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INTRODUCTION OF
ENTREPRENEURSHIP
By Advance Saraswati Prakashan Pvt. Ltd
Tinkune, 01-4790359
Learning Objectives
After comprehensive studying of this chapter, learners will be able
to:
Understand the concept and features of entrepreneurship,
Explain the concept, characteristics/traits, and functions of entrepreneurs,
Explain the different types of entrepreneurs (entrepreneurship), .
Know the concept and factors affecting entrepreneurial mindset
Explain the concept and important of Eco efficiency and ecopreneurship
Describe the entrepreneurial process (process of new venture creation).
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CONCEPT OF ENTREPRENEURSHIP
Entrepreneurship refers to all the activities of entrepreneurs for establishing and operating
business ventures.
Entrepreneurship is concerned with starting one’s own business for earning profit and
wealth.
The word “entrepreneur” is derived from the French verb ‘enterprendre’, which means ‘to
undertake’ the risk of establishing new enterprises.
It is the process of actions of an entrepreneur who is a person always in search of
something new and uses such ideas and knowledge to grab profitable opportunities by
accepting the risk and uncertainty with the enterprise.
“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”.
A. H. Cole
“Entrepreneurship involves a wide range of area on which series of decisions are required
which can be grouped into three categories consisting of perception of an opportunity,
organizing an industrial unit, and running the industrial unit as a profitable, going and
growing concern.”
FEATURES OF ENTREPRENEURSHIP
CONTD…
1. Establishment of new ventures: Entrepreneurship involves all the activities
necessary for establishing and operating new business ventures.
2. Related to innovation: Innovation of new idea, concept and knowledge is an
important component of entrepreneurship. Innovation refers to the generation of new
idea for starting a new business for earning profit and wealth
3. Dedication and hard work : Entrepreneurship requires unwavering dedication and
hard work to overcome challenges, innovate, and build a successful business. These
qualities drive persistence, resilience, and the ability to navigate the ups and downs of
the entrepreneurial journey.
4. Assumption of risk : Entrepreneurs need to assume certain level of risk for
establishing new ventures such as financial risk, career risk, social risk and
psychological risk.
5. Involvement and achievement : Entrepreneurs are deeply involved in every aspect
of their business, from ideation to execution, ensuring all areas are aligned with their
vision. This active involvement leads to a sense of achievement as they see their ideas
CONTD…
6. Expectation of reward : Entrepreneurs take on significant risks and challenges
with the expectation that their efforts will lead to financial gain, growth, and
personal fulfillment. This drive for reward motivates them to innovate, work
hard, and persist through obstacles.
7. Best use of opportunity : Entrepreneurs are skilled at identifying and seizing
opportunities in the market, often turning challenges into profitable ventures. By
capitalizing on these opportunities, they create value, innovate, and gain a
competitive edge in their industry.
8. Create value: Entrepreneurship involves creativity and innovation that leads
towards establishing new business venture. It refers to the capacity and
willingness of an entrepreneur to develop, organize and manage a business
venture along with any of its risks in order to make a profit.
IMPORTANT/SIGNIFICANT OF ENTREPRENEURSHIP
CONTD…
A. Economic Impact : Entrepreneurial development has
a strong impact on economic strength and stability of
the country. The following are the economic impact of
entrepreneurship
1. Innovation: :
Innovation refers to the generation of a new idea and its
implementation into a new products or service that can create value to the
customers. Entrepreneurship is the means of innovation of new concept and
knowledge in terms of products or services that have economic value.
2. Job Creation : Entrepreneurship drives job creation by establishing new
businesses that require employees, thus contributing to economic growth and
reducing unemployment.
3. Capital formation : Entrepreneurship fosters capital formation by attracting
investments and generating savings that are reinvested into businesses,
spurring economic development.
