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1. 2. 3.

MEANING Entrepreneur is an organizer of a business firm central to its distributive and productive function. Entrepreneur are specialized group of persons who bear risk and deal with uncertainties Entrepreneur is an economic man who tries to maximize his profits by innovations. Innovation involves problem solving and entrepreneur gets satisfaction from using capabilities in attacking problems.

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EVOLUTION OF ENTREPRENEURSHIP

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1. Earliest period : Marco polo is an early example of an entrepreneur who attempted to establish trade route to far east. Marco polo would sign contract with money person to sell his goods. A common contract for taking loan stated that trader had to pay interest of 22.5 % for the loan. Which includes insurance. When the merchant adventurer would successfully sell the goods and complete the trip profit were divided into two parts of which capitalist would gain 75% of profit and trader would end up getting 25 % of income. 2. Middle ages : in middle ages entrepreneur were more described as actor, person, manager. His job was to manage large production projects. He was merely managing the business while the risk was borne by the government of the country and not the entrepreneur. A typical entrepreneur in middle ages were the clerk in charge of great architecture.

Evolution of entrepreneurship

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3. 17th century manager : emerging connection of risk with entrepreneurship developed with 17th century. In this stage entrepreneur entered in contract with government were payment to be made to capitalist was fixed and after fixed payment, profit or loss incurred through the business had to be borne by entrepreneur.

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E.g. Richard Cantillon a noted economist and author in 1700 understood laws mistake. He developed one of the early theories of the entrepreneur and is regarded some as the founder of the term. He viewed entrepreneur as risk taker. He was the first person to recognize the role of entrepreneur in economic theory. He stressed on the entrepreneur and not his personality.

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4. During this period entrepreneur were divided into two persons a. Person with capital b. Person who needed capital Major reason for such differentiation was due to the industrialization occurring throughout the world. Many inventions developed during the period were reactions to the changing world. E.g. Edison raised capital from private sources to develop and experiment in the field of electricity and chemistry. Similarly Whitney had to finance his invention of cotton gin from expropriated British crown property. Therefore both were entrepreneur looking for venture capitalist to finance their inventions. J B Say broadened the concept of entrepreneur and included the concept of combining the factors of production.
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5. 19th and 20th century : during this period entrepreneur were not distinguished from mangers and were viewed mostly from managers and from economic perspective in following manner : a. He organizes and operates the enterprise for his personal gains. b. He pays current prices for the materials consumed in the business. c. He contributes his own initiative, skill, in planning, organizing and administering things in company. d. He assumes the chance of loss and gain consequent to uncontrollable factors.
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a. b.

c.

d.

During the period of 20th century entrepreneur was seen as innovator in the economy. He was the one who came up the unique concept in the market. He performed following functions as entrepreneur : To revolutionize the pattern of production by exploiting inventions. To perform pattern of production by exploiting technological method of producing new commodity or old commodity in new patter. Opening new source of supply of raw materials or new change outlet of products Performing these functions by organizing new industry. Cont....
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a. b. c. d.

Concept of innovation and newness is the integral part of entrepreneur which not only requires the ability to create and conceptualize but ability to understand forces at work environment. The newness in the concept can be in the following ways : Introduction of new or quality goods Introducing new method of production Utilization of new source of raw material Carrying out new organizational form of industry.
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6. 21st century : during the present century two characteristics are associated with the entrepreneur they are innovation and creativity. Creativity is the ability to bring some thing new into existence. While innovators are practical people and create from the opportunities available in reality . Following principles of innovation have emerged leading to success of entrepreneur : a. Action oriented and searching for new ideas b. Making the product service simple and understandable c. Trying, testing and revising d. Learning from failures e. Hard work is the key to success
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Supervise and control

Risk taking Innovate

Direct activities of firm

Analyze opportunity

Functions of entreprene ur
Develop venture

Strategies to start venture

Start venture Acquire resources

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Develop business plan

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1.

2.

3.

FUNCTIONS OF ENTREPRENEUR Risk measurement and risk taking : risk taking and risk measurement is the primary function of entrepreneur. Risk are not only related to success or failure of business but also involve personal and professional career forgone for the sake of opportunity. Innovate/ create/ discover : entrepreneurship is innovativeness of individual and does not involve ownership. Principal function of the entrepreneur is to carry out new combinations of means of production. Analyze opportunities : entrepreneur has to have opportunity seeking style where he has to evaluate credibility of various alternatives and choose suitable alternative which will prove to be profitable in future.

