Unit-5

Uniy-V
Entrepreneurship Development
5.1 Concept of Entrepreneurship
Entrepreneurship may be defined as the visualization and realization of new ideas by

insightful individuals, who are able to use information and mobilize resources to implement
their vision. Entrepreneurship is the ability (i.e., knowledge plus skills) of a person to
translate ideas of commencing a business unit into reality by setting up a business on ground
to serve the needs of society and the nation, in the hope of profits
Definition:
An entrepreneur can be described as “one who creates a new business in the face of risk and
uncertainty for the purpose of achieving profit and growth by identifying significant
opportunities and assembling the necessary resources to capitalize on them” (Zimmerer &
Scarborough, 2008, p. 5).
A concise definition of entrepreneurship “is that it is the process of pursuing

opportunities without limitation by resources currently in hand” (Brooks, 2009, p. 3)
and “the process of doing something new and something different for the purpose of
creating wealth for the individual and adding value to society”
Meaning of Entrepreneur
The entrepreneur is defined as someone who has the ability and desire to establish, administer
and succeed in a startup venture along with risk entitled to it, to make profits. The best
example of entrepreneurship is the starting of a new business venture. The entrepreneurs are
often known as a source of new ideas or innovators, and bring new ideas in the market by
replacing old with a new invention.
5.1.1 Need of Entrepreneurship

1. Passion, Perseverance & Persistence
Passion is a strong and uncontrollable emotion that is based on something higher to achieve
than what the person is carrying within himself. Perseverance is a mature emotion that comes
through experiences gathered and analysed. While, persistence is the sail that will row the
boat of an entrepreneur through the toughest of climates.
Dr. Banka Kumar Raja. M. Com, NET, Ph.D. MBA,NET. Assistant Professor in Commerce – Loyola Academy
2. Big Dreamer
Dreaming big further strengthens an entrepreneur with his ability to dream and see the wide
picture. This is the very first step that sets the path to self-discovery.
3. Learning
Learning is never to stop irrespective of age and thus arming oneself with education does
play a vital role in forming leadership qualities when needed.
4. Good Listener
The ability to contribute will only come once we have abundance in ourselves, and this
comes by absorbing the words of others. The ability to truly listen to the customers and
employees is actually what makes a difference. This very skill leads to a successful venture.
5. Financing Partner
Choosing a financing partner who understands the business needs is very much essential.
This is as critical as choosing the business which the entrepreneur wants to pursue. Also, a
business loan from the right lender will for sure play a pivotal role in realizing the dreams of
becoming a successful entrepreneur.
5.1.2 Importance of Entrepreneurship
 Creation of Employment- Entrepreneurship generates employment. It provides an
entry-level job, required for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the

employment base is large and diversified. It brings about changes in society and
promotes facilities like higher expenditure on education, better sanitation, fewer
slums, a higher level of homeownership. Therefore, entrepreneurship assists the
organisation towards a more stable and high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of

living of a person by increasing the income. The standard of living means, increase in
the consumption of various goods and services by a household for a particular period.
 Supports research and development- New products and services need to be

researched and tested before launching in the market. Therefore, an entrepreneur also
dispenses finance for research and development with research institutions and
universities. This promotes research, general construction, and development in the
economy.
5.2 Characteristics of Entrepreneurs:
Not all entrepreneurs are successful; there are definite characteristics that make
entrepreneurship successful. A few of them are mentioned below:
 Ability to take a risk- Starting any new venture involves a considerable amount of
failure risk. Therefore, an entrepreneur needs to be courageous and able to evaluate
and take risks, which is an essential part of being an entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company

and earn profits out of it. Change can be the launching of a new product that is new to
the market or a process that does the same thing but in a more efficient and
economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have a

clear vision of his new venture. However, to turn the idea into reality, a lot of
resources and employees are required. Here, leadership quality is paramount because
leaders impart and guide their employees towards the right path of success.
 Open-Minded- In a business, every circumstance can be an opportunity and used for

the benefit of a company. For example, Paytm recognised the gravity of
demonetization and acknowledged the need for online transactions would be more, so
it utilised the situation and expanded massively during this time.
 Flexible- An entrepreneur should be flexible and open to change according to the

situation. To be on the top, a businessperson should be equipped to embrace change in
a product and service, as and when needed.
 Know your Product-A company owner should know the product offerings and also
be aware of the latest trend in the market. It is essential to know if the available
product or service meets the demands of the current market, or whether it is time to
tweak it a little. Being able to be accountable and then alter as needed is a vital part of
entrepreneurship.
Entrepreneurship development is the means of enhancing the knowledge and skill of

entrepreneurs through several classroom coaching and programs, and training. The main
point of the development process is to strengthen and increase the number of entrepreneurs.
5.3 Process of Entrepreneurship Development
The below-mentioned steps will illustrate how to build an effective entrepreneurship

development program for an entrepreneur to organize and launch the new ventures.
 Discover – Any new process begins with fresh ideas and objectives, wherein the
entrepreneur recognizes and analyzes business possibilities. The analyzing of
opportunities is a risky task, and an entrepreneur looks out for inputs from other
persons, including channel partners, employees, technical people, consumers, etc. to
reach an ideal business opportunity.
 Evaluation – The evaluation of an opportunity can be done by asking several

questions to oneself. For instance, questions like whether it is worth taking a chance
and investing in the idea, will it attract the consumer, what are the competitive
advantages and the risk linked with it are asked. A reasonable and sensible
entrepreneur will also analyze his skills and whether it matches his entrepreneurial
objectives or not.
 Developing a plan:– After the identification of an opportunity, an entrepreneur has to

