ENTREPRENEURSHIP & DEVELOPMENT

MODULE 1
Entrepreneur
 MEANING OF ENTREPRENEUR

 Entrepreneur is taken from French word “Enterprendre” means ‘to

undertake’ or to initiate

 Economist, An Entrepreneur is one who brings resources, labor, materials, and

other assets in to combination that make their value greater than before and
also introduces changes, innovations and a new order.

 In General Entrepreneur is one who innovates, raises money ,assemble inputs

,undertakes ,risks ,bears uncertainties and also performs the managerial
functions of decision making and co-ordination.
DEFINITION OF ENTREPRENEUR

 Robert Schwartz – “The entrepreneur is essentially a

visualizer and an actualizer. He can visualize something and
when he visualizes it he sees exactly how to make it happen.”

 International labour organization (ILO) define

entrepreneurs as those people who have the ability to see and
evaluate business opportunities ,together with the necessary
resources to take advantage of them and to initiate appropriate
action to ensure success.
FEATURES/IMPORTANCE/CHARACTERISTICS
OF ENTREPRENEUR

1.Disciplined:
focus on making their business work, and eliminate any
hindrances or distractions to their goals. They are over strategies
and outline the tactics to accomplish them.

2.Hard work:

entrepreneur possess an intense level of strong

determination and willingness to work hard. they possess capacity
to work long hours ,intense desire to complete task ,overcome
hurdles and they achieve never ending goal of excellence.
3.Dynamism: it is potential combination of prosperity. Given the
potentialities of the enterprise, he sets attainable goals, which are
to be accomplished within specific time frames. Tends to approach
problems in pragmatic way.

4.Risk taking and decision making ability: Entrepreneurs are

persons who take decisions under conditions of uncertainty and
therefore are willing to bear risk. Persons who can take risks and
make quick decisions always prosper.

5.Innovative: innovate and creativeness helps him to in analysis of

various problems and situation in order to deal with them. An
innovative entrepreneur introduce new products, develops new
method of production ,discovers new market and reorganizes the
enterprise.
6. Goal orientation: Goal setting is the achievement of targets and objectives for
successful performance of an entrepreneur. The goal setting process has three
steps:
I. Definition of Goal
II. Specific goals
III. Feedback

7.initiative:
initiative seeking personal responsibility for actions and use the available
resources for optimization of the objectives.

8.Generation of employment opportunities:

These problem can be minimized by encouraging hidden human potential
through entrepreneurship creation of tiny ,micro and small enterprises by the
entrepreneurs can lead to creation of both employment and wage employment
opportunities, thereby solving the problem of unemployment in the country.
9.Motivation:

Should have a strong motivation towards the achievement of a task and

must be able to exert considerable efforts in getting things done by others. he
should be a person who likes working with people and has skills in dealing
with them.

10.Optimistic:

entrepreneurs do not believe that the success or failure of a new business

ventures depends mostly upon luck or fate or external uncontrollable factors
.they are highly optimistic about the success of the enterprises.

they uses positive knowledge to support their thinking.

11.Mental ability :the are creative thinkers and intelligent
and analysis of various problems, situation and anticipating
change.

12.Clear objectives: nature of business ,goods to produce and

profits.

13.Secrey : guard business secrets.

14.Persistent problem solver : intense desire to complete a

task or solve a problem.

15.Human relation ability: customers and employees.

16.Capital formation: generates capital .

17They are authoritative
EVOLUTION OF THE CONCEPT
ENTREPRENEUR
o The word entrepreneur is derived from the French word Entreprendre which
means to initiate or undertake.

o In 16th century the Frenchmen who organized and led military expeditions
were refereed to as “entrepreneurs.”

o In 18th century the term “entrepreneur "was applied to business by French

economist Richard Cantillon.

According to him the entrepreneur buys the factors service at certain prices with
a view to sell their products at uncertain prices in future.
 Richard Cantillon conceived of an entrepreneur as a bearer of non-
insurable risk.

