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Startup and New Venture


Management

Presented By
Dr. V. R. Malkar

Prepared by Dr. V. R. Malkar 1


Unit No.1
1.1 Concept and definitions : Entrepreneur &
Entrepreneurship, Entrepreneurship and
Economic Development, A Typology of
Entrepreneurs.
1.2 Entrepreneurial Competencies: The
Entrepreneurs Role, Task and Personality,
Entrepreneurial Skills, Creativity, Problem Solving,
Decision Making, Communication, leadership
quality, Mc clelland N-Ach theory, Self analysis,
Personal efficacy, culture and values, risk taking
behavior, Technology backup.

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Unit No.1 Contd
1.3 Factors affecting Entrepreneurial Growth :
Economic and non economic factors, EDP
programmers, Entrepreneurial Training.
1.4 Traits and qualities of entrepreneur: Entrepreneur
; Manager Vs. Entrepreneur, The early career
dilemmas of entrepreneur, Defining survival and
success, Entrepreneur as a style of Management, The
Entrepreneurial venture and the Entrepreneurial
organization, Entrepreneurial Process.
1.5 Steps of Entrepreneurial Process: Deciding-
Developing Moving - Recognizing

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Who is an Entrepreneur

One who creates a new business in the


face of risk on uncertainty for the
purpose of achieving profit and
growth by identifying opportunities
and assembling the resources to
capitalize on those opportunities.

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Who is an Entrepreneur?
Person conducting own business (Webster)
Person who sets up business deals in order to
make profits (Collins Cobuild)
Organizer of an economic venture, one who
owns, organizes, manages, and assumes the
risks of the business (Chandrashekhar)

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Why Entrepreneurship?
Process of creating something different, with
value, by devoting necessary time and effort,
by assuming the accompanying financial,
psychological, and social risks, and receiving
the resulting rewards of monetary and
personal satisfaction (Bowen and Hisrich,
1986).

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Role of the Entrepreneur
An innovator who combines technical innovations
and financial finesses.
Important role in producing competitive products,
processes, and services.
Generation of new employment
Local and regional economic development
Improved allocation of resources and transfer of
technologies

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The World of the Entrepreneur
A new business is born every 11 seconds in
the United States
Study of influential Americans the defining
issue of the 21st Century: Entrepreneurship!
One of 12 Americans is actively involved in
trying to start a new business.

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Chronologically Entrepreneur Concept

1734: Richard CantillonNon-fixed income earners who pay


known costs of production but earn uncertain incomes
1803: Jean-Baptiste SayAn economic agent who unites all
means of production- land, labour and capital to produce a
product or service. Product sales pay rent, wages, interest and
what remains is profit. He shifts economic resources from an
area of lower to an area of higher productivity.
1934: Joseph SchumpeterInnovators who change the status
quo to set up new products and new services.
1961: David McClellandA person with a high need for
achievement [N-Ach] who is energetic and a moderate risk
taker.

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1964: Peter DruckerOne who searches for change, responds
to it and exploits opportunities. Innovation is a specific tool of
an entrepreneur hence an effective entrepreneur converts a
source into a resource.
1971: Peter KilbyImitative entrepreneurs do not innovate, but
bring technologies innovated by others into another context.
1975: Howard H. StevensonThe pursuit of opportunity
without regard to resources currently controlled.
1975: Albert ShaperoThose who take initiative, accept risk of
failure and have an internal locus of control.
2013: Ronald MaySomeone who commercializes his or her
innovation.

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Entrepreneurial Activity Across the Globe

Percentage of Adult Population Working to Start a New Business

Unit ed St at es 8.5%

Canada 6.8%

Israel 5.4%

It aly 3.4%
Country

Great Brit ain 3.3%

Germany 2.2%

Denmark 2.0%

France 1.8%

Japan 1.6%

Finland 1.4%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

Percent

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Entrepreneurship Concept
The word entrepreneurship is derived from
French root which means, to undertake.
Today, it is known by various names, e.g.
adventurism, risk taking, thrill seeking,
innovating, etc.