build a complete business plan. It is the most important step for new business as it sets
a standard and the assessment criteria and sees if a company is working towards the
set goals.
 Resources:– The next step in the process of entrepreneurial development is

resourcing. Here, the entrepreneur recognizes the source of finance and from where
the human resource can be managed. In this step, the entrepreneur also tries to find
investors for his new business.
 Managing the company:– After the hiring process and funds are raised now its time
to start the operation to accomplish the desired goals. All the entrepreneur will decide
on the management structure that will be assigned to resolve the operational problems
whenever it occurs.
 Harvesting:– The last step in this process is harvesting, where an entrepreneur

determines the future growth and development of the business. Here, real-time
development is compared with the projected growth, and then the business security or
the extension is initiated accordingly.
5.4 TYPES OF ENTREPRENEURSHIP
Let us take a look at different types of entrepreneurs. All forms of entrepreneurship are
essential and complementary forces of economic development.
A. Based on Risk
(a) Innovative Entrepreneurship
Entrepreneur comes up with new ideas and turns them into viable business and find new
ways to market the products that make their business stand out from the crowd and
sometimes create a new crowd. Examples are Steve Jobs and Bill Gates.
(b) Imitative Entrepreneurship
It implements current techniques from which they copy certain business ideas and
improve upon them as to gain an upper hand in the market. Imitative entrepreneurship is
characterized by the adoption of exogenously changing technologies. Examples are
development of small shopping complexes and small car manufacturers.
(c) Fabian Entrepreneurship
It is concerned with such business organizations in which the individual owner does not
take initiative in visualizing and implementing new ideas and innovation. Dealings are
determined by customs, religion, trading and past practices. They are not too interested in
taking risks or changes and they try to follow the beaten track created by their
predecessors
(d) Drone Entrepreneurship
It is concerned with such businesses in which owners are satisfied with the existing mode
and speed of business activity and show no inclination in gaining market leadership. They
refuse to make any modification in the existing production methods inspite of incurring
recurring losses
B. Based on type of Business
(a) Agricultural Entrepreneurship
It covers a wide spectrum of agricultural activities like cultivation, marketing of

agricultural produce, irrigation, mechanization and agricultural technology.
(b) Manufacturing Entrepreneurship
It identifies needs of customers and then explores the resources and technology to be used
to manufacture the products to satisfy those needs by converting raw materials into
finished products.
(c) Trading Entrepreneurship
It procures finished products from manufacturers and sells these to customers either
directly or through middlemen such as wholesalers, dealers, and retailers. These
middlemen act as a link between the manufacturer and customer.
C. Based on use of Technology
(a) Technical Entrepreneurship
It deals with establishing and running industry based on science and technology. They use
innovative methods of production.
(b) Non-Technical Entrepreneurship
It is concerned with the use of alternative and imitative methods of marketing and
distribution strategies to make their business survive and thrive in a competitive market.
D. Based on Ownership
(a) Corporate entrepreneurship
It was pioneered by Burgelman. Corporate ownership is where an individual through

innovation and skill organises, manages and controls a corporate undertaking efficiently.
(b) Private Entrepreneurship
It is where an individual sets up a business as a sole owner of the business and bears the
entire risk involved in it.
(c) State Entrepreneurship
It is where trading or industrial venture is undertaken by the State or the Government.
(d) Joint Entrepreneurship
It implies a joint business endeavor between a private entrepreneur and the Government.
E. Based on size of Enterprise
1. Micro Enterprises: Any business with a turnover of up to Rupees five crore.
2. Small-Scale Entrepreneurship: A small enterprise has an annual turnover of more

than Rupees five crore but not more than Rs 75 crore.
2. Medium-Scale Entrepreneurship: A business with a turnover over Rs 75 crore and

upto Rs 250 crore
4. Large-Scale Entrepreneurship: Business with turnover over Rs 250 crore
F. Based on Gender
(a) Women Entrepreneurship
The Government of India defines women entrepreneurship as, “a business enterprise

which is owned, managed and controlled by women having a minimum financial interest
of 51 per cent of the capital and giving at least 51 per cent of employment generated in
the enterprises to women.” Schumpeter defines women entrepreneurship as, “based on
women’s participation in equity and employment of a business enterprise.”
G. Based on Social Problems
Social Entrepreneurship
The concept of social entrepreneurship came around the 1960s but the establishment of
Grameen Bank by Muhammad Yunus in Bangladesh was the first instance where it was
thoroughly used. Social entrepreneurship focuses on social problems and environmental
problems aiming at bringing about transformation.
This obligation of contribution to social well-being is primary and in a way, profit takes a
back seat or is more or less secondary but essential to the survival
5.2 Role of an Entrepreneur in the Process of Nation-Building