 Another Frenchmen ,J.B Say ,expanded Cantillon’s idea and

conceptualized the entrepreneur as an organizer of a business firm,
central to its distributive and production functions.

 Beyond stressing the entrepreneur’s importance to the business, Say

did little with his entrepreneurial analysis.

 According to him an entrepreneur is an economic agent who unties all

means of production, the labour force of the one and the capital or land
of the others and who finds in the value of the products his results from
their employment, the reconstitution of entire capital that he utilizes
and the value of wages ,the interest and the rent which he pays as well
as profit belonging to himself.
(he emphasized the function of co-ordination,organization and
supervision)
 Leading economist off all the school, including Karl Marx have
emphasized the contribution of entrepreneurs to the development
of economies,

 Peter F.Drucker ,in his book of “Innovative

Entrepreneurs”defines entrepreneurs as innovators
.entrepreneurs search for change and exploits opportunities.
Innovation is the specific role of an entrepreneur.

 Adam Smith in “The Wealth of Nations”, spoke of the ‘enterpriser’

as an individual who undertook the formation of an organization
for commercial purposes. He describes the role of industrialist as
– a person with unusual foresight who could recognize the
potential demand for goods and services.
 Cunningham and Lischerson in their recent work
have described six possible schools of thought on
entrepreneur:
1. “the great person school” which says entrepreneur born
with an intuitive ability a sixth sense and this sense helps
him in startup stage.

2. “psychological characteristics school” explains that

entrepreneur have unique values attitudes and needs which
drive and help them in start up stage.

3. “Classical school of thought’ says that central

characteristics of entrepreneurial behavior is innovation
.this characteristics helps in start-up and early growth.
4. “Management School” says entrepreneurs are organizers of economic
venture and they organize ,own ,manage and assume is risk.

5. “leadership school” it says that entrepreneurs are leaders of people

and they have the ability to adopt their style to the needs of people.

6. “Intrapreneurship schools” is an act of developing independent units,

to create market and expand services within the organization.
 Entrepreneurship is regarded as closely associated with economic
history of India. Accordingly its evolution is traced way back to
even early as Rig-Veda, when metal handicraft existed in the
country.

 The important upheavals include – decline of handicraft industry

towards the end of 18th century, advent of East India Company,
Swadeshi Campaign, First & Second World war, partition of
undivided India etc.

 Post Independence, the Govt. took three important measures in its

industrial resolutions:
 To maintain proper distribution of economic power between
private and public sector

 To encourage the tempo of industrialization by spreading

entrepreneurship from the existing centers to other cities,
towns and villages, and

 To disseminate the entrepreneurship acumen concentrated in a

few dominant communities to a large number of industrially
potential people of varied social strata.
 FUNCTIONS OF AN ENTREPRENEUR.
 Idea generation

Idea generation implies product selection and project

identification. Idea generation is possible through vision, insight, keen observation,

education, experience and exposure. This needs scanning of business environment and market
survey.

 Determination of business objectives

The Entrepreneur must be clear about the nature and type of business, i.e. whether
manufacturing concern or service oriented unit or a trading business so that he can very well
carry on the venture in accordance with the objectives determined by him.

Risk bearing function: the entrepreneur assumes all possible risks of business which emerges
due to the possibility of changes in the tastes of customers ,modern techniques of production
and new invention. such risk are not insurable and incalculable
 Rising of funds:

An Entrepreneur can raise the fund from internal source (Personal savings, Retained
profits, Working capital, Sale of fixed assets ) as well as external source(loans,
business partners). He should be aware of different sources of funds.

 Procurement of machines and materials:

 Entrepreneur has to identify cheap and regular sources of raw materials which will
help him to reduce the cost of production and face competition boldly. Boldly

 While procuring machineries he should specify the technical details and the capacity.
He should consider the warranty, after sales service facilities etc. before procuring
machineries
 Market research:

Market research is the systematic collection of data regarding the product which the
Entrepreneur wants to manufacture. Entrepreneur has to undertake market research persistently
to know the details of the intending product, i.e. the demand for the product, size of the
market/customers, the supply of the product, competition, the price of the product etc.

