Concept of entrepreneur

and
entrepreneurship
 Evolution of concept of entrepreneur
• 17th century- person bearing risk of profit/loss in a
fixed price contract with govt.
• 18th century-separated profits of entrepreneur and
profits of capital
• 19th century-entrepreneur is innovator and develops
untried technologies
• Present-the entrepreneur brings overall change
through innovation for maximum social good. He has
firm belief in social betterment and carry out this
responsibility with conviction. He is a visionary and
integrated man with outstanding leadership qualities
and gives top priority to research and development.
 What is entrepreneur?
• He is the one who creates a new business in the
face of risk and uncertainty for the purpose of
profit and growth of self and economy by
identifying significant opportunity and
assembling the necessary resources and
capitalizing on them
 Some definitions
• Joseph A. Schumpeter- “the entrepreneur in advanced economy is an
individual who introduces something new in the economy- a method of production
not yet tested by experience in the branch of manufacture concerned, product with
which consumers are not yet familiar, a new source of raw material or of new
market and like”
• Peter Drucker- “ innovation is the specific tool of entrepreneurs, the means
by which they exploit changes as an opportunity for a different business or a
different service. It is capable of being presented as a discipline, capable of being
learned and practised. Entrepreneurs need to search purposefully for the source of
innovation, the changes and their symptoms that indicate opportunity for
successful innovation and they need to know and to apply the principles of
successful innovation”
• Three conditions have to be fulfilled as per above definition:-
– Innovation at work
– Innovation must build on their strength
– Innovation has to be close to the market

• As per Britannica encyclopedia- entrepreneur is one who bears

the risk of operating a business in the face of uncertainties of future conditions
 Some clarifications
– In strict sense the people who invented some product
are considered entrepreneur, like person who first
visualized the importance of two wheelers in modern
times and first started its commercial manufacture is
entrepreneur
– Though we call people involved in manufacturing,
service or trading as entrepreneur as they have some
aspect of entrepreneur.
– Drug-trafficker, smugglers or black marketer are not
entrepreneur as there is no social good and violate
business ethics.
 Characteristics
• Desire for responsibility/Ethics
• Moderate risk takers- they are risk eliminators
• Confidence in their ability- very less luck factor
• High level of energy- work for longer hours
• Reviews their performances
• Future orientation
• Skill at organizing
• Value achievement over money
• High degree of commitment
• Tolerance for ambiguity
• Flexibility
• Tenacity
 Skills /Qualities
• Ability to plan
• Communication skills
• Team building skills
• Leadership skills
• Interpersonal skills
• Time management skills
• Stress management skills
• Marketing skills
• Basic management skills
 Benefits
• Opportunity to create your own destiny
• Opportunity to make a difference
• Opportunity to reach your full potential
• Opportunity to reap impressive profits
• Opportunity to do what you enjoy and have
fun at it
• Opportunity to get recognition of society
 Drawbacks
• Uncertainty of income
• Risk of loosing your investment and even
more
• Long hours of work
• Lower quality of life till business get
established
• High level of stress
 What feeds entrepreneurial fire
• Considered as heroes
• Psychological factors
– Need achievement
– Withdrawal of status
• Education
• Technological advancements
• International opportunities
• Govt. actions
 Entrepreneurship ?
• Entrepreneurship is a composite skill, the resultant of a
mix of many qualities like imagination, readiness to
take risk, abilities to bring together and put to use
other factors of production, capital, labour, land and
also intangible factors like ability to mobilize scientific
and technological advances.
• It has four key elements :-
– Innovation
– Risk taking
– Vision
– Organizing skill
 Entrepreneurship
• Process of creating something new and
assuming the risks and rewards
• Process of Pursuing a new venture or business
• Whether it is new product in existing market
• Or a existing product in new market
• Or all together starting a new organization
Graphic presentation of concept

Entrepreneur Entrepreneurship Enterprise

Individual Process of Action Object

Characteristics of entrepreneurship

Accepting
Challenges Organization
Decision making

Skilful
Risk taking Management

Innovation Achieving Success

Entrepreneurship
 Stimulation of entrepreneurship
• Entrepreneurship development is most
complex and complicated
• It is both function of internal and external
variables
• There are traditional commercial communities
and these acts as stimulus for development of
entrepreneurs
• Mentoring by existing corporate of the
prospective young entrepreneurs under CSR
• Creating awareness about entrepreneurship
by educational institutes among budding
entrepreneurs
• Providing hand holding facilities like incubator
facilities to covert the idea into commercial
product and establish the business network
• Provide concessional funding or other fiscal
benefits for startups
 Cultural diversity in entrepreneurship
• Young entrepreneurs
• Women entrepreneurs
• Part time entrepreneurs
• Home based businesses
• Family businesses
• Co-preneurs
• Social entrepreneurs
 Mistakes of entrepreneurships
• Management mistakes
• Lack of experience
• Poor financial control
• Weak marketing efforts
• Weak strategic plan
• Improper inventory control
• Incorrect pricing
• Inability to make transition
 Entrepreneur Vs Entrepreneurship
Entrepreneur Entrepreneurship
• Refers to a person • Refers to process
• Visualiser • Vision
• Creator • Creation
• Organizer • Organization
• Innovator • Innovation
• Decision maker • Decision
• Planner • Planning
• Leader • Leadership
• Motivator • Motivation
• Programmer • Action
• Risk taker • Risk taking
• Communicator • Communication
• Administrator • Administration