Entrepreneurs play a very important role in the process of nation-building, especially in a
developing country like India. entrepreneurs start many entrepreneurial ventures which
in turn hire many people thereby giving them employment, livelihood and vocational
opportunities. These people earn money in the form of salaries, wages, stipends, etc.
Also, entrepreneurs borrow money from banks, shareholders, investors, etc. who earn
interest, dividends, profits, etc. All this money is indirectly used in the economic
development of the nation. Thus entrepreneurs facilitate the economic development of
the nations. And economic development is a very important component of nation-
building.
1. Wealth Creation and Sharing:
By establishing the business entity, entrepreneurs invest their own resources and attract
capital (in the form of debt, equity, etc.) from investors, lenders and the public. This
mobilizes public wealth and allows people to benefit from the success of entrepreneurs
and growing businesses. This kind of pooled capital that results in wealth creation and
distribution is one of the basic imperatives and goals of economic development.
2. Create Jobs:
Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The
simple translation is that when you become an entrepreneur, there is one less job seeker
in the economy, and then you provide employment for multiple other job seekers. This
kind of job creation by new and existing businesses is again is one of the basic goals of
economic development. This is why the Govt. of India has launched initiatives such
as StartupIndia to promote and support new startups, and also others like the Make in
India initiative to attract foreign companies and their FDI into the Indian economy. All
this in turn creates a lot of job opportunities, and is helping in augmenting our standards
to a global level.
3. Balanced Regional Development:
Entrepreneurs setting up new businesses and industrial units help with regional
development by locating in less developed and backward areas. The growth of industries
and business in these areas leads to infrastructure improvements like better roads and rail
links, airports, stable electricity and water supply, schools, hospitals, shopping malls and
other public and private services that would not otherwise be available.
Every new business that locates in a less developed area will create both direct and
indirect jobs, helping lift regional economies in many different ways. The combined
spending by all the new employees of the new businesses and the supporting jobs in
other businesses adds to the local and regional economic output. Both central and state
governments promote this kind of regional development by providing registered MSME
businesses various benefits and concessions.
4. GDP and Per Capita Income:
India’s MSME sector, comprised of 36 million units that provide employment for more
than 80 million people, now accounts for over 37% of the country’s GDP. Each new
addition to these 36 million units makes use of even more resources like land, labor and
capital to develop products and services that add to the national income, national product
and per capita income of the country. This growth in GDP and per capita income is again
one of the essential goals of economic development.
5. Standard of Living:
Increase in the standard of living of people in a community is yet another key goal of
economic development. Entrepreneurs again play a key role in increasing the standard of
living in a community. They do this not just by creating jobs, but also by developing and
adopting innovations that lead to improvements in the quality of life of their employees,
customers, and other stakeholders in the community. For example, automation that
reduces production costs and enables faster production will make a business unit more
productive, while also providing its customers with the same goods at lower prices.
6. Exports:
Any growing business will eventually want to get started with exports to expand their
business to foreign markets. This is an important ingredient of economic development
since it provides access to bigger markets, and leads to currency inflows and access to
the latest cutting-edge technologies and processes being used in more developed foreign
markets. Another key benefit is that this expansion that leads to more stable business
revenue during economic downturns in the local economy.
7. Community Development:
Economic development doesn’t always translate into community development.
Community development requires infrastructure for education and training, healthcare,
and other public services. For example, you need highly educated and skilled workers in
a community to attract new businesses. If there are educational institutions, technical
training schools and internship opportunities, that will help build the pool of educated
and skilled workers.
A good example of how this kind of community development can be promoted is Azim
Hashim Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for
promoting education through the Azim Premji Foundation. This foundation works with
more than 350,000 schools in eight states across India.
5.3 Entrepreneur Traits/Challenges:
1. Selecting a service or product
An entrepreneur may have the skills and passion to start a company, but one important
factor in starting a business is deciding what to sell. To start, they may identify a demand
in their community they could meet. A marketing firm or freelance researcher may help
them conduct market research to discover what needs there are and which ones they have
the resources to address. For example, an entrepreneur may learn that the people in their
community drive out of town to get massages, so they know there is a local demand for a
spa that they could fill.
2. Developing a sales strategy
Though an entrepreneur may recognize an opportunity in a certain community, they
might also research the best way to sell to that community. They may hire a professional
to create a marketing plan or make one themselves. To do this, they can assess who their
target audience is and what strategy might best reach them. For example, if an
entrepreneur opens a business in a rural community where they know many people listen
to the radio, they may develop a digital ad to broadcast locally.
3. Establishing starting funds
For entrepreneurs who start with lower capital, there are ways to earn funding to get
started. They may begin with a traditional bank loan or a federal small business loan. If
they plan to provide a product or service that they know has significant demand already,
they might start a fundraising campaign. For entrepreneurs who would rather use a self-
fuelled growth model, they may start by targeting a small audience and slowly building
to serve larger client bases.
4. Maintaining a budget
Because running a company can be unpredictable, an entrepreneur can stay prepared by
carefully maintaining a budget. They may do this by prioritizing efficient marketing
strategies and allocating the rest according to their unique needs. Assessing which
expenses are necessary may help entrepreneurs adjust their funds to better prepare for
changes. For example, they may observe that there is a more affordable manufacturer
they can use and reallocate those savings to address higher utility costs.
5. Sustaining revenue
It's important for entrepreneurs to manage their organization's money carefully to
account for any potential delay in invoice payments. Aside from budgeting,
entrepreneurs may charge a down payment to ensure they can afford expenses until they
receive full payment. By sending invoices as early as possible and requesting payment as
soon as they complete projects, entrepreneurs can secure funding to keep operations
running efficiently.
6. Staffing the organization
To make sure that they hire people who care about their organization's mission and will
work hard, entrepreneurs may oversee the hiring process. They may publish highly
detailed listings to attract candidates whose qualifications match the organization's specific
needs. Before interviewing anyone, they can develop questions to assess if the candidate
might be a good fit for their organization and if the role can help them in their career
goals.
7. Managing employees
As the creators and leaders of an organization, entrepreneurs guide their employees on
how to best carry out the organization's goals. They can achieve this by developing clear,
detailed instructions for each role. When an entrepreneur effectively communicates the
goals of the organization, employees may better understand what they expect and what
they're working toward. For example, if the founder of a clean water initiative tells
employees the story of why they started the company, they may feel more inspired to work
toward the common goal of providing clean water.
8. Expanding the business

