AccordingtoGeorgeBernardShaw,peoplefallintothreecategories:(i)thosewhomake

thingshappen.(2)Thosewhowatchthingshappen,and(3)thosewhoarelefttoaskwhatdid
happen.Generally,entrepreneursfallunderthefirstcategory.
EVOLUTIONOFTHECONCEPTOFENTREPRENEUR
The word entrepreneur is derived from the French word entreprendre. It means to undertake.
Thus,entrepreneuristhepersonwhoundertakestheriskofnewenterprise.Itsevolutionisas
follows.

EARLYPERIOD:TheearliestdefinitionoftheentrepreneurasagobetweenisMarco
Polo.HetriedtoestablishtraderoutetothefarEast.Heusedtosignacontractwithaventure
capitalisttosellhisgoods.Thecapitalistwastheriskbearer.Themerchantadventurertooktherole
oftrading.Afterhissuccessfulsellingofgoodsandcompletinghistrips,theprofitsweresharedby
thecapitalistandthemerchant.
MIDDLEAGES:Thetermentrepreneurwasreferredtoapersonwhowasmanaginglarge
projects.Hewasnottakinganyriskbutwasmanagingtheprojectsusingtheresources
provided.Anexampleistheclericwhoisinchargeofgreatarchitecturalworkssuchas
castles,publicbuildings,cathedralsetc.

th

17 CENTURY:Anentrepreneurwasapersonwhoenteredintoacontractualarrangement
withtheGovt.toperformaserviceortosupplysomegoods.Theprofitwastaken(orlosswas
borne)bytheentrepreneur.
th

18 CENTURY: It was Richard Cantillon, French Economist, who applied the term
entrepreneurtobusinessforthefirsttime.Heisregardedbysomeasthefounderofthe
term.Hedefinedanentrepreneurasapersonwhobuysfactorservicesatcertainpriceswith
aviewtosellthematuncertainpricesinthefuture
th

19 CENTURY: Theentrepreneurswerenotdistinguishedfrommanagers.Theywere
viewedmostlyfromtheeconomicperspective.Hetakesrisk,contributeshisowninitiativeand
skills.Heplans,organizesandleadshisenterprise.

20 CENTURY: During the early 20 century Dewing equated the entrepreneur with
business promoter and viewed the promoter as one who transformed ideas into a profitable
business.ItwasJosephSchumpeterwhodescribedanentrepreneurasaninnovator.Accordingto
himanentrepreneurisaninnovatorwhodevelopsuntriedtechnology.

th

th

21th CENTURY: Research Scientists live De Bone pointed out that it is not always
important that an individual comes up with an entirely new idea to be called an
entrepreneur,butifheisaddingincrementalvaluetothecurrentproductorservice,hecan
rightlybecalledanentrepreneur.
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MEANINGANDDEFINITIONOFENTREPRENEUR
Anentrepreneurisordinarilycalledabusinessman.Heisapersonwhocombinescapital
andlabourforthepurposeofproduction.Heorganizesandmanagesabusinessunitassumingthe
riskforprofit.Heistheartistofthebusinessworld.
In the words of J.B. Say, An entrepreneur is one who brings together the factors of
production and combines them into a product. He made a clear distinction between a capitalist and
anentrepreneur.Capitalistisonlyafinancier.Entrepreneuristhecoordinatorandorganizerofa
businessenterprise.Joseph A Schumpeter defines an entrepreneur as one who innovates, raises
money,assembles inputs andsetstheorganizationgoingwiththeabilitytoidentifythemand
opportunities, which others are not able to fulfil such economic opportunities. He further said, An
entrepreneurisaninnovatorplayingtheroleofadynamicbusinessmanaddingmaterialgrowthto
economicdevelopment.
CHARACTERISTICSOFANENTREPRENEUR
Anentrepreneurisahighlyachievementoriented,enthusiasticandenergeticindividual.He
isabusinessleader.Hehasthefollowingcharacteristic:
1) Anentrepreneurbringsaboutchangeinthesociety.Heisacatalystofchange.
2) Entrepreneurisactionoriented,highlymotivatedindividualwhotakesrisktoachievegoals.
3) Entrepreneuracceptsresponsibilitieswithenthusiasmandendurance.
4) Entrepreneuristhinkeranddoer,plannerandworker.
5) Entrepreneur can foresee the future, seize market with a salesmans persuasiveness, manipulate
fundswithfinancialtalentandsmellerror,fraudsanddeficiencies with an auditors precisions.
6) Entrepreneur undertakes venture not for his personal gain alone but for the benefit of
consumers,governmentandthesocietyaswell.
7) Entrepreneur builds new enterprises.Hepossesses intenselevelofdetermination anda
desiretoovercomehurdlesandsolvestheproblemandcompletesthejob.
8) Entrepreneurfindstheresourcesrequiredtoexploitopportunities.
9) Entrepreneurdoesextraordinarythingsasafunctionofvision,hardwork,andpassion.He
challengesassumptionsandbreaksrules.
10) Althoughmanypeoplecomeupwithgreatbusinessideas,mostofthemneveractontheir
ideas.
DEFINITIONOFENTREPRENEURSHIP
In the words of Stevenson and others, Entrepreneurship is the process of creating value by
bringing together a unique package of resources to exploit an opportunity. According to A.H. Cole,
Entrepreneurship is the purposeful activities of an individual or a group of associated
individuals undertaken to initiate, maintain or organize a profit oriented business unit for the
productionordistributionofeconomic goods and services.
Allactivities undertakenbyanentrepreneurtobringabusiness unitintoexistenceare
collectivelyknownasentrepreneurship.Itistheprocessofchangingideasintocommercial