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Entrepreneurship
Author like Joseph Schmpter (1950-60) advocates,
Entrepreneurial activity as essentially a creative
activity. It consists in doing such things which are
generally not done in the ordinary course of
business.
An entrepreneur is one who innovates. He further
states that, Entrepreneur is specially motivated and
talented class of people.

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A Few Definitions
Entrepreneur:
Person whose goal is to create or capitalize on new economic
opportunities through innovation
Entrepreneurship:
Process through which entrepreneurs create and grow enterprises
Entrepreneurial Community:
Community where significant economic and social entrepreneurial
activity exists within an effective system of public and private support
Entrepreneurship Development:
Policies and practices (public and private) that foster
entrepreneurship

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Identifying Entrepreneurs
People with
underused talent
Social Small
entrepreneurs businesses

Entrepreneurship High-growth
Unemployed businesses

Youth Innovators

Self- employed

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ENTREPRENEURSHIP AND Economic
Development
Increase in Per Capita Income
Capital formation
Employment generation
Balanced regional development
Rural Development

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Entrepreneur as an Economic Pioneer
Introduction of new goods and products
Introduction of new processes and methods of
production
Opening up of new markets
Opening up of new sources of supply
Industrial re-organization

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A Typology of Entrepreneurs
Type of Business determines the
Entrepreneurs :
Business Entrepreneur : Idea Generator
Trading Entrepreneur : Exchange of Goods & Svs , Mktg &
Brand Building
Industrial Entrepreneur : Manufacturer first & Innovator Next
Corporate Entrepreneur : Plans, Organise,Develops &
Manages Corporate
Agriculture Entrepreneur : Develops Agri Based Activities

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Technology Based :
Technical Entrepreneur : Highly Skilled in
product Crafts men. Focuses mainly on
Product Design
Non- Technical Entrepreneur : Focuses on
Mktg, Distribution& designing the cheaper
product.
Professional Entrepreneur : Who creates new
technology or idea & sells it to others for
money & Moves to next level of creation

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Motivational Based :
Pure Entrepreneur : Who creates jobs rather
seek a job
Induced Entrepreneur : Who is encouraged by
govt. bodies
Motivated Entrepreneur : Who creates jobs
rather seek a job

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Entrepreneurial Competencies
Creativity ,
Problem solving,
decision making,
Communication,
Leadership qualities
Mc Clellands N-ach theory,
Self analysis, Personal Efficacy,
Culture and values,
Risk Taking Behavior,
Technology Back-up

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Role of the Entrepreneur
An innovator who combines technical
innovations and financial finesses.
Important role in producing competitive
products, processes, and services.
Generation of new employment
Local and regional economic development
Improved allocation of resources and transfer
of technologies
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Factors affecting Entrepreneurial Growth
Economic factors
Capital
Labour
Raw Materials
Market
Non- Economic Factors
Social
Legitimacy of Entrepreneurship
Social Mobility
Marginality
Security
Psychological
Need Achievement
Withdrawal of Status Respect

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EDP
Designed with an aim of encouraging self employment

Imparts training and motivates potential and existing entrepreneurs


to start new business or diversify and expand the existing one

Helps employment and wealth creation among educated


unemployed youth

Well equipped to face risks and challenges as an entrepreneur

Government needs considerable human and material resource,


importance to detailed planning & implementation
Phases of EDP
Select area from existing government policy
guidelines/socio-economic reports

Techno-economic survey of the selected area; feasibility


study

Identify potential and existing entrepreneurs interested in


starting new business/expansion/diversification

Training

Follow up and consultancy services


EDP Cycle
Stimulatory Role

1. Registration of unit
2. Arranging finance
3. Prov iding land, shed, power, water etc.
4. Guidance for selecting and obtaining machinery
5. Supply of scarce raw materials.
6. Getting licences / import licences
7. Providing common facilities
8. Granting tax relief or other subsidy
9. Offering management consultancy
10. Help marketing product
Support Role
1. Entrepreneurial education.
2. Planned publicity for entrepreneurial opportun ities.
3. Identification of potential entrepreneurs through scientific
methods.
4. Motivational training to new entrepreneurs.
5. Help and guide in selecting products and preparing project
reports.
6. Making available techno-economic information and
product profits.
7. Evolving locally suitable new products and processes.
8. Availability of local agencies with trained personnel for
entrepreneurial counselling and promotions.
9. Organising entrepreneurial forum.
Sustaining Role
1. Help modernization
2. Help diversification/expansion / substitute production.
3. Additional financing for full capacity utilization
4. Deferring repayment/interest.
5. Diagnostic industrial extension/consultancy source.
6. Production units/ legislation/policy change
7. Product reservation / creating new avenues for
marketing
8. Quality testing and improving services
9. Need - based common facilities centre
Organizations providing EDP
Entrepreneurship Development Institute
of India (EDII)
Develops programmes for entrepreneurial training and development

