Entrepreneurship

Development
G.ALEX RAJESH
 Entrepreneurship Development

 The word “entrepreneurship” comes from the Old French verb

entreprendre, which means “to undertake” or “to do something”.
 The word “entrepreneur” was used as a noun by the 16th century to
describe someone who takes on a business venture.
 Entrepreneurship is the ability and readiness to develop, organize and
run a business enterprise, along with any of its uncertainties in order to
make a profit. The most prominent example of entrepreneurship is the
starting of new businesses.
 Joseph Alois Schumpeter is regarded as the father of
entrepreneurship. He introduced the concept of
entrepreneurship
CONCEPT
ENTREPRENEURSHIP IS THE ABILITY AND READINESS TO DEVELOP, ORGANIZE
AND RUN A BUSINESS ENTERPRISE, ALONG WITH ANY OF ITS UNCERTAINTIES
IN ORDER TO MAKE A PROFIT. THE MOST PROMINENT EXAMPLE OF
ENTREPRENEURSHIP IS THE STARTING OF NEW BUSINESSES.
According to Richard Cantillon,” An entrepreneur is a person who buys factor services at
certain prices with a view to selling its product at uncertain price”.

According to McClelland,” An entrepreneur is someone who exercises some control over

the means of production and produces more than what he can consume in order to sell (or
exchange) it for individual (or household) income”.
 The entrepreneurial vision is defined by discovery and risk-taking and is
an indispensable part of a nation’s capacity to succeed in an ever-
changing and more competitive global marketplace.
 The entrepreneurial vision is defined by discovery and risk-taking and is
an indispensable part of a nation’s capacity to succeed in an ever-
changing and more competitive global marketplace
 The 4 Types of
Entrepreneurship?

 Small Business Entrepreneurship-

 These businesses are a hairdresser, grocery store, travel agent,
consultant, carpenter, plumber, electrician, etc. These people run or
own their own business and hire family members or local employee. For
them, the profit would be able to feed their family and not making 100
million business or taking over an industry. They fund their business by
taking small business loans or loans from friends and family.
 Scalable Startup Entrepreneurship-
 This start-up entrepreneur starts a business knowing that their vision
can change the world. They attract investors who think and encourage
people who think out of the box. The research focuses on a scalable
business and experimental models, so, they hire the best and the
brightest employees. They require more venture capital to fuel and
back their project or business.
 Large Company Entrepreneurship-
 These huge companies have defined life-cycle. Most of these
companies grow and sustain by offering new and innovative products
that revolve around their main products. The change in technology,
customer preferences, new competition, etc., build pressure for large
companies to create an innovative product and sell it to the new set of
customers in the new market. To cope with the rapid technological
changes, the existing organisations either buy innovation enterprises or
attempt to construct the product internally.
 Social Entrepreneurship-
 This type of entrepreneurship focuses on producing product and services that resolve
social needs and problems. Their only motto and goal is to work for society and not
make any profits.
 Characteristics of Entrepreneurship:
 Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change
in a product and service, as and when needed.
 Know your Product-A company owner should know the product offerings and also
be aware of the latest trend in the market. It is essential to know if the available
product or service meets the demands of the current market, or whether it is time to
tweak it a little. Being able to be accountable and then alter as needed is a vital part
of entrepreneurship.
 Ability to take a risk- Starting any new venture involves a considerable amount of failure
risk. Therefore, an entrepreneur needs to be courageous and able to evaluate and take
risks, which is an essential part of being an entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company and
earn profits out of it. Change can be the launching of a new product that is new to the
market or a process that does the same thing but in a more efficient and economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have a
clear vision of his new venture. However, to turn the idea into reality, a lot of resources
and employees are required. Here, leadership quality is paramount because leaders impart
and guide their employees towards the right path of success.
 Open-Minded- In a business, every circumstance can be an opportunity and used for the
benefit of a company. For example, Paytm recognised the gravity of demonetization and
acknowledged the need for online transactions would be more, so it utilised the situation
and expanded massively during this time.
Importance of Entrepreneurship

