Part B Entrepreneurship Unit - 5 Entrepreneur Introduction Entrepreneurs and Enterprises form the core of the small scale industries

sector across the country. Self employment and the urge to do something on your own is what drives entrepreneurs. How is a SSI defined. Small Scale Industry (SSI) Small Scale Service and !usiness Enterprises (SSS!E) "ncillary Units #iny Units E$port %riented Units are some of the types of units which fall under the am&it of industries run &y entrepreneurs. #he industry could &e run &y women also who are 'nown as (omen Entrepreneurs. #hey type of unit is defined &y the outlay in plant and machinery and the items or service they offer. #he )ovt. of India also supports the growth of small scale industries &y offering su&sidies reduced rate of interest on &orrowings reserving certain products for manufacture or services etc. Meaning of Entrepreneur and evolution of the concept #he word entrepreneur appears to have its roots in the word enterprise. Enterprise essentially implies a spirit of freedom an urge to do different things to innovate to do things differently to foster change &y &ringing in new ideas methods products . "n entrepreneur is one who cannot &e made to sit *uietly at one place for long. He would &e on the move most of the time towards achieving dreams e$ploiting opportunities that are thrown up &y this fast changing world. He thus accelerates self development as well as society technology and economy. %ne could say that an entrepreneur is one who sets up an enterprise. However the word is 'nown to have originated from the +rench word ,enterprendre- which means to underta'e. "lso in +rance in the ./th century. +renchmen who organi0ed and undertoo' military e$peditions were referred to as ,entrepreneurs1 In the early .2th 3entury a +rench economist 4ichard 3antillon applied the word for the first time for &usiness. Since then the word entrepreneur is used to descri&e one who ta'es the ris' of starting new organisation or &usiness or introducing new ideas products or services to society. #he &eauty of the word entrepreneur is that there is always a ris' factor associated with it. %ne ventures into unchartered waters unaware of what is going to happen in the end. . "n entrepreneur could &e summari0ed to &e an individual who ta'es ris's unites various factors of production to e$plore the perceived opportunities in order to evo'e demand create wealth and 5employment Characteristics of a successful Entrepreneur 3reativity is different from innovative. 3reativity is the a&ility to &ring something new into e$istence. #he definition emphasises the 6a&ility1 not the 6activity1 of &ringing something new into e$istence. " person may therefore conceive of something new and visualise how it is useful &ut necessarily ta'e the action to ma'e it a reality. Ideas evolve through a creative process )ermination 7reparation Incu&ation Illumination 8erification )ermination is the origination of an idea. %ne hears something it triggers a flow of thought and one gets an idea. #hen starts the process of 7reparation. %ne goes a&out finding details a&out the idea. 4esearching whether on how it could ta'e shape if at all. "fter collecting a lot of data a&out it one cannot immediately get concrete solutions. %ne Incu&ates on the idea. #he idea is on the &ac' &urner of the mind. #he su& conscious un'nowing wor's on it. +low of thoughts which otherwise would have &een limited &y a logical mind now freely wor' on the idea. #hen suddenly one is illuminated and feels clear as to what is to &e done and how. #hen the verification whether it is possi&le. (hether all things needed for it are availa&le are availa&le or not. Eg. an inventor may come up with a &rilliant idea and during verification find that similar ideas are already availa&le in the mar'et. %r some&ody has already filed for a patent. Innovation #he &ringing into action the ideas. Using the resources in a different way to create more resources. Entrepreneurs aim high and in due course grow. #here are a num&er of instance where small scale industries have grown to &e medium and large scale ones. Innovation is an important function of an entrepreneur. 9ynamism "lways trying new openings aiming higher changing product mi$ improving e$isting products etc. at the same time &eing practical. #here is no running away from pro&lems for an entrepreneur. He is the &oss and has to ta'e pro&lems &y the horn and tac'le them. " good entrepreneur trains others as well as himself. He also sets up a second line to ta'e decisions in his a&sence.

