate about their business. Are
you?
Be passionate about what you do, and being an entrepreneur gets just a li le bit
easier.

4. Take risks
Humans are generally risk-averse, but part of being an entrepreneur is recognizing
the risks that you should take.
Successful entrepreneurs take risks. It's part of the job.
Successful entrepreneurs also know which risks to take and which they shouldn't.
Learn to recognize the risks that will benefit your business and take them.
Taking risks has a dangerous side, but the opportuni es they present o en far
outweigh the poten al dangers.
Learn how to iden fy which risks are worth taking and you'll learn how to be a
successful entrepreneur.

5. Trust yourself
If you don't believe in yourself, who will?
Being a successful entrepreneur means that you've learned to listen to your intui on
and rely on your wisdom when making decisions.
Your ability to trust and believe in yourself will show your confidence. People are
more likely to follow and trust confident leaders.
Trus ng in your own skills will also take some of the pain of uncertainty out of being
an entrepreneur.
When you feel uncertain, remember how much experience and knowledge you have.
Most entrepreneurs start their business a er years of experience working for
someone else.

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There's nothing wrong with asking for help when you need it or turning to a mentor
for advice, but you also have to learn to trust yourself and your own judgment
without input from others.
Learn to trust yourself and you're already star ng down the path of entrepreneurial
success.

6. Reduce fear
Fear stops ac on. Entrepreneurs have to be able to pivot and quickly take ac on
when they see an opportunity or recognize a mistake.
With fear riding on your shoulder, you won't be a successful entrepreneur.
As an entrepreneur, if you let fear be your guide, you won't be able to listen to your
intui on, you'll be afraid to take the necessary risks, and your judgment will be
clouded by emo on.
Find ways to reduce and manage your fear and you'll be a much more successful
entrepreneur.
Remember, fear has to do with your perspec ve.
Research has shown that the more crime TV that you watch, the more likely you are
to fear crime. Reduce your fear by changing your perspec ve.

My favorite p for managing fear as an entrepreneur is to do confidence-building

exercises.
For me, I like to take a few moments at night to think of the decisions I made that day
that had a successful outcome.
Thinking each day about the decisions that you made that benefited you, others, or
your business will help you to quickly build your confidence and reduce fear.

7. Visualize goals
This p is less abstract than you might think, so bear with me.
When I recommend that entrepreneurs visualize their goals, I don't intend for them
to close their eyes and see the goal in front of them.
What I want you to do to visualize your goal is to define it so clearly that it's real and
tangible.
For example, which of these is a more accomplishable:
1. I want to become a successful entrepreneur.
2. I will become a successful entrepreneur by star ng a business that solves a
problem for this specific niche of my audience.
The second one, right?
When you can clearly ar culate and visualize your goal, it becomes more achievable.
There are many ways to visualize your goal if you aren't sure how to start. You can
write it down or draw it out.
You can tell someone, such as a friend or business partner, or take photographs that
represent your goal. Go with your strengths.

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When you ask a successful entrepreneur what their goal is, they can tell you in great
detail what it is that they're working to achieve

1.7 WOMEN ENTREPRENEURS

Women Entrepreneurs: Concept and Func ons of Women Entrepreneurs!

Concept:

Women entrepreneur may be defined as a woman or group of women who ini ate,
organize, and run a business enterprise. In terms of Schumpeterian concept of
innova ve entrepreneurs, women who innovate, imitate or adopt a business
ac vity are called “women entrepreneurs”.

Defini on of woman entrepreneur as

“A confident, innova ve and crea ve woman capable of achieving self-economic

independence individually or in collabora on, generates employment
opportuni es for others through ini a ng, establishing and running the enterprise
by keeping pace with her personal, family and social life.”

The Government of India has defined women entrepreneurs based on women

par cipa on in equity and employment of a business enterprise. Accordingly, the
Government of India (GOI2006) has defined women entrepreneur as “an enterprise
owned and controlled by a women having a minimum financial interest of 51 per cent
of the capital and giving at least 51 per cent of the employment generated in the
enterprise to women.” However, this defini on is subject to cri cism mainly on the
condi on of employing more than 50 per cent women workers in the enterprises
owned and run by the women.

In nutshell, women entrepreneurs are those women who think of a business

enterprise, ini ate it, organize and combine the factors of produc on, operate the
enterprise and undertake risks and handle economic uncertainty involved in running
a business enterprise.

Func ons of Women Entrepreneurs:

As an entrepreneur, a woman entrepreneur has also to perform all the func ons
involved in establishing an enterprise. These include idea genera on and screening,
determina on of objec ves, project prepara on, product analysis, and
determina on of forms of business organiza on, comple on of promo onal
formali es, raising funds, procuring men, machine and materials, and opera on of
business.

Frederick Harbison (1956) has enumerated the following five func ons of a woman
entrepreneur:
1. Explora on of the prospects of star ng a new business enterprise.
2. Undertaking of risks and the handling of economic uncertain es involved in
business.

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3. Introduc on of innova ons or imita on of innova ons.

4. Coordina on, administra on and control.
5. Supervision and leadership.

1.8 SUMMARY

The defini on of an entrepreneur has evolved over me as the surrounding

economic structures have become more complex. Today, entrepreneurship is
defined as the process of crea ng something different by devo ng the necessary
me and effort; assuming the accompanying financial, psychic, and social risks; and
receiving the resul ng monetary rewards and personal sa sfac on. Before
embarking on an entrepreneurial journey, you should take some me to reflect on
your own a ributes, par cularly your need to be in control. This will help you iden fy
an opportunity and create a plan of ac on that is suited to you and increase the
likelihood of success.

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