 Creation of Employment- Entrepreneurship generates employment. It provides an entry-level job,

required for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market, technology and
quality of goods, etc., and increase the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the employment
base is large and diversified. It brings about changes in society and promotes facilities like higher
expenditure on education, better sanitation, fewer slums, a higher level of homeownership. Therefore,
entrepreneurship assists the organisation towards a more stable and high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of living of a person
by increasing the income. The standard of living means, increase in the consumption of various goods
and services by a household for a particular period.
 Supports research and development- New products and services need to be researched and
tested before launching in the market. Therefore, an entrepreneur also dispenses finance for research
and development with research institutions and universities. This promotes research, general
construction, and development in the economy.
Different Types of Entrepreneurs

 Innovative Entrepreneur
 An innovative entrepreneur is visionary and seeks new opportunities to
create and develop groundbreaking ideas, products, or services. They are
known for their ability to think creatively, take calculated risks, and disrupt
traditional business models
 Imitative Entrepreneur
 An imitative entrepreneur is an individual who focuses on replicating existing
business ideas, products, or services with minor modifications or adaptations.
They are skilled at identifying and duplicating successful business models in
different markets or contexts. While imitative entrepreneurs may lack
novelty, they can still succeed by capitalizing on proven concepts.
 Fabian Entrepreneur
 A Fabian entrepreneur adopts a cautious and incremental approach to
entrepreneurship. They tend to proceed gradually, making calculated
decisions and mitigating risks as they progress. Fabian entrepreneurs
prioritize stability and long-term sustainability over rapid growth. They
carefully analyze market conditions, customer demands, and resource
availability before making strategic moves.
 Drone Entrepreneurs
 Drone entrepreneurs are another type of entrepreneur. These
individuals resist embracing new opportunities and fail to capitalize on
them. They adhere to conventional methods and are unwilling to adapt
their production processes, even if it results in losses. Their resistance
to change earns them the label of “laggards.”
On the Basis of Business Type

 Business Entrepreneur
 Business entrepreneurs start and manage businesses in various
sectors. They identify market opportunities, develop business plans,
and create sustainable enterprises.
 Trading Entrepreneur
 Trading entrepreneurs are involved in buying and selling goods or
services. They operate in the realm of trade and play a crucial role in
connecting producers and consumers.
 Industrial Entrepreneur
 Industrial entrepreneurs are involved in manufacturing and industrial
sectors. They set up factories, developed production processes, and
produced goods on a large scale.
 Corporate Entrepreneur
 Corporate or intrapreneurs exhibit entrepreneurial characteristics within
existing organizations. They drive innovation, develop new products or
services, and identify growth opportunities for the company.
 Agricultural Entrepreneur
 Agricultural entrepreneurs are involved in agricultural activities,
including farming, livestock production, and agribusiness. They focus on
optimizing agricultural practices and finding innovative solutions to
meet the needs of the farming industry.
 Example: Joel Salatin, a sustainable farmer and advocate for
regenerative agriculture, is an agricultural entrepreneur known for his
innovative farming methods. He has developed practices that prioritize
soil health and animal welfare.
On the Basis of Technology

 Technical Entrepreneurs
 Technical entrepreneurs possess specialized technical knowledge or
skills in a specific field or industry. They leverage their expertise to
develop innovative products, services, or solutions.
 Example: Bill Gates, the co-founder of Microsoft, is a technical
entrepreneur with a deep understanding of computer programming and
software development
 Non-Technical Entrepreneur
 Non-technical entrepreneurs may not possess specialized technical
knowledge but excel in other areas such as business management,
marketing, finance, or leadership. They focus on identifying market
opportunities, building teams, and creating successful businesses.
 Example: Oprah Winfrey is a non-technical entrepreneur who built a
media empire. While she did not have a technical background. She
excelled in media production, hosting talk shows, and connecting with
audiences, which led to her success in various ventures, including
television, film, and publishing.
On the Basis of Motivation

