ENTREPRENEUR

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 Meaning of Entrepreneur
 Characteristics of Entrepreneur
 Classification & Types of Entrepreneur
 Stages In Entrepreneurial Process
 Role of Entrepreneurs in Economic Development
 Entrepreneur –an Emerging Class.
 Entrepreneurship in India
 Entrepreneurship – its Barriers.
 Identification of Business Opportunities
 Market Feasibility Study
 Technical Feasibility Study
 Financial Feasibility Study
 Social Feasibility Study.
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 Entrepreneur is a person who undertakes an
enterprise. The process of creation is called
entrepreneurship.
 An entrepreneur can be considered as a person who
bears the risk of operating a business in the face of
uncertainty about the future conditions.
 Entrepreneur as One Who Always searches for
Change, Responds to it & Exploits it as an
Opportunity.

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 Entrepreneur is one
◦ Who innovates and introduces something new in the
economy.
◦ Who shifts resources out of an area of lower and
into an area of productivity and greater yield.
◦ Who plays a critical role in economic development and an
integral part of economic transformation.

 Entrepreneur is an agent who buys the four factors

of production at certain prices in order to combine
them into product with a view to selling it at
uncertain prices in future.

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 You are your own boss, boss to other
 Chance to put your ideas into practice

 Make money for yourself

 Chance to work directly with your customer

 Personal satisfaction of creating & running

business
 Work in a field of your interest

 Get experienced in various discipline

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1. Creativity
• Germination, Preparation, Incubation,
Illumination, Verification
2. Innovation
3. Dynamism
4. Leadership
5. Teambuilding
6. Achievement motivation
7. Problem solving
8. Goal Orientation
9. Risk taking & Decision making ability
10. Commitment
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 He is a Person who creates Enterprise. The Process
Creation is called as ―Entrepreneurship‖.
 This evolved from the French Word ―Entreprende‖ in the 12th
Century.
 In the early 16th Century, it was applied to those
who were engaged in Military Expeditions.
 In the 17th Century, it was extended to cover Civil Engg
Services.
 In the 18th Century, Richard Centillon described
Entrepreneur as “One Who Bears Risk by buying at Certain
Prices & selling at Uncertain Prices” which is closer to the
Terms as Applied Today.

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1. Planning of the project: idea of
the project and Program launching structure
business of the
2. Management: responsible for the management of
business
3. To Face Risks: faces uncertainly & bears risks
4. Distribution of Rewards: pays the reward in the
shape of rent, wage, & interest and bears the risk of
profit or loss himself

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5. Sale of Products: responsible of
marketing,
advertising
6. Scale of Production: decided the scale of business, takes
the decision of what where and how to produce goods.
7. Joint stock Organization: In a partnership, the
entrepreneurial functions are divided between the
partners. But in public limited company
entrepreneurial decisions the are left
government or a body to which to government
the has
delegated its powers.

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I) Classification of Entrepreneurs based on Functional
Characteristics
a. Innovative Entrepreneur: Introduces New Goods /
Products / Services or New Methods of Production or
discovers New Markets or
Reorganizes his Enterprise.
b. Imitative or Adoptive Entrepreneur: Imitate or Copy
Techniques & Technology
c. Fabian Entrepreneur: display great caution & skepticism
in experimenting with any change in their Enterprise.
d. Drone Entrepreneur: Die – Hard Conservative Attitude,
do not easily seize opportunities to make changes in
their production techniques or the Technology
employed

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II) Classification of Entrepreneurs on the
Development Angle :
a. Prime Mover: sets into Motion a Powerful
Sequence of Development, Expansion &
Diversification of Business
b. Manager: does not initiate Expansion & is
content just Staying in Business
c. Minor Innovator: contributes to Economic
Progress by finding better use for Existing
Resources
d. Satellite: assumes a Supplier’s Role & slowly moves
towards a Productive Enterprise
e. Local Trading: limits his enterprise to the Local Market.

