Module 1Concept of an Entrepreneur and

Entrepreneurship

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CONTENT

1. The entrepreneur’s role, task and personality, 2. A typology of entrepreneurs, 3. Entrepreneurship as a style of management, 4. The entrepreneurial venture and the

entrepreneurial organization

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WHO ARE ENTREPRENEUR?

Entrepreneur can be defined as:1. Creating something new or initiative taking or

innovative,2. Accepts risks or failure,3. Gets reward.

Entrepreneurs are found in all professions (education, medicine, architecture, research, law, engineering).

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Entrepreneur

ProcessUniqueness

Growth

Profit or No Profit Creating

Value

Organization Creation

InnovationDefining Entrepreneurship

MISCONCEPTIONS ABOUT ENTREPRENEURSHIP

1. Successful entrepreneurship needs only great idea.

2. Entrepreneurship is easy.3. Entrepreneur is risk gamble.4. Entrepreneurship is found only in small business.5. Entrepreneurship ventures and small business

are same thing.

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TYPES OF ENTREPRENEURS

1. Nascent Entrepreneur2. Novice Entrepreneur3. Habitual Entrepreneur4. Serial Entrepreneur5. Portfolio Entrepreneur

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REWARDS AND CHALLENGES OF BEING ENTREPRENEUR

Rewards:1. High degree of freedom2. Get to use a variety of skills and talents3. Freedom to make decisions4. Accountable to yourself only5. Feeling of achievement and pride6. Potential for greater financial rewards

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REWARDS AND CHALLENGES OF BEING ENTREPRENEUR (CONT.)

Challenges:1. Must be comfortable with changes and

uncertainties.2. May face tough economic choices.3. Must be comfortable with taking risk.4. Need many different skills and talents.5. Must be comfortable with potential failure.

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ENTREPRENEURIAL DECISION PROCESS

1. Exploring the entrepreneurial context2. Identifying opportunities and possible

competitive advantage3. Starting the venture

i) Researching feasibilityii) Planning the ventureiii) Organizing the ventureiv) Launching the venture

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ENTREPRENEURIAL DECISION PROCESS (CONT.)

4. Managing the venturei) Managing processesii) Managing peopleiii) Managing people and Entrepreneurial

challenges

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REASONS FOR THE FAILURE OF BUSINESS

• Wrong location• Inexperienced promoters• Technological factors• Non productive capital asset• Long gestation period• Rosy pictures presented by consultancy firms• Faulty demand forecasting• Improper environmental scanning

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VISIBLE PROBLEMS FOR THE BUSINESS

• Internal problems• External problems

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INTERNAL PROBLEMS • Management problems • Financial problems• Labor problems• Diversion of resources• Failure to modernize• Personal wasteful expenditure

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EXTERNAL PROBLEMS

• Govt. policy• Increased competition from MNCs• Power cuts • Shortage of raw material• Recession in the market• Credit squeeze

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SIGNIFICANCE OF ENTREPRENEUR IN ECONOMIC DEVELOPMENT

• Promotes capital formation by mobilizing idle savings• Provides immediate large-scale employment• Helps in reducing the concentration of economic

power• Stimulates equitable redistribution of wealth, income• Promotes country’s export trade: an important

ingredient to economic development• Encourages effective resource mobilization of capital

and skill

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COMPARISON OF ENTREPRENEURS AND

MANAGERS • Managers 1. Dependents on owners. 2. Primary motives are promotions and

traditional corporate rewards.3. Short term orientations meeting quotas,

budgets or annual planning. 4. Delegates and supervises more than direct

involvement. 5. Careful and tries to avoids failures and

risks.6. Operates from with in the organization.7. Need not to raise capital8. Serves others9. Usually agrees to decisions taken at upper

management positions.

• Entrepreneurs1. Independent 2. Primary motives are independence,

opportunity to create and money.3. Survival and achieving 5-10 yrs growth of business.4. Direct involvement.

5. Deals with full risks and failure.

6. Operates from outside.7. Himself raises the necessary capital. 8. Serves self and customers.9. Follows dreams with decisions taken by

himself.

TYPES OF START-UPS

1. Lifestyle firms2. Foundation firms3. High-potential venture4. Gazelles

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Chapter Closed

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