`

GANADIPATHY TULSI’S JAIN ENGINEERING COLLEGE.

DEPARTMENT OF MBA
MB25C06/ Entrepreneurship Development (I Year / I Sem)
MB25C06 Entrepreneurship Development L T P C 3 0 0 3
Course Objectives: This course aims to equip the knowledge and skills to identify entrepreneurial
opportunities, develop a comprehensive business plan, and manage the lifecycle of a startup, from launch
to sustainable growth. It integrates theoretical frameworks with practical applications of the entrepreneurial
ecosystem and ethical business practices. Entrepreneurial Mindset and Competencies:

UNIT-1 Entrepreneurship concept – Entrepreneurship as a Career – Entrepreneurial Personality -

Characteristics of Successful Entrepreneurs – Knowledge and Skills of an Entrepreneur.

UNIT-2 Entrepreneurial Ecosystem and Policy Support: Entrepreneurial Environment – Role of Family,
Society and Culture – Government Industrial Policies – State and Central Schemes (Startup India, Stand-
Up India, PMEGP, MSME) – Role of DICs, SIDBI, EDII, TBI, DST, NSIC – Role of Industry Associations
and Support Services – Incubation Centers and Accelerators – International Policy Ecosystem (Global
Innovation Index, GEM).

UNIT-3Opportunity Identification and Business Planning: Sources of Product for Business - Prefeasibility
Study - Criteria for Selection of Product - Ownership - Capital Budgeting- Project Profile Preparation -
Matching Entrepreneur with the Project - Feasibility Report Preparation and Evaluation Criteria.

UNIT-4 Launching the Startup and Funding Mechanisms: Finance and Human Resource Mobilisation -
Operations Planning - Market and Channel Selection -Growth Strategies - Product Launching – Incubation,
Venture capital, Start-ups.

UNIT-5 Managing and Scaling the Business: Small Business Operations – Inventory, Finance, and People
Management – Customer Acquisition and Retention – Digital Tools for Small business – Measuring
Business Performance – Managing Uncertainty and Change – Business Model Innovation – Lean Startup
Strategy – Scaling Frameworks – Case Studies on Growth-Oriented Startups.

UNIT-6 Business Sustainability, Exit Strategies, and Ethics: Monitoring and Evaluation of Business -
Business Sickness - Prevention and Rehabilitation of Business Units - Effective Management of small
Business - Case Studies
TOTAL : 45 PERIODS
COURSE OUTCOMES:
After the completion of the course, the students will be able to:
1. The learners will gain entrepreneurial competence to run the business efficiently.
2. The learners are able to undertake businesses in the entrepreneurial environment
3. The learners are capable of preparing business plans and undertake feasible projects.
REFERENCES:
1. [Link], Entrepreneurial Development, [Link] and Company Limited, New Delhi, 2016.
2. [Link], Entrepreneurship, Tata McGraw Hill, New Delhi, 2018.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 1

 UNIT – 1 ENTREPRENEURIAL COMPETENCE

Entrepreneur:- Owner of a concern / business.

The term is derived from the French word “entreprendre” – Meaning “to undertake.”

Meaning:- Entrepreneur means the person who undertakes the risk of running an enterprise.

He arranged everything that required setting up an enterprise.

Eg:- fund, land, people, material etc.,

Definition: “Entrepreneur is an individual who takes risks and starts something new in business”

Examples : Famous Indian Entrepreneurs.

• Ratan Naval Tata--Ratan Naval Tata is the Chairman of the Tata Group.
• Indu Jain--Most successful woman entrepreneurs of India, owner of "The Times of India," one of the leading
newspapers in India.
• Sunnil Mital--Sunnil Mital is the name behind Bharti Airtel, the largest mobile service and distributor in
India.
ENTREPRENEURSHIP:
MEANING : Entrepreneurship can be defined by describing what entrepreneurs do.

"Entrepreneurship involves bringing about change to achieve some benefit.

Definition: Acc. to [Link], “ Entrepreneurship is the purposeful activity of an individual or a group of associated
individuals, undertaken to initiate , maintain or organize a profit-oriented business unit for the production or distribution of
economic goods and services”.

Entrepreneurship is a continuous economic process which recognizes the need to change and an Entrepreneur is a key
person to initiate any change.

Entrepreneur Vs Entrepreneurship

Entrepreneur: . • Refers to a person • Creator • Organizer • Decision maker • Initiator • Leader • Motivator • Risk taker •

Entrepreneurship: Refers to a process • Creation • Organization • Decision making • Initiative • Leadership • Motivation •
Risk taking

ENTREPRENEURSHIP CONCEPT

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 2

 Like other economic concepts, entrepreneurship has been a subject of much debate and discussions.
Various experts have defined the term entrepreneur in different words. Some of the definitions are as
follows:

According to [Link], “an entrepreneur is the economic agent who unites all means of production,
land of one, the labour of another and the capital of yet another and thus produces a product. By selling a
product in a market he pays rent to land, wages for labours, interest on capital, and what remains his profit”.

