UDGAM SCHOOL FOR CHILDREN

Std XI Entrepreneurship (066)

Chapter 1 Entrepreneurship Concept and functions.
Notes
Name: _________ Div _______ Roll No _____ Date: __________

Q1. Define an entrepreneur and an enterprise.

1. An enterprise is a business organization that is formed by an individual or a group of

individuals, which brings all required resources together to produce goods and services.
2. An entrepreneur is an innovator, risk taker, has creativity and who sets up an organization
to build something of commercial value.

Q2. Give two points of difference between advantages and dis-advantages of

Entrepreneurship.

1. Following are the two main advantages of being an entrepreneur:

Excitement: Due to its high capacity for risk, there is a lot of adventure. An entrepreneur is
an enthusiast and is excited to try new combinations and accept new challenges.
Originality: Some feel that they can offer a new service or product that no one else has
offered before, i.e., Smart watches.
2. Following are two main dis-advantages of being an entrepreneur:
Salary: Starting your own business means that you must be willing to give up the security of
a regular paycheck. Entrepreneurs earn remuneration in business which keeps on fluctuating
in the daily course of operational activities.
Benefits: There will u be fewer benefits in the initial stage at least. In certain businesses,
there is less support extended by the government also.

Q3. Explain the Entrepreneurial functions performed by an entrepreneur.

1. Innovation- It is a process of entrepreneurship. It involves the conversion of a useful idea into

an application which has common value. As an innovator, the entrepreneur must discover new
opportunities, areas of a new product, new methods of production, a new use for a product or
service or a new way of integrating several uses in one product or service for optimum
utilization of resources.
2. Risk taking- Risk may be defined as the condition of not being able to predict the outcome of
an activity. It refers to taking responsibility for a loss that may occur due to unforeseen
contingencies in the future. An entrepreneur reduces uncertainty in his/her plan of investment,
diversification of production and expansion of the enterprise. Risks can be of different in nature
like financial risks, natural or man-made risks.
3. Organization building- Organization refers to the bringing together of the various factors of
production, ensures continuing management and risk-bearing function. The purpose is to
allocate the productive resources to minimize losses and reduce costs in production.

Q4. Explain the concept of need for entrepreneurship.

1. Lifeline of a nation: No country can progress without development. Every country is trying
to promote its trade so that it can share the benefits of development. Therefore,
entrepreneurship is the yardstick to measure the level of development of a country.
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 Entrepreneurs act as a catalyst agent trying to supply what is being demanded and thus also
become an agent of progress.
2. Provides innovation: Entrepreneurship provides new ideas, imagination, and vision to the
enterprise. An entrepreneur is an innovator as he tries to find new technology, products, and
markets. He/she increases the productivity of various resources. Entrepreneur stands at the
center of the whole process of economic development. He conceives business ideas and
puts them into effect, to enhance the process of economic development.
3. Change of growth /Inclusive growth: An enterprise operates in a changing environment.
The entrepreneur moulds the enterprise in a changing environment. The entrepreneur being
in the enterprise also alters the environment itself, to ensure the success of the enterprise.
4. Increased profits: Profits can be increased in any enterprise, either by increasing the sales
revenue or reducing costs. To increase the sales revenue entrepreneurs can reduce costs,
increase their profits, and provide opportunities for future growth and development.
5. Employment opportunities: Entrepreneurship and entrepreneurs provide more
opportunities to large numbers of people which benefits the growth of a country. The growth
in the increasing number of entities brings more and more employment opportunities.
6. Social Benefits: Entrepreneurship benefits both business enterprise and to the society at
large. It raises the standard of living by providing good quality products and services at the
lowest possible cost. It also makes the optimum use of scarce resources and promotes peace
and prosperity in society.

Q5. Explain the Commercial functions performed by an entrepreneur.

1. Production: The activities of production are independent of the size of the undertaking.
o In a small concern, one person may be undertaking this function whereas,
in large organizations, this activity may be undertaken by various
individuals or separate teams.
o It is the creation of goods and services. It consists of manufacturing,
ancillary, and advisory activities.
2. Finance: Finance is the life blood of the business. All activities performed are based on
financial resources available.
o Need of money arises for the setting up of new business, to purchase
various fixed capital like building, land, and machineries, to purchase raw
materials, payment for day-to-day routine expenses like maintenance
expenses, telephone bills, electricity bills and remuneration to staff
members.
o The future capital is required for further expansion and development of an
enterprise.
3. Marketing: It is primarily concerned with the movement of goods and services from the
producer to the ultimate consumer. It is directed towards the satisfaction of consumer wants.
Marketing plays a significant role in promoting the well-being of the business enterprise.
So it is the role of the entrepreneur to strategically place his company in an advantageous
position to secure the top position in the market.
4. Personnel: This function is concerned with employment, development and compensation for
the personnel, the provisions of working conditions and welfare measures to maintain a good
workforce in the organization.
5. Accounting: It is defined as a systematic record of all business transactions and prepares
necessary accounts required in business for the financial position of the enterprises. The
entrepreneur should investigate the record keeping of the entries of all transactions which
take place in the organization so that he/she is aware of his/ her financial position.