 Recruitment of manpower:

To carry out this function an Entrepreneur has to perform the following activities.

(a) Estimating man power requirement for short term and long term.

(b) Laying down the selection procedure.

(c) Designing scheme of compensation.

(d) Laying down the service rules.

(e) Designing mechanism for training and development

 Implementation of the project
Entrepreneur has to develop schedule and action plan for the implementation of
the project. The project must be implemented in a time bound manner.

 Determining form of enterprise:

Entrepreneur has to determine form of enterprise depending upon the nature of the
product, volume of investment etc. The forms of ownership are sole proprietorship,
partnership, Joint Stock Company, co-operative society etc.

Decision Making: an entrepreneur determines the business objective suitable for

the business.
He decides in securing financial resource and maintains good relation with
existing and potential investors.
He decides the market to target and to develop the product or service
He decides in introducing advance modern technology.etc
 TYPES OF ENTREPRENEUR
A.)Danhof classifies Entrepreneur into four types/based on functional
characteristics :

1.Innovative entrepreneur: This type of Entrepreneur, sense the opportunities for

introduction of new ideas, new technology, discovering of new markets and creating
new organizations. Such Entrepreneur can work only when certain level of
development is already achieved and people look forward to change and improve. Such
Entrepreneur are very much helpful for their country because they bring about a
transformation in life style.

2. Adoptive or imitative entrepreneur: Such entrepreneurs imitate the existing entrepreneur

and set their enterprise in the same manner. Instead of innovation, may just adopt the
technology and methods innovated by others.(adopts successful invention done by others).
3.Fabian entrepreneurs: Fabian entrepreneurs are characterized by great caution and
doubt, in experimenting any change in their enterprises. They imitate only when it becomes
perfectly clear that failure to do so would result in a loss of the relative position in the
enterprises.

4. Drone entrepreneurs: Such entrepreneurs are conservative or orthodox in outlook.

They always feel comfortable with their old fashioned technology of production even
though technologies have changed. They never like to get rid of their traditional business,
traditional machineries and traditional system of business even at the cost of reduced
returns.

5.Individual and institution entrepreneur:

in small scale sectors, individual entrepreneurs are dominant .such entrepreneur have the
advantages of flexibility, quick decision –making etc.
B.Arthur H Cole based Classification
Arthur H Cole classifies entrepreneurs as:

1.Empirical: He is entrepreneur hardly introduces anything

revolutionary and follows the principle of rule of thumb.

2.Rational: The rational entrepreneur is well informed about the

general economic conditions and introduces changes, which look
more revolutionary. Is the quality or state of being reasonable, based
on facts or reason.

3.Cognitive: Cognitive entrepreneur is well informed, draws upon the

advice and services of experts and introduces changes that reflect
complete break from the existing scheme of enterprise
c.)Classification Based on the Scale of Enterprise

 Small scale: These entrepreneurs do not posses the necessary

talents and resources to initiate large-scale production and to
introduce revolutionary technological changes..

 Large scale: They possess the necessary financial and other

resources to initiate and introduce new technological changes.

They possess talent and research and development facilities.

D.) classification based on types of business:

1.Business entrepreneurs:
are individuals who conceive an idea for new products or service
and combine the resources to set up a big or small business unit to put
their idea into reality.

2.Agricultural entrepreneurs: They engage themselves in

agricultural activities like horticulture, floriculture, animal
husbandry, poultry etc.

3.Trading entrepreneurs: he is one who undertakes trading

activities and is not concerned with the manufacturing work. he
identifies potential markets, stimulates demand for his product line
and creates a desire and interest among buyers to go in for his
product.

4.Industrail entrepreneurs: he is manufacturer who identifies the

potential needs of customers and tailors the product or service to meet
the market needs.
E.)classification based on Motivation:
1.Pure entrepreneur: individual who is motivated by
psychological and economic rewards. he works for his personal
satisfaction ,ego or status.

2.Induced entrepreneur: he is one who is induced to take up a

task due to the policy measures of the government that provides
assistance, incentives ,concession etc.