[Link], is of the overview that, “a person who introduces innovative changes is an

entrepreneur and he is an integral part of economic growth”.

The term “entrepreneur” has been defined as one who detects and evaluates a new situation in his
environment and directs the making of such adjustments in the economic systems, as he deems necessary. In
this process, performs one or more of the following:

❖ Perceives opportunities for profitable investments;

❖ Explores the prospects of starting such a manufacturing enterprise;

❖ Obtains necessary industrial licenses;

❖ Arranges initial capital;

❖ Provides personal guarantees to the financial institutions.

Thus, an entrepreneur is always action-oriented. He has the ability to visualize the necessary steps
involved from idea generation to its actualization. He is both a thinker and doer; planner and worker. He
accepts risk and manages it. All the above definitions portray an entrepreneur as an initiator of action,
stimulator of social economic change and a harnesser of resources.

DIFFERENT TYPES OF ENTREPRENEURS.

Entrepreneurs can be classified into four major types:

1. Innovators: who produce new goods in new way and do enter into new markets by undertaking
new methods of organization.

2. Imitators: do follow the innovators and design their production.

3. Fabian Entrepreneurs: are lazy and they would follow old customs, tradition and sentiments, with
the result, they are totally uninterested in taking risk and imitating successful entrepreneurs.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 3

 4. Drone Entrepreneurs or Laggards: this type of entrepreneurs never allow any changes in their
production and the style of functioning.

Other types of Entrepreneurs:

1)ACCORDING TO THE TYPE OF BUSINESS

i)Business entrepreneurs:-who start business units after developing ideas for new products/services. (buy
max)

ii)Trading entrepreneurs :-who undertake buying & selling of goods, but not engage in manufacturing.
(Retailing)

iii)corporate entrepreneurs:-who establish and manage corporate form of organization which have separate
legal existence. Good examples of corporate entrepreneurial leaders are, in technology, Steve Jobs of Apple;

iv)Agricultural entrepreneurs:- who undertake activities like raising and marketing of crops, fertilizers and
other allied activities.(Sunil Khairnar is bringing new resources and valuable networks to agricultural
entrepreneurs in India,, Sunil is helping entrepreneurs set up agriclinics to provide vital data to farmers
around the country, Maharashtra ,finished agriculture engineering , management from IIM, Godrej ,gained
Knowledge agri commodity Trade

2) ON THE BASIS OF STAGES OF DEVELOPMENT

i)First generation entrepreneurs:-who do not possess any entrepreneurial background. They start industry by
their own innovative skills.(A true first generation entrepreneur, Sunil Mittal has been awarded the Padma
Bhushan)

ii)Second generation entrepreneurs:-who inherit the family business and pass to next generation.

Anil Ambani

3) ON THE BASIS OF MOTIVATION

i)Pure entrepreneurs:-who are basically motivated to become entrepreneurs for their personal satisfaction,
ego etc..(Suchi Mukherjee)

ii)Induced entrepreneurs:- who are induced to take up entrepreneurial role by the assistance and policy of
government including incentives, subsidies etc.(paper,cloth bag)

4) ON THE BASIS OF TECHNOLOGY

i)Technical entrepreneurs:- who are task oriented and ‘craftsman type’. They prefer doing to thinking. . He
concentrates more on production than marketing

ii)Non-technical entrepreneurs:- who are not concerned with technical side, but rather with marketing and
promotion. (trading)

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 4

iii)Professional entrepreneurs:- who start a business unit, but later sell the running business and start a new
unit later.(SUZLON-REPOWER: Pune, India and RePower systems SE (now Senvion SE) is a German
wind turbine company founded in 2001, owned by Centerbridge Partners.

5) ON THE BASIS OF CAPITAL OWNERSHIP

i)Private entrepreneurs:- individual or group set up enterprise, arrange finance, share risk etc..

ii)Joint entrepreneurs:- the combination of private and government entrepreneurs. (SHSP)

6) ACCORDING TO GENDER AND AGE

i)Man entrepreneurs

ii)Women entrepreneurs

iii)Young entrepreneurs(Bhaveish)

iv)Old entrepreneurs

v)Middle-aged entrepreneurs

7) ACCORDING TO AREA

i)Urban entrepreneurs

ii)Rural entrepreneurs (Madanlal Kumawat,Rajasthan inventing a fuel-efficient, multi-crop thresher, a

machine used to separate grain from stalks and husks

8) ACCORDING TO SCALE

i)Large scale entrepreneurs

ii)Medium scale entrepreneurs

iii)Small scale entrepreneurs

iv)Tiny scale entrepreneurs (kiosk)

9)OTHERS

Social entrepreneurs- who works to increase social capital by founding social ventures, including
charities,. Jaipur Rugs was founded by Nand Kishore Chaudhary in 1978, who started the carpet business
with two looms. Now ,20+ branches, 6 states and 600 villages in India with distribution to over 40 countries

Edupreneurs - Edupreneurs can be defined as educational entrepreneurs who plan, open and successfully
operate educational services

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 5

IMPORTANCE OF ENTRPRENEURS:

Ex: FREE MARKET:, with the rise in the use of the internet, an entrepreneur may see the potential
to set up a new home delivery service which uses an app for consumers to buy.