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opportunitiesandcreatingvalues.Inshort,entrepreneurshipistheprocessofcreatingabusiness
enterprise.
NATUREANDCHARACTERISTICSOFENTREPRENEURSHIP
Featuresofentrepreneurshiparesummarizedasfollows:
1)

Itisafunctionofinnovation.

2)

Itisafunctionofleadership.

3)

Itisanorganizationbuildingfunction.

4)

Itisafunctionofhighachievement.

5)

Itinvolvescreationandoperationofanenterprise.

6)

It is concerned with unique combinations of resources that make existing methods or

productsobsolete.

7)

Itisconcernedwithemploying,managing,anddevelopingthefactorsofproduction.

8)

Itisaprocessofcreatingvalueforcustomersbyexploitinguntappedopportunities.

9)

It is a strong and positive orientation towards growth in sales, income, assets, and
employment.
INNOVATIONANDENTREPRENEURSHIP
Innovationisoneoftheunderlyingdimensionsofentrepreneurship.Itisakeyfunctionin
the entrepreneurial process. Without innovation, an entrepreneur cannot survive in the modern
competitive business world. Entrepreneurship is a creative and innovative response to the
environment and an ability to recognize, initiate and exploit an economic opportunity. An
entrepreneurisaninnovatorwhointroduceswhointroducessomethingnewinaneconomy.
As per the Schumpeters view, a person becomes an entrepreneur only when he or
she is engaged in innovation .further, innovation is equal to competitive advantage. The
entrepreneurstodayrealizetheneedforinnovation.Innovationaddsvaluetotheproduct.Itisonly
throughinnovation,theorganizationscansurvivetheincreasingcompetitioninthemarketplace.
RISKSINVOLVEDWITHENTREPRENEURSHIP
Entrepreneurshipinvolvesthefollowingtypesofrisks.
1) FINANCIALRISK: Theentrepreneurshiphastoinvestmoneyintheenterpriseonthe
expectationofgettinginreturnsufficientprofitsalongwiththeinvestment.Hemayget
attractiveincomeorhemaygetonlylimitedincome.Sometimeshemayincurlosses.
2) PERSONALRISK: Startinganewventure uses much of the entrepreneurs energy and
time.Heorshehastosacrificethepleasuresattachedtofamilyandsociallife.
3) CARRIERRISK: Thisriskmaybecausedbyanumberofreasonssuchasleavinga
successful career to start a new business or the potential of failure causing damage to

professionalreputation.
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4)PSYCHOLOGICALRISK: Psychologicalriskisthementalagoniesanentrepreneur
bears while organizing and running a business venturesome entrepreneurs who have suffered
financialcatastropheshavebeenunabletobounceback.
BARRIERSTOENTREPRENEURSHIP
Entrepreneurialdevelopmentisveryslowinunderdevelopedanddevelopingcountries.
Thisisduetothepresenceofseveralfactors.GunnarMyrdalpointedoutthatAsiansocietieslack
entrepreneurshipnotbecausetheylackmoneyorrawmaterialbutbecauseoftheirattitudes.These
barrierstoentrepreneurshipareclassifiedintothreeasfollows:
A. ENVIRONMENTALBARRIERS
Followingaretheimportantenvironmentalbarrierstoentrepreneurship:
1) NonAvailabilityofRawMaterial:Nonavailabilityofrawmaterialsespeciallyduringpeak
season is one of the obstacles inhibiting entrepreneurship. This leads to competition for raw
material.
2) LackofSkilledLabour:Thisisthemostimportantresourceinanyorganization.Unfortunately,
desiredmanpowermaynotbeavailableinanorganization.Thisiseitherduetothelackofskilled
labourorduetolackofcommittedorloyalemployeesintheorganization.
3)LackofGoodMachinery:Goodmachinesarerequiredfortheproductionofgoods,because
ofrapidtechnologicaldevelopments,machinesbecomeobsoleteverysoon.Smallentrepreneurs
finditdifficulttogetlargeamountofcashforinstallingmodernmachinery.
4) Lack ofInfrastructure: Lackofinfrastructure facilities is amajor barrier tothe growth of
entrepreneurshipparticularlyinunderdevelopedanddevelopingeconomies.Theinfrastructural
facilitiesincludelandandbuilding,adequateandcheappower,propertransportation,waterand
drainagefacilitiesetc.
5) LackofFund:Therearevariousmethodsbywhichanentrepreneurarrangesforfunds,e.g.,own
savings,borrowingsfromfriendsandrelatives,banksandotherfinancialinstitutions.Manypeople
donotenterintoentrepreneurialactivitiesbecauseoflackoffunds.
6) Other Environmental Barriers: Lack of business education, Lack of motivation from
government,corruptioninadministration,highcostofproductionetc.aretheotherenvironmental
barriersthatinhibitthegrowthofentrepreneurshipinunderdevelopedcountries.
B PERSONALBARRIERS
Personalbarrierarethosebarriersthatarecausedbyemotionalblocksofanindividual.Some
ofthepersonalbarriersmaybeoutlinedasbelow:
1) UnwillingnesstoInvestMoney:Eventhoughpeoplehavemoney,stilltheydonotcome
inentrepreneurship.Theyarenotwillingtotaketheriskofinvestingmoneyinbusiness.
2)