4. Resource mobilization : Entrepreneurship facilitates resource mobilization by
efficiently gathering and utilizing capital, labor, and materials to create value
CONTD…
5. Raising living standard : Entrepreneurship improves the living standards
of people by uplifting entrepreneurs' economic status through profit and
wealth, creating jobs for skilled employees whose income stimulates the local
economy, benefiting both them and those indirectly connected to the
business.
6. Add national income : Entrepreneurs involves in various forms of
business activities based on their skill, efficiency, knowledge and interest.
They involve in industrial, trading or service sectors based on scope.
B. IMPACT ON SOCIETY : Entrepreneurship drives innovation by creating new
goods and services that fulfill economic objectives of profit and wealth, with
innovations like smartphones, social networks, and healthcare advancements
improving lives, productivity, and quality of life. These entrepreneurial
innovations, such as Amgen's life-saving drugs, have a profound impact on
society, enhancing health, work, and entertainment, while also introducing new
moral and ethical challenges for communities to manage.
CONTD….
C. Impact on Larger Firms : Small entrepreneurial firms contribute to
larger businesses by providing essential parts and services that enhance
production efficiency, with many global brands relying on these smaller
firms for components. This collaboration helps large companies improve
their products, from smartphones to automobiles, driving innovation and
quality across industries.
Concept of Entrepreneur
An entrepreneur is one who creates new business venture by bearing certain level of risk
and uncertainty for earning profit and wealth.
He perceives an idea and then brings together resources consisting of human resource,
capital, material, machines, and technology for establishing a business.
He creates something new that can provide value to the customers and other
stakeholders. An entrepreneur creates his own business, organizes, operates, shares the
risk and gets return on successful operation of business.
He creates new ideas, manages resources, grab opportunity, and initiates action to
establish and operate business.
“The entrepreneur always searches for change, responds to it, and exploits it as an
opportunity”
Peter Drucker
“An entrepreneur is a person who starts a new venture, taking the initiative and risk
associated with it and does so by creating something new to provide value to the
customers.”
David Holt
Characteristic/Traits of Successful Entrepreneur
1. Desire for Involvement
2. Moderate Risk Bearer
3. Confidence on Ability
4. High Level of Energy
5. Take Immediate Feedback
6. Future Orientation
7. Skill of Organizing
8. High Level of Commitment
9. Tolerance of Ambiguity
10.Flexible Attitude
CONTD….
1. Desire for involvement: Desire for involvement from inner part of heart and
mind is an essential requirement for entrepreneurs. They must have willingness
to involve in business based on their interest, skill and knowledge.
2. Moderate risk bearer: Entrepreneurs need to assume moderate level of risk
for establishing new ventures such as financial risk, career risk, social risk and
psychological risk.
3. Confidence on ability: The successful entrepreneurs have an abundance of
confidence in their ability to become success in business. They have believed in
their ability and new idea.
4. High level of energy: Entrepreneurs are more energetic than the average
persons. They want to accomplish more within short period of time.
5. Take immediate feedback: Entrepreneurs enjoy the challenge of running a
business and they like to know how they are running and are constantly looking
for feedback. They generate new idea based of requirement and situation.
CONTD…
6. Future oriented : Successful entrepreneurs possess a high level of energy
that drives them to work tirelessly, overcome obstacles, and pursue their
goals with passion and determination. This energy enables them to stay
focused, adapt to challenges, and maintain the momentum needed to grow
and sustain their businesses.
7. Skill of organizing : Successful entrepreneurs excel in the skill of organizing
by effectively coordinating resources, tasks, and people to achieve business
goals. This ability to structure operations, manage time, and prioritize
responsibilities is key to maintaining efficiency and driving growth.
8. High level of commitment : Successful entrepreneurs demonstrate a high
level of commitment by staying dedicated to their vision and goals, even in
the face of setbacks and challenges. This unwavering determination drives
them to invest time, effort, and resources to ensure their business thrives and
succeeds.
