Entrepreneur development

• 1. Rajendran Ananda Krishnanhttps://www.facebook.com/ialwaysthinkprettythings

2. https://www.facebook.com/ialwaysthinkprettythings 3. MEANING1. Entrepreneur is an organizer of a business firm central to its distributive and productive function.2. Entrepreneur are specialized group of persons who bear risk and deal with uncertainties3. Entrepreneur is an economic man who tries to maximize his profits by innovations. Innovation involves problem solving and entrepreneur gets satisfaction from using capabilities in attacking problems.https://www.facebook.com/ialwaysthinkprettythings 4. EVOLUTION OFENTREPRENEURSHIP https://www.facebook.com/ialwaysthinkprettythings 5. Evolution of entrepreneurship1. Earliest period : Marco polo is an early example of an entrepreneur who attempted to establish trade route to far east. Marco polo would sign contract with money person to sell his goods. A common contract for taking loan stated that trader had to pay interest of 22.5 % for the loan. Which includes insurance. When the merchant adventurer would successfully sell the goods and complete the trip profit were divided into two parts of which capitalist would gain 75% of profit and trader would end up getting 25 % of income.2. Middle ages : in middle ages entrepreneur were more described as actor, person, manager. His job was to manage large production projects. He was merely managing the business while the risk was borne by the government of the country and not the entrepreneur. A typical entrepreneur in middle ages were the clerk in charge of great architecture. https://www.facebook.com/ialwaysthinkprettythings 6. 3. 17th century manager : emerging connection of risk with entrepreneurship developed with 17th century. In this stage entrepreneur entered in contract with government were payment to be made to capitalist was fixed and after fixed payment, profit or loss incurred through the business had to be borne by entrepreneur. https://www.facebook.com/ialwaysthinkprettythings 7. E.g. Richard Cantillon a noted economist andauthor in 1700 understood laws mistake. Hedeveloped one of the early theories of theentrepreneur and is regarded some as the founderof the term. He viewed entrepreneur as risk taker.He was the first person to recognize the role ofentrepreneur in economic theory. He stressed onthe entrepreneur and not his personality.https://www.facebook.com/ialwaysthinkprettythings 8. 4. During this period entrepreneur were divided into two personsa. Person with capitalb. Person who needed capital Major reason for such differentiation was due to theindustrialization occurring throughout the world. Manyinventions developed during the period were reactions tothe changing world. E.g. Edison raised capital fromprivate sources to develop and experiment in the field ofelectricity and chemistry. Similarly Whitney had tofinance his invention of cotton gin from expropriatedBritish crown property. Therefore both wereentrepreneur looking for venture capitalist to financetheir inventions. J B Say broadened the concept ofentrepreneur and included the concept of combining thefactors of production. https://www.facebook.com/ialwaysthinkprettythings 9. 5. 19th and 20th century : during this period entrepreneur were not distinguished from mangers and were viewed mostly from managers and from economic perspective in following manner :a. He organizes and operates the enterprise for hispersonal gains.b. He pays current prices for the materials consumed inthe business.c. He contributes his own initiative, skill, in planning,organizing and administering things in company.d. He assumes the chance of loss and gain consequentto uncontrollable factors.https://www.facebook.com/ialwaysthinkprettythings 10. During the period of 20th century entrepreneur was seen as innovator in the economy. He was the one who came up the unique concept in the market. He performed following functions as entrepreneur :a.To revolutionize the pattern of production byexploiting inventions.b.To perform pattern of production by exploitingtechnological method of producing new commodityor old commodity in new patter.c.Opening new source of supply of raw materials ornew change outlet of productsd.Performing these functions by organizing newindustry. Cont.... https://www.facebook.com/ialwaysthinkprettythings 11. Concept of innovation and newness is the integral part of entrepreneur which not only requires the ability to create and conceptualize but ability to understand forces at work environment. The newness in the concept can be in the following ways :a.Introduction of new or quality goodsb.Introducing new method of productionc.Utilization of new source of raw materiald.Carrying out new organizational form ofindustry. https://www.facebook.com/ialwaysthinkprettythings 12. 6. 21st century : during the present century two characteristics are associated with the entrepreneur they are innovation and creativity. Creativity is the ability to bring some thing new into existence. While innovators are practical people and create from the opportunities available in reality . Following principles of innovation have emerged leading to success of entrepreneur :a. Action oriented and searching for new ideasb. Making the product service simple andunderstandablec. Trying, testing and revisingd. Learning from failurese. Hard work is the key to successhttps://www.facebook.com/ialwaysthinkprettythings 13. Risk takingSuperviseInnovateand controlDirectAnalyzeactivities ofopportunityfirmFunctionsofentrepreneur Develop Strategies to venture start venture DevelopStart venturebusiness plan Acquireresources https://www.facebook.com/ialwaysthinkprettythings 14. FUNCTIONS OF ENTREPRENEUR1. Risk measurement and risk taking : risk taking and risk measurement is the primary function of entrepreneur. Risk are not only related to success or failure of business but also involve personal and professional career forgone for the sake of opportunity.2. Innovate/ create/ discover : entrepreneurship is innovativeness of individual and does not involve ownership. Principal function of the entrepreneur is to carry out new combinations of means of production.3. Analyze opportunities : entrepreneur has to have opportunity seeking style where he has to evaluate credibility of various alternatives and choose suitable alternative which will prove to be profitable in future.https://www.facebook.com/ialwaysthinkprettythings 15. 