3.Motivated entrepreneur: he is motivated by self fulfill desire.

4..Spontaneous entrepreneur:

they are the persons with initiative ,boldness and confidence in

their ability which motivates them to undertake entrepreneurial
activities.
Other Classification

 Solo operators: These are the entrepreneurs who essentially work

alone, introduce their own capital and if essential employ very few
employees. In the beginning most of the entrepreneurs start their
enterprises like them.

 Active partners: Such entrepreneurs jointly put their efforts and

resources. They actively participate in managing the daily routine of
the business concern. Entrepreneurs who only contribute their funds
but not actively participate in the business are called simply
‘Partners

 Inventors: Such entrepreneurs are creative in character and feel

happy in inventing new products, technologies and methods of
production. Their basic interest lies in research and innovative
activities.

 Inheritance entrepreneur :inherit the family business

QUALITIES OF SUCCESSFUL
ENTREPRENEUR
1.Initiative
2.Willingness to assume risk
3.Ability to learn from experience
4.Motivation
5.Self confidence
6.Orientation towards hard work
7.Decision making ability
INTRAPRENEUR- AN EMERGING CLASS -
 INTRAPRENEURS

 Intrapreneurship describes the innovation that occurs

inside the established companies through the efforts of
creative employees .it gives the managers of the corporation
the freedom to take initiative and try new ideas.

 In large organizations, the top executives are encouraged to

catch hold of new ideas and then convert them into
products through R and D activities within the framework
of organizations.
IN GERNAL,

An Intrapreneur is an inside entrepreneur, or an

entrepreneur within a large firm, who uses entrepreneurial skills
without incurring the risks associated with those activities.
Intrapreneur are usually employees within a company who are
assigned to work on a special idea or project, and they are
instructed to develop the project like an entrepreneur would.
Intrapreneur usually have the resources and capabilities of the
firm at their disposal.
Read more:
Intrapreneurial Environment /Importance of
intrapreneurship:

 New ideas encouraged

 Trial and error encouraged

 Failures allowed

 Resource available and accessible

 Long time horizon

 Appropriate reward system

 Support of top management

 Innovation, risk taking, commitment

 An objective analysis of opportunity & turning

into business reality.
PROCESS OF INTRAPRENEURSHIP:

 Satge1:problem identification: (understand the customers need )

is first stage of entrepreneurship process. the key to recognizing

entrepreneurial opportunities is to be sensitive to change and open to surprise.

o Stage 2: coalition building: (team building to achieve the objective)

temporary alliance or partnering of groups in order to achieve a common

purpose or to engage in joint activity .it is the process by which parties
(individuals ,organization or nations)come together to form a coalition. forming
coalitions with other groups of similar values , interests and goals allows
members to combine their resources and become more powerful than when each
acted alone.
 Stage 3: Resource Mobilization( all inputs at one place)

the Intrapreneur is looking for the same types of resources as the entrepreneur such as
physical ,technological ,financial ,organizational , human and reputational. To succeed
,an internal corporate venture must be rare , valuable, imperfectly imitable and without
desirable substitutes.

o Stage 4 :project Execution : (idea into action)(actual launch of new venture)

is the phase in which the plan designed in the prior phases of the project life are
put into action . The purpose of project execution is to deliver the project expected
results. this is longest phase of the project management lifecycle, where most resources
are applied.

o Stage 5: venture completion:( investment at present ,future and at time of risk)

venture capital investment completion would involves seed funding that would most
probably happen through eventual realization event. Most of newer companies find
venture capital investment completion to be advantageous. if it succeeded, it can be
sustained and supported with additional investment.
DIFFERENCE BETWEEN ENTREPRENEUR
AND INTRAPRENEUR
CONCEPT OF ENTREPRENEURSHIP
ENTREPRENEURSHIP

Entrepreneurship is the process of starting a business or other

organization. The entrepreneur develops a business model, acquires the
human and other required resources, and is fully responsible for its success
or failure. Entrepreneurship operates within an entrepreneurship ecosystem.