Lack of Confidence: Many people thing that they lack what it takes to become an
entrepreneur.Theyfeelthattheycouldnotmasteralltheskills.Thusmostpeoplearereluctantto
becomeentrepreneurs.
3) LackofMotivation:Whenanindividualstartsanewventure,heisfilledwith
enthusiasmanddrivetoachievesuccess.Butwhenhefacesthechallengesofrealbusinessorbears
8
loss, or his ideas dont work, he loses interest or motivation.

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4) LackofPatience:Thedesiretoachievesuccessinthefirstattemptortobecomerichvery
soonistheprimemotivatingfactorofmodernyouth.Whensuchdreamsdonotcometrue,
theyloseinterest.Thisgraduallydrivestofailinbusiness.
5)

InabilitytoDream:Entrepreneurs,whoareshortonvisionorbecomesatisfiedwithwhat
theyachieve,sometimesloseinterestinfurtherexpansion/growthofbusiness.
C

SOCIALBARRIERS

The social attitude inhibits many people even from thinking of starting a business. The
importantsocialbarriersareasfollows.
1) Low Status: The society things that entrepreneurs are the people whoexploit the
society.Thustheattitudeofthesocietytowardsentrepreneursisnotpositive.
2)CustomandTraditionofPeople:Mostpeoplewantarealjob.Evenparentswhoare
entrepreneurs wouldnt like their children to be entrepreneurs. Thus lack of support from society
andfamilyhinderthegrowthofentrepreneurs.
ENTREPRENEURSHIPINKERALA
Keralais industrially backward.There aremany reasons forthis condition.Oneofthe
importantreasonsislackofanentrepreneurialclass.Thetradeandthecommerceofthestatewere
originally in the hands of outsiders who migrated to Kerala for business purposes. Later on
ChristiansandMuslimsenteredthefieldofbusiness.MajorityofthepeopleofKeralashowno
interestintradeandcommerce.Everybodywantsawhitecollarjob.Furtheradequatefundsarenot
beingchannelizedintoentrepreneurialactivities.Aconsiderableportionofcapitalisbeingutilized
fornonproductivepurposes.Forexample,peoplespendmuchoftheirsavings inconstructing
houses.ThistendencyisveryprominentinMalabar.PeopleworkinginMiddleEastareinterested
inacquiringlandedpropertyandGoldwiththeirsavings.
Another cause for the states poor entrepreneurship is the large amount of capital is flowing
outofstate.Forinstance,LICcollectshugefundsfromwithinthestate,bututilizesonlyavery
little portion for the states development.
FACTORSAFFECTINGENTREPRENEURIALGROWTH
Therearelargenumberofvariedfactorswhichcontributetothegrowthofentrepreneurship.These
factorscanbebroadlyclassifiedintofive.
PSYCHOLOGICALFACTORS: Inspirationforachievementpreparesanentrepreneurto
set higher goals and achieve them. The important psychological factors influencing
entrepreneurialgrowthmaybeoutlinedasbelow:
(A) NeedforAchievement:Needforachievementmeansthedrivetoachieveagoal.Peoplehaving
needforachievementwillbesomuchselfconfidentthattheydonotbelieveinmereluck.Ifan
individualhasneedforachievement,hewillbecomeasuccessfulentrepreneur.
(B) Personal Motives: These have been found to be one of the crucial factors responsible for
entrepreneurshipamongstindividuals.BillGatesdreamtthatonedayhewouldbecometherichest

person.Hisdreambecamearealitylater.
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(C) Recognition: Manypeoplebecomesuccessfulentrepreneursjustforgettingrecognition from