:eadership Is a &asic *uality of an entrepreneur. He leads from the front and ta'es the group with him. Since he does things differently he stands apart from the rest. #eam !uilding He naturally &uilds a team. "ll wor' together towards meeting targets and goals. #here &eing mutual trust among its mem&ers there is a healthy climate conducive for trying out innovative ideas. "chievement ;otivation Entrepreneurs are achievement oriented. #hey are guided &y an inner urge towards accomplishments. Some entrepreneurs and only dreamers and do not &ring their dreams into action. Some are dou&ters and have a negative trait in them of dou&ting. #hey are not innovative &ecause they might dou&t themselves. #hey follow a path of least resistance. #hen there are the doers. #hey accept any challenge and set a&out overcoming it. #hese type of entrepreneurs have a lot of people in history whom they can immolate. #atas !irlas Singhanias ;afatlals <irlos'ar !a=a= > #he forefathers of these industry chased their dreams day &y day and innovated in the process of &uilding their empires &ric' &y &ric'. It no dou&t too' time . It cannot &e done overnight. #he proof of their hard wor' is evident. +or the whole world to see. #he old timers firmly &elieved in 6Slow and Steady wins the race1. !ut the path they all followed was new un-treaded and their methods were innovative. Imagine flying a plane for the first time (? @ #ata) which later &ecame "ir India. 7ro&lem Solving Essential an entrepreneur need to solve pro&lems *uic'ly as well as foresee them and avoid them. " formal model for solving pro&lems consists of / steps A 9efine the pro&lem )ather information Identify various solutions Evaluate solutions and select the &est one. #a'e "ction Evaluate action ta'en. )oal %rientation )oal setting is the achievement of targets and o&=ectives for successful performance of an entrepreneur. )oals should &e &oth long and short term. )oals setting involves three steps 9efinition of goal Specific )oal +eed&ac' a&out achievement #he leader e$plaining the need and purpose of the goal is defining a goal. "spects of )oal Setting 3larity of )oals 3lear Simple @o misinterpretation or misunderstanding 4eformation of )oals 9ynamic +le$i&le. 4edefined according to re*uirements 4estating )oals 4edefined goals should &e restated 7lan of "ction 9etailed action plan 9uties 4esponsi&ilities 9efining standards 7erformance ;easurements 4ecognising ris's and o&stacles Stum&ling &loc's :osses involved 7rovision )oal 4eaffirmation 7eriodic review ;odifications 4eset 4eschedule )oal "ttainment B A Have the goals &een attainedC ;odification re*uiredC 4echec'. #ypes of )oals #arget oriented +ocus on )oal. #argets are *uantitative not *ualitative "chievement %riented #argets have a *ualitative orientation also. 7erformance is given a weightage. Specific (7rimary) "re the pivots around which activity revolves %verall (ider &ase. @o.. 7osition target Secondary Important. "chievement of these defines effectiveness of primary goals :ong 4ange D Short 4ange 7ersonal D Social 4is' #a'ing and 9ecision ;a'ing "&ility Entrepreneurs ta'e decisions in an environment of Uncertainty. #herefore they ta'e ris's. !ut they never gam&le with the results. Introducing new methods changing product mi$ hard wor' towards achieving targets. 3ommitment (ill power 9etermination )o-get attitude under pressing situations .5 to .2 hrs a day wor' E days a wee' F 5G wee's Functions of Entrepreneur 7rimarily the functions are towards esta&lishing and developing the enterprise setup &y him. +iunctions could &e classified into three groups - 7rimary +unctions - %ther +unction - +unctions important for developing countries

Primary Function .. 7lanning G. %rganising 5. 9ecision ;a'ing H. ;anagement 5. Innovating /. 4is' !earing E. :eading 2. 3ontrolling

Other Functions 9iversification of 7roduction E$pansion of the enterprise Employer-employee relationship #al'ing D solving la&our issue s 3oordination with outside agencies

Important For developing countries ;anagement of scarce resources 9ealing with 7u&lic Engineering @ew 7roduct 9evelopment 7ro&ing 7arallel %pportunities ;ar'eting ;anagement 3ustomer 4elations