The capacity and willingness to develop, organize and manage a business

venture along with any of its risks in order to make a profit. The most
obvious example of entrepreneurship is the starting of new businesses.
DEFINITION:

 According to Peter Drucker ,”entrepreneurship is

neither a science nor an art .it is a practice.it has a
knowledge base. knowledge in entrepreneurship is a
means to an end. the end largely defines indeed what
constitutes knowledge in practice i.e by the practice.”
 EVOLUTION/NATURE/DEVELOPMENT OF
ENTREPRENEURSHIP

Earliest Period

 In these period, the Marco polo defined, Entrepreneur defined as a go-

between, who attempted to establish trade routes to the far east.

 The Marco polo sign a contract with money person to sell his goods.

 The contract involves providing loan with a interest of 22.5 percent

including insurance.

 The capitalist are the passive risk bearers and the merchant- adventurer
took the active role in trading.

 When the merchant sells goods successfully, the profit were divided with
the capitalist of 75% and merchant takes 25%.
Middle Ages

 The Entrepreneur was described as both an actor and a

person who managed large production projects.

 In such projects, the individual did not take any risks, but
merely managed by government of the country.

 In this age, the Entrepreneur perform the clerical works

such as castles(forts), public buildings abbeys and
cathedrals (church)
17th Century:
 Entrepreneur enters into contractual arrangement with
the government to perform services or supply stipulated
products.
 Contract prices are fixed, any profit or losses will be the
entrepreneur.
 John Law, a Frenchman established a Royal Bank and
turned into loss because he attempted to push the company’s
stock price higher than the value of assets
 Richard Cantillon , an economist understood the John
mistakes and developed the early theories of entrepreneur as
they are farmers, merchants, craftsmen who buy at
certain price and sell at an uncertain price, therefore
operating at risk.
 18th Century
 The person with capital was differentiated from one
who needed capital.
 The differentiation is made because of
industrialization occurring throughout the
world.
 Eli Whitney and Thomas Edison were developed
new technologies but unable to finance their inventions
themselves.
 Whitney financed his cotton gin with expropriated
British crown property.
 Edison raised the capital from private sources to
develop and experiment in the fields of electricity
and chemistry
19th and 20th Century
 In the late 19th and early 20th centuries, entrepreneurs were
frequently not distinguished from managers.
 The Entrepreneur Andrew Carnegie invented nothing but
rather adapted and developed new technology in the
creation of the products to achieve economic vitality.
 In the middle 20th century, the entrepreneur as an
innovator.
(a) Introduction of new product in the market.
(b) Use of new method of production, which is not yet tested.
(c) Opening of new market.
(d) Discovery of new source of raw materials.
(e) Bringing out of new form of organization.
CHARACTERISTICS OF ENTREPRENEURSHIP

 Innovation : new product ,new methods of production, new markets, new

sources of raw materials, new forms of organization.

 Motivation: highly active(try to achieve something greater then what they

already have)

 Risk Taking: decision making.

 Organization Building: multiply oneself by effectively delegating

responsibility.

 Managerial –Skills And Leadership

NATURE OF ENTREPRENEURSHIP
 Interest and vision (growth and expansion)

 Risk And Reward

 Organization and delegation

 Investment (reputation ,skill, time and money )

 skill
 SKILLS REQUIRED IN ENTREPRENEURSHIP

Technical skills Business Management skills

 Writing  Planning
 Oral communication  Human Resources
 Technology  Decision Making
 Interpersonal  Finance
 Listening  Marketing
 Network building  Control
Personal
Entrepreneurial skills
 Risk Taker
 Visionary Leader
 Change Oriented
 Ability to manage change
ROLE OF ENTREPRENEURSHIP IN ECONOMIC
DEVELOPMENT
1. Entrepreneurship promotes capital formation by mobilizing the
idle saving of the public.

2. It provides immediate large scale employment. Thus, it helps

reduce the unemployment problem in the country

3. It promotes balanced regional development.

4. It helps reduce the concentration of economic power.

5. It stimulates the equitable redistribution of wealth, income

and even political power in the interest of the country
6.It encourages effective resource mobilization of capital and
skill which might otherwise remain unutilized and idle.