others.
(D) Need of Authority: Need of authority will inspire men to work. When they become
entrepreneurs,theycanexerciseauthorityovermanagers,employeesetc.
CULTURALFACTORS:Cultureconsistsof(1)Tangiblemanmadeobjectslikefurniture,
buildingsetc..,(2).Intangibleconcepts likeLaws,morals,knowledgeetc..,(3)Valuesand
behaviour acceptable within the society. The important cultural factors influencing
entrepreneurialgrowtharebrieflyexplainedasfollows:
(A) Culture:Cultureiscloselyrelatedwithacceptedvaluesandhumanbehaviour.Fore.g. some
societieshavecustomsofpolygamyandsomehavenot.
(B) ReligiousBelief: AccordingtoMaxWeber,entrepreneurismisafunctionofreligiousbelief
and the impact of religion shapes the entrepreneurial culture. He emphasized that the
entrepreneurialenergiesareexogenoussuppliedbymeansofreligiousbelief.
(C) Minority Groups: Hoselitz explained that the supply of entrepreneurship is governed by
cultural factors, and culturally minority groups are the spark plugs of entrepreneurial and
economic development. Minority groups like the Jews and Greeks in Medieval Europe, the
LebaneseinWestAfrica,theIndiansinEastAfricahasimportantrolesinpromotingeconomic
development.
(D) SpiritofCapitalism:Itguidestheentrepreneurtoengageinactivitiesthatcanbringmoreand
moreprofits.Theprofitmotivecharactercoupledwiththeattitudetowardsacquisitionofmoney
urgestheindividualtostartnewventure.
SOCIAL FACTORS: What mould a man into an entrepreneur is the sociological and
environmentalfactorsduringchildhood,andattheschool,personalexperienceinadultlifeat
thecollegeandjobenvironments,themobility,occupationandsupportfromparents.The
socialfactorsinclude:
(A) LegitimacyofEntrepreneurship:Systemofnormsandvalueswithinasocioculturalsetting
is responsible for the emergence of entrepreneurship. The degree of approval or disapproval
grantedtoentrepreneurialbehaviourwillinfluenceitsemergenceanditscharacteristicsifitdoes
emerge.
(B) SocialMarginality:Individualsorgroupsontheperimeterofagivensocialsystemorbetween
twosocialsystemsprovidethepersonneltoassumetheentrepreneurialroles.Socialmarginalityis
likelytopromoteentrepreneurshiparelargelydeterminedbytwofactors,namelythelegitimacyof
entrepreneurshipandsocialmobility.
(C) Family,RoleModelsandAssociationwithSimilarTypeofIndividuals:Ifanindividualhasa
supportivefamily,heorsheismorelikelytobecomeanentrepreneur.Similarly,ifanindividual
hasrolemodelswhohavebeensuccessfulinentrepreneurship,certainly,hemaybemotivatedto
startventures.Ifapersonisinassociationwithentrepreneurs,thismayaddtohisor
herdesireofsettingupanewventure.Reliance,Tata,Birlaetc.aretheindustriesdependupon
family based inheritance. Roberts (1991) has developed the idea of the entrepreneurial heritage

todescribetheimportanceofthefamilybackgroundfortheentrepreneur.Thisheritageincludes
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factors such as the fathers occupation, the family work ethicandreligion,familysizeandthefirst

bornson,growingupexperienceandsoon.
(D) CasteSystem:Certainreligionsandcasteencouragethegrowthofentrepreneurialtalent.
Some religious communities like the parsees, marwaris and sindhees seem to have an
affinityforentrepreneurialactivity.ThecastesysteminHindusocietyhaspromotedtothe
growthofbusinessandprofessionalskills.
(E) Occupation:Thoseborninrichfamilieswithsilverspoonsintheirmouthhavenotonly
an advantage of having financial resources for carrying out business but also learn the
businessskillbycontinuousinteractionandcontactswithparents,customers,employeesand
visitorsinfamilyshops,officesandhomes.
(F) EducationandTechnicalQualifications:Education is the best means of developing
mansresourcefulnesswhichencompassesdifferentdimensionsofentrepreneurship.Itmay
beexpectedthatthehighlevelofeducationmayenabletheentrepreneurstoexercisetheir
entrepreneurialtalentmoreefficientlyandeffectively.
(G)SocialStatus:Everyhumanbeingaspiresforahighsocialstatusandonceheachievesa
reasonablelevel,hisaspirationsanddesiresforitsstartgettingmultiplied.Peopleworkhard
tomaintaintheirstatusasitalsocontributestotheirentrepreneurialgrowth.
(H)SocialResponsibility:Itistheobligationtothesocietyinwhichthebusinessenterprise
operates.Anentrepreneurgeneratesemploymentforothersbesideshelpinghimself.
ECONOMIC FACTORS: Economic factors also influence the growth of
entrepreneurship.Theimportanteconomicfactorsare:
(A)Infrastructural Facilities: Entrepreneurship development requires certain basic
infrastructurelikepower,transportation,communication,technicalinformationetc.Theseprovide
external economies and improve the efficiency of investments by entrepreneurs. These
infrastructuralfacilitiesarescarceinlessdevelopedcountries.Theentrepreneursthemselveshave
toprocurethesefacilitiesattheirowncost.Theyhavetoobtainthesefacilitiesathighercosts.
Thiswillgreatlydiscouragetheentrepreneurshipdevelopment.Inadvancedcountries,thosewho
aredesirousofstartinganenterprisewillfindnodifficultyinprocuringtheinfrastructuralfacilities
atreasonablecosts.
(B)FinancialResources: Financeisthelifebloodofbusinessactivity.Capitalisrequiredto
obtainmaterials,machinery,equipment,etc.andtoundertakeinnovation.Capitalisregardedas
lubricanttotheprocessofproduction.Thelackoffinancialresourcesdiscouragestheyouthand
potentialentrepreneurstostartnewventures.Hence,theneedforfixedandworkingcapitalshould
beadequatelymetifnewentrepreneursaretocomeforwardandgrow.
(C)AvailabilityofMaterialandKnowHow:Entrepreneurshipisencouragedonlyifthereis
an adequate supply of materials and knowhow. Easy availability of materials attracts more
individuals towards entrepreneurship. Technical knowhow is essential for innovation. With
technicalknowledge,mendiscovermoreandsophisticatedtechniquesofproduction.
(D)LabourConditions: Thequalityratherthanquantityoflabourisanotherfactorwhich
influences the emergence and growth of entrepreneurship. The availability of cheep labour
positively affects entrepreneurship. Labour problem can be solved not by capital intensive
technologies but by increasing their mobility, by offering them facilities, incentives and
concessionsineveryremotecornerofthecountry.