Develops innovative training techniques for trainers

Focused attention on women entrepreneurs with first such EDP in


1988

EDP for rural entrepreneurship development in U.P and Orissa

Famous for organising camps on entrepreneurship

Condusted EDP in Sri Lanka, Nepal, Ghana, Kenya etc


National Institute for entrepreneurship and Small
Business Development (NIESBUD)
Established by Government of India in 1983

An apex body for coordination and supervision on activities of


various institutes engaged in entrepreneurial development

Helps evolution of EDP, model syllabi, effective training strategies,


methodology, manuals and tools

Activities undertaken:

Organise and conduct training programmes


Coordinate training activities of various agencies/institutes
Provide affiliation to such institutes
Hold examinations and confer certificates to trainers and trainees
Small Industries Service Institutes
(SISI)
Three months part time evening courses in management

4-6 weeks part time courses in intensive training in functional areas


(marketing, finance)

Special courses in quality control, HR, production planning, product


development etc

Mobile workshops imparting training on correct usage of tools and


equipment

Helps with preparation of plant layouts

Helps individual firms on specific problems faced


Micro,Small &Medium Enterprises
Development Commission (MSME DC)
Runs EDP in collaboration with financial
institutes, directorate of industries

Gives on the job training on shop floor


(carpentry, electrical devices)

Sends its officials/trainers to organisations to


update their knowledge
National Small Industries Corporation (NSIC)

Provides apprenticeship for 2 years

Training supervisory staff of SSI up to 2 years

Training to engineers up to 2 years

Training workmen for 12 months

Training to set up own venture

Advice on machinery and components

Production of technologically advanced machines


National Alliance of Young
Entrepreneurs (NAYE)
Contribution in encouraging women entrepreneurship

Set up womens wing in 1975

This wing assists women in:

Getting better access to resources, infrastructure, markets

Identify investment opportunities

Attending to problems of individual industries

Sponsor participation in trade fairs, exhibitions, conferences

Organise seminars, training programmes, workshops


1.4 Traits/ Qualities of Entrepreneur,
Managers Vs. Entrepreneur, The early career
dilemmas of Entrepreneur, Defining survival
and success,
Entrepreneurship as a style of Management,
Entrepreneurial Venture and Entrepreneurial
Organization, Entrepreneurial Process
Qualities of a Successful Entrepreneur
1) Creative
2) Calculated risk taking
3) Goal Oriented
4) Hard Working
5) Persistent
6) Takes personal responsibilities
7) Desires feedback and learns from experience
8) Ability to exploit Opportunities.
9) Willing to learn
10)Self-confidence
11)Likes to excel in work

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12)Decision making
13)Competitive
14)Dreamer
15)Family & Friends second to business
16)Time is important
17)Imaginative
18)Realistic
19)Courageous
20)Self Starter
21)Innovative
22)Good communication
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Difference between Entrepreneur and Manager
Motive: The main motive of an entrepreneur is to start a venture by setting up an enterprise.
He understands the venture for his personal gratification. But, the main motive of a manager
is to render his services in an enterprise already set up by someone else.

Status: An entrepreneur is the owner of the enterprise. A manager is the servant in the
enterprise owned by the entrepreneur.

Risk-bearing: An entrepreneur being the owner of the enterprise assumes all risks and
uncertainty involved in running the enterprise. A manager as a servant does not bear any risk
involved in the enterprise.

Objectives: An entrepreneur and a manager differ in their objectives. Entrepreneurs


objective is to innovate and create and he acts as a change agent. where as a managers
objective is to supervise and create routines. He implements the entrepreneurs plans and
ideas.

