Lesson 4: Entrepreneurship skills

Distinction between an Entrepreneur and a Manager

- Sometimes the two terms; an entrepreneur and manager are considered to be meaning the

same. The distinction between the two terms is as presented below:

Difference between Entrepreneur and Manager

Job Role Establishing a company Running daily operations

Status in the
Owner Employee
organization

Entrepreneurs focus on thinking big, tapping Managers are responsible for carrying
Job Focus
unexplored territories, and bringing change. plans as directed and meeting the defin

Monetary The profit obtained from business management Salary earned for managing daily busin

returns /Benefits is at times highly uncertain operations

Organizational achievements work as

Motivation Power and perhaps compensation
motivation for entrepreneurs

A manager’s decision-making is calcul

An entrepreneur’s decisions are driven by
Decision making they are based on deductive logic, info
inductive logic, courage, and determination.
gathering and advice.

A manager maintains the current state o

The main driving force of an entrepreneur is
Creativity but is prompted to get innovative and t
creativity and innovation
the box

Specialization Any enterprising individual can become an Managers are trained to perform a set o

entrepreneur. They do not need to be specialized

 in any particular trade. They are specialists in their domain.

Risk-bearing Entrepreneur takes/assumes all the risk As a servant, he does not bear any risk

Qualifications Entrepreneur strives to possess qualities and - A manager needs to poss

qualifications for high achievements, originality, qualifications in management

forecasting and risk bearing

Vision Entrepreneur is visionary i.e he knows where his - He just follows the vision as p

business shall be in future the owner of the business

CLASSIFICATION OF ENTREPRENEURS

-Entrepreneurs are found in every economy and in every form of economic activity as

well as in other social and cultural activities

- They are found amongst labourers, artisans, exporters, importers, supervisors,

engineers, bankers, professionals and amongst farmers and fishermen.

A) Classification by Clarence Danhof

N/B- Clarence Danhof; reputed economist, professor, and author. He carried out a

study on American agriculture and on basis of his study, he classified entrepreneurs into

four categories which are stated below:

1. Innovating Entrepreneurs - those are entrepreneurs who introduces new goods, new

methods of production, discovers new markets and reorganises the enterprise

- Such entrepreneurs can only work when certain level of development is already achieved,

what is required is improvement

 2. Imitative Entrepreneurs- these are characterised by readiness to adopt successful

innovations developed by innovating entrepreneurs

- They do not innovate the changes themselves, they only imitate techniques and technology

innovated by others

3. Fabian Entrepreneurs

- Fabian Entrepreneurs are characterized by their cautious approach to business, prioritizing

stability and long-term sustainability over rapid growth.

- They are risk-averse, preferring gradual innovation and relying on proven methods and

thorough market research before making strategic decisions like when it comes to adopting

techniques and technology innovated by others. They imitate only when it becomes clear

that failure to do so would result in a loss of relative position in the enterprise.

4. Drone Entrepreneurs - they are characterised by a refusal to adopt opportunities to make

changes in production techniques even at the cost of severely reduced returns relative to

other entrepreneurs in the same production activities. Drone Entrepreneurs stick to

traditional business skills, focus on operational consistency, customer loyalty.

B) Classification by Behavioural Scientists

i) Solo operators:- These are the entrepreneurs who essentially work alone and, if

needed at all, employ a few employees

ii) Active partners: those are entrepreneurs who carry, start an enterprise as a joint

venture, where they all participate in the operations of the business

iii) Inventors: such entrepreneurs use their competence and inventiveness to invent new

products. Their interest lies in research and innovative activities

 iv) Challengers: These are the entrepreneurs who enter into an industry because of the

challenges it presents. When one/original challenge seems to be met, they begin to

look for new challenges

v) Buyers: those are entrepreneurs who fear the risk of starting ventures from the

scratch. They like buying the on-going ventures, and they prefer businesses of buying

and selling goods/services

vi) Life timers: They take business as part of their life, and would do anything for the

business to survive

C) Classification According to the Type of Business

i) Business entrepreneurs: These are individuals who conceive an idea for a new

product or service and then create a business to turn the ideas into reality.

- They almost tap both the production and marketing resources to develop a new business

opportunity

- They may set up a large size or a small size business

ii) Trading entrepreneur- He is not concerned with manufacturing work, he only

undertakes trading activities.

- He is a basically a marketing person, for he identifies potential markets, stimulates

demand by creating a desire and interest among buyers of his product lines

- He is engaged in both domestic and international trade

- Industrial entrepreneurs- He is a product-oriented man who starts an industrial unit for

making some new products. He has the ability to convert economic resources and

technology into a profitable venture.

iv. Imitative entrepreneurs- They are copycats i.e they copy or imitate the products or

methods developed by innovative entrepreneurs. However, they may make slight

modifications to their production methods.

v). Corporate entrepreneurs – they start business organizations which are registered under

the Act of parliament. He must demonstrate his innovation skill in organising and managing

a corporate undertaking.

vi). Agricultural Entrepreneurs- they undertake agricultural activities such as farming and

marketing farm produce, fertilizers and other farm inputs. The government motivates and

encourages them to undertake agricultural activities through mechanisation, irrigation and

other applications of technologies for dry land.

D) Classification According to the use of Technology

The Application of new technology is necessary for future growth of business. Classification

of entrepreneurs according to technology is as follows:

1. Technical entrepreneurs: A technical entrepreneur is as good as a craftsman. Because of

his craftsmanship, he develops improved quality of goods.