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(E) Market: Thesizeandcompositionofmarketinfluenceentrepreneurshipintheirownways.

Practically, monopoly in a particular product in a market becomes more influential for
entrepreneurshipthanacompetitivemarket.
(F) Support System: Ability, initiative and support systems include financial and commercial
institutions,research,training,consultancyservices,ancillaryindustryetc.
(G)GovernmentPolicy:Thesociopoliticalandeconomicpoliciesofthegovernmentinhibitor
fosterentrepreneurialgrowth.Landandfactoryshedsatconcessionalrates,adequatesourcesof
power,supplyofmaterialsandotherphysicalfacilitiesshouldbeprovidedbythegovernmentto
facilitatethesettingupofnewenterprises.Thegovernmenthasadominantroletoplayinthe
industrial development of backward regions with a view to attain a balanced regional
development.
PERSONALITY FACTORS: The supply of entrepreneurship in a society is largely
influencedbythepresenceofindividualswiththeinitiativeness,foresightednessandorganizing
andmanagerialcompetence.Thefollowingpersonalityfactorscontributetotheentrepreneurial
development:
(A).Personality:Theentrepreneurialpersonalitycomprisesoftheperson,hisskills,stylesand
motives. Impressive personality and individual skill help to develop entrepreneurship. These
qualities are required for entrepreneurs because they have to work with officers, managers,
engineers,labourers,customers,investors,govt.officers,ministersetc.
(B). Independence:Another personality factors which influences entrepreneurship is
independence.Anentrepreneurworksoutplansonhisown,searchesandexploresresourcesand
experiences and uses inner urge to make the enterprise a success instead of waiting for
suggestionsordirectionsfromothers.
(C).Compulsion:Certaincompellingreasonsalsoforcethepeopletobecomeentrepreneurs.
Theseinclude:(a)unemploymentordissatisfactionwithexistingjoboroccupation,(b)touse
technicalorprofessionalknowledgeandskills,(c)toputtheidlefundstouse.Alargenumberof
technicallyqualifiedpeopleaftergaininginitialexperienceandconfidenceandnotbeingsatisfied
bytheirgrowthintheprofessionhaveacompulsivereasontotryentrepreneurship.
QUALITIESOFASUCCESSFULENTREPRENEUR
Inordertoorganizeandrunitsuccessfully,theentrepreneurmustpossesssomequalitiesandtraits.
Theyareasfollowing:
1) Willingness to Make Sacrifices and Assume Risks: A new venture is full of
difficultiesandunanticipatedproblems.Insuchaninhospitableenvironmententrepreneurhastobe
preparedtosacrificehistime,energyandresourcesinordertocarryouttheventureandmakeit
success.
2)HardWork:Willingnesstoworkharddistinguishesasuccessfulentrepreneurfroman
unsuccessfulone.Forexample,AssimPremji(chairmanofWipro)worksinhisofficefourteen
hourseveryday.Heisasuccessfulentrepreneur.HeisoneoftherichestpersonsinIndia.
3)Optimism:Successfulentrepreneursarenotworriedbythepresentproblemsthatthey
face.Theyareoptimisticaboutthefuture.Thisenhancestheirconfidenceanddrivesthemtowards

success. Some of the worlds greatest entrepreneurs failed beforetheyfinallysucceeded.