Types of Entrepreneurs "ccording to #ype of !usiness !usiness Enterprise new products or service D development in products mar'eting sales #rading Enterprise #rading A &uying and selling. @ot into manufacturing Industrial Enterprise ;anufacturing activity predominantly. 3orporate Enterprise Innovative s'ill in organising managing corporate underta'ings "gricultural Enterprise 3rops +ertili0ers "gricultural e*uipment 4etail Enterprise 4etail sales of a variety of products A any item groceries industrial tools Service Enterprise 4endering any service A 39 rental car rental repair I maintenance "ccording to Use of #echnology #echnical D @on #echnical Entrepreneur technical involved in developing and manufacturing @on technical in sales and mar'eting 7rofessional Entrepreneur Esta&lishes and then hands over reigns D sells out to those who want to run it. He starts another venture. :ow #ech D High #ech entrepreneur E$tent of technology used in the activity. "ccording to ;otivation 7ure Entrepreneur %ne who wor's for his own satisfaction not for monetary gains. Induced Entrepreneur %ne who is induced &y the policies that provide assistance incentives and concessions etc that govt. provides. ;otivated Entrepreneur#o achieve something for themselves Spontaneous Entrepreneur @atural inherent talent "ccording to )rowth )rowth Entrepreneur :ow medium Super )rowth Entrepreneur high "ccording to Stages of 9evelopment +irst generation Entrepreneur one who starts a venture &y his own initiative s'ill and ideas ;odern Entrepreneur underta'es pro=ects that are needed and suited for changing demands 3lassical Entrepreneur 3oncerned with the customer and mar'et needs while developing a new venture "ccording to "rea Ur&an Entrepreneur :ocated in ur&an area 4ural :ocated in rural area. !enefits A su&sidies. +rom govt. "ccording to "ge and )ender Joung Entrepreneur %ld Entrepreneur ;ale Entrepreneur +emale Entrepreneur "ccording to Scale of %peration Small Scale Entrepreneur #he scale of the industry is determined &y the amount invested in ;edium Scale Entrepreneur fi$ed asset A plant and machinery items. #he SSI units get a lot of :arge Scale Entrepreneur &enefit %ther #ypes S'illed Entrepreneur :ine of activity in line with your education and s'ill @on S'illed :ine of activity different from your education and s'ill. Inherited Entrepreneur +ather to son. 4eady industry for running. Son might not &e as good

+orced Entrepreneur %ne who chooses the line as a last resort. #here &eing no other lines. @ational D International Entrepreneur %ne catering to re*uirements D needs within the country. D %ne having customer &ase overseas also. +oreign e$change earner. )ovt. provides ta$ e$emptions. Innovative Entrepreneur 3omes up with new ways of manufacturing which are moneysaving. (7harmaceutical Shop). Initiative Entrepreneur 4evolutionary. #a'es up new wor's which are not tried &y others. #his sets a chain action in motion. (;o&ile &ill rates) Intrapreneur is entrepreneurship within the organisation. 4estructuring the organisation for ease of decision ma'ing and speed of implementing new ideas. Shortening the gap &etween order and supply of product or service. 3hanging the manufacturing techni*ue. "dding modern machines techni*ues. #here has to &e changes incorporated within any industry to 'eep pace with the changing times. #he inherent resistance to fle$i&ility diversification e$pansion etc. can &e overcome &y intrapreneurship. Entrepreneur An emerging class. #he importance of Entrepreneurship development is very much related to industrial development regional growth and employment generation. It is not possi&le for government to float pu&lic sector enterprises to generate employment at the scale at which the need for employment is rising. Entrepreneurs are the one sect of people who in the process of doing something on their own create employment opportunities for others serve the society in some way or the other earn a living themselves. (hen they grow and e$pand there is all round increase in service earning as well as employment. %thers are influenced and also ta'e up &eing entrepreneurs. Entrepreneurs contri&ute to the development of the economy of any country. #heir importance is felt more now than any other time in the past. #he advancement in technology has also now helps entrepreneurs to thin' out of the &o$ and come up with radically new methods and techni*ues of developing products manufacturing them or rendering a service. Entrepreneurs are truly an emerging class. 9ifference &etween an entrepreneur and ;anager 7oint of 9iscussion Entrepreneur ;anager .. )oal ;anagement Starts a venture &y setting up a new " manager renders service in an enterprise for his personal gratification enterprise set up &y someone else. G. Status %wner of the enterprise " servant of the enterprise 5. 4is's !ears all ris's and uncertainties involved !eing a servant he &ears no ris's (hether or not 3o. is ma'ing profit H. 4ewards Entrepreneur for &earing the ris's gets the 4eceives salary for services rendered profit. It could &e uncertain irregular and Its fi$ed and regular. @ever negative. at times negative 5. Innovation Introduces changes as needed &y the E$ecutes plans of the entrepreneur. customer or process ;anager translates ideas into practice. Concept of Entrepreneurship - Entrepreneurship is the process underta'en &y the entrepreneur to enhance his &usiness interests. - Entrepreneurship is the a&ility to minimise the inputs and ma$imi0e the output. - Entrepreneurship is the creating a team &uilding it and ena&ling it to function as one - Entrepreneurship is the process of recogni0ing the opportunities as and when they come up and arranging for the resources to capitali0e on them and ma$imi0e ones profits - Entrepreneurship is stri'ing when the iron is hot and ma'ing the &est of the opportunities &efore too many people =oin the fray. 3ole defines entrepreneurship to &e the purposeful activity of an individual or group of "ssociated individuals underta'en to initiate maintain and aggrandi0e profit &y production or distri&ution of economic goods and services. "ccording to Higgins 6Entrepreneurship is the function of foreseeing investment and production opportunities organising an enterprise to underta'e a new production process raising capital hiring la&our arranging the supply of raw materials finding site introducing new techni*ues discovering new source of raw materials and selecting top managers for day to day operations.