- He is concerned and concentrates more in production than marketing.

- He demonstrates his innovative capabilities in the matter of production of goods and

rendering of services.

2. Non-technical Entrepreneurs:- They are only concerned with developing alternative

marketing and distribution strategies in order to promote their business.

- They are not concerned with the technical aspect of the product in which they deal.

3. Professional Entrepreneurs- He is a person who establishes a business and sells out the

running business and starts another venture with the same proceed.
 - At times they may establish the business and run it by employing people with the

required skills.

E) Classification According to Motivation

Motivation influences the efforts of the entrepreneur to accomplish his objectives. An

entrepreneur is motivated to improve his excellence in job performance. On the basis of

motivation entrepreneurs are classified as:

1. Pure entrepreneur: When an individual is motivated by psychological and economic

rewards he is termed as a pure entrepreneur. He undertakes an entrepreneurial activity for

his personal satisfaction in work, status or ego.

2. Induced entrepreneur: He is one who is induced to take up entrepreneurial tasks due to

the various policy measures, incentives, tax benefits offered by the government to start a

venture

3. Motivated entrepreneur (fill-in the gap entrepreneurs)- He is motivated by possibility of

making and marketing a new product for the use by consumers in addition to rewards in

terms of profits

4. Spontaneous entrepreneur: He is a talented person with initiative, boldness, confidence and

inborn ability that motivates him to undertake entrepreneurial activity.

F) Classification According to Growth

The industrial units are identified as units of high growth, medium growth and low growth

industries and as such we have “growth entrepreneurs” and “ super-growth entrepreneurs”.

1. Growth Entrepreneurs- they invest in high growth industries which helps their

investments to pick very fast and continue growing very fast. They are positive thinkers

who don’t give up easily

 2. Super-growth entrepreneurs- their ventures shows enormous/super growth right from the

beginning compared to growth entreprenuers’ventures

G) Classification According to Stages of Development

1. First Generation Entrepreneurs- A first generation entrepreneur is usually an innovator.

He possesses inborn innovative skills.

2. Modern Entrepreneur- He is a person who undertakes those ventures that suits the

current market needs, and which go well with the changing demand in the market

3. Classical Entrepreneur- He is a stereotype entrepreneur whose aim is to maximise his

returns. He is only concerned with the customers and marketing needs through the

development of self-supporting ventures.

4. Conservative Entrepreneur- They are cautious in decision-making, they maintain status

quo i.e. they hardly introduce changes in their organizations

H) Other types of Classifications

 According to Areas of operation

a) Urban entrepreneurs

b) Rural entrepreneurs

 According to Gender

a) Men entrepreneurs

b) Women entrepreneurs

 According to scale of operation

a) Small-scale entrepreneurs

b) Large scale entrepreneursLESSON

 Technopreneurship is a combination of “technology” and “entrepreneur”. It is a

“technology innovator and business man rolled into one”; or better still “an entrepreneur

whose business involves technology related activities”.

They are indeed gifted, smart, creative, but not essentially properly educated; aggressive

young men & women passionate for success; mostly assemblers and at times innovators,

and they can be found in most commercial cities in the world.

They include: - Software Developers - PC Manufactures among others. The Asian

experience of Techno-preneurship success includes India where the Indian Ministry of

Science & Technology in conjunction with related agencies launched a novel programme

known as “Technopreneur Promotion Programme (TePP)”. Bill Gates,

 First-Generation Entrepreneurs: This category consists of those entrepreneurs whose

parents or family had not been into business and was into salaried service. The booming

economy of India has led to a multitude of business opportunities, and with deregulation,

it has become easier to set up businesses. Also, with a change in the mindset of the

middle class, it is now more acceptable to become an entrepreneur.

A first-generation entrepreneur is one who starts an industrial unit by means of an

innovative skill.

He is essentially an innovator, combining different technologies to produce a marketable

product or service.

 Modern Entrepreneur:

A modern entrepreneur is one who undertakes those businesses which go well along with

the changing scenario in the market and suits the current marketing needs.

 Women Entrepreneurs:
 Women as entrepreneurs have been a recent phenomenon in kenya. The social norms in

kenya had made it difficult for women to have a professional life. Now this has changed.

Progressive laws and other incentives have also boosted the presence of women in

entrepreneurial activity in diverse fields.

In 1988, for the first time, the definition of Women Entrepreneurs’ enterprise was

evolved that termed an SSI unit/industry-related service or business enterprise, managed

by one or more women entrepreneurs in proprietary concerns, or in which she/they

individually or jointly have a share capital of not less than 51 per cent as partners /

shareholders / directors of a private limited company / members of a cooperative society,

as a Woman Enterprise.

 Nascent Entrepreneur:

A nascent entrepreneur is an individual who is in the process of starting a new business.

 Habitual Entrepreneur: A habitual entrepreneur is an individual who has prior business

ownership experience. The nascent entrepreneur can either be a novice or a habitual

entrepreneur.

 Lifestyle Entrepreneurs:

Lifestyle entrepreneurs have developed an enterprise that fits their individual

circumstances and style of life. Their basic intention is to ear an income for themselves

and their families.

 Co-preneurs

It is related to the married couples working together in a business. When a married couple

share ownership, commitment and responsibility for a’ business, they are called

“copreneurs”.
As co-preneurs, couples struggle in ventures to establish equality in their relationships.

Such couples represent the dynamic interaction of the systems of love and work.