4. Strategies for venture : entrepreneur has to strategize long term plan for starting venture. He has to analyze the market and devise effective strategies to face present and future competition.5. Develop business plan : business plan is written document containing details about every aspect of proposed business venture. It provides roadmap to employees working in company to attain objectives and is capable of convincing potential customers they are share holders and investors of company.6. Acquire resources : entrepreneur has to acquire various types of resources such as men, money, material, machinery to start venture. Entrepreneur has to have suitable skills to line up required resources for the company.https://www.facebook.com/ialwaysthinkprettythings 16. 7. Organize and start venture : entrepreneurshould be a good organizer, he should deploysuitable resources at right place in right timerequired to for the company to ensure effectiveworking of organization.8. Develop and grow venture : it is not onlyimportant to start a venture but also companyshould be able to respond to changes happeningin the business market which is crucial factordeciding existence of company. https://www.facebook.com/ialwaysthinkprettythings 17. 9. Delegate, direct and lead the plan : during the growth stage of the company entrepreneur should provide required resources for the company and during later stage entrepreneur should come up with effective strategies to face competition and guide employees in company performing role of leader.10. Supervise and control : for success of business it is important to have suitable mechanism in place so that entrepreneur can track overall success of the company.https://www.facebook.com/ialwaysthinkprettythings 18. CHARACTERISTICS OFENTREPRENEURShttps://www.facebook.com/ialwaysthinkprettythings 19. FEATURES OF ENTREPRENEUR Vision entrepreneur works hard to fulfil his dream inprocess to achieve his objective, he visualizes marketscenario, socio economic, and technological environmentbased on these information he predicts future situationand accordingly plans his vision and ways to achievedesired objective. Knowledge as entrepreneur is soul of organization he isrequired to have knowledge about all the operationscarried in organization so that he can direct and regulateactivities of his employees from time to time. Desire to succeed entrepreneur are recognized in societybecause of their varied mindset and high dreams whichmotivates them to bring in invention and innovation inare of their business.https://www.facebook.com/ialwaysthinkprettythings 20. Independence entrepreneur needs independence inhis work area as they are not know to follow theirrule of thumb. Optimistic entrepreneurs are optimistic aboutachieving their objective as they intend to take risk toany extent to accomplish desired goals. Value addition entrepreneurs are known for bringingnew things in market. They create, innovate, addvalue to existing products in market. Leadership entrepreneur exhibits qualities of goodleader. They are good planners, organizers, decisionmakers and are empathetic towards employees atworkplace.https://www.facebook.com/ialwaysthinkprettythings 21. Hardworking entrepreneur are know to beworkaholic. They put in continuous efforts toachieve success and know that their is nosubstitute for hard work. Risk taking ability is one of the major trait ofsuccessful entrepreneur .https://www.facebook.com/ialwaysthinkprettythings 22. TYPES OF ENTREPRENEURS1. Based on functional characteristics :a. Innovative entrepreneur : such entrepreneurs introduce new goods or new methods of production or discover new markets or new organise their enterprise. Entrepreneurs in this groups are characterized by aggressive assembly of information for trying new combination of factors.b. Imitative or adoptive entrepreneur : these people imitate techniques and technology innovated by others. Entrepreneurs of this trait are reactive in nature and are ready to adopt to innovation happening around. https://www.facebook.com/ialwaysthinkprettythings 23. c. Fabian entrepreneur : accept change only whenthey feel threatened that failure to do so wouldresult in losses. They are imitative by nature butnot determinant and also lack in power.d. Drone entrepreneur : these are entrepreneur whorefuse to accept to adopt to changes adopted bythe competitors. When competition increasesthey are pushed out of the market as it becomesuneconomical for them to carry their businessfurther due to financial crisis. https://www.facebook.com/ialwaysthinkprettythings 24. 2. Based on development :a. Prime mover : he is a person who moves in powerfulsequence of development, expansion and diversificationof business.b. Manager : these kind of entrepreneur do not initiateexpansion or innovation but believe in utilizing availableresource in organization and performing assignedactivities to them.c. Minor innovator : these set of entrepreneurs contributeto economic progress by finding better use for existingresources.d. Satellite : these are set of suppliers who providebusiness with required resources and then move towardsproductive enterprise.e. Local trading : these entrepreneur limit their productsor service to local market.https://www.facebook.com/ialwaysthinkprettythings 25. 3. Based on entrepreneur business :a. Manufacturing : these are set of entrepreneurs whoare into production of products that will be sold inmarket using resources and suppliers. E.g. Apparel,textile products.b. Whole selling : these are set of entrepreneur whoprove to be supporting hand for producers they sellin goods produced in production centre tomiddlemen in market.c. Retailing : he is kind of entrepreneur one who sellsgoods produced by companies directly toconsumers.d. Service : these are set of qualified entrepreneurswho are specialized in particular field and renderservice to customershttps://www.facebook.com/ialwaysthinkprettythings 26. 