#he a&ove two definitions highlight ris' &earing innovating and resource organising aspects of an individual or group of individuals achieving goals through production or distri&ution of productsDservices #hus entrepreneurship is the set of activities set in motion &y the entrepreneur. #he entrepreneur preceeds entrepreneurship. #he difference &etween the two is as under K Entrepreneur .. 7erson G. 8isualiser 5. %rganiser H. 9ecision ;a'er /. Innovator E. ;otivator 2. 4is' !earer L. 3reator .M. :eader Entrepreneurship 7rocess 8ision %rganisation 9ecision ;a'ing Innovation ;otivation 4is' !earing 3reation :eadership Entrepreneur ... ;anager .G. Initiator .5. 7lanner .H. #echnician .5. 3ommunicator ./. "dministrator Entrepreneurship ;anagement Initiation 7lanning technology 3ommunication "dministration

3haracteristics of Entrepreneurship Entrepreneurship has multidimensional characteristics. " few are .. Innovation Entrepreneurship involves innovating new products processes methods to effect dynamism to ensure that the enterprise is a step ahead of the competition and reaps rich dividends G. 4is' #a'ing 4is' is an in&uilt element in any entrepreneurship. 3atering the uncertainty is the essence of entrepreneurship 5. S'illful ;anagement Entrepreneurship essentially has s'illful management involving all the functions of management A planning organising staffing directing controlling etc H. %rganisation !rings together the facilities of production for efficient use 5. 9ecision ;a'ing 8ital for any organisation. Entrepreneurship is no e$ception. It is however e$pected to &e faster in a an entrepreneurship which is normally dynamic as compared to large organisations. /. ;a'ing the enterprise a success 3reating and running an enterprise to meet the customers needs to customer satisfaction is what ma'es an entrepreneurship a success. Evolution of Entrepreneurship Entrepreneurship e$isted centuries ago in different ways Early 7eriod In the olden days adventurers tried various trade routes to the far east. " venture capitalist funded the venture and supplied the goods which the adventurer (also played the role of a merchant) set off with. "s per the contract the capitalist and the adventurer were to share the profits of the sale of goods on return. #he capitalist was the financial ris' &earer. #he adventure too' all the physical ris's trading ris' and the ris' of the unforeseen. ;arco 7olo was one such adventurer. ;iddle "ges In the middle ages the term entrepreneur was applied to a person managing large pro=ects. He was not ta'ing any ris's as such &ut was entrusted with &uilding of large castles or cathedrals etc. .Eth 3entury saw the amalgamation of the ris' factor with entrepreneurship. " person signed a contract with the government for delivering goods or rendering a service. #he price was fi$ed first. #he tas' was to &e carried out &y the person. 7rofit or loss was to &e &orne &y him. #hus it emerged that an entrepreneur was a ris' ta'er. .2th and .Lth 3entury .2th century saw industriali0ation. " capitalist (%ne who had money) was differentiated from one who needed to &e financed (the entrepreneur). ;any inventors did not have the money to convert their ideas D inventions into products. 3apitalists helped them out. GMth 3entury saw the notion that an entrepreneur was an innovator was esta&lished since he too ris' set up an enterprise organi0ed operated for personal gains. It was always a dou&t whether the product &eing manufactured would sell and fetch gains. "s an innovator the entrepreneur created mar'ets also for the items produced &y him. "&ility to innovate is seen through history to have &een e$isting though not recogni0ed as such.