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4. Strategies for venture : entrepreneur has to strategize long term plan for starting venture. He has to analyze the market and devise effective strategies to face present and future competition. 5. Develop business plan : business plan is written document containing details about every aspect of proposed business venture. It provides roadmap to employees working in company to attain objectives and is capable of convincing potential customers they are share holders and investors of company. 6. Acquire resources : entrepreneur has to acquire various types of resources such as men, money, material, machinery to start venture. Entrepreneur has to have suitable skills to line up required resources for the company.
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7. Organize and start venture : entrepreneur should be a good organizer, he should deploy suitable resources at right place in right time required to for the company to ensure effective working of organization. 8. Develop and grow venture : it is not only important to start a venture but also company should be able to respond to changes happening in the business market which is crucial factor deciding existence of company.

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9. Delegate, direct and lead the plan : during the growth stage of the company entrepreneur should provide required resources for the company and during later stage entrepreneur should come up with effective strategies to face competition and guide employees in company performing role of leader. 10. Supervise and control : for success of business it is important to have suitable mechanism in place so that entrepreneur can track overall success of the company.

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CHARACTERISTICS OF ENTREPRENEURS

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FEATURES OF ENTREPRENEUR Vision entrepreneur works hard to fulfil his dream in process to achieve his objective, he visualizes market scenario, socio economic, and technological environment based on these information he predicts future situation and accordingly plans his vision and ways to achieve desired objective. Knowledge as entrepreneur is soul of organization he is required to have knowledge about all the operations carried in organization so that he can direct and regulate activities of his employees from time to time. Desire to succeed entrepreneur are recognized in society because of their varied mindset and high dreams which motivates them to bring in invention and innovation in are of their business.
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Independence entrepreneur needs independence in his work area as they are not know to follow their rule of thumb. Optimistic entrepreneurs are optimistic about achieving their objective as they intend to take risk to any extent to accomplish desired goals. Value addition entrepreneurs are known for bringing new things in market. They create, innovate, add value to existing products in market. Leadership entrepreneur exhibits qualities of good leader. They are good planners, organizers, decision makers and are empathetic towards employees at workplace.

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Hardworking entrepreneur are know to be workaholic. They put in continuous efforts to achieve success and know that their is no substitute for hard work. Risk taking ability is one of the major trait of successful entrepreneur .

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TYPES OF ENTREPRENEURS 1. Based on functional characteristics : a. Innovative entrepreneur : such entrepreneurs introduce new goods or new methods of production or discover new markets or new organise their enterprise. Entrepreneurs in this groups are characterized by aggressive assembly of information for trying new combination of factors. b. Imitative or adoptive entrepreneur : these people imitate techniques and technology innovated by others. Entrepreneurs of this trait are reactive in nature and are ready to adopt to innovation happening around.
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c. Fabian entrepreneur : accept change only when they feel threatened that failure to do so would result in losses. They are imitative by nature but not determinant and also lack in power. d. Drone entrepreneur : these are entrepreneur who refuse to accept to adopt to changes adopted by the competitors. When competition increases they are pushed out of the market as it becomes uneconomical for them to carry their business further due to financial crisis.

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2. Based on development : a. Prime mover : he is a person who moves in powerful sequence of development, expansion and diversification of business. b. Manager : these kind of entrepreneur do not initiate expansion or innovation but believe in utilizing available resource in organization and performing assigned activities to them. c. Minor innovator : these set of entrepreneurs contribute to economic progress by finding better use for existing resources. d. Satellite : these are set of suppliers who provide business with required resources and then move towards productive enterprise. e. Local trading : these entrepreneur limit their products or service to local market.
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3. Based on entrepreneur business : a. Manufacturing : these are set of entrepreneurs who are into production of products that will be sold in market using resources and suppliers. E.g. Apparel, textile products. b. Whole selling : these are set of entrepreneur who prove to be supporting hand for producers they sell in goods produced in production centre to middlemen in market. c. Retailing : he is kind of entrepreneur one who sells goods produced by companies directly to consumers. d. Service : these are set of qualified entrepreneurs who are specialized in particular field and render service to customers
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4.Based on nine personality types of entrepreneurs a. Improver : when entrepreneur continuously focuses on development of business then he tends to improve overall economy through development in business process. b. Advisor : these are entrepreneurs who provide high level assistance to customers in market. Main motto of these entrepreneur is to provide vale addition information required by customers. c. Superstar : he is kind of person who tends to attract attention through his charismatic features example CEO, MD of organization. d. Artist : these kind of entrepreneurs are reserve by nature but are suitable for the jobs which require creativity such as web designer.
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e. Visionary : visionary entrepreneur are futuristic in nature, they will have high degree of curiosity to understand changes happening in world. They prefer taking initiative and like to be in line with competitive environment. f. Analyst : analyst entrepreneur is a person one who believes in analyzing the existing and tries to maintain status quo and bring improvement. g. Fireball : entrepreneur running business which is composed of life, energy, optimism and one who believes in bringing change by changing mindset of customers. E.g. Aid agency. h. Hero : these are kind of entrepreneurs who have ability to lead and run their business through challenges. i. Healer : these are entrepreneur one who believe harmony in healing and bring in harmony to business.