7. It also induces backward and forward linkages which

stimulate the process of economic development in the country.

8.It also promotes country’s export trade i.e. an important

ingredient to economic development.

9.It helps in encourage innovation in enterprise.

10.Reducing unrest and social tension amongst youth.

FACTORS AFFECTING ENTREPRENEURSHIP

a. Economic factor :
most direct and immediate influence on entrepreneurship. This is
because people become entrepreneurs due to necessity when there are no
other jobs or because of opportunity.

1.capital:
availability of capital facilitates the entrepreneur to bring together the land
one, machine of another and raw materials of yet another to combine them
to produce goods. capital is therefore, regarded as lubricant to the process
of production.

2.labour:
quality of labour is another factor which influence the emergence of
entrepreneurship. The consideration of economic and emotional security
inhibit labour mobility. Entrepreneurs often find difficulty to secure
sufficient labour.
3.Raw materials :
in the absence of raw materials, neither any enterprise can be
established nor can an entrepreneur emerge.

4.Market :
the fact remains that the potential of the market constitutes the major
determinant of probable rewards from entrepreneurial function.

b.)social factors:
1.Caste :
there are certain cultural practice and values in ever society which
influence the ‘action of individuals. these practices and values have
evolved over hundred years
2.Family background :the size of family, type of family and
economic status of the family. background of a family in
manufacturing provided a source of industrial entrepreneurship.
Occupational and social status of the family influence mobility.

3.education:
it enables one to understand the outside world and equips him
with the basic knowledge and skills to deal with day to day
problems.

4.Attitude of society: certain societies encourage innovations and

novelist, and thus approve entrepreneurs actions and rewards
like profits.
DEVELOPMENT OF ENTREPRENEURSHIP
ENTREPRENEUR DEVELOPMENT PROGRAM (EDP)

MEANING:

Entrepreneurial development program is a programme

designed to help a person in strengthening his entrepreneurial
motives and in acquiring skills and abilities necessary for
paying his entrepreneurial role effectively.

Definition:
EDP designed as a programme designed to help an
individual in strengthening his entrepreneurial motive and in
acquiring skills and capacities necessary for paying his
entrepreneurial role effectively
OBJECTIVES OF EDP
 To prepare entrepreneurs to accept the risk and uncertainty
involved in running a business.

 To develop broad vision of business, passion for integrity and

honesty.

 To make entrepreneurs to understand and cope up with

statutory obligations.

 To prepare them to analyze environmental set up relating to

small industry.

 To train entrepreneurs to take right decision at the right time.

 To enable entrepreneurs to communicate clearly and effectively.

 To give the knowledge of sources of help, concessions and help

available for starting a small scale industry.
NEED AND IMPORTANCE OF EDP
1.EDP is a tool of industrialization and the path to economic growth through
entrepreneurship.

2.It provides opportunities for self-employment and entrepreneurial careers.

3.EDP develops motivation, competence and skills necessary for successful

launching. Management and growth of the enterprise.

4.EDP ,by inculcating entrepreneurial capabilities and skill in the trainees,

create new generation entrepreneur.

5.Helps in optimum utilization of resources.

6.Helps in successful launching of new unit

7.Helps in the elimination of poverty and unemployment.
8.EDP helps in the promotion of balanced religion development.
 STEPS IN CREATING AND ENHANCING
EFFECTIVE EDP
1. Outline the objective of the program and focus on venture development.

2. Select educated people who have high entrepreneurial potential.

3. Select uneducated people who have high entrepreneurial potential.

4. Identify the local market and search for people who have potential in it.

5. Provide support through private sector based organization.

6. Provide a methodology that will help in improving the entrepreneurs in the

short as well as long run .
7. Implement measures to improve usefulness of trainers
and facilities.

8.Selection of areas for pilot program.

9.Launch pilot Ed programs.