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4)SelfConfidence:Thisisthegreatestassetofasuccessfulentrepreneur.Hemusthave
theconfidencetomakechoicesaloneandbouncebackwhenhefails.
5) Leadership: Successful entrepreneur generally has strong leadership qualities. He
shouldbeagoodjudgeofhumannatureandagoodleader.Hemustbeabletoselect,trainand
developpersonswhocanproperlymanageandcontrolthelabourforce.McClellandidentifiedtwo
maincharacteristicsinanentrepreneur(1)Doingthingsinanewandbettermanner.(2)Decision
making under uncertainty. A successful entrepreneur must be capable and wellinformed, a
successfulleaderofmen,akeenjudgeofthings,courageousandprudent.Aboveallhemustbe
giftedwithalargemeasureofpracticalcommonsense.TherearenotmanyFords,Tatas,Birlas,
ThaparsandAmbanisintheworld.Entrepreneurshipisnotlimitedtoanyclass,communityor
religion.Thereisnoagebar,foranypersonwhopossessescertainbehaviouraltraitsandattitudes
canworktobecomeanentrepreneur.
NEEDFORACHIEVEMENT(ACHIEVEMENTMOTIVATION)
Itisthepsychologicalneedtoachieve.Itprovidesdrivetotheentrepreneur
tosetupanewventure,toachievetargets,tosenseproblemsandopportunity,totakemuchriskso
as to run the business successfully. It is nothing but a persons desire either for excellence or to
succeed in competitive situation. Thus achievement motivation means a drive to overcome
challengesinreachinghighergoals.Itisastrongdesiretoachieveahighergoalandmakedreams
cometrue.Inshortitisthestrongdesiretowin.

TYPESOFENTREPRENEURS
Entrepreneursmaybeclassifiedinanumberofways.
A.ONTHEBASISOFTYPEOFBUSINESS.
Entrepreneursareclassifiedintodifferenttypes.Theyare
1)BusinessEntrepreneur:Heisanindividualwhodiscoversanideatostartabusiness
andthenbuildsabusinesstogivebirthtohisidea.
2).Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e;
buyingandsellingmanufacturedgoods.
3) IndustrialEntrepreneur:Heisanentrepreneurwhoundertakesmanufacturing
activities.
4) Corporate Entrepreneur: He is a person who demonstrates his innovative skill in
organizingandmanagingacorporateundertaking.
5)

AgriculturalEntrepreneur:Theyareentrepreneurswhoundertakeagricultural activities
suchasraisingandmarketingofcrops,fertilizersandotherimputsofagriculture.Theyarecalled
agripreneurs.
B.ONTHEBASISOFUSEOFTECHNOLOGY:Entrepreneursareofthefollowingtypes.
1)TechnicalEntrepreneur:Theyareextremelytaskoriented.Theyareofcraftsmantype.
Theydevelopnewandimprovedqualitygoodsbecauseoftheircraftmanship.Theyconcentrate

moreonproductionthanonmarketing.
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2)

NonTechnicalEntrepreneur:Theseentrepreneursarenotconcernedwiththetechnical
aspectsoftheproduct.Theydevelopmarketingtechniquesanddistributionstrategiestopromote
theirbusiness.Thustheyconcentratemoreonmarketingaspects.

3)

ProfessionalEntrepreneur:Heisanentrepreneurwhostartsabusinessunitbutdoesnot
carryonthebusinessforlongperiod.Hesellsouttherunningbusinessandstartsanotherventure.
C.ONTHEBASISOFMOTIVATION:
Entrepreneursareofthefollowingtypes:

1) PureEntrepreneur:Theybelieveintheirownperformancewhileundertakingbusinessactivities.
Theyundertakebusinessventuresfortheirpersonalsatisfaction,statusandego.Theyareguidedby
themotiveofprofit.Forexample,DhirubhaiAmbaniofRelianceGroup.
2) InducedEntrepreneur:Heisinducedtotakeupanentrepreneurialactivitywithaviewtoavail
some benefits from the government. These benefits are in the form of assistance, incentives,
subsidies,concessionsandinfrastructures.
3) MotivatedEntrepreneur:Theseentrepreneursaremotivatedbythedesiretomakeuseoftheir
technicalandprofessionalexpertiseandskills.Theyaremotivatedbythedesireforselffulfillment.
4) Spontaneous Entrepreneur: They are motivated by their desire for selfemployment and to
achieveorprovetheirexcellenceinjobperformance.Theyarenaturalentrepreneurs.
D.ONTHEBASISOFSTAGESOFDEVELOPMENT:Theymaybeclassifiedinto;
1) FirstGenerationEntrepreneur:Heisonewhostartsanindustrialunitbymeansofhis
own innovative ideas and skills. He is essentially an innovator. He is also called new
entrepreneur.
2) Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which suit the
modernmarketingneeds.
3) ClassicalEntrepreneur:Heisonewhodevelopsaselfsupportingventureforthesatisfactionof
customers needs.Heisastereotypeortraditionalentrepreneur.
E.CLASSIFICATIONONTHEBASISOFENTREPRENEURIALACTIVITY:Theyare
classifiedasfollows:
1) Novice:Anoviceissomeonewhohasstartedhis/herfirstentrepreneurialventure.
2)

SerialEntrepreneur:Aserialentrepreneurissomeonewhoisdevotedtooneventureata
timebutultimatelystartsmany.Herepeatedlystartsbusinessesandgrowsthemtoasustainable
sizeandthensellsthemoff.