EFFICIENCY: For example, in response to Uber taxi services, it created an incentive for established
taxi-firms to develop their own apps.

NEW PRODUCT: TAP SCANNER

FUNCTIONS OF ENTREPRENEURS

An entrepreneur performs all the functions right from the conceiving idea up to the establishment of
an enterprise. He is an opportunity seeker. He organizes and co-ordinates the factors of production. His main
functions are discussed below:

1. Generating Business Idea: Generation of idea is the first and foremost function of an entrepreneur.
Essentially there are only two ways, in which business ideas can be created namely, (i) generating own idea,
or (ii) Developing someone else’s idea. The second is far more common because virtually every successful
business is a development of an earlier business concept.

In terms of generating business ideas, there are three sources of opportunities such as adverts, agents,
and opportunity spotting, or watching out for business that one find match his objectives. All people and
organizations have needs that they fulfill in many different ways. If a person can meet these needs better
when compared to current method, then he will almost certainly have a business opportunity.
GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 6
2. Determining Business Objectives:

The next function of entrepreneur is determining business objectives. He should lay down his
objectives clearly. He should clearly state the nature of business and the type of business. In other words, he
has to specify clearly whether the business, which he decides to start, belongs to manufacturing activities or
trading or services oriented organization. It will enable him to carry on the activities without any hesitation.

3. Product Analysis:

The next important function of an entrepreneur is product analysis and market research. He should
conduct market research in order that the data regarding the product, which he likes to manufacture, can be
systematically collected. It should be carried on persistently because it gives him the information regarding
the demand for the product, supply of the product, price of the product, size of the customers etc.

4. Deciding the Form of Enterprise:

Another important function of an entrepreneur is deciding the form of an enterprise. It should be

decided by taking into account the factors such as nature of the product, volume of investment, nature of
activities, types of product, quality of product, quality of human resources etc. the various forms of
organizations that are prevalent are sole trading concerns, partnership firms, co-operative society and joint
stock companies. Before establishing an organization, the form of ownership is to be decided. Because,
based on the form of ownership only, the other legal formalities can be carried on to establish the
organization.

5. Promoting the Enterprise:

Once the form of ownership is decided, the next step is undergoing the necessary legal formalities as
required under the relevant statute if any to establish an organization. In case of sole trading concerns and
partnership firms, there are not many legal formalities when compared to joint stock companies and co-
operative societies. He has to read the relevant statute and fulfill the necessary legal formalities in
establishing the enterprise.

6. Raising Necessary Funds:

Finance is the life-blood of any business all the activities of a business depend upon it. Hence raising
of finance is considered as the most important function of an entrepreneur. He needs funds for purchasing
assets, carrying out day-to-day activities, meeting establishing expenses etc. he raises funds internally as
well as externally. He should know well about pros and cons of different sources of funds so that he can
choose the cheapest way. He should also have the full knowledge about various government-sponsored
schemes, which enables him to get assistance in the form of seed capital, working capital, etc.

7. Procurement of Machine and Material:

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 7

 The next function is procuring machines and raw materials. Machines and equipments are purchased
and installed in the initial stage itself. While purchasing them he should consider the aspects like details as
to the technology adopted, installed capacity of the machines, details of manufactures and suppliers, country
in which the machines are manufactured i.e. whether they made domestically or in a foreign country,
availability of after-sales service facilities and warranty period given etc. this will enable entrepreneurs to
buy quality machines at cheaper rates.

8. Recruiting Men:

Recruiting of suitable personnel for the various activities of the enterprise is another important
function of an entrepreneur. First of all, entrepreneur has to estimate the manpower need of the enterprise.
Then he has to lay down the selection procedure. He should devise suitable method of compensation.
Arrangements should be made for giving training to personnel to the jobs for which they have been
recruited.

9. Undertaking the Activities:

This is the stage of implementing the project. It should be done in a time-bound manner. He should
perform it as per schedule. This will enable him to avoid cost and time over run and also competition.

DISTINGUISH ‘ENTREPRENEUR’ FROM ‘MANAGER’.

