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UNIT – I
1 . RECENT CONCEPTS OF ENTREPRENEUR
 In 1975, As per Albert Shapero defined the term entrepreneur,
 “Entrepreneur is one who takes initiative, organizes some social, economic mechanism and
accepts risk of failure”.

 In 1980, another author called Karl Vesper said that, “Entrepreneur seen differently by
economists, psychologists, businesspersons and politicians”.
 In 1983, Gilford Pinchot opined, “Intrapreneur is an entrepreneur within an already
established organization”.
 In 1985, Robert Hisrich formulated an elaborate definition for the term entrepreneur, which
is given below:
 “Entrepreneurship is the process of creating something different with value by devoting
the necessary time and effort, assuming the accompanying financial psychological and social
risks and mreceiving the results-rewards of monetary and personal satisfaction”.
2. Qualities of an Entrepreneur:
As per the above concepts by analysis it has been founded that a entrepreneur have the following
qualities/traits of a successful entrepreneur:

 Capacity to take risk.

 Capacity to work hard.
 Energetic.
 Drive.
 Self-confidence.
 Intelligence and knowledge.
 Ability to foresee future.
 Willingness to change.
 Ability to mobilize resources.
 Ability to build up organization and administer.
 Ability to take decisions.
 Willingness to take responsibility.
 Innovativeness.
  Desire for high achievement.
 Capacity to solve problem.
 Using feedback
 Taking initiative
 Handling failures
 Locus of control
 Tolerance of uncertainty
 Flexibility
 Guarding business secrets.
 Quality conscious.
 Tactful.
 Have vision.
 Information seeking.
 Monitoring.
 Welfare orientation.
 Systematic planning.
 Persuasion.

Definitions:

 A. H. Cole, “Entrepreneurship is the purposeful activity of an individual or a group of

associated individuals, undertaken to initiate, maintain or aggrandize profit by production
or distribution of economic goods and services”.
 According to Higgins entrepreneurship is meant the function of seeing investment and
production opportunity, organizing an enterprise to undertake a new production
process, raising capital having labor, arranging for supply for raw material and selecting
top managers for day to day operation of the enterprise.
 According to Schumpeter, an entrepreneur is willing and
able to convert a new idea or
invention into a successful innovation.
 W. B. Gartner has detected some common themes in the
definitions of entrepreneurship as
lows;1.Role that entrepreneur plays2.Innovation3.Creation of organization4.Creation of value5.Profit or not for
profit environment6.Growth7.Uniqueness.
 3.Nature and characteristics

 Entrepreneurship is an ideal combination of multifarious competencies, with

multidimensional concept.
 The following are the important characteristics of entrepreneurship:
Risk-bearing:
 Entrepreneur when starting his new venture involves risks.
 Its doing new things and different which also involves risks.
 Sometimes it may earn profits or incur losses due to various factors such as competition,
changes in customer preferences etc.
 Despite, all the constraints a entrepreneur has to be risk-taker not risk avoider in order to
attain success.
Innovation:
 Creativity is one of the characteristics of Entrepreneur.
 Entrepreneur firms act these “Agents of Change” by providing an essential source of
new and unique ideas that might otherwise go untapped.
 The “Creative Destruction” process of innovation leads to technological changes and
employment growth.
 According to J.A.Schumpeter Entrepreneur is a creative activity, by new product, a new
method of production, a new raw material, a new market not exploited, a new
organization etc., these creativity serves the requirements of the customers.
Decision-making:
 Entrepreneurship involves both risk and uncertainty.
 Hence decision-making is crucial on the part of entrepreneurs to set up and run the
enterprises successful business.
 Decision making helps to decide nature and type of products to be introduced, type of
technology, which is ideal for the project, location of the factory, size of he unit and so
on.
 As entrepreneur, in business, forward planning and decision-making are considered very
important entrepreneur has to take decisions promptly and correctly.
Achievement Orientation:

 As per McClelland he had stressed two things for an entrepreneur such as (i) “Doing
things in a better way”, (ii) “Decision-making under uncertainty”
 These things are done with aid of motivation, which leads to success.
 Organization Building:

 In the opinion of F.Harbison implies skill to build the organization.