After an entrepreneur establishes their business, they may reach a level of success where
they want to expand. This stage of managing a business entails many considerations,
including figuring out a way to address greater demand, researching new partners and
reassessing their role in the company. An entrepreneur may revise existing processes to
better meet the company's needs. For example, if a consulting firm uses software built for
a smaller client list, they may upgrade to one that betters suits a wider client base.
9. Managing time
Starting a new business and managing it creates many periodic tasks, so entrepreneurs
may create deadlines to help with prioritizing their obligations. Because their role can
encompass many responsibilities, entrepreneurs have several approaches they can take to
manage time. One strategy they can use is creating goals for themselves and others in the
organization. They may assess which tasks are absolutely necessary and which they can
delegate.
10. Maintaining confidence
It can take a lot of confidence to start a company and just as much to run one. It's
important for entrepreneurs to maintain confidence so they can lead effectively and make
appropriate business decisions. Entrepreneurs may set long- and short-term goals to track
and reflect on their success. Keeping a community of supportive leadership and employees
may also help. When an entrepreneur is more confident, they may feel more prepared to
address challenges.
11. Collaborating with partners

For entrepreneurs whose organization is doing well, they may consider partnering with
other professionals or businesses. Though this may help them allocate leadership
responsibilities and increase funding, there are many considerations. First, entrepreneurs
can assess areas of improvement, whether a partnership might help and also how their
skills and personalities might combine to benefit the organization. It's important to
establish the terms of the partnership with a lawyer to protect all parties' interests.
5.4 Idea Generation:
Meaning:- According to Webster’s dictionary, “an idea means what exists in the mind as
a representation (as of something comprehended) or as a formulation (as of a plan).”
An idea is the content of cognition or the main thing one is thinking about or intends to
do. An idea may apply to a mental image or formulation of something seen or known or
imagined, to a pure abstraction, or to something that exists in the mind of a person.
Business idea:- An idea is relevant in the market place, having requisite feasibility,
commercial viability and innovative content, it can be termed as business ideas.
All ideas despite being innovative may not culminate into a viable business opportunity.
Business ideas should be thoroughly tested and validated before resources are tied up in
the business. The success of a business, in the first place rely heavily on robustness of
sound business idea.
5.4.1 Characteristics of a sound business idea:
1. fulfils a customer need – a problem is solved
2. Clear focus
3. Innovative
4. Unique
5. Sustainable
6. Profitable in the long term
The development of new products and/or services usually focuses on improving

“customer’s satisfaction”. Successful implementation of a business idea eventually leads
to lowering of cost, while also passing on the benefits to the consumers in terms of lower
product prices.
5.4.2 Idea generation
It is the creative process of generating new methods to solve problems and improve
the product’s conditions or the company itself. It is undoubtedly based on factors like idea
development, group discussions, choosing the best alternative, and finally, implementing the
idea in real-world scenarios. The idea doesn’t need to be practical, and it can also be a mere
thought.
5.5 Feasibility Study and Opportunity Assessment:
Meaning: A feasibility study is an assessment that determines the likelihood of a proposed
project being successful, such as a new product line or technical system. The study analyzes
the project's relevant factors, such as technical, economic and legal considerations, to assess
whether the project is worth an investment. The study can also identify potential issues and
problems that could arise from pursuing the project.
5.5.1 Importance of feasibility studies
Feasibility studies are extremely important when contemplating the undertaking of a new
project. Agreeing to a proposed business plan is an investment for any company, so it is
helpful to examine all the factors that go into a project from pre-planning to its completion.
Below are a few reasons feasibility studies are important:
 Identifies valid reasons to advance or veto a project idea

 Improves the focus of the project team
 Provides useful information for the next steps after the study
 Narrows potential business alternatives
 Evaluates current and needed resources and technology
 Enhances the success or failure rate of the project by assessing all variables
 Estimates the return on investment
5.5.2 Elements of a Feasibility Study
Project Scope:- Creating a project scope is part of the planning process and defines all
aspects of the proposed plan. It should address all parts of the business that could be impacted
when the plan goes into motion. In addition, it's important to address the potential outcome of
the project in the product scope. This includes all work that needs to get completed to deliver
the project such as project goals, tasks, costs, deliverables and deadlines.
Current Analysis:- The purpose of the current analysis is to define and understand the
current methods being used in the organization. With this analysis, you can identify the
benefits and disadvantages of the current product or system. This information is used to
determine whether it's possible to use certain components of the current product when
creating the prospective product or potentially save money when producing the new product
or system.
Requirements:- The requirements of the potential project depend on the project's overall
purpose. Two components to identify are the technical and capital requirements of the
venture. Investors should possess information about technology obligations as well as how
much money to invest overall so they can identify the proper approach to obtain the
requirements.
Approach:- After analyzing the requirements, a consultant typically recommends a course of

action to satisfy the requirements that were established in the previous step. Sometimes, using
existing systems already in place is more beneficial than choosing a brand new system, which
can be more costly. The consultant then weighs all options and recommends the most
beneficial solution to the organization before proceeding.
Evaluation:- After choosing an approach, a consultant usually evaluates the cost-