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III) Classification of Entrepreneurs based on Types
of Business :

a. Manufacturing: Entrepreneur is involved in Production

of Value Added Goods by using Various Inputs
b. Wholesaling: An Entrepreneur with such a Business
sells Products to the Middle Men or Retailers
c. Retailing: An Entrepreneur with such a Business
sells Products directly to the Consumer’s or End
Users.
d. Service: An Entrepreneur in this Business sells Services &
not the Products.

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IV) Classification of Entrepreneurs as per the
Behavioral Scientists :
a. Solo Operators: work alone, introduce their own capital
b. Active Partners: jointly put their efforts and
resources
c. Inventors:interest lies in research and innovative
activities
d. Challengers : entrepreneurs plunge into industry
/business because of the challenge it presents.
e. Buyers : Purchase the existing one and by using their
experience and expertise try to run the enterprise
successfully.
f. Life Timers: integral point of their life
g. Industrial entrepreneurs: Such entrepreneurs engage in
manufacturing and selling products.

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V) According to growth
a. growth
b. super growth
VI) According to stages of development
a. modern
b. classical
VII) According to the area
a. urban
b. rural
VIII) According to the gender and age
a. men
b. women
IX) According to the sale of operation
a. small
b. large
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 Economic independence
 Establishing their own creativity

 Establishing their own identity

 Achievement of excellence

 Building confidence

 Developing risk taking ability

 Motivation

 Equal status in society

 Greater freedom and mobility

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• Exploration of the prospects of starting a new business
• Pool up the resources
• Establish the industrial enterprise
• Manage the business
• Development of strategies.
• To assume risk & uncertainty
• To develop business & business decision
• Motivation
• Supervision & leadership

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1. Lack confidence
2. Problem of finance & working capital
3. Socio- cultural barriers
4. Production problem
5. Inefficient Marketing Arrangements
6. Male dominations

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1. Provide basic education & establish special
institutions to train women entrepreneurs.
2. Conduct especial workshops to women for better
awareness.
3. Liberal financial support to motivate women
entrepreneurs
4. Favourable credit policies to women
5. Provide better marketing help to women
entrepreneurs

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6. Provide need- based training for development of
skills & entrepreneurship.
7. Establish self-help groups, Voluntary agencies &
social welfare organization for women entrepreneurs
8. Provide concessions to women entrepreneurs.
9. Provide a common platform to all the concerned
agencies & R & D organization to achieve an
interacted approach for promoting women
entrepreneurs.

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 Suchi Mukherjee
CEO of the online social discovery platform for
women, LimeRoad
[Link]
 Anu Sridharan

Founder of NextDrop, a company which allows

Indian residents in the urban areas to track the
availability of piped water through SMS.

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 Is an emerging class found in large industrial
organizations who emerge from within the confines
of the large industrial organizations.
 Top executives are encouraged to catch hold of new
ideas and convert them into products through
research and development activities within the
framework of the organization.
 Dependent, does not bear risk in business, does not
raise funds, operates from inside.

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1) Perceiving ,identifying opportunity
2) Evaluating opportunity
 Description of product
 Agreement of opportunity
 Assessment of the entrepreneur
 Resources needed
 Amount & sources of capital
 Profit expected

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3) Drawing up a business plan
 Title of project, table of contents
 Description of business & industry.
 Technology plan
 Financial plan
 Organization plan
 Production & operation plan
 Marketing & distribution plan
 Summary
4) Marshalling resources
5) Creating the enterprise
6) Consolidation and management

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1) Promotes capital formation by
mobilizing the idle saving of the public.
2) Provides immediate large scale
employment thereby reducing the
unemployment problem in the country.
3) Promotes balanced regional development.
4) Helps reduce the concentration of
the economic power.

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5) Stimulates equitable redistribution of wealth,
income and even political power in the interests
of the country.
6) Encourages effective resource mobilization of
capital and skill which otherwise would remain
unutilized and idle.
7) Induces backward and forward linkages which
stimulate the process of economic development in
the country.
8) Promotes export trade which is an important
ingredient for economic development

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1) Lack of a viable concept
2) Lack of market knowledge
3) Lack of technical skills
4) Lack of seed capital
5) Lack of business know how
6) Complacency—lack of motivation
7) Social stigma
8) Time presence and distractions
9) Legal constraints and regulations
10) Monopoly and protectionism
11) Inhibitions due to patents
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 It focuses on indentifying
entrepreneurship qualifies of an
individual,
training, providing
preparing required
related project reports,
preparing the entrepreneurs to manage
finance, Production, technology marketing
& infrastructure facilities.
 EDP also provides knowledge to solve
problems &difficulties of entrepreneur.