3)

PortfolioEntrepreneurs:Aportfolioentrepreneurstartsandrunsanumberofbusinesses
atthesametime.Itmaybeastrategyofspreadingriskoritmaybethattheentrepreneuris
simultaneouslyexcitedbyavarietyofopportunities.
F.CLASSIFICATIONBYCLARENCEDANHOF:ClarenceDanhof,OnthebasisofAmerican
agriculture,classifiedentrepreneursinthefollowingcategories:
1)InnovativeEntrepreneurs:Theyaregenerallyaggressiveonexperimentationand
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cleverlyputattractivepossibilitiesintopractice.Aninnovativeentrepreneur,introducesnewgoods,
inauguratesnewmethodsofproduction,discoversnewmarketsandreorganizestheenterprise.
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Innovativeentrepreneursbringaboutatransformationinlifestyleandarealwaysinterestedin
introducinginnovations.
2)

Adoptive Or Imitative Entrepreneurs: Imitative entrepreneurs do not innovate the

changesthemselves,theyonlyimitatetechniquesandtechnologyinnovatedbyothers.Theycopy
andlearnfromtheinnovatingentrepreneurs.Whileinnovatingentrepreneursarecreative,imitative
entrepreneursareadoptive.

3)

Fabian Entrepreneurs: These entrepreneurs are traditionally bounded. They would be

cautious. They neither introduce new changes nor adopt new methods innovated by others
entrepreneurs.Theyareshyandlazy.Theytrytofollowthefootstepsoftheirpredecessors.They
followoldcustoms,traditions,sentimentsetc.Theytakeupnewprojectsonlywhenitisnecessary
todoso.

4)

Drone Entrepreneurs: Drone entrepreneurs are those who refuse to adopt and use
opportunitiestomakechangesinproduction.Theywouldnotchangethemethodofproduction
alreadyintroduced.Theyfollowthetraditionalmethodofproduction.Theymayevensufferlosses
buttheyarenotreadytomakechangesintheirexistingproductionmethods.
Thereisanotherclassificationofentrepreneurs.Accordingtothis,entrepreneursmaybe
broadlyclassifiedintocommercialentrepreneursandsocialentrepreneurs.
CommercialEntrepreneurs:Theyarethoseentrepreneurswhostartbusinessenterprisesfortheir
personalgain.Theyundertakebusinessventuresforthepurposeofgeneratingsalesandprofits.
Mostoftheentrepreneursbelongtothiscategory.
SocialEntrepreneurs:Theyarethosewhoidentify,evaluateandexploitopportunitiesthatcreate
social values andnot personal wealth. Social values refer to the basic long standing needs of
society.Theyfocusonthedisadvantagedsectionsofthesociety.Theyplaytheroleofchange
agentsinthesociety.Inshort,socialentrepreneursarethosewhostartventuresnotformaking
profitsbutforprovidingsocialwelfare.
COPRENEURS
Copreneursareentrepreneurialcoupleswhoworktogetherascoownersoftheirbusiness.
Theyarecreatingadivisionoflabourthatisbasedonexpertiseasopposedtogenderstudiesshow
thatcompaniescoownedbyspousesrepresentoneofthefastestgrowingbusinesssectors.Marcia
SherrillwithherhusbandWilliamKleinberg(USA)runsKleinbergSherrills,aleathergoodsand
accessories business. She says, There is nothing more exciting than nurturing a business and
watching it grow with someone you love.
INTRAPRENEURS
ThetermintrapreneurwascoinedinUSAinthelateseventies.Manyseniorexecutivesof
bigcompaniesinAmericalefttheirjobsandstartedsmallbusinessoftheirown.Theyleftthe
organisationbecausetheydidnotgetanyopportunitytoapplytheirownideasandinnovative
ability.Theseentrepreneursbecomesuccessfulintheirownventures.Someofthemcausedathreat
tothecorporationstheyleft.ThistypeifentrepreneurshavecometobecalledIntrapreneurs.They
believestronglyintheirowntalents.Theyhavedesiretocreatesomethingoftheirown.Theywant

responsibilityandhaveastrongdriveforindividualexpressionandmorefreedomintheirpresent
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organisationalstructure.Whenthisfreedomisnotforthcoming,theybecomelessproductiveor
evenleavetheorganisationtoachieveselfactualisationelsewhere.
ULTRAPRENEURS
Nowadays, new products and services are conceived, create, tested, produced and
marketed very quickly and with great speed. Therefore, todays entrepreneur needstohavea
different mindset about establishing and operating a business. This mindset is called
ULTRAPRENEURING. An entrepreneur with this mind set is known as Ultrapreneur. The
conceptofUltrapreneuringistoidentifyabusinessopportunity,determineitsviabilityandforma
company.Itrequiresassemblingasupercompetentmanagementteam,whothendevelop,produce
andmarketstheproductorserviceintheshortestoptimumtimeperiod.Theycreatebusinessand
thensellout,mergeorcombine.
FUNCTIONSOFANENTREPRENEUR
Entrepreneurisaleadplayerinthedramaofbusiness.AccordingtoKilbt,anentrepreneurhasto
performfourgroupsoffunctions:
EXCHANGERELATIONSHIP:
1) Perceivingmarketopportunities
2) Gainingcommandoverscareresources.
3) Purchasinginputs.
4) Marketingoftheproductsandrespondingtocompetition.
POLITICALADMINISTRATION:
1) Dealingwithpublicbureaucracy(concession,licencesandtaxes)
2) Managingthehumanrelationwithinthefirm.
3) Managingcustomerandsupplierrelations.
MANAGEMENTCONTROL:
1) Managingfinance.
2) Managingproduction.
TECHNOLOGY:
1) Acquiringandoverseeingassemblyofthefactory.
2) Industrialengineering.
3) Upgradingprocessandproductquality.
4) Introducingnewproducts.
AccordingtoArtherH.Cole,anentrepreneurperformsthefollowingfunctions:
1) Determining the objectives of the enterprise and revising the objectives in the light of
changedcircumstances.
2) Developing an organization including efficient relations with subordinates and all
employees.

