BBA ED UNIT 1

Entrepreneurship Development

ENTRPRENEURS The most famous entrepreneurs from India all have the same entrepreneurial spirit. These entrepreneurs did not inherit wealth from their families, or sign million dollar sport contracts. Each of these entrepreneurs started with a dream in a country that is known for producing successful entrepreneurs.They earned their millions the hard way through hard work, perseverance, and dedication.

NARAYANA MURTHYNarayana Murthy is one of the founders of Infoys Technologies Limited. In 1999, Infoys became the first Indian company to be listed on NASDAQ. By 2006 the company employed over 50,000 people and had a turn over of two billion dollars. Murthy has always believed that honesty, transparency and moral integrity are the key factors in business.

SHIV NADARHe is the Chief Executive Officer of Hindustan Computers Limited (HCL), India's largest info tech conglomerate.While working as an engineer with another company, Nadar wanted to become an entrepreneur by setting up his own business. He quit his job and launched his own company making office products mainly copiers. In 1970 when IBM quit India, Shiv Nadar's HCL stepped in for IBM.

RAHUL BAJAJRahul Bajaj is Chairman of the Bajaj Group which is one of the top ten business groups in India. His company has diversified interests in everything ranging from automobiles to home appliances. After the recession and stock market collapse in 2001, the Bajaj Auto was hit hard.However, the company re-invented itself and become a major success.

Dr. PRATAP REDDYDr. Pratap Reddy developed India's first corporate hospital group, The Apollo Hospital Group.

He has revolutionized India's whole health care sector and today has over 750 corporate hospitals throughout the country.

The idea came to Dr. Reddy when a patient could not make it to Texas for open heart surgery and died.

Dr. Reddy created a medical infrastructure in India which made medical care more affordable and accessible for everyone.

KIRAN MAZUMDAR SHAWShe is the Chairman and Managing Director of Biocon LTD, the largest Biotechnology Company in India. Shaw started Biocon in 1978 in a rented garage space. Faced with a variety of problems and challenges since biotechnology was a new field and woman entrepreneur was very rare, Shaw overcame all entrepreneurial barriers and made Biocon a success.

NARESH GOYALNaresh Goyal is the founder and Chairman of Jet Airways, India's largest domestic airline. After he graduated college, Goyal joined the travel business. By 1974, Goyal founded Jet Airway to look after sales and marketing of foreign airlines in India. In 1991, Goyal took advantage of the open skies policy of the Indian Government and set up Jet Airways for operation of scheduled air service on domestic flights in India.

ANIL DHIRUBHAIHe is the Chairman of Anil Dhirubhai Ambani Group. After receiving his MBA, Ambani joined Reliance Company. He was responsible for India Inc's entry into overseas capital markets. In 1997 the 100-year Yankee bond issue was launched under his command. After the split in the Reliance Group, Ambani formed his own company and became Chairman of several of the Reliance entities.

AZIM PREMJIHe is Chairman of Wipro Technologies which is one of the largest software companies in India. As a student Premji was summoned home due to the death of his father. During an annual meeting, a shareholder advised Premji to sell his shares. This made Premji even more determined to make the company a success. Today Wipro Technologies is the largest independent R&D service provider.

EKTA KAPOORShe is known as the reigning Queen of Indian television. She is the creative director of Balaji Telefilms and was awarded the startup entrepreneur of the year in 2001 by Ernst & Young. At nineteen she ventured into the TV-serial production arena.Her company Balaji Telefilms has produced over 25 serials which are shown four times a week on different channels.

HENRY FORDThe automobile would allow Americas masses to fulfill their Manifest Destiny to populate every corner of the continent. But his more profound impact was on industry. The moving assembly line he designed to build his cars was the signal breakthrough of the Industrial Age.Appropriately, Ford earned the seed capital for his enterprise by working as an engineer at the Edison Illuminating Company in Detroit.

LAXMI NIWAS MITTALThe largest steel producer of the world He manages his empire that employs some 165000 workers. Lakshmi Mittal is an Indian born British steel billionaire and one of the richest men in the world .As of March 2010, he is the fifth richest person in the world. He is also the richest person in Europe with a personal wealth of US$28.7 billion

RASHMI SINHARashmi is the founder-CEO of Slide Share. She is an Indian internet entrepreneur.Slide share is the worlds largest community for individuals and organization to share their presentations. Today, SlideShare receives more than 32 million unique visits in a month.