 By virtue of skill, an Entrepreneur will be able to delegate the authority to others.
 Organization building is most critical and requires critical skill, as it provides for the
economic use of other innovations.
 On the whole, entrepreneur is a organizer builder.
Is a Function of Managerial Skills and Leadership:

 According to Hoselitz, “managerial skills and leadership are the most important facets of
entrepreneurship, where financial skills are secondary.
 An entrepreneur must have the ability to lead and manage.
 There are innumerable cases, in entrepreneurial history, firms which failed because their
founders could not function as managers or feared to enlist the services of managers when
required.
 He identifies three types of business leadership, namely merchant money lenders,
managers and entrepreneurs.
 As a money lender, the commodities which deal is acceptable to everyone, but the
industrial entrepreneur creates his own commodity and the acceptability is uncertain.
 Hence, an entrepreneur has more risks.
 Hence, an entrepreneur has multi-faceted personalities to act as a better skilled,
managerial, and leader.
Gap filling Function:

 It’s the most significant feature of entrepreneurship is gap filling.

 As per Liebenstein there are two broad types of
entrepreneurship, (i) Routineentrepreneurship, associated with the managerial
function, (ii) New entrepreneurship, associated with innovative in nature.
 Its vital role of an entrepreneur to fill the gap or make up the deficiencies which
always exist in the knowledge about the production function. The gaps or deficiencies
arise because all the inputs in the production function cannot be marketed.
 It’s the job of the entrepreneur to Marshall all the inputs to realize the final products, for
supply.
 IT’S A FUNCTION OF STATUS WITHDRAWAL:
 In the opinion of Hagen, “creative innovation” or change is the fundamental feature
economic growth.
 Hagen, opines an entrepreneur solves the problem pragmatically, creatively in the
technological realm.
  He describes an entrepreneur faces a problem without discomfort, with greater tolerance.
 Hagen, visualizes a entrepreneur as “innovative personality”, who is basically with
creativity that contributes towards economic growth.
A Function of Religious Beliefs:

 Max Weber analyzed religion and its impact on enterprising culture.

 According to him “spirit of capitalism” is a set of attitudes towards the acquisition of
money and the activities involved in it.
 He states that, spirit of capitalism can be generated only when mental attitude in the
society is favorable to capitalism.
 According to Weber the protestant ethics provides this mental attitude whole Hinduism
lacks such an attitude.

4.what are the functions of an Entrepreneur?

An entrepreneur performs all the functions right from the conceiving of an idea up to the
establishment of an enterprise. He organizes and co-ordinates the factors of production. The
main functions are discussed below:

1.Generating Business idea:

 This is first and foremost function of an entrepreneur.

 Essentially there are two ways in which business ideas can be created namely, (i)
generating own idea, or (ii) developing someone else’s ideas.
 The second is common and every successful business is a development of an earlier
business concept.
 These includes areas such as management buyouts/buy-ins, corporate spin-offs,
franchising and buying an existing business.In the generating business ideas, there are
three sources of opportunities, adverts, agents, and opportunity spotting, or watching out
for businesses that one find match his objectives.
2. Determining Business Objectives:
 This is setting out the goals, plan, etc.
 An entrepreneur has to be clear with the nature of the business, type of business.
 Next step, whether it is manufacturing or trading or service oriented organization.
3. Product Analysis:
  This is the next important function, to decide on the product and market research.Forthis
an entrepreneur has to conduct market research, collect data regarding the product that
he likes to manufacture or market with.
 This act of market research should be an continuous process that gives him the
information regarding the demand of the product, supply of the product, price of the
product, size of the product etc.
4.Deciding the form of Enterprise:

 This deciding on establishing the type of enterprise, such as sole trading concerns,
partnership firms, co-operative society and joint stock companies. Etc.
 Prior to the establishing and organization, the form of the ownership has to be decided.
 Based on the ownership the legal formalities will be proceeded.
 Decision on the establishment will be based on the factors such as nature of the product,
volume of the investment, nature of activities, types of product, quality of product,
quality of human resources etc.
5.Promotion of the Enterprise:

 After the formation of ownership, the next step is the legal formalities as per the
required statue to establish the organization.
 In case of sole trading concerns and partnership firms the legal formalities are minimal,
 Where as in case of joint stock companies and cooperative societies.
 An promoter has to read all the statue and fulfill the necessary legal formalities in
establishing the enterprise.
6. Raising Necessary Funds:

 Finance = Life – Blood , of any business.