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Q6. Explain the Managerial functions performed by an entrepreneur.

1. Planning: It is the basic managerial function of an entrepreneur.

• It helps in determining the course of action to be followed to achieve various
entrepreneurial objectives.
• Planning is concerned with the mental state of the entrepreneur. It is decision-making
in advance: what to do, when to do it, how to do it and who will do a particular task.
2. Organizing: Every business enterprise needs the service of several people to look after its
different aspects. The entrepreneur sets up the objectives or goals to be achieved by its
personnel. The function of organizing is to arrange, guide, co-ordinate, direct and control the
activities of the factors of production.
3. Staffing: It means recruiting the right person to the right place at the right time. The function
involves identifying required work force, followed by recruitment, selection and placement of
manpower, human resource development, promotion, transfer, appraisal development of
personnel, determination of employee’s remuneration.
4. Directing: Directing is telling people what to do and seeing that they do it to the best of their
ability and ensures the effective performance by subordinates towards the accomplishment
of group activities.
5. Leadership: It is the process by which an entrepreneur imaginatively directs/ guides and
influences the work of others in choosing and attaining specified goals by mediating between
the individual and organization in such a manner that both will get the maximum satisfaction.
6. Communication: It has been established that entrepreneurs spend most of their working
time communicating with others. It refers to the exchange of ideas, feelings, emotions,
knowledge, and information between two or more people via suggestions, feedback, and
instructions. Transparent and clear communication is the key to a successful venture.
7. Motivation: It is the psychological process of creating an urge among the subordinates to do
certain things or behave in the desired manner. A sound motivational system must be
productive, competitive, comprehensive, and flexible, and it must consider the psychological,
social, safety, ego, and economic needs of the worker.
8. Supervision: The entrepreneur must see that the given instructions are carried out in a
systematic way. Supervision refers to the job of overseeing subordinates at work to ensure
the maximum utilization of resources, to get the required and directed work done, and to
correct the subordinates whenever they go wrong.
9. Co-ordination: It is one of the most important functions, as it is essential to channel the
activities of various individuals in the organization, for the achievement of common goals.
The entrepreneur ensures that all activities are performed in a desired manner.
10. Controlling: Control is the process which enables the entrepreneur to get his/her company’s
policies implemented and take corrective action if performance is not according to the
predetermined standards. The process begins with establishing standards of performance,
measuring actual performance, comparing the actual performance with the standard, finding
variations and finally, taking corrective action.

Q7. Explain the Promotional functions performed by an entrepreneur.

1. Discovery of an idea: Entrepreneur visualizes ideas often construed as mental

representation and converts this idea into opportunities by using skill, talent and use it for a
particular type of business to earn maximum profits out of it. The idea may be to exploit new
areas of natural resources, more profitable ventures, or an existing line of business. He/she
develops the idea with the help of various experts in the field.
2. Detailed Investigation: Market research/surveys help an entrepreneur to yield valuable data
about trends of total demand and supply of a product, consumer taste and preferences. The
entrepreneur will estimate the total demand for the product. He/ she arranges the required
finances for the venture, along with the availability of power, labor, raw materials, and

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 machinery. The estimates of all resources should be based on proper analysis of various
factors.
3. Assembling the Requirements: Assembling the required resources is a crucial activity of
an entrepreneur. He approaches some more people like experts from various fields i.e.,
technical,” financial, marketing, production and legal to join him on board. He may also be
required to acquire some patent rights if he has invented something new. The entrepreneur
selects the factory location, land, decides about plant and machinery and contacts suppliers
of raw materials. Preliminary contracts are finalized, and the project is set to begin.
4. Financing the Proposition: The entrepreneur decides about the capital structure of the
enterprise with the help of predetermined objectives.
o Determine the amount of capital to be raised,
o The sources from which money will come up are determined,
o Long term and short-term financial requirements are estimated, and
o The type of source of funds is also decided-share, debenture, loan, etc.

Q8. Explain the process of Entrepreneurship.