effectiveness of the selected approach. A consultant may analyze and estimate the total
projected cost, as well as estimate alternative approaches. Finally, an evaluation and cost
summary are prepared, including items such as cost and benefit analysis as well as return on
investment (ROI).
Review:- A consultant collects all the above elements into a feasibility study and conducts a
formal review. The review shows the accuracy of the overall study and helps make a project
decision. At this point in the study, the project gets approved, revised or rejected. If approved,
all parties then sign a document stating their agreement to the project.
5.6 Business Plan: Meaning, purpose and elements
Meaning: A business plan is a guide for a company that identifies its goals and outlines the
steps for achieving those goals. Business plans help pinpoint a company's priorities and
metrics while also holding employees accountable in their roles. When companies develop
business plans, it allows employees at all levels to see the company as a whole enterprise.
A business plan is a documented strategy for a business that highlights its goals and its plans
for achieving them. It outlines a company's go-to-market plan, financial projections, market
research, business purpose, and mission statement. Key staff who are responsible for
achieving the goals may also be included in the business plan along with a timeline.
5.6.1 Elements of a business plan
Business plans consist of multiple parts that examine all factors that go into the business. All
business plans should address the following:
 Need for the business: Within the business plan, identify the need or objective of the
document.
 How to satisfy the need: Your business plan should describe the company in detail,
including how the product meets the demand in today's market.
 How to compete with others in the market: In your plan, you can discuss your
business model to explain how the company plans to be competitive in the market.
 The key players in the organization: This section lists and describes the
management team, board of directors and any other leaders or advisors in the
business. You can list the experience and credentials of each one.
 The size of the target market: You will need to research the industry in-depth to
gain an understanding of the target market. Your research may consist of product
attractiveness and profitability.
 Target customers: You should define your ideal customer to develop a successful
marketing strategy.
 Effective marketing strategies to implement: After you have defined your target
customers, design a marketing strategy to promote the product. Your business plan
should define a marketing strategy in detail.
 The financial aspects of the business: A business plan must delve into the finances
of the company. In this section, document the financial components of your business,
such as pricing structure, costs, margins and expenses.
 The amount of capital needed: Determine if you need further investment capital to
move forward. Calculate how much money you require. If you need supplemental
capital from investors, explain how much and what the money will go toward in the
business.
Not only the above, also consists the following
 Executive summary, Company description, List of company milestones, Market

analysis, Organization and management information, Service or product information,
Marketing and sales information and reports, Funding requests, Financial plans etc.
5.6.2 Purposes of a Business Plan
Chances are, someone drafting a business plan will be doing so for one or more of the
following reasons:
1. Securing financing from investors.
Since its contents revolve around how businesses succeed, break even, and turn a profit, a
business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of
showing potential investors or lenders how their capital will be put to work and how it will
help the business thrive.
All banks, investors, and venture capital firms will want to see a business plan before handing
over their money, and investors typically expect a 10% ROI or more from the capital they
invest in a business.
Therefore, these investors need to know if — and when — they'll be making their money
back (and then some). Additionally, they'll want to read about the process and strategy for
how the business will reach those financial goals, which is where the context provided by
sales, marketing, and operations plans come into play.
2. Documenting a company's strategy and goals.
A business plan should leave no stone unturned. Business plans can span dozens or even
hundreds of pages, affording their drafters the opportunity to explain what a business' goals
are and how the business will achieve them.
To show potential investors that they've addressed every question and thought through every
possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and
operations strategies — from acquiring a physical location for the business to explaining a
tactical approach for marketing penetration.
These explanations should ultimately lead to a business' break-even point supported by a

sales forecast and financial projections, with the business plan writer being able to speak to
the why behind anything outlined in the plan.
3. Legitimizing a business idea.
Everyone's got a great idea for a company — until they put pen to paper and realize that it's
not exactly feasible. A business plan is an aspiring entrepreneur's way to prove that a
business idea is actually worth pursuing.
As entrepreneurs document their go-to-market process, capital needs, and expected return on
investment, entrepreneurs likely come across a few hiccups that will make them second guess
their strategies and metrics — and that's exactly what the business plan is for.
It ensures an entrepreneur's ducks are in a row before bringing their business idea to the
world and reassures the readers that whoever wrote the plan is serious about the idea, having
put hours into thinking of the business idea, fleshing out growth tactics, and calculating
financial projections.
5.7 Execution of Business Plan:
Many entrepreneurs allow themselves to become swept up in putting out fires instead of
executing their plans. Moukadam pointed out that most entrepreneurs fail at execution due to
a lack of "a framework or methodology in place that is repeatable." These executives need to
connect their strategy to the individual goals of each employee. Here's his simple four-step
process to help entrepreneurs execute their strategies:
1. Set clear priorities.
Entrepreneurs might fail in carrying out their strategy if they set too many priorities.
Establish only one priority at a time along with supporting initiatives. For example, a priority
might be penetrating a new territory. Supporting initiatives could be leasing an office, hiring
staff and initiating a marketing plan.
Having too many priorities is like trying to keep too many balls in the air. Then it's
problematic if only one gets focused on. Chances are good that eventually all the balls fall to
the ground.
2. Collect and analyze data.
Entrepreneurs often specify measurable goals in their strategic plans. But once the planning
process is a wrap, the document might be set on a shelf and not revisited for quite a long
time.
A key to ensuring execution is staying on top of results. Entrepreneurs should develop key
performance indicators (or KPIs) that can be measured and monitored on an ongoing basis.
They need to procure operating data related to these indicators and evaluate results on
schedule (daily, weekly, monthly or quarterly).
The executives should evaluate what's working and continue these proceses and enhance
them to boost performance. With failing results, they should determine what processes don't
work and make immediate adjustments to prevent further deterioration.
3. Keep a rhythm to meetings.