3) Securingadequatefinance.
4) Therequisitionofefficienttechnologicalequipment.

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5) Developing a market for the products and devising new products to meet customers
demand.
6) Maintaininggoodrelationswithpublicauthoritiesandwithsociety.
ENTREPRENNEURIALCOMPETENCIES
Competencyisacharacteristicofaperson,whichresultsineffectiveand/orsuperiorperformance
inajob.Itisacombinationofknowledge,skillsandappropriatemotivesortraitsthatanindividual
mustpossesstoperformagiventask.
MEANINGOFENTREPRENEURIALCOMPETENCIES
Itisdefinedascharacteristicssuchasgenericandspecialknowledge,motives,traits,self
image,socialrolesandskillswhichresultinbirthofaventure,itssurvivaland/orgrowth.Inshort,
thecompetenciesrequiredbyanentrepreneurforstartingabusinessventureandcarryingiton
successfullyareknownasentrepreneurialcompetencies.
TYPESOFENTREPRENEURIALCOMPETENCIES
Itmaybeclassifiedintotwotypes:
A)PERSONALENTREPRENEURIALCOMPETENCIES:Thesearerequiredtoperformthe
taskseffectivelyandefficiently.Thisincludesthefollowing:
Initiative:Itisaninnerurgeinanindividualtodoorinitiatesomething.
Ability to See and Act on Opportunities: Entrepreneurs look for opportunities and
takeactiononsuchopportunities.
Persistence:It means the capacity or skill to take repeated and different actions
toovercomeobstacles.
Information Seeking: Asuccessfulentrepreneur always keeps his eyes andear open.
Heshouldacceptnewideaswhichcanhelphiminrealizinghisgoals.Heisreadyto
consultexpertsforgettingtheirexpertadvice.
ConcernforHighQualityofWork:Entrepreneurialpersonsacttodothingsthatmeet
orbeatexistingstandardsofexcellence.
Commitment to Work: Successful entrepreneurs are prepared to make all sacrifices
forcompletingthecommitmentstheyhavemade.
CommitmenttoEfficiency:Entrepreneurialpersonshavetolookandfindwaysforor
findwaystodothingsfasterorwithfewerresourcesoratalowercost.Theyshouldtry
newmethodsaimedatmakingworkeasier,simpler,betterandeconomical.
Systematic Planning: Entrepreneurial persons should be able to develop and use the
logicalstepbystepplanstoreachgoals.
Problem Solving: Entrepreneurial persons are supposed to possess the skill of
identifyingnewandpotentiallyuniqueideastoreachgoals.Theyshouldgeneratenew
ideasorinnovativesolutionstosolveproblems.
Assertiveness: They assert own competence, reliability or other personal or companys
qualities. They also assert strong confidence in own companys products or services.

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Persuasion: Entrepreneurs should have the ability to successfully persue others to

performtheactivitieseffectivelyandefficiently.
Use of Influence Strategies: Entrepreneurs should have the competence of using a
variety of strategies to influence others. Such entrepreneurs can develop business
contactsanduseinfluentialpeopletoaccomplishhis/herownobjectives.
B) VENTUREINITIATIONANDSUCCESSCOMPETENCIES:
Anentrepreneurmustalsopossesthecompetenciesrequiredforlaunchingtheenterpriseandfor
its survival and growth. These competencies may be further divided into two categories of
competencies:
1. ENTERPRISELAUNCHESCOMPETENCIES:Theseincludethefollowing:
Competencytounderstandthenatureofbusiness.
CompetencytocomplywithGovernmentregulations.
Competencytodealwiththebusiness.
Competencytofinancethebusiness.
Competencytolocatethebusiness.
Competencytoplanthemarketingstrategy.
Competencytochoosethetypeofownership.
Competencytoobtaintechnicalassistance.
Competencytodevelopabusinessplan.
Competencytodeterminethepotentialasanentrepreneur.
2. ENTERPRISEMANAGEMENTCOMPETENCIES:Theseincludethefollowing:
Competencytoprotectthebusiness.
Competencytomanagecustomercreditandcollection.
Competencytomanagethefinances.
Competencytomanagethebusinessrecords.
Competencytomanagesalesefforts.
Competencytopromotetheproductsandservicesofthebusiness.
Competencytomanagehumanresources.
Competencytomanagethebusiness.