Many people are of the view that the terms entrepreneur and manager mean the same. It is a wrong
notion since one can find a lot of differences between these two as given below:

MANAGER ENTREPRENEUR

Servant: A manager is acting in the capacity Owner: An entrepreneur is the owner of the
of a servant in the enterprise. enterprise, which he establishes himself.

Salary: The reward for a manager is salary Profit: The reward for an entrepreneur is
and his salary is certain and fixed. profit, which is highly uncertain.

No risk bearing: As a servant the manager Full risk bearing: As an owner, the
need not bear any risk involved in the entrepreneur has to bear all risks and
enterprise. uncertainties involved in running the business.

Managerial functions only: A manager All functions: An entrepreneur has to perform

renders only the managerial services in an many functions in order to run the enterprise
enterprise. successfully.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 8

 Executor: A manager mainly acts as an Innovator: An entrepreneur mainly acts as an
executor of plans prepared by the innovator and prepares plans for execution.
entrepreneur.

ENTREPRENEURSHIP:
MEANING : Entrepreneurship can be defined by describing what entrepreneurs do.

CHARACTERISTICS OF ENTREPRENEURSHIP:

Economic activity
Gap filling
Dynamic activity
Innovation
Risk taking
Accepting challenges
Mobilization of resources
PROCESS OF ENTREPRENEURSHIP:-
[Link] and evaluate the opportunity

[Link] a Business Plan

3. Determine the Resource Required

[Link] the Enterprise

ENTREPRENEURSHIP AS A CAREER

Entrepreneurship as a Career
The greatest challenge before the youngsters in India today is to build the country into an economic global
giant. The obvious questions that come to the minds of most of them are - “Why should we in India think of
being an entrepreneur? Why not work as part of a larger organization where the opportunities and resources
to scale ideas are perhaps far greater? Entrepreneurship is important for two reasons. One, it furthers
innovation to find new solutions to existing and emerging demands. Two, it offers far greater opportunities
for wealth creation for self and the society than anything else. Entrepreneurship has its challenges. It is about
20 per cent luck and 80 per cent effort, clarity, courage, confidence, passion and above all smartness.
What leads a person to take up entrepreneurship as a career option? There can be a number of reasons
including displacement from a job, frustration in the present job, not getting a job of his/her choice, etc.
Sometimes a person realises much in advance that his/her job is in jeopardy, as the organisation is moving

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 9

towards closure. At times a deserving employee getting superseded in promotion is compelled to quit the job
and look for doing something on his own. Some people object to a system wherein reward is often based on
seniority rather than merit.
Above facts are corroborated by the research findings of Gilad and Levine (1986). They proposed two
closely-related explanations of entrepreneurial motivation, the “push” and the “pull” theory.
The “push” theory argues that individuals are pushed into entrepreneurship by negative external
forces, such as job dissatisfaction, difficulty in finding employment, insufficient salary, or inflexible work
schedule. The “pull” theory contends that individuals are attracted into entrepreneurial activities seeking
independence, self-fulfillment, wealth, and other desirable outcomes. Research (Keeble et at., 1992; Orhan
and Scott, 2001) indicates that individuals become entrepreneurs primarily due to “pull” factors rather than
“push” factors.
Some of the prominent pull factors that attract individuals towards entrepreneurship as a career
option are: High Need for Independence: There are personalities who would like to have freedom about:
with whom to work, when to work, with whom to do business at what terms etc. It is this instinct in them
that pushes such personalities to start something of their [Link] satisfy the dream of having high Financial
Rewards: To satisfy the need to derive high financial rewards as an outcome of efforts leads some to start a
business of their own. The fundamental difference between job and own venture lies in the degree of
financial rewards for the efforts put in to achieve organisational [Link] to deal with all aspects of
a business: No job can provide an opportunity to learn and deal effectively with a wide spectrum of business
activities starting from idea generation, conceptualisation, design, creation, marketing to customer response
and customer satisfaction. Vision to leave a long lasting mark: Entrepreneurship creates an opportunity to
make definite contribution to the society by lifting the people in and around the venture. A continuous zeal
to innovate helps in touching the heads and hearts of people at large.
POSSITIVE ASPECTS

 Being the boss of his own business, he enjoys unlimited powers. He can do things in his own way and he
need not take orders from someone else. He can make his own decisions and act on them.
 There are numerous opportunities for his self- development.
 Working on one‟s own and thus getting rewards yields immense satisfaction and pleasure for more than
what he can get in a job.
 Monetary rewards can be more than commensurate with his capacity and capabilities.
 He can command deference and respect of his immediate family and friends. It is a kind of intangible
reward.
 Instead of depending on others, he generates employment for others.
 He can make significant contribution to the development of the country and be proud of taking part in
nation building activities.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 10

 He can be a great achiever realising his goals and proving his achievements to the world. He can be
recognised for his outstanding efforts.