7yramids of Egypt which involved moving and setting in places large stones with the limited technology availa&le. #he #a= ;ahal the Butu& ;inar the erecting of the monolithic )omateshwara are all sym&ols of innovations. 7ace ma'ers cell phones are modern day e$amples of innovations.

evelopment of Entrepreneurship 9evelopment of Entrepreneurship is seen at all stages through the ages. ;an has &een seen to &e intelligent and innovate right from the time of stone ages. He is 'nown to have made pointed stones to use as tools. #hen he tied the stones as an arrow tip to &ranches using twines to serve him as a spear while hunting. He discovered fire while stri'ing two flint stones together. #he flying spar's lit up dried leaves. He started coo'ing flesh su&se*uently since he could not heat and &oil water. He domesticated animals to do some wor' for him. !oiling of water made him discover steam. In the mean while he had copied on to stone the cross section of stems and &ranches and thus invented the wheel which literally spelt progress. 3anoes of dead stems lead to sail &oats. Steam engines for transport on land. #he industrial revolution saw a host of inventions. 3olt was a&le modify fire power for use in weapons. (hitney discovered the 6gin1 which revolutioni0ed spinning and weaving. 3otton fa&rics emerged ;orse discovered the telegraph which revolutioni0ed communication In the GMth century "merica &ecame a leading industrial nation. #he steel industry there was captained &y "ndrew 3orrigie. Henry +ord was the frontrunner in automo&iles. He was not an inventor &ut an entrepreneur. He ventured into something that was un'nown. (hether cars would wor' or not he did not 'now much less whether they would sell. #hat is true entrepreneurship Sir #homas "lva Edison invented electricity which pro&a&ly is the ne$t &iggest invention after the wheel which revolutioni0ed the whole world. )raham !ell invented the telephone which too' communication to a different level. India produced the #atas !irlas Singhanias <irlos'ars Hindu=as and a host of other entrepreneurs. I!; ;icrosoft "pple Intel Sun ;icro Systems > all have contri&uted to what the world is today. #he underlining theme starting from the early day to the current trend setters has &een the fact that there have &een individuals who stretched their nec's tried something new uncertain of the success of the venture and came up with something which the people needed. So much so that today we cannot imagine a world without computers mo&ile phones the internet on the one side and on the other two wheelers four wheelers aeroplanes > or washing machines mi$ers-grinders microwaves or coo'ing ranges. 9espite this in such a modern world there are villages which are yet to see electricity or modern form of transport. ?ust goes to say that there is still a lot of scope for entrepreneurship. !tages in entrepreneurial process Stages in an entrepreneurial process are when a new venture is &eing set up. "n entrepreneur has to find short list opportunities evaluate and develop the selected one over come li'ely or unli'ely pro&lems that might crop up etc. in arriving at something new. #he stages areK Identification of %pportunity Evaluation of %pportunity 7reparation of !usiness 7lan 9etermination and %rganisation the structure ;anagement of the enterprise started Identification of %pportunity is the first step in the entrepreneurial process. #he idea could &e his own or from an e$ternal source li'e feed &ac' from customers &usiness associates personnel of the distri&ution system sales and service teams technical organisations consultants or survey conducted for that purpose. 3onsumers however are the &est source for new ideas since they e$press a desire or need for an item or service. @e$t &est source is those who are in close contact with the consumers the sales team and the service team who get to 'now customer needs as well as features sought in e$isting products.