SANJEEV BIKHCHANDANISanjeev is the founder of Naukri.com an Indian job portal.Sanjeev possesses a BA in Economics from Delhi University, he studied there although he had qualified for IIT. After working a year, he qualified for IIM. He is a management graduate from IIM-Ahmedabad.In 1997, he left his cushy MNC job that paid Rupees 80,000 a month to set up Naukri.com, jobs portal on a server in the United States. By 2005, he was selected as a finalist for Ernst and Young Entrepreneur of the Year award.

EntrepreneurThe word entrepreneur is derived from the French word enterprendre it means to undertake and literally translated means between-taker or go-between.Entrepreneur is an individual who takes risk and starts something new.Development of entrepreneurship - Earliest period.- Middle Ages.- 17th Century.- 18th Century.- 19th and 20th centuries.

An entrepreneur is defined as person in effective control of commercial undertaking; one who undertakes a business or an enterprise.

Entrepreneur is an innovative person who maximizes his profits by following new strategies or venturing into new products or services.

Entrepreneurship is the act of being an entrepreneur, who starts any economic activity for being self-employed.

Entrepreneurship is the process of the entrepreneur. It is an attempt to create value through recognition of business opportunity. It is basically communicative and management functions to mobilize financial and material resources.

The entrepreneurial activity is governed by varying combination of socio-economic, psychological, cultural and other factors: Caste/religion, Family background, Level of education, Level of perception, Occupational background, Migratory character, Entry into entrepreneurship, Nature of enterprise, Investment capacity and Ambition/moderation.

Entrepreneurship

Entrepreneurs V. IntrapreneursEntrepreneurs are people that notice opportunities and take the initiative to mobilize resources to make new goods and services. Intrapreneurs also notice opportunities and take initiative to mobilize resources, however they work in large companies and contribute to the innovation of the firm.

Intrapreneurs often become entrepreneurs.

IntrapreneurshipLearning organizations encourage intrapreneurship. Organizations want to form:Product Champions: people who take ownership of a product from concept to market.Skunkworks: a group of intrapreneurs kept separate from the rest of the organization.New Venture Division: allows a division to act as its own smaller company.Rewards for Innovation: link innovation by workers to valued rewards.

Management - Chapter 6*Personal traits and characteristics of entrepreneurs.

Management - Chapter 6

*

Entrepreneurial CharacteristicsBeing an entrepreneur requires specific characteristics and skills that are often achieved through education, hard work, and planning.

Risk TakerBusinesses face risk. Entrepreneurs minimize risk through research, planning, and skill development.

PerceptiveEntrepreneurs view problems as opportunities and challenges.

CuriousEntrepreneurs like to know how things work. They take the time and initiative to pursue the unknown.Entrepreneurship development PreviousNextEnd

*ImaginativeEntrepreneurs are creative. They imagine solutions to problems that encourage them to create new products and generate ideas.

PersistentTrue entrepreneurs face bureaucracy, make mistakes, receive criticism, and deal with money, family, or stress problems. But they still stick to their dreams of seeing the venture succeed.

Goal-settingEntrepreneurs are motivated by the excitement of staring a new business. Once achieved, they seek out new goals or ventures to try.

HardworkingEntrepreneurs need a great deal of energy to see a venture start and succeed. Yet they are not deterred by the long hours to achieve their goal.

Entrepreneurial CharacteristicsPreviousNextEnd

Self-confidentEntrepreneurs believe in themselves. Their self-confidence takes care of any doubts they may have.

FlexibleEntrepreneurs must be flexible in order to adapt to changing trends, markets, technologies, rules, and economic environments.

IndependentAn entrepreneurs desire for control and the ability to make decisions often makes it difficult for them to work in a controlled environment.

Entrepreneurial Characteristics

Increases national production

Balanced area development

Dispersal of economic power

Reinvestment of profit for the welfare of the area of profit generation

Development is a function of motivation and human resource

Entrepreneurial awareness

Need for entrepreneurship

Functions of EntrepreneurInnovation.- The unexpected success or failure or any unexpected outside event.- Innovation based on process need.- Changes in industry and market structure.- Demographics changes.- New knowledge.Risk and uncertainty bearing.Organization building.- Perception of market opportunities.- Gaining command over scarce resources.- Purchasing inputs.- Marketing the products.- Dealing with bureaucrats.- Managing human relations within the firm.- Managing customer and supplier relations.- Managing finance.- Managing production.- Acquiring and overseeing assembly of the factory.- Upgrading process and product.- Introducing new production techniques and products.