 All activities of a business depends on finance.
 Raising or sourcing of finance is most important function of an entrepreneur.
 To procure or purchasing assets, carrying out day-to-day activities, meeting expenses
for establishment etc.
 Fund will be raised internally and externally.
 Fund has to be raised in the cheapest way.
 Essential knowledge of government-sponsored schemes is crucial, which enables him to
get the seed capital, working capital etc.
Procurement of Machine and Material:
 Procurement of machines and raw materials is an critical function of an entrepreneur.
  While purchasing the machines factors like technology adopted, installed capacity of
the machines, details of manufacturers and suppliers, country in which the machines are
manufactured, domestic or international, availability of after-sales service facilities and
warranty perio given etc.
 Regarding raw material purchase, the cheap and regular sources of supply of raw
material has to be identified.
 So that it reduces the production cost and makes him to face competition boldly.
Recruiting Men:
 Recruiting the right person for the right job is an important function of an entrepreneur.
 The man power need is to be estimated. Selection procedure has to be framed.
 Suitable method of compensation has to be devised.
 Proper training has to be implemented for the new recruits.

9. Undertaking the Activities:

This is the stage of implementing the project. It should be done in timelines. This will enable him
to avoid cost and time over run and also competition.

The Activities are categorized into three namely,

1.Risk bearing.

2.Organization.

3.Innovation.

5.Development of Women Entrepreneurs & Rural

entrepreneur

DEFINITIONS or Concept :

 Women entrepreneur may be defined as a woman or group of women who initiate,

organize and run a business enterprise.
 In terms of Schumpeterian concept of innovative entrepreneurs, women who innovate,
imitate or adopt a business activity are called women entrepreneurs.
Government of India:

 Has defined that “an enterprise owned and controlled by a women having a minimum
financial interest of 51% of the capital and giving at least 51% of the employment
generated in the enterprise to women”.

What are the functions of an Women Entrepreneur?

Frederick jHarbison has enumerated the following five functions of a women entrepreneur.

1.Exploration of the prospects of starting a new business enterprise.

2.Undertaking of risks and the handling of economic uncertainties involved in business.

3.Introduction of innovations or limitation of innovations.

4.Coordination, administration and control.

5.Supervision and leadership.

What are the Development of Women Entrepreneurs?

 In India, women entry into business is a new phenomenon. Women in India plunged into
business for both Pull and push factors.
 With growing awareness about business and spread of education among women over the
period, women have started shifting from 3 Ps, Pickles, Powder and Pappad to 3 Es, viz.,
Engineering, Electronics and Energy.
 Government of India, banks and financial institutions have introduced different schemes
for the development of women entrepreneurs in India.
The important schemes for the development of Women Entrepreneurs are as follows:

1. Development of Women and Children in Rural Areas (DWCRA)

2. Schemes of IDBI

 Interest Subsidy.
 Refinance Facility.
 Mahila Udyam Nidhi (MUN)
 Mahila Vikas Nidhi (MVN)
 Indirect Loans.
 Scheme of Karnataka SFC.
 Scheme of IFCI
 Rajasthan Financial Corporation Scheme.
 SBI’s Stree Shakti Package.
 SIDBI’s Assistance.
 BOI Priyadarshini Yojana.

Who is women entrepreneur? What are the problems faced by women entrepreneur?

Definition of women entrepreneur:

It may be defined as a woman or group of women who initiative organize and run a business
enterprise. In terms of Schumpeterian concept of innovative entrepreneurs, women who
innovate, imitate or adopt a business activity are called “women entrepreneur”.

6.Problems faced by Women entrepreneur:

Women entrepreneurs encounter two sets of problems, namely 1). General Problems of
entrepreneurs and , 2). Problems specific to women entrepreneurs.

In the entrepreneurship the problems that are faced are under follows:

Problem of finance:
Finance is regarded as “life-blood” for any enterprise, whether it is small or big. They suffer
shortage of funds on two counts, Firstly; women do not generally have property on their names
to use them as collateral for obtaining funds from external sources. Secondly, most of the time
the banks also consider women less credit-worthy and discourage women borrowers on the belief
that they can at any time leave their business. They have to only rely on their own savings. Thus,
women enterprises fail due to the shortage of finance.
 Scarcity of Raw Material:
The scarcity of raw material and necessary inputs, sometimes leads to stunted growth in the
women enterprises. Nevertheless, the high prices of raw material, minimum discount are the
other factors.

Stiff Competition:
The improper organizational set-up to pump in lot of money for marketing and advertisement.
Because they have to face the tough competition by organized sector and their male
counterparts. These factors ultimately affects the women enterprises.

Limited Mobility:
In India mobility of women is limited unlike men. In case of renting a room still viewed as
suspicious matter and cumbersome exercise involved in starting an enterprise coupled with the
officials humiliating attitude towards women compels them to give up idea of starting an
enterprise.