Negative aspects

• constrained by various people like his financiers, labourers, suppliers, customers

• have to face frustration

• has to work long and hard hours from morning to dusk

• always work with tension since there is always the risk of failure.

• Issues in Family & social life

ENTREPRENEURIAL PERSONALITY

Starting and growing own business requires many skills to be successful. business personality type are the
traits and characteristics of personality that blend with the needs of the business.
The 9 Personality Types of Entrepreneurs
1. The Improver: focused on using company as a means to improve the world.. Improvers have an
unwavering ability to run their business with high integrity and ethics.
Entrepreneur example: Anita Roddick, Founder of The Body Shop.
2. The Advisor: This business personality type will provide an extremely high level of assistance and
advice to customers. The advisor's motto is: the customer is right and we must do everything to please
them. Companies built by advisors become customer focused.
Personality Alert: Advisors can become totally focused on the needs of their business and customers that
they may ignore their own needs and ultimately burn out. Entrepreneur example: John W. Nordstrom,
Founder Nordstrom.
3. The Superstar: Here the business is centered around the charisma and high energy of the Superstar
CEO. This personality often will cause you to build your business around your own personal brand.
Personality Alert: Can be too competitive and workaholics.
Entrepreneur example: Donald Trump, CEO of Trump Hotels & Casino Resorts.
4. The Artist: This business personality is the reserved but highly creative type. Often found in businesses
demanding creativity such as web design and ad agencies. As an artist type you‟ll tend to build your
business around the unique talents and creativities you have.
Personality Alert: may be overly sensitive to customer‟s responses even if the feedback is constructive. Let
go the negative self-image.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 11

5. The Visionary: A business built by a Visionary will often be based on the future vision and thoughts of
the founder. will have a high degree of curiosity to understand the world around and will set-up plans to
avoid the landmines.
Personality Alert: Visionaries can be too focused on the dream with little focus on reality. Action must
proceed vision. Entrepreneurial example: Bill Gates, Founder of MicroSoft Inc.
6. The Analyst: run a business as an Analyst, company is focus on fixing problems in a systematic way.
Often the basis for science, engineering or computer firms, Analyst companies excel at problem solving.
Personality Alert: Be aware of analysis paralysis. Work on trusting [Link] example: Intel
Founder, Gordon Moore.
7. The Fireball: A business owned and operated by a Fireball is full of life, energy and optimism.
company is life-energizing and makes customers feel the company has a get it done attitude in a
fun playful manner.
Personality Alert: may over commit on teams and act to impulsively. Balance impulsiveness with business
[Link] example: Malcolm Forbes, Publisher, Forbes Magazine.
8. The Hero: have an incredible will and ability to lead the world and business through any challenge. they
are the essence of entrepreneurship and can assemble great companies.
Personality Alert: Over promising and using force full tactics to get way will not work long term.
To be successful, trust your leadership skills to help others find their way.
Entrepreneurial example: Jack Welch, CEO GE.
9. The Healer: provide nurturing and harmony to your business. have an uncanny ability to survive and
persist with an inner calm.
Personality Alert: Because of caring, healing attitude toward business, may avoid outside realities and use
wishful thinking. Use scenario planning to prepare for turmoil.

CHARACTERISTICS OF SUCCESSFUL ENTREPRENEUR

Anybody can become an entrepreneur provided he has got a certain set of behavioral traits and
mental aptitude. His success depends more on hard work than good luck. The success of an entrepreneur
depends largely on his intelligence, imagination, capacity, to innovate and his ability to turn visions into
realities. The only capacity, very essential to become an entrepreneur is the willingness to work hard. There
are certain characteristic features which make an entrepreneur successful in his venture. They have been
briefly discussed here under:

1. Hard work:

A successful entrepreneur is one who is willing to work hard from the very beginning of his
enterprise. An entrepreneur with his hard work and pervasive perseverance can revive his business even on
the verge of collapse.
GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 12
2. Prudence:

A successful entrepreneur must be prudent in all his dealings. He should have the ability to work out
the details of the venture from all angles, assess the favorable factors and pitfalls and take the suitable
measures to overcome the pitfalls.

3. Achievement Motivation:

The achievement motivation is the most important characteristic of an entrepreneur since all other
characteristics emanate from this motivation. He must have a strong desire to achieve high goals in business.
In fact, this achievement motivation helps him to surmount the obstacles, suppress, repair misfortunes and
devise plans for success.

4. Self-reliance and Independence:

A successful entrepreneur wants to follow his own routine policies and procedures and he does not
like to be guided by others. He is found to be self-reliant by acting as his own master and making him
responsible for all his decisions. He doesn’t like to work for others.