Organization building.- Perception of market opportunities.- Gaining command over scarce resources.- Purchasing inputs.- Marketing the products.- Dealing with bureaucrats.- Managing human relations within the firm.- Managing customer and supplier relations.- Managing finance.- Managing production.- Acquiring and overseeing assembly of the factory.- Upgrading process and product.- Introducing new production techniques and products.

Type of EntrepreneurInnovative entrepreneur Adoptive or imitative entrepreneurFabian EntrepreneurDrone Enterepreneur

Type of EntrepreneurClassification according to type of business.Business Entrepreneurs.Trading Entrepreneurs.Industrial Entrepreneurs.Corporate Entrepreneurs.Agricultural Entrepreneurs.Classification according to use of technology.Technical entrepreneur.Professional entrepreneur.Non-technical entrepreneur.High-tech entrepreneur.

Type of EntrepreneurClassification according to motivation of entrepreneur.Pure entrepreneur.Induced entrepreneur.Motivated entrepreneur.Spontaneous entrepreneur.Classification according to growth.Growth entrepreneur.Super growth entrepreneur.Classification according to stages of development.First generation entrepreneur.Modern entrepreneur.Classical entrepreneur.

Entrepreneur and Entrepreneurship

EntrepreneurEntrepreneurshipPersonProcessVisualizerVisionOrganizer OrganizationDecision maker Decision MakingInnovatorInnovationRisk bearer Risk bearing Motivator MotivationCreatorCreationLeader LeadershipManagerManagementInitiator InitiationPlannerPlanningTechnician TechnologyCommunicatorCommunicationAdministratorAdministration

Stages of Entrepreneurial ProcessConducting Opportunity Analysis.

Developing the plan and setting up the company.

Acquiring financial partners and sources of funding.

Determining resources required and implementing the plan.

Scaling and harvesting the venture.

Role of Entrepreneurs in Economic Development.Capital formation.Generation of employment.Improvement in per capita income.Reduces concentration of wealth.Balanced regional development.Resource mobilization.Improvement in standard of living.National self-reliance.Harnessing natural resources.Backward and forward linkages.Sense of purpose.

Creativity and InnovationSources of new ideas.- consumers.- Existing companies.- Distribution channels.- federal Government.- Research and development. Methods of generating ideas.- Focus Groups.- Brainstorming.- Problem inventory analysis.

Innovation and EntrepreneurshipSchumpeter has firmly expressed his opinion that the function of entrepreneurship is innovation.Innovation of new product.Innovation of new technology.Innovation of new process of production methods.Exploration of new markets.Searching for the new sources and supply.Innovation of industrial reconstruction method.

The Business PlanThe Business plan will take more than 200 to 300hours to prepare, depending upon the experienceand knowledge of the entrepreneur as well as thepurpose it is intended to serve. The detail outline of the business plan is as follows:Introductory Page.- Name and address of the business.- Name and address of the entrepreneur.- Nature of the business.- statement of financing need.- statement of confidentiality of report.

The Business PlanExecutive summary.- The summary should be at least four pages that summarizing the complete business plan.Industry analysis.- Future outlook and trends.- analysis of competitors.- Market segmentation.- Industry forecasts.Description of ventures.- product.- services.- size of business.- office equipment and personnel.- background of entrepreneurs.

The Business PlanProduction plan.- Manufacturing process.- Physical plant.- Machinery and equipment.- Names of suppliers of raw materials.Marketing plan.- Pricing.- distribution.- promotion.- product forecast.Organizational Plan.- From of ownership.- Identification of partners or shareholders.- Authority of principals.- Management team background.- roles and responsibilities of members of organisation.

The Business PlanAssessment of risk- evaluate weakness of business.- New technologies.- contingency plans.Financial plans.- pro forma income statements.- cash flow projections.- pro forma balance sheet.- Break-even analysis.- sources and applications of funds.Appendix.- Letters.- Market research data.- Leases or contract.- Price lists from suppliers.

The Business PlanThe business plan is designed to guide the entrepreneur through the first year of operations.There has been the tendency among many entrepreneurs to avoid planning. Planning is an important part of any business operations.Without good planning the entrepreneur is likely to pay an enormous price.Without good planning the employees will not understand the companys goals and how they are expected to perform in their jobs.

