INTRODUCTION

TO
ENTREPRENEURSHIP
Objectives
• Definition of Entrepreneur
• Entrepreneurial Traits
• Entrepreneur vs. Manager
• Entrepreneur vs. Intrapreneur
• The Entrepreneurial decision process
• Role of Entrepreneurship in Economic Development
What Is An Entrepreneur ?
Concept of Entrepreneurship
• Various views about an ‘Entrepreneur’:
• as a risk bearer
• as an organizer
• as an innovator
• Entrepreneurship is related to:
• coordination, innovation and performance of the
entrepreneur.
• a system of creating new business.
• referred to the various activities, done for the establishment
and operation of an enterprise.
Definition of Entrepreneurship
• “Entrepreneurship is the purposeful activity of an individual or a
group of associated individuals, undertaken to initiate, maintain or
aggrandize profit by production or distribution of economic goods
and services”
- A. H. Cole

• “Entrepreneurship is based on purposeful and systematic

innovation. It included not only the independent businessman but
also company directors and managers who actually carry out
innovative functions.”
- Joseph A. Schumpeter
Definition of Entrepreneurship
• “Entrepreneurs are people who have the abilities to see and
evaluate business opportunities , together with the necessary
resources to take advantage of them, and to ensure appropriate
action to ensure success.”
- International Labour Organization

• “An entrepreneur is a person who starts a new venture, taking the

initiative and risk associated with it and does so by creating
something new to provide value to customers.”
- David Holt
Other Definitions of Entrepreneurship
• “Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently control.”
- Stevenson & Jarillo

• “Entrepreneurship is the art of turning an idea into a business.”

- Fred Wilson
Entrepreneurial Traits
• Innovation
- does something new and different, seeking to do
something different and unique, try to meet the changing
requirements of customers.

• Risk – Bearing
- must be able to assume the risk involved in the enterprise,
needs to be a risk taker not an avoider, should have ability of
risk bearing .
Entrepreneurial Traits (Contd..)
• Passion for the Business
- This passion typically stems from the entrepreneur’s belief
that the business will positively influence people’s lives.

• Product/Customer Focus
- An entrepreneur’s keen focus on products and customers
typically stems from the fact that most entrepreneurs are, at
heart, craftspeople.

• Execution Intelligence
- The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
Entrepreneurial Traits (Contd..)
• Achievement motivated • Lengthy attention span
• Alert to opportunities • Optimistic disposition

• Creative • Persuasive
• Responsive to criticism
• Decisive
• Self-confident & Self-starter
• Energetic
• Tenacious
• Has a strong work ethic • Tolerant of ambiguity
• Is a networker • Visionary
• Initiative Taker
Entrepreneurs v/s Managers
• Entrepreneur refers to a person who creates an enterprise, by
taking financial risk in order to get profit.

• Manager is an individual who takes the responsibility of controlling

and administering the organization.
BASIS FOR COMPARISON ENTREPRENEUR MANAGER
Focus Business startup Ongoing operations
Primary motivation Achievement Power
Approach to task Informal Formal
Status Owner Employee
Reward Profit Salary
Decision making Intuitive Calculative
Driving force Creativity and Innovation Preserving status quo
Risk orientation Risk taker Risk averse
The Entrepreneurial Decision Process
• Entrepreneurial decision process -
– Entails a movement from something to something.
– Movement from a present lifestyle to forming a new
enterprise .