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 Builds confidence in people
 Gives guidelines to the young

 Gives technical assistance, management,

training consultancy.
 Channelizes them to accelerate

industrialization
 It is helpful in growth of small scale

section.

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 Entrepreneurship is regarded as closely associated with the
Economic History of India. This is traced way back to even as early as Rig
Veda, when Metal Handicrafts manufacturing cottage & small enterprises
existed in the Country.
It has passed thro several Ups & Downs. The important ones
include the Decline of Indian Handicrafts Industry towards the end of the
18th Century, entry of the East India Company of the British’s in India’s
Business Activities. The Swadeshi Campaign for Indian Manufactured Goods,
the First World War,
Emergence of the Indian Managing Agency Systems by promoting
Joint Stock Companies, the Second World War, Partition of Undivided India
& undertaking planned development of Entrepreneurship in the Country by
Govt of India after Independence in 1947.
For the purpose of encouraging Entrepreneurship, the Govt of
India brought out the First Industrial Policy Resolutions in 1948 which
was subsequently revised from Time to Time.
 The Govt of India in order to promote , assist &
develop industries in the National Interest has
taken the following Three Important Resolutions in
the Industrial Resolutions :
i. To maintain a proper distribution of economic power
between Private & Public Sector.
ii. To encourage Rapid Industrialization by moving the
concept of Entrepreneurship from existing centers to
other cities, towns & rural areas.
To disseminate the Entrepreneurship acumen
iii. concentrated in a few dominant communities to a
large number of Industrially Potential People of varied
Social Background.
 To achieve these Objectives the Govt accorded emphasis on
the Development of Small Scale Industries in the Country.
 Since the 3rd Five Year Plan, the Govt announced various
Incentives & Concessions in the form of Capital, Technical
Know How, Reservation of Certain Items for Exclusive
Manufacture in Small Scale Sector Tax Concessions,
Provision of Infrastructural Facilities like Developed Land,
Sheds, Roads, Communication etc for Promotion of
Enterprises in the Country etc.
 This has helped in Speedy Economic Development in all the
States in the Country & to a great extent has minimized
regional imbalances.
 National Common Minimum Programme (NCMP)
describes Small Scale Enterprises as the Most
Employment Intensive Segment. At the beginning of the 10th
Plan, (2002 – 2003), the Segment provided gainful employment
to 24.9 Million People in the Rural & Urban Areas of the
Country thro 10.5 Million Units, engaged in Manufacturing &
providing a Wide Range of Goods & Services. If the Units in
Khadi Village Industries are also taken into account, the
Employment would rise to 332 Million.
 Thus this is rightly called as the segment which provides
employment next only to Agriculture. The Contribution of Small
Enterprises Segment to the Economic Development of the
Country is very significant. Nearly 39% of the Gross
Manufacturing Output & 34% of the Exports of India arise
from these Enterprises.
 Yet a large number of Entrepreneurs are facing lots
of Challenges. In order to assist them to
harness their potential by availing fully of
increasing opportunities generated by Trade Liberalization,
it is necessary to not only build an enabling Policy
Environment but also supplement the formerthe with a
specific set of measures to address the continuing
challenges.
 Therefore Ministry of Micro, Small &
Medium Enterprises,Govt of India has
announced
package for aPromoting such enterprises in Feb 07
to provide full support in the Areas of Credit,
Technological Up gradation, Marketing &
Infrastructural Up gradation in Major Industrial
Infrastructure etc.
 The opportunity to be your own boss, to implement
your own ideas, to earn for himself or herself is
reason to think of starting an SSI unit.
 Entrepreneur who starts their own business can

be grouped into two broad categories.