9. Flexible attitude : Successful entrepreneurs possess a flexible attitude,
allowing them to adapt quickly to changing market conditions and unexpected
Functions of Entrepreneur
Functions of Entrepreneur
Entrepreneurial Functions :Entrepreneurs involve in establishment and
operation of new venture of business. Therefore, as businessmen they have
to perform various functions which involve
a. Risk Bearing Function : Entrepreneurs need to bear certain level of risk
for establishing and operating new ventures.
b. Organizing Function : Entrepreneurs have to organize all the activities
of the enterprise. They have to take initiation for each and every activity
of the enterprise.
c. Innovation Function : Innovation refers to the generation of new idea
for starting a new business for earning profit and wealth. It can be in the
form of product, process or services
CONTD…
A. Planning
Planning is the process of determination of objectives and
selecting a best of course of action for achieving predetermined
objectives.
Planning is the process of determination of organizational
objectives and selecting the best alternative course of action for
achieving predetermined objectives.
Organizing
Organizing is the process of maintaining structural relationships
among various positions of an enterprise.
In other words, organizing is the process of accumulating together
all the organizational resources and establishing productive
relations among them to achieve predetermined objectives.
CONTD…
C. Staffing
Staffing involves all the activities related with manpower
management. Staffing involves all the activities related to
human resource management.
It involves activities such as the acquisition, development,
motivation, and maintenance of employees in the
organization.
D. Directing/Leading
Directing is the action or implementation part of
managerial function. Directing is the implementation part
of the managerial function.
It is the process of providing instruction, guidance, and
suggestion to subordinates for accomplishing the assigned
job. A brief description of these elements is as follows:
CONTD…
E. Controlling
Controlling is the process of comparing actual performance achieved with
that of standard performance and taking corrective step if any deviation is
found in actual performance.
Controlling is the process of measuring and comparing actual performance
achieved with that of standard performance and taking corrective action if
any deviation is found between actual and standard performance.
CONTD….
C. Promotional Functions : For establishment of new venture and its
effective operation the entrepreneurs need to perform some basic functions
known as promotional functions. These functions involve :
1. Identification and selection of business idea: The identification and
selection of profitable and rewarding project is the primary function of
entrepreneurs. For selection of the most appropriate business project, it is
essential to fulfill some specific process
2. Preparation of business plan: Once the business idea is selected
another function of entrepreneurs is to prepare a detail business plan or
project report.
3. Arrangement of capital: The significant function of entrepreneur is to
make arrangement of required capital. The capital requirement is
classified as working capital and fixed capital.
CONTD…
D. Commercial functions Entrepreneurs should involve in day-to-day
business activity of the organization which is known as commercial
function. The commercial functions involve manufacturing or production,
marketing and accounting.
1. Manufacturing: Manufacturing functions involve all the activities
necessary for production of goods and services.
2. Marketing: All the commercial products or service is meant for
marketing. Marketing involves all the activities necessary for distribution
of goods and services from producer to final consumers.
3. Accounting: Maintaining proper book of account is an important function
of entrepreneurs. The main objective of any business enterprise is to earn
profit and maximize wealth.
CONTD…
TYPES OF ENTREPRENEURS
1. Based on Types of Business : The following are the common types
of entrepreneurships based on types of business:
a. Trading Entrepreneurs : The trading entrepreneurships involve in
purchasing and selling of usable products and services. They
directly purchase products from manufactures and sale them to
customers
b. Manufacturing Entrepreneurs : The manufacturing
entrepreneurships involve in production of usable products and
services. They identify the needs of the customers and have started
the production process.
c. Service Entrepreneurs : The entrepreneurship which involves in
service business are known as service entrepreneurs. They provide
different types of services to the society in return of money.