10.Government policies.
PROBLEMS OF EDP
 Non availability of competent faculty
 Over estimation of trainees

 Duration of EDPs

 No Policy at National level

 Non Availability of infrastructural Facilities

 Improper methodology

 Mode of selection

 Poor response of financial institutions

ENTREPRENEURIAL CULTURE
Culture can be defined as the mix of norms, values and beliefs that
are shared by a particular community [be it a business community, a
cultural (or ethnic) community, a country, or a geographical region].

The entrepreneurial culture is favoured by the following set of

attitudes:
1. Business activities are valued.
2. Individual and collective initiatives are highly rated.
3. Determination and perseverance are desirable qualities.
4. An equilibrium between security and risk is accepted.
5. The tension between stability and change is resolved.

An entrepreneurial culture is supported by people who have a strong

belief in their projects, who will invest their physical, psychological and
other resources in their venture with a view to succeed.
The conditions required for establishing an Entrepreneurial Culture are:

 Identification and promotion of Role Models

An Entrepreneurial culture consists of a group of individuals who have
suppressed interests in an effort to achieve group success because group success
will advance their individual interests.

Difficulties Faced in Establishing an Entrepreneurial Culture

 Ignorance: Where people fail to capture the important role of entrepreneurship, for
instance, in poverty alleviation.
 Laziness: For example in communities who have got used to being assisted.
 Fear: Risk aversion
 Religious/Cultural constraints: Communities/societies where business and profit
making are perceived as being against cultural/religious values.
THE ENTREPRENEURIAL PROCESS
The process has four distinct phases
(1) Identification and evaluation of the
opportunity,
(2) Development of the business plan,
(3) Determination of the required resources, and
(4) Management of the resulting enterprise
CONTINUED…..
Identification and evaluation of the opportunity
 Most good business opportunities do not suddenly appear, but
rather result from an entrepreneur’s alertness to possibilities, or in
some case, the establishment of mechanisms that identify potential
opportunities.
 E.g. Entrepreneur asks at every cocktail party whether anyone is using
a product that does not adequately fulfill its intended purpose. This
person is constantly looking for a need and an opportunity to create a
better product.
 Entrepreneur always monitors the play habits and toys of her nieces
and nephews. This is her way of looking for any unique toy product
niche for a new venture
Sources for entrepreneurs
 Consumers and Business associates,.
 Members of the distribution system, and technical people.
 Developing a Business Plan

 A good business plan must be developed in order to

exploit the defined opportunity

 If an entrepreneur doesn’t have business plan then does

not have the resources to do a good job.

 A good business plan is essential to developing the

opportunity and determining the resources required,
obtaining those resources, and successfully managing the
resulting venture.
 Determine the Resources Required
 The process starts with an appraisal of the entrepreneur’s
present resources.
 Any resources that are critical need to be differentiated
from those that are just helpful.
 Care must be taken not to underestimate the amount of
variety of resources needed.
 The downside risks associated with insufficient or
inappropriate resources should also be assessed.
CONTINUED…..
Manage the Enterprise
 This involves implementing a management style
and structure, as well as determining the key
variables for success.
 A control system must be established, so that any
problem areas can be quickly identified and
resolved.
 DISTINCTION BETWEEN ENTREPRENEUR
AND MANAGER
Points Manager Entrepreneur Intrapreneur
Motive Promotion and other Independence, Independence and ability to
traditional corporate opportunity to create and advance in the corporate
rewards such as office, money rewards
staff and power
Time Short term- meeting Survival and achieving 5- B/w entrepreneurial and
orientation quotas and budgets, 10 year growth of traditional mangers,
weekly, monthly, business depending on urgency to meet
quarterly and annual self imposed and corporate
planning horizon time table
Risk Careful Moderate risk taker Moderate risk taker

Status Concerned about status Not concerned about Not concerned about
symbol status symbol traditional status symbol-
desires independence

Failure Tries to avoid mistakes Deals with mistakes and Attempts to hide risky
and and surprises failures projects from view until ready
mistakes
Who serves Others Self and customers Self, customers and sponsors
THANK YOU…..