Evaluation of %pportunity #he opportunities or ideas made availa&le &y the identifying process are screened and evaluated. #he opportunity is assessed for li'ely length of the demand li'ely investment for it return in investment real value and perceived value ris's involved whether it fits with the s'ills and 'nowledge of the enterprise its uni*ueness in the competitive world. S(%# "nalysis is one of the tools S and ( stand for Strengths and (ea'ness which are internal factors related to the enterprise. % and # are %pportunities and #hreats are related to the e$ternal factors not controlled &y the entrepreneur vi0. environment and competition. #he assessment &asically chec's the opportunities and ris's factor (ris' is something which the entrepreneur wants to ta'e) against the rewards the e$tent and duration of it and whether it ma'es it worthwhile for the entrepreneur to ta'e up the idea or not. 7reparation of !usiness 7lan +or the successful utilisation of the opportunity it is necessary that there is a detail plan in place as under which has to &e in order as well. - #itle of 7ro=ect #a&le of 3ontents and E$ecutive Summary @ame of the co. partners directors > - 9escription of &usiness and Industry type of &usiness mfg. service electronic agri mech. - #echnological 7lan high tech low tech la&our or machine intensive > - +inancial 7lan Investment amt. own funds &orrowings.> - %rganisational 7lan 7roprietory partnership pvt. :td. pu&lic :td. si0e A timy Small med. :arge no. of people no. of depts. Etc.... - 7roduction and %perational 7lan 9etails of production planning I who is to loo' after which dept. - ;ar'eting and 9istri&ution 7lan ;ar'eting A direct sales show rooms distri&utors agents - Summary of 7lan 7lans at a glance. " good plan is re*uired to assess the volume of activity resources availa&le resources re*uired cost of pooling resources duration for which such arrangement is to &e made returns e$pected. In today-s mar'et trends planning is also re*uired to collect dues from customers if service or product is delivered on credit. #he cost of credit also needs to &e considered 9etermination and %rganisation of the structure depends on the assessment of the resources availa&le and ris' factors. 4esource re*uired is an important aspect. Insufficient resource or incorrect assessment could spell doom fore the venture. #he ris' should &e appropriately calculated. Stand&y plans are a must. "lternate source of materials other resources etc ought to &e in place for successful completion of the venture. #he li'ely costs and returns on investment if the alternate route is followed should also &e ascertained. ;anagement of the enterprise started ;inimum wastage and optimal use of all resources made availa&le is essential for ma$imi0ing returns. 7roper e$ecution of plan scheduling etc is re*uired to achieve this good management of is essential. "ole of Entrepreneurs in Economic evelopment #he role of entrepreneurship is wide and varied in economic development. - #he entrepreneur starts and enterprise for satisfying a customer need and there &y earns a living - In running the enterprise he in turn directly employs a num&er of people there&y addressing the unemployment pro&lem al&eit in a small way - Indirectly a num&er of people are given =o&s A material manufacturers suppliers tools manufacturers and suppliers transporters consuma&les suppliers etc. - " num&er of such enterprises changes the structure of the industry itself. " &igger industrial unit when it gets a lot of components and su&assem&lies from small enterprises the unit concentrates on larger goals and targets as well as e$ports. #his adds to the economy in a &ig way. - (hen an entrepreneur innovates he &rings down the cost of the product which in turn also ma'es the final product cheaper and afforda&le &y the common man also to that e$tent. #hus it adds to economy - (hen products are made at less cost it leaves a surplus which could &e used for further development in technology or growth which contri&utes to the economy - "n entire area develops in an all round manner when a num&er of enterprises come up in the locality. ;ar'ets malls schools residential layouts roads amenities facilities all crop up and develop the area. 9evelopment of entrepreneurs and entrepreneurships leads to personnel development employee development industry development locality development and thus economic development. Entrepreneurship in India