Without continuous communication, employees can lose touch with an entrepreneur's goals
and objectives. Over time employees, and even the entrepreneur, can veer off course. This
leads to poor results, which can have a disastrous effect on an organization.
To ensure that the entire organization keeps in sync with the entrepreneur's vision and
strategic plan, the staff should gather periodically for different types of update meetings.
Daily huddles should take place within operational groups at the start of the day and last no
more than 15 minutes. Such daily meetings aim to ensure that everyone is on the same page
and aware of important recent developments such as performance updates, price changes,
new products or media reports.
The daily huddle can provide rapid-fire updates specifically tailored to the group. The
entrepreneur can oversee the daily huddles at small companies. In larger organizations, line
managers should take responsibility.
4. Evaluate the strategy.
The entrepreneur should also meet with the executive team and key management personnel
on a monthly or quarterly basis to evaluate the progress with the strategic plan. These
strategic meetings should be more in-depth and designed to determine if changes are
required.
The periodic strategic meetings should discuss strengths, weaknesses, opportunities and
threats (SWOT). They can help executives determine if the strategy's soundness in light of
changes within the organization, industry and economy. The meetings should aim to exploit
strengths and opportunities while mitigating weaknesses and threats.
Entrepreneurs can also wield another important tool: a one-page strategic plan. All the
essential elements of the strategic plan are boiled down into one page -- and give to all
employees. A benefit of this information sharing is that employees will feel like they are
contributing to the organization's overall success and will feel excited, motivated and
engaged.
5.8 Advantages of entrepreneurship to individuals, society and nations:
Advantages of entrepreneurship to individuals
Life as a business owner may not always be easy, but entrepreneurs do enjoy numerous
benefits. Here are some of the advantages that often come along with starting your own
business:
1. A flexible schedule
People who work reasonable hours are often more productive than those stuck at work for
nine hours or longer each day. Entrepreneurship offers the chance to get away from a fixed
routine and instead develop your own personal schedule.
Entrepreneurship allows you to start working at the break of dawn if you happen to be a
morning person or work late at night if you prefer evenings. You can organize your schedule
to do other things and work whatever hours you like. You have the freedom to close early on
Tuesdays and Thursdays to accommodate your child's sports practices or keep Sundays
completely clear of work to make time for rest, recreation or family time.
Having more control over your schedule is not only freeing but may also improve your
mental and physical well-being. If you do not want to be bound by working hours set by an
established organization, you can take the risk involved in entrepreneurship and start your
own business. You can report to and leave from work according to your schedule.
2. Autonomy
People who have more autonomy in their jobs are more invested and involved in their work.
Because entrepreneurs are responsible for their businesses, they have no shortage of
motivation to work hard to ensure that their business succeeds. With your own business to
manage, you have a sense of self-governing and self-directing.
3. Chance to build a career that aligns with your beliefs
The opportunity to align your core values with your career is a deeply fulfilling experience.
For instance, if you believe in environmental conservation, you could start a business in that
sector or implement green policies that help your business stand out from the competition.
Entrepreneurship allows you to make your dreams a reality. You get to live a life and career
that directly aligns with your beliefs and values, whether that means helping others,
conserving the environment or leading a family-centered life.
4. Continued growth and development
Entrepreneurship requires constant growth. You have to be able to adapt as your business
expands or the market shifts. A growth mindset enables you to view challenges as
opportunities and failure as something to overcome. There are always new concepts to learn
and apply to your business, which prevents complacency and encourages constant
professional growth.
5. Enhanced managerial abilities
Entrepreneurship will help you identify and develop your managerial skills. Necessity can be
a great teacher, and your firsthand experience as a business owner can enhance your existing
business knowledge and leadership abilities. With time, you may even learn new managerial
techniques and functions. You might even find yourself motivated to enroll in a business-
related course to ensure you understand what is required to build a successful business. No
matter what your future holds, all of the skills and knowledge you gain through
entrepreneurship are invaluable.
6. Economic development
Entrepreneurs play a vital role in any country's national economy. Beyond simply investing
their own funds, entrepreneurs also attract capital from the market. They use savings
productively, turning them into a productive resource. When financial resources are pooled,
entrepreneurs form the basis of wealth creation in an economy. This, in turn, leads to job
creation that contributes to a country's economic development.
7. Improving the standard of living
It is easy to overlook all the ways that entrepreneurs meet the needs of society and improve
the standard of living. They develop products and services to meet consumer requirements,
even when those needs and desires are not mainstream. Every niche requirement is satisfied
by entrepreneurs.
8. Meeting like-minded people
When starting a business, you want to work with people who know the sector. Some
entrepreneurs join groups of ambitious and helpful individuals who focus on starting and
improving businesses. Undoubtedly, these connections can push you to become a great
business person. There are also plenty of opportunities to connect with mentors and interact
with various industry leaders.
9. Unexpected and thrilling experiences
If you become an entrepreneur, brace yourself for the unexpected. It is exciting to start a day
not knowing how it will end, unlike the traditional office's predictable schedule. Also, dealing
with unexpected situations will be a great lesson on living in the moment and being present.
You will sharpen your decision-making and problem-solving skills as you work to resolve the
unexpected problems that arise when managing a business.
10. Become a digital nomad
Depending on the type of business you start, you may be able to combine fun travel with
online business and work from hotels, camping sites and co-working spaces. You can even
work from the best cities in the world wearing your favorite pair of pajamas.
11. Freedom to choose the people you work with
Entrepreneurs have the privilege of selecting the clients, employees and partnerships they
will pursue. You have total control over who you work with and what your company culture
is like. This makes work fun because you are dealing with those you are most comfortable
with.
12. Sense of pride and fulfilment
An entrepreneur makes things happen. You create a vision, lay out the plan and follow the
needed steps to make the business successful. When you do these things, you get an
incredible feeling of pride and joy. The company will become a priority, and as you nurture it
and watch it grow, you will enjoy a sense of fulfilment.
13. Potential profits can be more than salaries
When you are employed by another business, it does not matter how hard you work; the
benefits you receive are limited to your predetermined salary and bonuses. When you become
an entrepreneur, you are likely to earn much more if you have the right business idea and a
great execution plan.
14. Reap full rewards