 Social Entrepreneur
 A social entrepreneur is someone who starts a business to solve social
problems. Instead of just making a profit, they focus on making a positive
impact on society. They develop innovative solutions to issues like
poverty, education, and environmental sustainability, aiming to improve
the world.
 Example: Anshu Gupta, founder of Goonj in India, exemplifies social
entrepreneurship by repurposing urban surplus for rural needs, addressing
clothing scarcity and boosting dignity among the underprivileged. His
innovative model recycles waste, bridges urban-rural gaps, and
showcases the power of combining compassion with innovation for
sustainable development
 Spontaneous Entrepreneur
 A spontaneous entrepreneur is an individual who starts a business or
engages in entrepreneurial activities based on initiative and personal
motivation rather than being prompted or influenced by external
factors. These entrepreneurs have an inherent drive and desire to
create and innovate, often pursuing their passions or identifying
opportunities independently.
 Example: Mark Zuckerberg, the co-founder of Facebook, can be
considered a spontaneous entrepreneur. He started Facebook while he
was a student at Harvard University, driven by his passion for
connecting people and creating a social networking platform.
 Induced Entrepreneur
 An induced entrepreneur enters entrepreneurial activities due to
external factors or influences. These factors could include government
policies, incentives, market conditions, or economic circumstances.
Induced entrepreneurship often arises in response to specific
opportunities or external stimuli.
 Example: In response to government initiatives and incentives
promoting renewable energy, an individual starts a solar panel
installation company. The entrepreneur was induced to enter the
industry due to favourable policies and the growing demand for
renewable energy solutions.
 Motivated Entrepreneur
 A motivated entrepreneur is an individual who is driven by a specific
motive or purpose to start and run a business. This motive could be
financial gain, personal fulfilment, social impact, or a combination of
factors. Motivated entrepreneurs are deeply committed to achieving
their goals and are willing to put in the necessary effort and resources.
 Example: Anita Roddick, the founder of The Body Shop, was a
motivated entrepreneur driven by her strong commitment to ethical
and sustainable business practices. Her motivation was to provide high-
quality beauty products while promoting environmental and social
responsibility.
Other Categories of Entrepreneur

 First-Generation Entrepreneur
 A first-generation entrepreneur is an individual who starts a business or
venture from scratch without any family background in
entrepreneurship. These entrepreneurs often face unique challenges as
they build everything from the ground up. They rely on their ideas,
skills, and resources to establish successful enterprises.
 Example: First-generation entrepreneur is Jeff Bezos, the founder of
Amazon, who started the company as an online bookstore and grew it
into one of the world’s largest e-commerce and technology
corporations.
 Second-Generation Entrepreneur
 A second-generation entrepreneur takes over an existing family
business or venture that their parents or another family member
originally established. They inherit an established foundation and have
the advantage of learning from the experiences and knowledge of the
previous generation. Second-generation entrepreneurs often face the
challenge of balancing the preservation of the family legacy with the
need for innovation and growth.
 Example: Ratan Tata is a second-generation entrepreneur.
He succeeded his father as the chairman of Tata Group, one of India’s
largest conglomerates, and led its expansion into various industries.
 Third-generation Entrepreneur
 A third-generation entrepreneur represents the next wave of family
business leadership, taking over from their parents and grandparents.
They inherit a well-established business and often have access to a wealth
of resources and networks built over multiple generations. However, they
also face the challenge of maintaining relevance, adapting to changing
market dynamics and introducing innovations to drive growth.
 Example: Third-generation entrepreneur is Marta Ortega, the daughter of
Amancio Ortega, the founder of Inditex Group (owner of Zara). Marta
actively manages the company’s operations and promotes sustainability
initiatives
Knowledge of an Entrepreneur

 Academic Technical Knowledge

 Knowledge of Financial Management
 Knowledge of Operations Management
 Knowledge of Law
 Basic Computer Knowledge
SKILLS OF AN ENTREPRENEUR

 Administrative Skills
 Financial Knowhow
 Vision and Leadership Skills
 Conflict and Consensus Management Skills
 Interpersonal skills
 Communication skills
 Problem – Solving Skills
 Technical Skills