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5. According to use of technology : a. Technical entrepreneur : strength of technical entrepreneur is the technical knowledge of person. He possesses craftsmen skill in him which he develops to apply and implements to develop technical aspect of product. b. Non technical entrepreneur : these entrepreneurs believe in coming up with new strategies rather then concentrating technical aspect of the product. His target is not to change the technology related to the product but rather increase demand for product with effective strategies by attracting customers. c. Professional entrepreneurs : are the one who are interested in floating a business rather then managing or operating the same.
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6. According to stages of development : a. First generation entrepreneur : are those who do not possess any entrepreneurial background. They start industrial unit by the means of their own innovative skill. b. Second generation entrepreneur : are those entrepreneur who inherit family business firm and pass it from one generation to other. c. Classical entrepreneur : is a stereotype entrepreneur who aims to maximize his economic returns at every level consistent with the survival of the unit but with or without element of growth.
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7. According to capital ownership : a. Private entrepreneur : when an individual or group of people together set up enterprise collectively bear profit and loss of company, and adopting latest techniques in business are known as private entrepreneur. b. State entrepreneur : refers to trading or industrial venture undertaken by the state or the government. c. Joint entrepreneur : refers to combination of private and state enterprise running the business by sharing resources with each other.
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INTRAPRENEUR Intrapreneur is the person who works within the organization, utilizes the resources available within the organization and tries to accomplish present task in innovative and creative manner by effective utilization of available resources.

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CHARACTERISTICS OF INTRAPRENEUR 1. Creates new venture : giving birth to new business within the existing organization is the typical characteristics of intrapreneur. 2. Innovates products and services : intrapreneur to create effectiveness at workplace has to update organization techniques through implementation of new technology in company. 3. Innovates process : to sustain in market company's strategies should be effective to that of competitors for which intrapreneur should renew company process at regular interval of time.
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4. Proactive : intrapreneur attempt to lead rather than follow competitors through their proclivity in terms of advance operations in company. 5. Risk taking : intrapreneur possess risk taking attitude with regard to investment decision and strategic actions under uncertain situations. 6. Renews organization : intrapreneur is expected to transform the organization through renewal of key ideas. 7. Competitively aggressive : intrapreneur is expected to come up with new strategies to stabilize or develop company's brand image in market.
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DEVELOPMENT OF ENTREPRENEURSHIP 1. Government and non government support bodies : government in country has come up with various institution for supporting SSI they are national institute for entrepreneurship and small business development ( NIESBUD ) was established in 1983 by the ministry of micro, small and medium enterprise. Entrepreneurship development institute in India ( EDI ) an autonomous body and non profit institution set up for supporting SSI in country .

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2. Incubation facility : premiere business schools and technical institution in India have entrepreneurship centres which provide incubation facility to start up small scale unit. Incubator is facility designed to assist start up companies with respect to providing knowledge and technical assistance. 3. Educational programs : entrepreneurship is be coming popular choice as an elective in MBA programs at business schools in India. In addition to educational programs their are some business school which provide certification programs and training to candidates intending to start up their own business.
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Entrepreneurship networks : refers to association formed by successful entrepreneur where by becoming member of such association fresher's will get some guidance and assistance to start up their own business. E.g. TiE : the indus entrepreneurs was founded in silicon valley in 1992 by successful entrepreneurs and professionals in country. National entrepreneurship network ( NEN ) founded in 2002 is the non profit initiative working to inspire and educate emerging entrepreneurs in company.
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STAGES IN ENTREPRENEURIAL PROCESS

Identify an opportunity Establish vision Persuade others Gather resources Create new venture, product or market Change/ adapt with time
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Identify an opportunity : is an first step towards setting up an enterprise. Entrepreneur before identification of an opportunity should do proper market analysis about market situation, economic conditions and understand taste preference of customers. Establish vision : is second step towards establishing an enterprise. In the process entrepreneur is required to establish long term vision and accordingly plan in mission which will serve as roadmap to achieve company vision. Objectives established by entrepreneur should be flexible in nature to adjust according to changing situation.

