UNIT 5

Entrepreneurship Development
 Contents
• Concept of Entrepreneurship
• Functions of entrepreneur
• Generation of Business Idea
 Concept of Entrepreneurship

Entrepreneur Entrepreneurship Enterprise

Process of
Person Object
Action
• Entrepreneurship in a broader sense can be described as
a process of action an entrepreneur (person) undertakes
to establish his enterprise.

• It is a creative and innovative response to the

environment.
Entrepreneurship is a composite skill, the resultant of many
qualities and traits. These include imagination (an innovative
idea),Readiness to take risk, ability to bring together and put to
use other factors of production ,capital ,labor, land and also
intangible factors such as ability to mobilize scientific and
technological advances.

• Entrepreneurship thus involves taking risk and making the

necessary investments under conditions of uncertainty and
innovating ,planning and taking decisions so as to increase
productivity in business,agriculture,industry etc..
• It thus plays a key role in the process of economic development
 2)Managing
the
enterprise

1)Setting 3)Turning
up of the ideas into
enterprise action

Functions of
Entrepreneur

6)Growth
and 4)Feasibility
developm study
ent

5)Sale of
products
 Functions of Entrepreneur
• Entrepreneur is commonly seen as a business
leader and innovator of new ideas and business
process.
His Functions are as follows.

1)Setting up of the enterprise

• To set up enterprise the entrepreneur may need to
fulfill some legal formalities. For the set up he
finds suitable location ,design of premises, install
machinery etc.
2)Managing the enterprise

• To run the enterprise ,entrepreneur has to

manage men, material ,finance and organize
production of goods and services.
3)Turning ideas into actions
• He has to transform his ideas related to business
into reality.
For ex. Suppose A person wants to open a restaurant
business at a particular location then he will
collect information that people locating in that
area like south indian/north indian or Panjabi
food.
 3)Turning ideas into actions……
• People like to eat food while sitting in a
restaurant or take away(parcel) or need home
delivery.
• Based on this information ,restaurant owner
will take following decisions .
• Finalize popular menu/items, recruit Suitable
cook. He will recruit waiter or boys to deliver
the product.
 4)Feasibility study

• The entrepreneur conducts studies to assess the market

feasibility of the proposed products or services .
Ex.Suppose a person wants to open a pizza shop and he
has two options for locations .
• 1) residential area where family stays .
• 2)near a college which is attended by 500 students .
Families don’t like pizza much but college students like
pizza much . Based on the feasibility study business
owner will come to know that opening a pizza business
near college will be more profitable than in residential
area.
5)Sale of products
• An entrepreneur is also responsible for marketing
and advertising .He wants to maximize his profits
by selling his products in the market.
6)Growth and development
• Once the enterprise achieves its desired results
,the entrepreneur has to explore another higher
goal for its further growth and development.
• He is not satisfied only with achieving a set goal
but constantly strives for achieving excellence.
 Generation of Business Idea.
The different ideas to Start an enterprise may originate from
various sources ,for example:
• Demand for certain products in the market.
• Success story of a friend or relative of his business.
• Chances of producing a substitute for an existing article.(ex.
Relief spray is a substitute for Iodex)
• Visit to trade fairs and exhibitions.
• Study of projects.(Study the projects of smartphones of Samsung
company, he can get an idea to design a smart phone at cheaper rate in
india.for ex smartphones of micromax company.)
• Meeting with government organizations. (for ex. A govt. is
planning to make wearing helmet mandatory while driving so person can start
business of helmet.)