5. Highly Optimistic:

Successful entrepreneur is always optimistic about his future and he is never disturbed by the present
problems. He always expects a favorable situation for his business and he is able to run his business
successfully in the midst of temporary hurdles. He does not allow the past to obsess him.

6. Keen Foresight:

An entrepreneur must have keen foresight to predict the future business environment. He has the
capacity to visualize the likely changes to take place in the market, customer’s attitude, technological
developments, government’s policy etc., and take timely actions accordingly.

7. Innovativeness:

When all is said and done, innovation becomes a different task. One should be always innovative to
satisfy the varying demands of customers. For this purpose, the entrepreneur should initiate research and
innovative activities to produce new goods and services. It is a never-ending process.

8. Risk Taking:

An entrepreneur is not a gambler and hence he should not assume high risk. However, he must love a
moderate risk situation, high enough to be exciting, but with a fairly, reasonable chance to win.

9. Secrecy Maintenance: A successful entrepreneur must be capable of maintaining all his business
secrets. Leakage of business secrets to trade competitors will definitely lead to the downfall of his business.
Hence, he should be very careful in selecting his subordinates.

10. Maintenance of Public Relations:

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 13
 The extent of maintenance of public relations or human relations has a vital role to play on the
success or failure of an entrepreneur. A successful entrepreneur must have cordial relations with his
customers to gain their continued patronage and support. He must also maintain good relations with his
employees with a view to motivating them to higher levels of efficiency. Similarly, he must maintain good
relations with his suppliers, creditors and the community at large so that he may succeed in his ventures.

KNOWLEDGE AND SKILLS OF ENTREPRENEUR

KNOWLEDGE NEED FOR ENTREPRENEUR

• Initiative

• Looking for opportunity

• Persistence

• Information Seeker

• Quality Conscious

• Committed to Work

• Efficiency Seeker

• Financial Knowledge

• Proper Planning

• Time Management

SKILLS OF ENTREPRENEUR.

Business management skills

Business management skills are traits an entrepreneur must have to run a business and ensure all business
goals are met. Entrepreneurs with this skill set can oversee and manage operations of different departments
because they possess a good understanding of each function. Business management skills include
multitasking, delegating responsibilities and making critical business decisions.

Communication and active listening skills

Every entrepreneur must be able to communicate effectively with clients, team members and all other
stakeholders. Whether through verbal communication during meetings or sending reports and messages
GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 14
through emails about the project, entrepreneurs require superior written and verbal communication. Apart
from communication skills, entrepreneurs must be excellent listeners to understand the project's requirement
and discussion during project meetings.

Risk-taking skills

Being able to take calculated and intelligent risks is one of the essential entrepreneur skills to learn.
Employees with an entrepreneur mindset never shy away from taking risks because they understand that
calculated risks result in tremendous success. They know that risk is an opportunity to learn and grow a
business to the next level. Employers want candidates who can take risks in pursuit of potential gains and
profit.

Networking skills

Networking involves building and managing relationship with other professionals to grow and promote a
business. Effective networking skills open up future opportunities and help build a solid brand. Networking
allows entrepreneurs to meet like-minded professionals, build future teams and stay up-to-date with industry
trends. It is one of the most desirable skills for entrepreneurs because, through a solid network, they can
meet professionals to fund their ideas, access professional business expertise and get feedback on their new
venture or idea.

Critical thinking skills

Critical thinking is an entrepreneur skill that objectively analyses the information and draws a rational
conclusion. It helps entrepreneurs assess a situation and come up with a logical solution. Employers look for
candidates with critical thinking because it helps solve problems and build strategies for business growth.
Usually, a critical thinker is independent, competent and reflective. This skill helps entrepreneurs logically
connect ideas, scrutinise information, evaluate arguments, find inconsistencies in work and solve complex
issues. Instead of memorising information, such candidates use the information to deduce meaningful
insights.

Problem-solving skills

Often, entrepreneurs face challenging and unexpected situations. It could be a venture capitalist refusing
further funding or a team member refusing to work as per the project guidelines; an entrepreneur must
possess excellent problem-solving skills to handle stressful situations and calmly identify alternate solutions.
Exceptional problem-solving skills ensure they reach their business goal.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 15

Creative thinking skills

Creativity is a valuable yet underappreciated skill in the digital world. Creative thinking is the backbone for
innovation and it forces employees to think differently. Entrepreneurs with creative thinking skills are never
hesitant to try solutions that others may overlook because of fear of failure. Such people think out-of-the-
box and always seek input from professionals in a different field for understanding a new perspective. It is
one of the most sought-after entrepreneur skills because it allows them to see patterns (even when there are
no patterns) and develop innovative ways to solve business issues.

Customer service skills

Quality customer service promotes the brand and increases loyalty. Regardless of the industry, excellent
customer service skills are essential for business success. From talking to clients to discussing funding
opportunities, customer service skills help entrepreneurs connect with their potential customers.