The Business PlanSources of information.- Small business administration.- Department of commerce.- federal information centers.- Bureau of census.- state and municipal governments.- banks.- chamber of commerce.- trade associations.- trade journals.- libraries.- Universities and community colleges.

Growth of Entrepreneurship In IndiaEntrepreneurship Growth before 1850Entrepreneurship Growth after 1850Entrepreneurship Growth in the Post Independence Era

Role Of Entrepreneurship In Economic Development Key Elements For Economic DevelopmentINNOVATIONRISK BEARING ECONOMIC ORGANISATIONVISIONORGANISING SKILLS

Women EntrepreneurIn IndiaWomen EntrepreneurIt may be defined as a woman or group of women who initiate, organise and run a business enterprise.Government of India has defined women entrepreneurs as owning and controlling an enterprise with a woman having a minimum financial interest of 51% of the capital and giving atleast 51% of the employment generated in the enterprise to women.

WOMEN ENTREPRENEURS IN INDIAImaginativeAttribute to work hardPersistenceAbility and desire to take riskProfit earning capacity

LEADERSHIP QUALITIESAccept challengesAmbitiousDriveEnthusiasticHard workPatienceIndustriousMotivatorSkillfulUnquenchable optimismAdventurousConsciousEducatedDetermination to excelExperiencedIntelligentPerseveranceStudiousKeenness to learn and imbibe new ideas

IMPORTANCE OF WOMEN ENTREPRENEURSA good share of the population.Traditionally outside the domain of economic activities.They must be made part of the economic development, because it will ensure the economic & social development of the women along with providing more human resources to strengthen the economy of the country. The economic status of women is now accepted as an indicator of a societys stage of development.

WHY WOMEN BECOME ENTREPRENEURS?PULL FACTORSAn urge to do something newLiking for businessNeed and perception of Womens Liberation, Equity, etc.To gain recognition, importance and social status.To get economic independenceTo build confidenceTo developing risk-taking abilityTo gain greater freedom and mobility

PUSH FACTORSDeath of bread winnerSudden fall in family incomePermanent inadequacy in income of the familyThe category of push factors forms a negligible percentage of women entrepreneurs.

THE NEW THRUSTHarvard Experts feel that the basic quality of efficient management is futuristic and outlook and a capacity to nurture and plan for the future or unknown. This comes naturally to women.But this inherent talent of woman and her entrepreneurial skill go unrecognised and unaccounted.

Earlier there were 3 KsKitchenKidsKnittingThen came 3 PsPowderPapadPicklesAt present there are 3 EsElectronicsEnergyEngineeringWhen women move forward, the family moves, the village moves and the nation moves.....-Pandit Jawaharlal NehruTHE INDIAN APPROACH

OVERALL PRODUCT SELECTION BY WOMEN ENTREPRENEURS IN INDIA

Chart1

29

7

12

15

20

13

4

Column1

Sheet1

Column2Column1

General29

Electronics7

Engineering12

Plastics15

Chemicals20

Textiles13

Leather4

NEW AWARENESSNIP highlighted the need for special entrepreneurship programmes for women entrepreneurs.Industrial and business opportunities are many.Majority of want-to-be women entrepreneurs are from middle class families. Their potential should be identified and trained.Adequate infrastructure support may be helpful.Mobile training centres should be opened.Post-training follow-up is vital.

SOME FAMOUS WOMEN ENTREPRENEURSStarted her own company, Biocon, in her garage with an investment of `10000 in the year 1978.Loan application was turned due the reasons:Biotechnology was nascent at the time in India.She was a woman.Her organisation had almost nil assetsWith hard work and commitment, Shaw transformed Biocon into one of the leading biopharmaceutical firms in India.Dr. Kiran Mazumdar Shaw

Woman who single-handedly founded and made Balaji TelefilmsCurrently the creative head of Balaji Telefilms and counted as one of the top 10 women entrepreneurs of today. Known to be fiercely protective of her company and brand, Ekta is also very professional and has strong business acumen.Ekta Kapoor

One of the most prominent personalities of the corporate world. The products launched by her Company head their way to leading global stores.Her company Shahnaz Husain Herbals has witnessed tremendous growth.She has received many awards such as "The Arch of Europe Gold Star for Quality", "The 2000 Millennium Medal of Honour", "Rajiv Gandhi Sadbhavana Award" and many more.Shahnaz Husain