Everything the business gains automatically becomes yours. No one else has a claim to your
success. After paying your employees and covering other overhead expenses, you can pocket
all the profits. Alternatively, you can invest profits back into the business and reap the
rewards later.
Disadvantages of entrepreneurship
Entrepreneurs do face a few challenges. However, each of these can be overcome and even
turned into an opportunity through careful planning and a positive mindset. Here are a few
examples:
1. Uncertain income
When you are employed by a business, you know exactly how much money you will make
each month. Entrepreneurs have no guaranteed paycheck—especially in the early days of
their business venture. However, with a solid business plan, hard work and excellent business
strategies, your business has unlimited growth potential.
2. Demands on your time
Most successful entrepreneurs work longer hours than the average traditional employee.
Depending on how many employees you are able to hire, you may not have the luxury of
reducing your working hours. However, as the business owner, you have great flexibility to
build a schedule that supports your desired work-life balance.
3. Possibility of a failed business
There are many successful startups every year, and this increases competition in the field. No
business is a sure thing. However, a great entrepreneur does not lose hope at the first sign of
difficulty. Instead, they rebound stronger than before by employing new business plans and
creating innovative strategies of tackling their competition as well as any economic and
demographic changes.
4. Building a customer base
Many consumers decide to purchase based on public reviews. Some consumers even give this
information as much weight as they would a referral from a relative or a close friend. When
starting a new business, a lack of online reviews and personal referrals may seem like a
daunting challenge. However, with shrewd advertising strategies and promotions, you can
attract consumers and build a loyal customer base.
5. Risk of future financial instability
In the first few years of entrepreneurship, your disposable income will likely reduce. This can
lead to some other challenges, such as lower credit scores and higher interest rates. When you
are self-employed, you may also find it harder to obtain a mortgage because you lack a
history of financial success.
To give yourself more financial security, plan ahead for these potential challenges and stay
focused on your goals. As your business grows, so will your creditworthiness and your
income. You may even qualify for more favorable loans with a valuable asset that you can
use as security.
6. Attracting start up investors
Some ventures require a lot of capital. Most entrepreneurs begin their journey in debt after
borrowing to fund the startup costs. Finding business partners or investors to work with is
challenging. However, with a great business plan, you can attract investors and venture
capitalists to support you financially.
7. Increased responsibilities
Entrepreneurship requires dedicated people willing to bear the involved responsibilities. You
are responsible for the business's finances as well as legal issues, sales, keeping the company
afloat and many other things related to the business. Whether the business succeeds or fails, it
is all in your hands. However, the increased responsibilities give you a larger stake in your
business and can help you develop a wide variety of useful skills.
8. High stress levels
The stress associated with entrepreneurship can be high because you spend much of your
time striving to make the most of every opportunity. However, after finding and
implementing a great business idea, you are able to reap the fruits of your hard work.
Advantages of entrepreneurship to society and nations
Economic growth
The bottom line of vibrant entrepreneurialism is that it creates wealth: for the entrepreneur,
for the people that are employed as a result and for the local economic development. It
creates wealth on a national scale for the government in the form of taxation, which is then
redistributed accordingly to the services and communities that need it the most.
Entrepreneurship benefits national income.
The success of an entrepreneur is ultimately in creating a product or service that adds value to
the lives of its users; whether that is an inherent need for the item or a simple desire to have
it. Either way, an innovation on this scale can help to push a market forwards on a domestic
level, and – where relevant – drive exports to new overseas markets. This again is a wealth-
creating exercise, which is a key driver of economic growth.
Often an entrepreneur has to take a risk or two to enjoy success, and it is this spirit which
serves as a wake-up call for many an ailing industry and economy. As such, it is those
governments that cultivate a sense of entrepreneurialism – through an effective economic and
legal framework – that will reap the ultimate benefit. Prosperity is a two-way street after all.
Job creation
Successful entrepreneurialism often requires the skills and labour of many hands; and that
necessitates job creation. As a thriving business grows so do the opportunities for others and
the cumulative impact of new start-ups in a particular geographical area will go a long way
towards cutting queues at the job centre.
This facilitates economic development benefits – employees with money in their pockets will
naturally spend them on local goods and services. It also helps to push societies forward too:
it is well documented that unemployment causes crime, poverty and a gamut of physical and
mental illnesses; adding further strain to already stretched health services.
Success in business generally has a cascading effect, and so a range of stakeholders can
expect to flourish from entrepreneurial growth. Suppliers, retailers, storage facilities, courier
services, recruitment agencies... any or all of these can benefit from a local company that is
thriving. This helps to create jobs in these firms too, and so the cycle continues.
Philanthropy
Often the statistics are hard to measure – not all entrepreneurs wish to boast of their
charitable activities – but it is fair to say that many successful business owners, some of
whom will have come from financially insecure upbringings, are keen to redistribute their
new-found wealth to charities and local community ventures.
As a survey conducted by Harris Interactive and Ernst & Young entitled ‘Entrepreneurs &
Philanthropy: Investing in the Future’ testifies, 90 per cent of entrepreneurs donate money
and 70 per cent donate a resource that is just as important: their time. A third factor, and one
which cannot be overlooked, is that most entrepreneurs are successful because they were able
to identify market opportunities or leverage profit from economies of scale. This kind of
knowledge can be indispensable to non-profit organisations.
Innovation
Necessity is the mother of invention, as the saying goes, and so perhaps its older sibling is
innovation. Most entrepreneurs enter a market successfully thanks to their innovative
approach: whether that’s inherent in the product/service they offer, or in the way in which
they deliver it.
By finding a solution to a problem – whether it was explicit or merely an opportunity for
competitive advantage, an entrepreneur can drive innovation in a market and create
competition; a theorem that results in better and often more affordable products and services
for consumers. Steve Jobs and his Apple colleagues invented the iPod, and this created an
area of innovation in MP3 players. Today, this is a vibrant industry with many competitors;
which has created technological excellence at the top end of the market and perfectly
functional products at the budget end. Who wins? The buying public.
Increased competition
Success breeds success, and once one entrepreneur has flourished in a given market more
often than not another businessman or woman looks to enjoy their own slice of the pie.
As we know, competition is a good thing for the consumer, as it requires companies to