Financial skills

The ability to handle resources, assess investments, calculate ROI is a must for entrepreneurs. Apart from
this, they must know how to use accounting and budgeting software to keep track of all the financial
processes. By learning financial skills, entrepreneurs avoid overspending and optimally allocate resources.

Leadership skills

Being able to inspire colleagues, empower the workforce and lead from the front requires excellent
leadership skills. Exemplary leaders lead by examples and can take a leadership role and work as a part of a
team. Entrepreneurs with leadership skills motivate their employees, manage operations and delegate tasks
to reach the business goal.

Time management and organisational skills

Effective time management increases productivity and organises your workspace. Entrepreneurs with time
management and organisational skills understand different ways to prioritise tasks and avoid procrastination.
For ensuring timely completion of projects, entrepreneurs analyse their and their team's time, set time limit
for each task, complete priority tasks first, delegate work to others, create a to-do list and use technology to
keep the workspace organised.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 16

Technical skills

Technical skills are hard skills that are gained by using digital tools and software. Entrepreneurs must know
how to use planning, marketing and budgeting software. Knowledge of software helps in managing projects,
tracking sales and allocating a viable budget for the project.

KEY QUALITIES OF ENTREPRENEUR

7 key Qualities of Entrepreneur Being an entrepreneur is about more than just starting a business or two, it is
about having attitude and the drive to succeed in business. All successful Entrepreneurs have a similar way
of thinking and posses several key personal qualities that make them so successful in business. Successful
entrepreneurs like the ambitious Richard Branson have an inner drive to succeed and grow their business,
rather than having a Harvard Business degree or technical knowledge in a particular field. All successful
entrepreneurs have the following qualities:

Inner Drive to Succeed Entrepreneurs are driven to succeed and expand their business. They see the bigger
picture and are often very ambitious. Entrepreneurs set massive goals for themselves and stay committed to
achieving them regardless of the obstacles that get in the way.

Strong Belief in themselves Successful entrepreneurs have a healthy opinion of themselves and often have
a strong and assertive personality. They are focused and determined to achieve their goals and believe
completely in their ability to achieve them. Their self optimism can often been seen by others as
flamboyance or arrogance but entrepreneurs are just too focused to spend too much time thinking about
unconstructive criticism.

Search for New Ideas and Innovation All entrepreneurs have a passionate desire to do things better and to
improve their products or service. They are constantly looking for ways to improve. They're creative,
innovative and resourceful.

Openness to Change If something is not working for them they simply change. Entrepreneurs know the
importance of keeping on top of their industry and the only way to being number one is to evolve and
change with the times. They're up to date with the latest technology or service techniques and are always
ready to change if they see a new opportunity arise.

Competitive by Nature Successful entrepreneurs thrive on competition. The only way to reach their goals
and live up to their self imposed high standards is to compete with other successful businesses.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 17

Highly Motivated and Energetic Entrepreneurs are always on the move, full of energy and highly
motivated. They are driven to succeed and have an abundance of self motivation. The high standards and
ambition of many entrepreneurs demand that they have to be motivated!

Accepting of Constructive Criticism and Rejection Innovative entrepreneurs are often at the forefront of
their industry so they hear the words "it can't be done" quite a bit. They readjust their path if the criticism is
constructive and useful to their overall plan, otherwise they will simply disregard the comments as
pessimism. Also, the best entrepreneurs know that rejection and obstacles are a part of any leading business
and they deal with them appropriately. True entrepreneurs are resourceful, passionate and driven to succeed
and improve. They're pioneers and are comfortable fighting on the frontline The great ones are ready to be
laughed at and criticized in the beginning because they can see their path ahead and are too busy working
towards their dream.

EXTRA CONTENT, BEYOND SYLLABUS

ENVIRONMENTAL FACTORS DO INFLUENCE THE EMERGENCE AND DEVELOPMENT OF

ENTREPRENEURSHIP

There are certain major factors that affect the growth of entrepreneurship. In many of the less
developed countries, most of their inventions either lies in idle conditions or flow out to the more prosperous
nations. On the one hand entrepreneurs do not seem to come; on the other hand, those who are present tend
to leave their countries in search of better opportunities. Several factors are affecting the growth of
entrepreneurship. They can be studied under the following heads:

A. Economical Factors.
B. Social Factors.
C. Cultural Factors.
D. Personality Factors.
E. Psychological and Sociological Factors.

A. ECONOMICAL FACTORS.

The economic factors that affect the growth of entrepreneurship in the less developed countries are:

(a) Lack of Adequate Basic Facilities: Certain basic or overhead facilities like modern transport and
communication, adequate irrigation and power facilities, latest technology etc. are very essential for
undertaking innovative activities. They provide external economies by increasing the output and reducing
the cost of production. Unfortunately, these facilities are not adequately available in less developed
countries. Hence, entrepreneurs have to provide these facilities themselves or obtain them at lowest costs.