Entrepreneurship in the true sense of the term was started in India started around the .25Ms with the setting up of a cotton mill in !om&ay. 7rior to that the field was dominated &y the trading community 'nown in India as the 6!aniyas1 or 8aishyas1. #he activity they were into was mainly trade and commerce. !uying and selling. %ccasionally stoc'ing. (henever the demand for an item was availa&le the &usinessmen arranged for the item. #hey got it from the producer and supplied. #he people involved in the manufacture also undertoo' to ma'e items &ased on orders received. "ll in the family were involved in producing the items re*uired. #he industrial activity itself was cast &ased. +armers gold smiths &lac' smiths weavers etc. #he s'ill was inherited from their forefathers. 7ost .25Ms though the growth has &een steady to tremendous in the recent five-si$ decades where entrepreneurship has seen progress in leaps and &ounds. Every field of activity has seen tremendous growth. ;anufacturing services electronics goods health care education technology e$ports imports &an'ing automo&iles software communications > Some of our well 'nown entrepreneurs are ) 9 !irla ? 4 9 #ata )odre= ?amnalal !a=a= (adia Hindu=a "0i0 7rem=i of (ipro @arayan ;urthy of Infosys 9hiru&hai "m&ani <arsen&hai 7atel of @irma. 7rior to .LHMs the industry was dominated &y the !ritish e$cept for the #atas !irlas and the (adia groups. "fter the (( II and post independence the growth was more noteworthy. 9hira=lal Hirachand "m&ani (9hiru&hai "m&ani) a son of a school teacher started out into the world at the age of .E (in .LHL) when he followed his &rother to "den and too' up a =o& of filling gas at a Shell station for 4s 5MM a month. 3ame &ac' in .L52 and started a trading &usiness dealing with spices - turmeric and ginger. " company floated at the same time with 4s .5 MMMD" year later he changed from spices to yarn. +rom trading he turned to yarn manufacture in .L// when he set up a plant in @aroda near "hmeda&ad. "t a time when the Indian )overnment hard pressed for foreign e$change formed rules where the proceeds of e$port of nylon yarn could &e used to import goods 9hiru&hai capitali0ed and his earnings from e$ports to 4ussia 7olland Nam&ia Uganda Saudi "ra&ia were used to e$pand and moderni0e the mill which was to &e the &est te$tile mill in the country then. #hen 4eliance Industrial Industries went pu&lic in .LEE. "t a time when the merchant &an'ers were advising people not to invest the company got 52MMM investors many of whom were first time investors. #hus he is 'nown as the ;essiah of Investors. He roped in a&out HMM crores &y floating de&entures. :ater 4eliance 7etro 3hemicals was floated and fetched 4s 5./ crores in pu&lic issues where GMla'h people responded. In .LL5 4I: emerged as India-s largest industry with a turn over of over 4s HMMM cr It &ecame the first "sian company to enter the US mar'et when it floated a !onds issue in .LLE 9hiru&hai created a record when he dedicated to the nation the worlds largest grass roots refinery valued at 4s G5MMM crores set up at ?amnagar in )u=arat. <arsan&hai 7atel of @irma was a chemist at the )u=arat ;ineral development 3orporation in "hmeda&ad drawing a meager salary. "t that time he discovered a need for afforda&le detergent in rural India. He e$perimented in his 'itchen and came up with a pale yellow product which he called @irma after his one-year old daughter @iran=ana. He started door to door sales in his neigh&ourhood. :adies found that the rate was afforda&le and *uality was much &etter than the cheap &ars availa&le then. Buality was as good as surf if not &etter. #hus started the venture where he too' on the might of a multinational Hindustan :ever. #he word of mouth appraisal of @irma too' wings and soon agents distri&utors wholesalers started 'noc'ing at his doors for the product. #oday @irma sells a&out 2MMMMM tonnes of the product all over the country and holds as much as 55O of the mar'et share. Entrepreneurshipits Barriers. #he pro&lems faced &y entrepreneurs are &asically of two 'inds A Internal and E$ternal Internal 7ro&lems are 7lanning #echnical +easi&ility - Inade*uate 'now-how locational disadvantage %utdated prodn. process Economic 8ia&ility - High input casts &rea'even point high underestimation of financial re*uirements over estimation of demand :arge investment in fi$ed assets. Implementation 3ost overruns as a result of delay in getting licenses sanctions finance etc. 7roduction 7roduction ;anagement (rong product mi$ poor capacity utilisation high wastage poor ;aintenance lac' of modernisation

Higher wage structure poor la&our relations poor la&our production over staffed lac' of s'illed or technical la&our ;ar'eting ;anagement Single customer dependency poor sales reali0ation defective pricing policy large orders &oo'ed in an inflatory mar'et. +inance ;anagement +aulty costing financial indiscipline inade*uacy of wor'ing 3apital "&sence of cost consciousness defective collection system "dministrative ;anagement %ver centralisation lac' of professionalism lac$' of feed &ac' lac' of diversification e$cessive spend on 4I9 E$ternal 7ro&lems Infrastructural :ocation Improper. +ar from &us and train stations. @ot an industrial area. 7ower Erratic power. "ffects production. 3aptive generation costly. (ater @ot availa&le. %ut sourcing adds to cost 7ost %ffice etc @ot near. %ther amenities 3ommunication :ines not availa&le near location %4 +aulty lines. @o mo&ile tower near&y @on availa&ility of critical raw materials 7roduct chosen is such that rDm is not readily availa&le #ransport &ottlenec's ;aterials posts couriers ta'e unduly long to reach you. +inancial 3apital Insufficient. (or'ing capital Inade*uate 4ecovery 7oor. :ot of sundry de&tors. 3onse*uent high interest paya&le on loans ;ar'eting 7oor mar'eting. @ot a&le to mar'et to the full scope possi&le. #a$ation )ovt. norms impose ta$ which ma'es product or service costlier (@irma) 4aw .material Scarce. #ransportation to location difficult and costly time consuming Industrial and +inance 4egulations 9ifficult to implement and adhere to all rules and regulations #echnology 9eveloping at a rapid pace. Ina&ility to 'eep pace with it. +orced to &ring in more funds and spend on training )ovt. 7olicies "dhering to )ovt. 7olicies &ecomes difficult. 4ampant 3orruption 3atering to this leaves a large hole in the poc'et. Else wor' gets held up :ac' of 9irection "ll the e$ternal causes leaves the enterprise lost in mid stream directionless 3ompetitive and 8olatile environment #oo much of competition. unpredicta&le mar'et. 9ifficult to 'eep pace with it and change in time.