delivery a better quality product in order to survive. This can also create price wars (take a
look at the ongoing battle between the Xbox and PlayStation as a good example), and it is
true that often only the strongest will prosper. But the benefits to the general public are
obvious.

Unit-5

Uploaded by

Copyright:

Available Formats

Unit-5

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit-5

Uploaded by

Copyright:

Available Formats

Uniy-V

5.1 Concept of Entrepreneurship

Entrepreneurship may be defined as the visualization and realization of new ideas by

A concise definition of entrepreneurship “is that it is the process of pursuing

5.1.1 Need of Entrepreneurship

 Impact on Society and Community Development- A society becomes greater if the

 Increase Standard of Living- Entrepreneurship helps to improve the standard of

 Supports research and development- New products and services need to be

 Innovation- It should be highly innovative to generate new ideas, start a company

 Visionary and Leadership quality- To be successful, the entrepreneur should have a

 Open-Minded- In a business, every circumstance can be an opportunity and used for

 Flexible- An entrepreneur should be flexible and open to change according to the

Entrepreneurship development is the means of enhancing the knowledge and skill of

The below-mentioned steps will illustrate how to build an effective entrepreneurship

 Evaluation – The evaluation of an opportunity can be done by asking several

 Developing a plan:– After the identification of an opportunity, an entrepreneur has to

 Resources:– The next step in the process of entrepreneurial development is

 Harvesting:– The last step in this process is harvesting, where an entrepreneur

(a) Innovative Entrepreneurship

(b) Imitative Entrepreneurship

(c) Fabian Entrepreneurship

(d) Drone Entrepreneurship

(a) Agricultural Entrepreneurship

It covers a wide spectrum of agricultural activities like cultivation, marketing of

(b) Manufacturing Entrepreneurship

(c) Trading Entrepreneurship

C. Based on use of Technology

(a) Technical Entrepreneurship

(b) Non-Technical Entrepreneurship

(a) Corporate entrepreneurship

It was pioneered by Burgelman. Corporate ownership is where an individual through

(c) State Entrepreneurship

It is where trading or industrial venture is undertaken by the State or the Government.

(d) Joint Entrepreneurship

E. Based on size of Enterprise

1. Micro Enterprises: Any business with a turnover of up to Rupees five crore.

2. Small-Scale Entrepreneurship: A small enterprise has an annual turnover of more

2. Medium-Scale Entrepreneurship: A business with a turnover over Rs 75 crore and

4. Large-Scale Entrepreneurship: Business with turnover over Rs 250 crore

(a) Women Entrepreneurship

The Government of India defines women entrepreneurship as, “a business enterprise

5.2 Role of an Entrepreneur in the Process of Nation-Building

8. Expanding the business

11. Collaborating with partners

5.4.1 Characteristics of a sound business idea:

1. fulfils a customer need – a problem is solved

6. Profitable in the long term

The development of new products and/or services usually focuses on improving

5.5.1 Importance of feasibility studies

Below are a few reasons feasibility studies are important:

 Identifies valid reasons to advance or veto a project idea

5.5.2 Elements of a Feasibility Study

Approach:- After analyzing the requirements, a consultant typically recommends a course of

Evaluation:- After choosing an approach, a consultant usually evaluates the cost-

5.6 Business Plan: Meaning, purpose and elements

5.6.1 Elements of a business plan

Not only the above, also consists the following

 Executive summary, Company description, List of company milestones, Market

5.6.2 Purposes of a Business Plan

1. Securing financing from investors.