A native ofAmritsar.Kumar has been designing the wardrobes com of the three winningMiss Indias, for their participation in InternationalBeauty Pageants.Ritus outfits have been patronized by style icons such as latePrincess DianaandJemima Khan.Ritu Kumar

Cherish Life creates apparel and accessories for pregnant women, young mothers and infants.Cherish Life aims to accomplish precisely what the name suggests: to applaud every pregnant lady for the life she creates.Arathi Kuppu

BASIC PROBLEMS FACED WOMEN ENTREPRENEURSHer being a womanResponsibility towards family, society and workMale dominated societyTough Competition with large scale unitsLack of business trainingLack of educationLow risk bearing abilityObtaining creditNon-awareness of facilities provided by governmentQuestions by licensing authoritiesMarketing

PSYCHO-SOCIAL BARRIERSPoor self-image of womenInadequate motivationDiscriminating treatmentFaulty socialisationRole conflictCultural valuesLack of courage and self-confidence

Inadequate encouragementLack of social acceptanceUnjust socio-economic and cultural systemLack of freedom of expressionAfraid of failures and criticismSusceptible to negative attitudesNon-persistent attitudeLow dignity of labourLacking in leadership qualities

SUGGESTIONSProcedure of getting finance should be simpleEffective propagation of programmes and yojnas.Linkages between product, services and market centers.Encouragement to technical and professional education.

Direct & indirect financial supportNationalized banks, State finance corporation, Small Industries Development Bank of India (SIDBI)Yojna schemes and programmesNehru Rozgar Yojna, Jawahar Rozgar YojnaTechnological training and awardsStree Shakti Package by SBI, Entrepreneurship Development Institute of India, Trade Related Entrepreneurship Assistance and Development (TREAD)Federations and associationsFederation of Indian Women Entrepreneurs (FIWE), Self Employed Womens Association (SEWA)SUPPORTIVE MEASURES

OTHER SUPPORT AGENCIESDomestic Agencies: Small Industries Development Bank of India, SIDBIIndustrial Development Bank of India (IDBI)Ministry of Small Scale Industries (SSI), Government of India.National Bank for Agriculture Rural Development (NABARD)Department of Women and Child Development (WCD), Ministry of HRD, GOISelf Help Groups (SHG)Mahila Mandali

International Agencies:

United Nations Development Fund for Women (UNIFEM)Asian Development Bank (ADB)International Labour Organization (ILO)United Nations Conference on Trade and Development (UNCTAD)Center for International Private Enterprises (CIPE), USASwedish International Development Cooperation Agency (SIDA), SwedenWorld Trade Organization (WTO)

WOMEN ORGANISATIONS SUPPORTING WOMEN ENTREPRENEURSShri Mahila Griha Udhyog Lijjat Papad; www.lijjat.comMahila Bunkar Sahakari Samiti, UPSABAL: Crafting Exports of Indian Handicrafts; www.sabalaindia.comwww.indiatogether.org

13.3% in 2007;

**ENTREPRENEURIAL CHARACTERISTICSRisk TakerEntrepreneurs often take on a high degree of risk and stress.Many entrepreneurs face bankruptcy, that can leave them with not business and no personal assets.PerceptiveThe owner of Cott Corp. was perceptive, he saw the opportunity to offer a private-label beverage to the grocery industry.Private label or private brand is a product that is manufactured by another company but is sold with a stores brand name; also called a store brand or private brand.CuriousRay Kroc, a leader in the development of the modern franchise system, recognized the potential of the McDonalds brothers restaurant and its formula for producing good and inexpensive food and capitalized on it.*ENTREPRENEURIAL CHARACTERISTICSImaginativeThe founder of Canadian Railway Newspaper Company (Cara Operations Ltd.), T.P. Phelan took his newspaper service to the next step by providing food service in many sectors.PersistentThe story about The Little Engine That Could is a childrens storybook tale of persistence.Goal-settingSome entrepreneurs have local success and then take on new challenges by going international with their business.HardworkingJ.M. Schneider worked days for a button factory and in the evenings and at night he worked to provide his own customers with sausages.*ENTREPRENEURIAL CHARACTERISTICSSelf-confidentSir Richard Branson, the founder of Virgin Records, went out of his comfort zone and started Virgin Airlines.FlexibleVideo rental businesses demonstrated flexibility buy quickly adapting to the change from video format to DVD format.IndependentEach venture is a reflection of the independent entrepreneur who started it.

See