:a&our ;anagement

Sylla&us
#$IT % Entrepreneur ;eaning of EntrepreneurP Evolution of .the 3onceptP +unctions of an Entrepreneur #ypes of Entrepreneur Entrepreneur A an emerging. 3lass. 3oncept of Entrepreneurship - Evolution of Entrepreneurship 9evelopment of EntrepreneurshipP Stages in entrepreneurial processP 4ole of entrepreneurs in Economic 9evelopmentP Entrepreneurship in IndiaP Entrepreneurship - its !arriers.

"t the end of the unit the student will &e a&le to K .. 9escri&e and entrepreneur and his characteristics G. 9istinguish &etween and entrepreneur and a manager 5. 9escri&e the functions performed &y an entrepreneur H. 9escri&e different types of entrepreneurs 5. 9efine entrepreneurship and its evolution /. 9escri&e the characteristics of a successful entrepreneur. E. "ppreciate the role of entrepreneurship in the economic development of the country "evie& 'uestions () *ist out the characteristics and +ualities of an entrepreneur ,) Bring out the -road classification of entrepreneur .) E/plain the stages in an entrepreneurship process H. (hat are the functions of an ,Entrepreneur-C E$plain

%) Briefly e/plain the roles of an entrepreneur in economic development 0) Mention -arriers to entrepreneurship E. E$plain the stages in an entrepreneurial process 2. 9ifferentiate &etween ,Entrepreneur- and ,IntrapreneurAssignment 'uestions are those that are Bold a&ove !u-mit -y ne/t 1ednesday2 ,3th March2 ,4(. Mgmt 5 Entps) 'uestions from 6T# Papers #nit % Tntrepreneurship ;ar's 9ec. GMM2 (M/":5.) ..a. :ist out the characteristics and *ualities of an entrepreneur &. !ring out the &road classification of entrepreneur c. E$plain the stages in an entrepreneurship process 9ec. GMML (M/":5.) ..a. E$plain the meaning of ,Entrepreneur&. (hat are the functions of an ,Entrepreneur-C E$plain c. !riefly e$plain the roles of an entrepreneur in economic development d. ;ention &arriers to entrepreneurship 9ec. GM.M (M/":5.) ..a. 9efine the term ,Entrepreneur-. E$plain the functions of entrepreneurs &. E$plain the steps in an entrepreneurial process 9ec. GM.. (M/":5.) ..a. !riefly e$plain the characteristics and *ualities of an entrepreneur &. 9iscuss the evolution and growth of industrial entrepreneurships in India c. E$plain the stages in an entrepreneurial process ?une. GMML (M/":/.) ..a. (ho is an entrepreneur &. !riefly e$plain the characteristics of an entrepreneur c. E$plain in detail various types and functions of an Entrepreneur d. 9ifferentiate &etween ,Entrepreneur- and ,Intrapreneur9ec. GMML (M/":/.) ..a. 9efine an entrepreneur. 9ifferentiate &etween ,Entrepreneur- and ,Intrapreneur&. E$plain the evolution and growth of entrepreneurship in India c. E$plain the role of entrepreneur in economic development ?une. GM.M (M/":/.) ..a. (hat is entrepreneurshipC E$plain its model and types of entrepreneurs &. 9ifferentiate &etween ,Entrepreneurs- ,Intrapreneur- and ,;anagersc. (hat are the !arriers of ,Entrepreneurship-C E$plain the role of entrepreneur in economic development ?une. GM.. (M/":/.) ..a. (hat are the *ualities of an entrepreneur &. 9ifferentiate &etween ,Entrepreneurs- ,Intrapreneur- and ,;anagersc. (hat are the various stages in an entrepreneurial process MH .M M/ MH M/ M/ MH .M .M M/ M2 M5 MG M/ M2 MH M/ M2 M/ ME ME M/

M2 ME M5