d. Agriculture Entrepreneurs : The entrepreneurship which
involves in commercialization of agriculture products are known as
agriculture entrepreneurs
CONTD…
2. Based on Size of Enterprise : Based on size of enterprise, entrepreneurships may be
classified into the following three types:
a. Small-Scale Entrepreneurs : The individuals who established business entity by
investing up to Rs. 50 million on fixed assets are known as small scale
entrepreneurship
b. Medium Scale Entrepreneurs : The individuals who establish business entity by
investing from Rs. 50 million to Rs. 150 million on fixed assets are known as medium
scale entrepreneurship
c. Large-Scale Entrepreneurs : The individuals who established business entity by
investing more than Rs. 150 million on fixed assets are known as large scale
entrepreneurship
3. Based on Ownership : Therefore, based on ownership the entrepreneurships may be
categorized in the following forms
a. Private Entrepreneurs : When an individual or group of individuals establishes a
business entity through investment of own capital it is known as private
entrepreneurship.
CONTD…
4. Based on Innovation : The following are the types of
entrepreneurships based on innovation:
a. Innovating Entrepreneurs : Such entrepreneurs are more
creative and they involve in innovation of new idea, concept,
knowledge and technology. They introduce new method and process
of production.
b. Imitative Entrepreneurs : They are not creative
entrepreneurships but they immediately copy the new invention
made by the innovative entrepreneurs
c. Fabian Entrepreneurs : They are the traditional type of
entrepreneurs. They do not want to make immediate change in
present operating system of business. They feel inconvenience to
make frequent change in organizational activities
d. Drone Entrepreneurs : They are conservative type of
entrepreneurships for new change in the organization. They are
CONTD…
5. Based on Behavior : Based on behavior the following are the common types
of entrepreneurships:
a. Solo Operators : They just like sole proprietors. They perform all the
business activities alone
b. Active Partners : They actively participate in day-to-day business
activities of the enterprise. They do business in joint venture through joint
investment of capital, skill and time.
c. Inventors : They are innovative and creative in nature. They involve in
invention of new concept, idea, design, model, structure, and knowledge for
producing products and services.
d. Challengers l They are competitive in nature and want to work in
challenging environment. They seek new challenges in business operation.
e. Buyers : They are just like consignment dealers. They do not want to bear
more risk.
f. Life Timers : They consider business as an integral part of their life. They
Contd…
6. Based on Focus : The following are the common forms of entrepreneurships
based on focus:
a. Women Entrepreneurs : At present may females are involved in various
types of business independently. They involve in manufacturing, trading,
and service-related business on the basis of their interest, skills and
knowledge.
b. Minority Entrepreneurs : They involve entrepreneurships who are not of the
majority population of the country. They represent to minority population of
the country.
c. Immigrant Entrepreneurs : They involve individuals who are recently
arrived in the country and start business for economic survive.
d. Part-Time Entrepreneurs : They involve individuals who have full time job in
any organization and form a business to devote extra time after job.
e. Home Based Entrepreneurs : They do various types of business from their
own home. Generally, home based business units are small in size that
Contd…
f. Family Business : The family business entrepreneurships involve two or
more family members for business activities
g. Corporate Entrepreneurs : They involve in establishment of new business,
products or services. They create value to the products and services
ENTREPRENEURIAL MINDSET
When an individual is motivated to work as an entrepreneur it is considered
as entrepreneurial mindset.
It refers to influence in behavior and activities of individual to become an
entrepreneur.
Acting entrepreneurially is concerned with establishing and operating an
enterprise for earning profit and wealth.
It is concerned with involving in various activities such as using qualities of
leadership, managerial capabilities, and decision making in order to
establish and operate a business enterprise.
FACTORS INFLUENCING ENTREPRENEURIAL
MINDSET
CONTD…
1. Entrepreneurial self-efficacy: Entrepreneurial self-efficacy is the
conviction that one can successfully execute entrepreneurial
process.
2. Perceived desirability: The perceived desirability refers to
attitude of individual toward entrepreneurial action. It is a
judgmental statement toward entrepreneurial activity and
outcomes.