◦ People who know exactly what they want to do and are

merely looking for the opportunity or resources to do it.
◦ People who want to start their own business, but do not
have definite ideas about what may would like to do.

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 Project identification is concerned with the
collection complication and analysis of data for the
eventual purpose of locating possible opportunities
for investment and with the development of the
characteristics of such opportunities.
 Opportunities, according to Drucker, are of three

kinds:
◦ Additive
◦ Complimentary
◦ break-through.

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 Additive opportunities are those opportunities which enable the
decision maker to better utilize the existing resources without in
any way involving a change in the character of business.
 Additive opportunities involve the least amount of disturbance to
the existing state of affairs and hence the least amount of risk.
 Complementary opportunities involve the introduction of new
ideas and as such do lead to certain amount of change in the
existing structure.
 Breakthrough opportunities on the other hand, involve
fundamental changes in both the structure and character of
business.

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 The output characteristics of a project define what the project
will generate in the form of goods and services, employment
revenue etc.
 The quantity and quality of all these output should be clearly
specified.
 In addition every project will have impact on society. It
inevitably affects the current equilibriums of demand and
supply in the economy.
 It is necessary to evaluate carefully the sacrifice which the
society will be required to make and the benefits will not
accrue to the society from a given project.

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 Project identification cannot be complete without
identifying the characteristics of the project.
 Every project has three elements—inputs, outputs and
social costs and benefits.
 The input characteristics define what the project will consume
in terms of raw material, energy, manpower, finance and
organizational setup.
 The native and magnitude of these input must be
determined in order to make the input characteristics
explicit.

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 Project feasibility analysis is carried out
to ensure viability of project.

The important project feasibility study is

1. Market feasibility
2. Technical feasibility
3. Financial feasibility
4. Economic feasibility
5. Ecological feasibility

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Market feasibility
Market feasibility is concerned with two aspects the aggregate demand for
the proposed product/service, the market share of the project under
consideration. For this market analysis requires variety of information and
appropriate forecasting methods.

The kind of information required is

● Consumption trends in the past and the present consumption level
● Past and present supply position
● Production possibilities and constraints
● Imports and exports
● Structure of competition
● Cost structure
● Elasticity of demand
● Consumer behavior, intentions, motivations, attitudes, preferences
and requirements
● Distribution channels
● Administrative, technical and legal constraints
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Technical Analysis

Technical analysis seeks to determine whether

prerequisites for successful commissioning of the
project have been considered and reasonably good
choices have been made with respect to location,
size, and so on.

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The important questions raised in technical analysis are:
Has the availability if raw material, power, and other
inputs been established?
 Is the selected scale of operation optimal?
 Is the production process chosen suitable?
 Are the equipment and machines chosen appropriate?
Have the auxiliary equipment and supplementary
engineering works been provided for?
 Has provision been made for treatment of effluents?
 Is the proposed layout of the site, buildings and plant
sound?
 Have work schedules been drawn up realistically?
Is the technology proposed to be employed appropriate
from the social point of view?

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Technical analysis seeks to
whether determine prerequisites for
commissioningsuccessful
of the project have been considered
and reasonably good choices have been made with
respect to location, size, and so on.

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 Has the availability if raw material, power, and other
inputs been established?
 Is the selected scale of operation optimal?

 Is the production process chosen suitable?

 Are the equipment and machines chosen

appropriate?
 Have the auxiliary equipment & supplementary

engineering works been provided for?

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 Has provision been made for treatment of
effluents?
 Is the proposed layout of the site, buildings and

plant sound?
 Have work schedules been drawn up

realistically?
 Is the technology proposed to be employed

appropriate from the social point of view?

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This is concerned with judging a project from the
larger social point of view, where in the focus if on
social costs and benefits of a project, which may
often be different from its monitory costs and
benefits.

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 What are the direct economic benefits and costs of the
project measured in terms of shadow (efficiency) prices
and not in terms of market prices?
 What would be the impact of the project on the

distribution of income in the society?

 What would be the impact of the project on the level of

savings & investment in the society?

 What would be the contribution of the project towards

the fulfillment of certain like self- sufficiency,

employment and social order?

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