Reasons For Possibilities

Desire to
The Present Changing to Become An
Become An
Status The Present An Entrepreneur
Entrepreneur
Status Entrepreneur
Steps in the Entrepreneurial Process
• Once the decision to become an entrepreneur is taken, the
entrepreneurial process begins.
• The 5 stages of entrepreneurial process are –
1. Discovery
2. Concept Development
3. Resourcing
4. Actualization
5. Harvesting

Concept
Discovery Resourcing Actualization Harvesting
Development
Steps in the Entrepreneurial Process (Contd..)
1. Discovery: The stage in which the entrepreneur generates ideas,
recognizes opportunities, and studies the market.
2. Concept Development: Develop a business plan: a detailed proposal
describing the business idea.
3. Resourcing: The stage in which the entrepreneur identifies and
acquires the financial, human, and capital resources needed for the
venture startup, etc.
4. Actualization: The stage in which the entrepreneur operates the
business and utilizes resources to achieve its goals/objectives.
5. Harvesting: The stage in which the entrepreneur decides on business’s
future growth/ development, or demise.
Role Of Entrepreneurship In Economic Development
• Entrepreneurship is one of the most important input in the
economic development of a country.
• The entrepreneur acts as a trigger head to give spark to economic
activities by his entrepreneurial decisions.
• The entrepreneur plays a pivotal role not only in the development
of industrial sector of a country but also in the development of farm
and service sector.
• The crucial role played by the entrepreneurs in the development of
the Western countries has made the people of underdeveloped
countries too much conscious of the significance of
entrepreneurship for economic development.
Role Of Entrepreneurship In Economic Development
1. Promotes Capital Formation
2. Creates Large-Scale Employment Opportunities
3. Promotes Balanced Regional Development
4. Reduces Concentration of Economic Power
5. Wealth Creation and Distribution
6. Increasing Gross National Product and Per Capita Income
7. Improvement in the Standard of Living
8. Promotes Country's Export Trade
9. Induces Backward and Forward Linkages
10. Facilitates Overall Development
Role Of Entrepreneurship In Economic Development
• Promotes Capital Formation
• Entrepreneurs promote capital formation by mobilizing the idle savings of
public.
• They employ their own as well as borrowed resources for setting up their
enterprises.
• Creates Large-Scale Employment Opportunities
• Entrepreneurs provide immediate large-scale employment to the
unemployed which is a chronic problem of underdeveloped nations.
Role Of Entrepreneurship In Economic Development
• Promotes Balanced Regional Development
• Entrepreneurs help to remove regional disparities through setting up of
industries in less developed and backward areas.
• The growth of industries and business in these areas lead to a large
number of public benefits like road transport, health, education,
entertainment, etc.
• Reduces Concentration of Economic Power
• Industrial development normally lead to concentration of economic power
in the hands of a few individuals which results in the growth of
monopolies.
• In order to redress this problem a large number of entrepreneurs need to
be developed.
Role Of Entrepreneurship In Economic Development
• Wealth Creation and Distribution
• It stimulates equitable redistribution of wealth and income in the interest
of the country to more people and geographic areas, thus giving benefit to
larger sections of the society.
• Increasing Gross National Product and Per Capita Income
• Entrepreneurs are always on the look out for opportunities.
• They explore and exploit opportunities,, encourage effective resource
mobilization of capital and skill, bring in new products and services and
develops markets for growth of the economy.
• In this way, they help increasing gross national product as well as per
capita income of the people in a country.
Role Of Entrepreneurship In Economic Development
• Improvement in the Standard of Living
• Increase in the standard of living of the people is a characteristic feature of
economic development of the country.
• Entrepreneurs play a key role in increasing the standard of living of the
people by adopting latest innovations in the production of wide variety of
goods and services in large scale that too at a lower cost.
• Promotes Country's Export Trade
• Entrepreneurs help in promoting a country's export-trade, which is an
important ingredient of economic development.
Role Of Entrepreneurship In Economic Development
• Induces Backward and Forward Linkages
• Entrepreneurs like to work in an environment of change and try to
maximize profits by innovation.
• When an enterprise is established in accordance with the changing
technology, it induces backward and forward linkages which stimulate the
process of economic development in the country.
• Facilitates Overall Development
• Entrepreneurs act as catalytic agent for change which results in chain
reaction by multiplying their entrepreneurial activities, thus creating an
environment of enthusiasm and conveying an impetus for overall
development of the area