3. Risk taking tendency: It is said that there is no business if there
is no risk. It means entrepreneurship involve some level of risk.
4. Proactive personality: Proactive personality of individual is
associated with entrepreneurial behavioral intentions. Proactive
individuals are matured and practical for doing any entrepreneurial
activities
5. Behavioral control: It measures the individuals’ perception of
how easily and successfully they could establish and run a
CONTD…
7. Internal locus of control: Internal locus of control is associated with
entrepreneurial success. The people who show strong self-control
usually believe that the quality of life depends on their own actions.
8. Family Background: An individual's family background can influence
their entrepreneurial aspirations, as children often follow their parents'
professional paths. Growing up in an entrepreneurial environment, they
learn key strategies and insights, which encourages them to pursue
entrepreneurship themselves.
9. Social Environment: It is found that social environmental factors
such as legal rules, social values, and social support are
important factor that influences individual entrepreneurship. The
social environment factor is an adjustment variable that affects
the individual's entrepreneurial intentions by interacting with
individual attitudes.
ECO EFFICIENCY
Eco-efficiency is a management philosophy that aims at minimizing
ecological damage while maximizing efficiency of the firm's production
processes.
It emphasizes on maximization of working efficiency of the company by
reducing ecological damage.
It is based on the principles of the use of high efficiency production
methods and technology, the use of less energy and natural resources for
the same amount of production.
It should emphasize for implementation of more advanced waste
management system.
It is possible through the lesser use of energy, material, and water, more
recycling, and elimination of hazardous products or by-products.
IMPORTANCE OF ECO-EFFICIENCY
The following are the significance of econ-efficiency:
It enhances brand image through marketing and communicating
improvement efforts
It reduces costs through more efficient usages of energy and materials
It reduces risk and liability by eliminating the need for toxic substances
ECOPRENEURSHIP
Ecopreneurship is a management philosophy where business efforts of
entrepreneurs are not only driven by profit, but also by a concern for the
environment.
Ecopreneurship is also known as environmental entrepreneurship and eco-
capitalism.
It is becoming more widespread as a new market-based approach to
identifying opportunities for improving environmental quality and
capitalizing upon them in the private sector for profit.
It is a term used to represent the process of principles of entrepreneurship
being applied to create businesses that solve environmental problems and
operate sustainably..
IMPORTANCE OF ECOPRENEURSHIP
It encourages for maintaining fair trade practices for maintaining image and
brand name.
Local consumption can be achieved by establishing sustainability policies
in specific settings
It encourages entrepreneurs to involve in organic products.
ENTREPRENERIAL PROCESS
ENTREPRENEURIAL PROCESS
The following are the common steps to be considered for entrepreneurial
development:
Idea generation: The process of entrepreneurship begins with the idea
generation where the entrepreneur identifies and evaluates the business
opportunities.
Identifying opportunities: After generation of new idea another step of
entrepreneurship development is to identify business opportunities for new
ideas.
Developing a business plan: After identification of business opportunity
another step of entrepreneurship development is to create a comprehensive
business plan.
Resourcing and evaluation: Resourcing is process of identifying sources from
where the financial resource and human resource can be acquired. The source of
financial resource may involve equity capital and borrowed capital.
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Assignment
Very Short Answer Questions
1. What do mean by entrepreneurship?
2. Mention four features of entrepreneurship.
3. Write any four important of entrepreneurship.
4. Write the process of entrepreneurship.
5. What is entrepreneur?
■ Descriptive Answer Questions
1. What do mean by entrepreneurship? Explain its any four features.
2. Define the term entrepreneurs. Explain the major functions of
entrepreneurs.
3. An entrepreneur must have some specific qualities which is not
achievable to the general people. By focusing above statement explain
the features/traits of successful entrepreneur.
4. What is entrepreneurial mindset? Explain the factors influencing
02/20/2025
it.
5. Explain the term Eco efficiency and ecopreneurship.
Any Question?
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