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 18

An entrepreneur cannot set up his own power project for undertaking innovative activities. Hence,
entrepreneurs are discouraged from going for innovations.

(b) Non- availability of Capital:

Innovations generally require huge capital investment on capital equipments. Capital equipments
have to be imported which involves heavy shipping and insurance expenses. Sometimes, even the basic
expertise has to be imported. Imports also involve the use of considerable amount of foreign exchange,
which is also scarce in less developed countries. Hence, innovations are scarce to developing countries and
thus, non-availability of capital hampers entrepreneurial growth.

(c) Non-availability of Raw Materials and Finished Goods:

Again, raw materials supply is not uniform throughout the year. Hence, they have to be stocked in
plenty during the periods of their supply. Moreover, large stocks of inventories have to be kept to ensure
adequate industrial supplies. Hence the amount of working capital required is increased considerably in less
developed countries pushing up the cost of production. Borrowed capital either for fixed or working capital
requirements involves high interest rates also. Hence, the entrepreneurial growth is affected very much in
these countries.

(d) Greater Risks Involved in Business:

Risks are greater in less developed countries than developed nations due to the following reasons:

● There is considerable instability in both domestic and foreign economic policies.

● There is instability in the market due to seasonal fluctuations of demand.

● The domestic market is also small that inhibits new investments.

● There is lack of information on cost, market demand, overhead facilities etc; hence, an entrepreneur

cannot make correct estimates of his proposed venture.

B. SOCIAL FACTORS.

Social factors also play a decisive role in encouraging entrepreneurship in a country. In fact, the
favourable social factors that prevailed in Europe during the 17 th and 18th centuries led to the very emergence
of the ‘entrepreneur’ as a factor of production. Some of these factors are:

(a) Customers and Traditions:

If customs and traditions play a dominant role in production decision-making rather than the critical
assessment of facts, then entrepreneurship will not be encouraged. It is so because an entrepreneur will be

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 19

guided more by customers than his individual initiative and drive. In fact, in Europe, people rejected
customs and traditions.

(b) Rationality of the Society:

A society is said to be rational when decisions regarding resource utilization are based on empirical
facts and critical scientific standards. While rational behaviour is the order of the day in the developed
nations, a majority of the less developed countries are characterized by a non-rational society, which is
unsuitable to entrepreneurship.

(c) Social System:

The social system prevailing in a locality also affects entrepreneurship. For instance, in a society
where the joint family system is in vogue, entrepreneurship cannot be developed. It is so because those
members of the joint family who gain wealth by their labour, since they have to share their wealth with the
other members of the family.

(d) Social Set-up:

The social set–up in some countries in hostile to entrepreneurship. For instance, in some societies,
education, research and training are given very little importance. Such societies cannot expect entrepreneurs
to emerge and take up new ventures.

C. CULTURAL FACTORS.

The cultural factors prevailing in a country decide the level of entrepreneurial activities in that
country. If the culture does not attach great value to business talents, industrial leadership etc. then people
may not prefer any business ventures.

Again, entrepreneurial growth requires motives. In less developed countries, people are not
economically motivated and they have greater scope for attaining social status by non-economic pursuits.
Hence entrepreneurship is not developed.

D. PERSONALITY FACTORS.

(a) Support Personality:

In the less developed countries, the entrepreneur is looked upon with suspicion. People tend to see in
the entrepreneur a suspect personality. They see the entrepreneur only as profit maker and an exploiter.
Thus, the public opinion has become hostile to entrepreneurship.

(b) Emergence of Planning:

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 20

 In developed countries, people favour direct state activity in the economy rather than private
entrepreneurship due to suspect personality factors. Hence, many countries have resorted to planning as a
means of achieving economic progress and the state has been given vital role. Planning imposes controls and
this goes against the very personality of the entrepreneurs.

E. PSYCHOLOGICAL AND SOCIOLOGICAL FACTORS.

There are many psychological and sociological factors that affect entrepreneurship. Many theories
have been put forth by psychologists and sociologists to explain the root of entrepreneurship. They can be
summarized as follows:

o According to McClelland “need achievement” motives induces entrepreneurship. This is confirmed

by Paul Wilken who says “entrepreneurship becomes the link between need achievement and
economic growth”.

o This need achievement is influenced not only by social and cultural factors, but also by parental
influence.

Referred From:

1. Hisrich, Entrepreneurship, Tata McGraw Hill, New Delhi, 2001.

2. [Link], Entrepreneurial Development, [Link] and Company Limited, New Delhi,2001.

END OF UNIT I

GTEC/MBA/Entrepreneurship Development / Notes/ Unit-1 prepared by [Link] Page 21