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Persuade others : even though the idea of entrepreneurship is initiated by individual person, it requires team effort to covert an idea into reality. Entrepreneur is required to convince skilled employees to work on business plan, make investors and marketers understand credibility of business to enhance status and goodwill of company in business market. Gather resources : next step towards entrepreneurship requires gathering of required resources to start business. Resources includes a. Finance resources : it refers to getting required capital through financial institutions, raising capital through general public by issue of shares, raising required finance though other resources such as self investment, finance through family and friends.

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b. Operating resources refers to tangible and intangible resources which includes machinery, raw material, company image, operating procedure, transportation etc. c. Human resources refers to skilled labour force in organization and other decision in relation to human resource such as training and development of employees, decision to hire permanent or temporary employees, amount of investment to be made of human resource in organization.

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d. Information resources : it is very important on part of organization to collect information about competitors, customers taste and preference, recent development in area of business company will be operating. The company has to maintain valid and accurate management information system in order to suffice to the information needs of company.

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create new venture : once the entrepreneur has arranged in for resources mentioned above, next step involves creation and establishment of new venture. Which requires fulfilment of various legal formalities. Change and adapt with time : initial plan developed by entrepreneur may not be suitable for long run. So business plan is required to be updated on regular basis to cope up with recent trends or updation in market.

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ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT 1. Create employment opportunities : unemployment is major problem faced by developing and under developing countries around the world. As small scale industries are labour intensive in nature they generate more employment opportunities rather then large scale industries in country. 2. Inspire others towards entrepreneurship : team created by entrepreneurship provides opportunity for employee cum tem mates to have first hand experience in process of setting up an venture creating possibility for team mate to come up with his own SSI in future.
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3. Create knowledge spill over : entrepreneurship serves as mechanism by which knowledge over to the firm in which it is commercialized. New firm gets the benefit by the experience and knowledge gained by the founder in the company. 4. Augment the number of enterprise : augment refers to making basic comparison and trying to find out area in which competitors are ahead. Entrepreneurship not only leads to formation of new business but also brings into picture idea or new concept in market exploring almost all the available areas in market creating tuff competition in market thus leading to supply of quality products in market.
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5. Provide diversity in the firms : entrepreneurship activity in particular region often results into creation of variety of firms in country. These firms operates into diverse activities and these diversity fosters economic development in the country.

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ENTREPRENEURSHIP AND ITS BARRIERS 1. Macro economic environment : macroeconomic environment in which SSI operates is dependent on policies of the government in supporting private participation in business. Macro means large and it refers to various factors existing in the environment which effect the working of company. E.g. instability in government of country which leads to change in legal legislation o continuous basis. 2. Legal and regulatory environment : for entrepreneurship is formed by registration and licence procedure, commercial and contractual laws, real estate regulations and laws. If the administration procedure and laws are unclear, time consuming and cumbersome then it proves to be barrier in operation of SSI.
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3. Corruption and unfair competition : a corrupt can lead to unfair competition, which in turn can become major hurdle to entrepreneurship activity in country. Excessive approvals and regulations and approval from government required by entrepreneurs may make the government officials corrupt they develop attitude to take bribe for quicker completion of work. 4. Financial obstacles : start up ventures are usually dependent upon capital to be sourced from financial institution. But it is general tendency of financial institution to be reluctant in providing finance to SSI rather then LSI as LSI given in more amount of interest compare to SSI.
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5. Tax burden : in many regions government charges tax to SSI at similar rate as to LSI which SSI cannot afford to pay as the revenue generated by SSI is comparatively less. 6. Challenges in attracting talent : to generate improved quality of product in the company human resource in company should be efficient in nature. It is possible only when company is able to attract efficient employee to join company, but candidates these days expect in for higher salary which SSI cannot afford to pay because of the same SSI has to compromise with average candidates in the company.
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7. Difficulty to source raw material : for timely production of product in the market it is important to have proper supply of raw material, but supplier in market give second preference to SSI in market compare to LSI as they order in bulk rather then SSI in market. 8. Expensive to access proprietary technology : as investment amount of SSI is industry is less they cannot afford to do heavy investment in technology which again has adverse effect on quality and quantity of product produced by the company.
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