Rewards: The rewards an entrepreneur gets for bearing risks involved in the enterprise is
profit which is highly uncertain. A manager gets salary as rewards for the services rendered
by him in the enterprise. Salary of a manager is certain and fixed.
Fraudulent behavior: An entrepreneur is not induced to involve in fraudulent
behavior where as a manger does. A manager may cheat by not working hard
because his income is not tied up to the performance of the organization

Innovation: Entrepreneur himself thinks over what and how to produce goods to
meet the changing demands of the customers. Hence, he acts as an innovator also
called change agent. But, what a manager does is simply to execute the plans
prepared by the entrepreneur. Thus, a manager simply translates the entrepreneurs
ideas into practice.

Qualification: An entrepreneur needs to posses qualities and qualifications like high


achievement motive, originality in thinking, risk-bearing ability and so on. On the
contrary, a manager needs to posses distinct qualifications in terms of sound
knowledge in management theory and practice.

An entrepreneur could be a manager but a manager cannot be an entrepreneur. An


entrepreneur is intensely dedicated to develop business through constant
innovation. He may employ a manager in order to perform some of his functions
such as setting objectives, policies, rules etc. A manager cannot replace an
entrepreneur in spite of performing the allotted duties because a manager has to
work as per the guidelines laid down by the entrepreneur. On the downside, typical
manager brings professionalism into working of an organization. They bring fresh
perspectives, ideas and approach to trouble shooting which can be invaluable.
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Rewards of Being an Entrepreneur

o High degree of independence freedom


from constraints
o Get to use a variety of skills and talents
o Freedom to make decisions
o Accountable to only yourself
o Opportunity to tackle challenges
o Feeling of achievement and pride
o Potential for greater financial rewards
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Feeding the
Entrepreneurial Fire
Entrepreneurs as heroes
Entrepreneurial education
Demographic and economic factors
Shift to a service economy
Technological advancements
Independent lifestyles
E-Commerce and the World Wide
Web
International opportunities

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Challenges of
Being an Entrepreneur
o Must be comfortable with change and
uncertainty
o Must make a bewildering number of
decisions
o May face tough economic choices
o Must be comfortable with taking risks
o Need many different skills and talents
o Must be comfortable with the potential for
failure
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Steps of Entrepreneurial Process

I. Deciding-
II. Developing-
III. Moving-
IV. Managing-
V. Recognizing
The Entrepreneurial Process
Starting the Venture:
Researching Feasibility
Planning the Venture
Identifying Organizing the Venture
Exploring the
Opportunities/Possible
Entrepreneurial Launching the Venture
Competitive Advantage
Context

Managing the Venture:


Managing Processes
Managing People
Managing Growth
Special Issues

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18 STEPS
FOR
SUCCESS
AS
ENTREPRENEUR 18. PROFIT
17. REPAYMENT
16. SALES
15. PERMANENT REGN.
14. PRODUCTION
13. MANPOWER NEEDS
12. GET STATUTORY LICENCE
11. RAW MATERIAL
10. ELECTRICITY CONNECTION
9. PURCHASE OF MACHINERY
8. LOCAL BODY
7. FIXING WORK PLACE
6. GETTING FINANCE
5. PROJECT REPORT
4. LOCATION OF THE UNIT
3. REGISTRATION OF THE UNIT
2. PRODUCT SELECTION Prepared by Dr. V. R. Malkar 47
1 DECISION TO BE AN ENTREPRENEUR
Benefit of Entrepreneurship
Opportunity to make a difference

Opportunity to reach your full


potential
Benefit of
Entrepreneurship Opportunity to get unlimited
profits

Opportunity to do what you


enjoy doing

Opportunity to gain control Opportunity to contribute to


over your own destiny society and be recognized for
your efforts

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Topics
Assignment Questions
Q.1 Entrepreneur and Entrepreneurship are
catalyst in the process of economic
development of the country, Explain with
example
Q.2 Describe with examples the salient
characteristics of successful Entrepreneur.
Q.3 What factors do influence the emergence
and development of entrepreneurship.
Thank you

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