Family Ties:
In India, it is mainly a woman’s duty to look after the children and other members of the family.
Hence in case of married women, she has to strike a fine balance between her business and
family. Hence her total involvement in family leaves little or no energy and time to devote for
business. Hence support of husbands and family is very crucial for the women.

Lack of Education:
In India, around three-fifths (60%) of women are still illiterate. Illiteracy is the root cause of
socio-economic problems. Due to the lack of education and that too qualitative education,
women are not aware of business, technology and market knowledge. Also lack of education
causes low achievement motivation among women. Thus, lack of education creates problems for
women in the setting up and running of business enterprise.

Male-Dominated Society:
Prevalence of Male chauvinism is still an great block for women Indian to develop. Despite
Constitution of India speaks of equality between sexes, but in practice women are looked upon as
abla, i.e. weak in all respects. The male reservations about women as weak in ability, capacity,
and in their role, in male-dominated Indian society, where women are not treated equal to men.
These factors are barriers to women entry into business.

Low Risk-Bearing
Women in India lead a protected life. They are less educated and economically not self-
dependent. All these reduce their ability to bear risk involved in running an enterprise. Risk-
bearing is an essential requisite of a successful entrepreneur.

In addition to above problems, inadequate infrastructural facilities, shortage of power, high cost
of production, social attitude, low need for achievement and socio-economic constraints also
hold the women back from entering into business.

7.STATE THE MEASURES TO OVERCOME ISSUES OF RURA L

ENTREPRENEUR

ISSUES:

 In the course of development of entrepreneurship especially rural entrepreneurship is

as important is not so easy.
 One of the most predominant constraints is financial constraints, followed by lack of
technical know-how,
 Lack of training and extension services, management problems, lack of quality of
control,
 High cost of production due to high input cost,Ability:
 Lack of communication and market information,
 Poor quality of raw materials,
 Lack of storage and warehousing facilities,
 Obsolete and primitive technology and lack of promotional strategy.
According to the Ninth Plan, the major problems faced n developing entrepreneurship in rural
areas are (i) inadequate flow of credit, (ii) use of obsolete technology, machinery, and
equipment, (iii) poor quality standards, and (ivO in adequate infrastructural facilities.

Measures to overcome or How to develop rural entrepreneurship:

The following measures are suggested for developing entrepreneurship in the rural areas in
the country.

 Raw material is a must for any industry. However, the non-availability of raw
materials accompanied by their prohibitive cost has weakened the viability of these
industries. Past experience bears evidence that rural industries with employment
potential cannot be sustained for long unless a strong raw material-base is created in
rural areas itself. Therefore, an urgent policy is called for to strengthen the raw
material base in rural areas.
  Finance is considered as lubricant for setting up and running an industry. Funds,
therefore, need to be made available on time at soft terms and conditions to those who
really need it.
 In order to solve the problem of marketing for rural industries, common production
cum-marketing centers need to be set up and developed with modern infrastructural
facilities, particularly, in the areas having good production and growth potential. This
is would help in promoting export business, on the one hand, and bringing the buyers
and sellers in close interaction avoiding middleman in between them, on the other
legislative measure have to be taken to make the government purchases compulsory
from rural industries.
 In rural areas people choose the entrepreneur by chance. Lack of aptitude
competency on the entrepreneurs makes the units sick. Hence there is a need to
develop entrepreneurial attitude and competencies among the prospective
entrepreneurs through the training interventions like Entrepreneurship Development
Programmes (EDP), Women Entrepreneurship Development Programmes and
TRYSEM (Training of Rural Youth for Self Employment.
 One effective way to inculcate the entrepreneurial acumen and attitude may be
imparting entrepreneurial education in the schools, colleges, and universities.
(Kakinada experiments in Andhra Pradesh).
 Providing information in setting up of industries which is the real problem.
 Proper provisions need to be made to impart the institutional training to orient the
entrepreneurs in specific products and trades so that the local resources can be
harnessed property.
 The governmental organizations, such as NGOs, such as national Alliance of Young
Entrepreneurs (NAYE), World Assembly of Small and Medium Entrepreneurs
(WASME), Xavier Institute for Social Studies (XISS), AWAKE (Association of
Women Entrepreneurs of Karnataka), and Rural Development and Self-Employment
Training Institute (RUDSETIs) based in Karnataka.

Enumerate the points to be borne in mind while selecting the

product.OR Describe Product Planning and development.