1. Self-discovery:
Entrepreneur enjoys doing different things and learn out of it.
Examine their strengths and weaknesses.
Understand his abilities, talent, knowledge, and feelings relating it to potential opportunities.
2. Identifying opportunities: Entrepreneur looks for needs, wants, problems, challenges, and
craft opportunities that other people miss or that are not yet being met and convert it into
different forms effectively.
3. Generating and evaluating ideas: He uses his creativity, conscious endeavor, and
experience to collect ideas from different sources and find out a creative and innovative
solution and ends as a creative venture.
4. Planning: Making a written business plan including requirement of financial resources,
human resources, technical resources, material resources according to size of business,
prepares applicable marketing strategies and turn the idea into a viable venture.
5. Raising Start-up capital: Using the business plan to attract investors, venture capitalists
and partners. This stage can involve producing prototypes or test-marketing services.
6. Start-Up: Entrepreneurs launch the venture as per the requirement, need, taste and
preferences of a customer, and keep a margin of flexibility in marketing strategy and
operational plans as required.
7. Growth: Time to time scanning of environment, making sure of constant flow of ideas, by
adapting to new, different strategies, different economic policies, changing technology,
innovation diversification facilitate growth and expansion.
8. Harvest: Harvesting is the final phase in the entrepreneurial value creation, process where
the owners can simply sell the business and reap the value of their
investment in the firm and harvesting the rewards.

Q9. Explain the Myths of Entrepreneurship.

According to Guy Kawasaki, many entrepreneurs believe a set of myths about

entrepreneurship, the most common being:
1. Starting a business is easy:
It is not. Most people who begin the process of starting a company fail to sustain the entity in
the long run. Only one-third of entrepreneurs have a new company with positive cash flow
greater than the salary and expenses. But small enterprises are comparatively easier to start.
2. It takes a lot of money to finance a new business.
The typical start-up only requires about Rs.1,50,000/- to get going. The successful
entrepreneurs, who don’t believe the myth, design their businesses to work with little
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 cash. They rent instead of buying and purchase secondhand assets in place of new. They
are conscious of their choices and spend rationally.
3. Start-ups can’t be financed with debt.
Debt is more common than equity. A lot of entrepreneurs use debt rather than
equity to fund their companies as it is a less expensive form of financing.
4. Banks don’t lend money to start-ups.
Under various schemes like Start-Up India, Banks and many other government
organizations have started providing funding to the budding entrepreneurs.
5. Most entrepreneurs start businesses in attractive industries.
Most entrepreneurs head right for different industries for start-ups. The correlation
between the number of entrepreneurs starting businesses in an industry and the number
of companies failing in the industry is 0.77. That means that most entrepreneurs are
picking industries in which they are most likely to fail.
6. The growth of a start-up depends more on an entrepreneur’s talent than on the
business he chooses.
This is not true as the industry that an entrepreneur chooses to work has a huge effect on
the odds that it will grow. For instance, various dotcom companies mushroomed all over
the world.
7. Most enterprises are successful financially.
This is also another myth. Entrepreneurship creates a lot of wealth but is distributed in
Different areas of the business. Only the top ten percent of entrepreneurs earn more money
than employees.

Q10. Differentiate between Entrepreneur and Entrepreneurship.

ENTREPRENEUR ENTREPRENEURSHIP
An entrepreneur is a person who finds an Entrepreneurship is a process which
idea and converts it into an opportunity follows certain set activities.
An entrepreneur is a tangible person. Entrepreneurship is an intangible activity.
An entrepreneur creates a product/service. Entrepreneurship creates commercial
value of the entity in the market.
An entrepreneur possesses certain traits Entrepreneurship is the activity where
and skills. these skills and traits are demonstrated.

Q11. Differentiate between Managerial and Entrepreneurial functions.

MANAGERIAL FUNCTIONS ENTREPRENEURIAL FUNCTIONS

It is a list of activities distributed among
It is a list of activities to be performed by
different levels of management. the entrepreneur.
It explains the managerial skills and It explains the technical knowledge and
knowledge required to be possessed. experiences required in the innovative
field.
To be performed in the ongoing activities To be performed mainly in the initial setup
of production. of the organization.

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SELF ATTEMPT QUESTION.

Q12. Match the entrepreneur and his/her enterprise from the following table given below:

A12. Fill in the answers:

Enterprise Entrepreneur
Wipro
Credit Card
Nirma
Reliance
HCL Technologies
Bharti
Café Coffee Day
Amul
Biocon Industries
Air Deccan

Q13. Name the entrepreneur who introduced the logo given below and state the idea
behind the same.

A13.
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