Definition of Product:

A product is a combination of several attributes such as colour, material, design, features,

performance abilities, qualities, etc. Product planning involves the consideration of all the
attributes of a product.

Characteristics of Selection of a product:

Product planning or in the process of selecting the product is the starting point of the overall
marketing programme of a firm.
It is a very wide activity.

It involves the innovation of new products, improvement in the existing product line or dropping
the uneconomic products from the product line.

In the words of KARL H. TIETJEN, product planning is the “Act of marketing and
commercialization of new products, the modification of existing lines and the
discontinuance of marginal or unprofitable items”.

Thus product planning involves three considerations.

 The development and introduction of new products.

 The modification of existing lines to suit the changing consumer needs and preferences.
 The discontinuance or elimination of unprofitable products.

THE FOLLOWING ARE THE POINTS TO BE BORNE DURING PRODUCT

SELECTION OR DEVELOPMENT:

As stated by William J. Stanton, the combined scope of product planning and product
development includes making decisions in the following areas:

 Which product should the firm make and which it should buy?
 Should the company market more or fewer products?
 What new uses are there for each product?
 What brand, package and level should be used for each product?
 How should the product be styled and designed and what sizes, colors and materials
should it be produced?
 In what quantities each item should be produced?
 How should the product be priced

Thus in the course of selection of a product or product planning is a term of much wider
implications and covers wide areas.
 UNIT – II
How to identify a project? Or (Opportunity scanning)

In the process of identifying and selection of a project it starts with the generation of a product
idea. To identify a promising project an entrepreneur has to generate the ideas from sources,
internally or externally.

The following are the sources:

 Knowledge of potential customer needs,

 Watching emerging trends in demands for certain products,
 Scope for producing substitute product,
 Going through certain professional magazines catering to specific interests like
electronics, computers etc.,
 Success stories of known entrepreneurs or friends or relatives,
 Making visits to trade fairs and exhibitions displaying new products and services
 Meeting with the Government agencies,
 Knowledge about the Government policy, concessions and incentives, list of items
reserved for exclusive manufacture in small-scale sector, and
 A new product introduced by the competitor.
All the aforementioned sources putting together may give a few ideas about the possible projects
to be examined as the final project.

This is also described as ‘Opportunity scanning and identification’.

Explain various sources of business idea.

The process of generation is the precursor for starting a new business. Generating ideas is an
innovative, creative process. The idea generation is a continuous process throughout the life of
business.
Sources of Ideas: Sources of Ideas:
  Personal Interest or Hobbies:
Many entrepreneurial ventures were formed because of an entrepreneur’s love of doing
something such as resorting antique automobiles, baking grandma’s scrumptious praline
chocolate brownies, etc. A successful entrepreneurial business might be built around personal
interests in a particular product or activity.

Entrepreneur’s Work Experiences etc.

Another potential source of data, and a popular one is an entrepreneur’s work experiences,
knowledge, and skills. By tapping into the knowledge of a particular industry or market gained
by working in it, an entrepreneur can pinpoint areas of potential opportunity.

Products and Services Currently Available.

The third source of possible ideas is looking at products and services currently available. Here,
both familiar and unfamiliar ones are to be analyzed. Such analysis is to be made by finding
answers to the following questions. What products do you use every day? Do they do everything
that you wished they would? What about products you are not familiar with? Can you take what
you are familiar wit and apply it to those unfamiliar ones?

4.DISCUSSION WITH PEOPLE:

This is an importunate and potential source for entrepreneurs to source ideas.Whilediscussing

with others one may secure many useful ideas. Through this source an entrepreneur would come
to know about the demands of the people, what people will buy, what is the really the market is
or would be, what are the improvement could be made in the goods and services from current
trend. By finding answers to these questions an aspiring entrepreneur will find the solutions that
would develop into an best idea for his new venture.

5. Success of Friends and Relatives:

Successful stories of friends and relatives are another source of ideas. Such stories are capable of
inspiring people and drive them to appraise and undertake new projects.

6. Experience of Existing Entrepreneurs:

Experience of experienced entrepreneurs in the filed will give a wider areas of possible projects.
The existing entrepreneurs could share the position to tell the new entrepreneurs of the scarce
materials could be obtained where and how? What type of services would be suitable? and where
the rare spares could be obtained. These kind of ideas if converted into projects and
commercialized will definitely succeed.

7. Short Supply/Excess Demand for Certain Goods:

In real life, we come across short supply of certain products. It shows clearly that production of
those goods will be definitely successful