4.Based on nine personality types of entrepreneursa. Improver : when entrepreneur continuously focuses on development of business then he tends to improve overall economy through development in business process.b. Advisor : these are entrepreneurs who provide high level assistance to customers in market. Main motto of these entrepreneur is to provide vale addition information required by customers.c. Superstar : he is kind of person who tends to attract attention through his charismatic features example CEO, MD of organization.d. Artist : these kind of entrepreneurs are reserve by nature but are suitable for the jobs which require creativity such as web designer.https://www.facebook.com/ialwaysthinkprettythings 27. e. Visionary : visionary entrepreneur are futuristic in nature, they will have high degree of curiosity to understand changes happening in world. They prefer taking initiative and like to be in line with competitive environment.f. Analyst : analyst entrepreneur is a person one who believes in analyzing the existing and tries to maintain status quo and bring improvement.g. Fireball : entrepreneur running business which is composed of life, energy, optimism and one who believes in bringing change by changing mindset of customers. E.g. Aid agency.h. Hero : these are kind of entrepreneurs who have ability to lead and run their business through challenges.i. Healer : these are entrepreneur one who believe harmony in healing and bring in harmony to business.https://www.facebook.com/ialwaysthinkprettythings 28. 5. According to use of technology :a. Technical entrepreneur : strength of technical entrepreneur is the technical knowledge of person. He possesses craftsmen skill in him which he develops to apply and implements to develop technical aspect of product.b. Non technical entrepreneur : these entrepreneurs believe in coming up with new strategies rather then concentrating technical aspect of the product. His target is not to change the technology related to the product but rather increase demand for product with effective strategies by attracting customers.c. Professional entrepreneurs : are the one who are interested in floating a business rather then managing or operating the same.https://www.facebook.com/ialwaysthinkprettythings 29. 6. According to stages of development :a. First generation entrepreneur : are those who do not possess any entrepreneurial background. They start industrial unit by the means of their own innovative skill.b. Second generation entrepreneur : are those entrepreneur who inherit family business firm and pass it from one generation to other.c. Classical entrepreneur : is a stereotype entrepreneur who aims to maximize his economic returns at every level consistent with the survival of the unit but with or without element of growth.https://www.facebook.com/ialwaysthinkprettythings 30. 7. According to capital ownership :a. Private entrepreneur : when an individual or group of people together set up enterprise collectively bear profit and loss of company, and adopting latest techniques in business are known as private entrepreneur.b. Stateentrepreneur : refers to trading or industrial venture undertaken by the state or the government.c. Joint entrepreneur : refers to combination of private and state enterprise running the business by sharing resources with each other.https://www.facebook.com/ialwaysthinkprettythings 31. INTRAPRENEUR Intrapreneur is the person who works within theorganization, utilizes the resources availablewithin the organization and tries to accomplishpresent task in innovative and creative manner byeffective utilization of available resources.https://www.facebook.com/ialwaysthinkprettythings 32. CHARACTERISTICS OF INTRAPRENEUR1. Creates new venture : giving birth to new business within the existing organization is the typical characteristics of intrapreneur.2. Innovates products and services : intrapreneur to create effectiveness at workplace has to update organizationtechniquesthrough implementation of new technology in company.3. Innovates process : to sustain in market companys strategies should be effective to that of competitors for which intrapreneur should renew company process at regular interval of time.https://www.facebook.com/ialwaysthinkprettythings 33. 4. Proactive : intrapreneur attempt to lead rather than follow competitors through their proclivity in terms of advance operations in company.5. Risk taking : intrapreneur possess risk taking attitude with regard to investment decision and strategic actions under uncertain situations.6. Renews organization : intrapreneur is expected to transform the organization through renewal of key ideas.7. Competitively aggressive : intrapreneur is expected to come up with new strategies to stabilize or develop companys brand image in market.https://www.facebook.com/ialwaysthinkprettythings 34. DEVELOPMENT OF ENTREPRENEURSHIP1. Government and non government supportbodies : government in country has come up withvarious institution for supporting SSI they arenational institute for entrepreneurship and smallbusiness development ( NIESBUD ) wasestablished in 1983 by the ministry of micro,small and medium enterprise. Entrepreneurshipdevelopment institute in India ( EDI ) anautonomous body and non profit institution set upfor supporting SSI in country .https://www.facebook.com/ialwaysthinkprettythings 35. 2. Incubation facility : premiere business schools and technical institution in India have entrepreneurship centreswhich provide incubation facility to start up small scale unit. Incubator is facility designed to assist start up companies with respect to providing knowledge and technical assistance.3. Educational programs : entrepreneurship is be coming popular choice as an elective in MBA programs at business schools in India. In addition to educational programs their are some business school which provide certification programs and training to candidates intending to start up their own business.https://www.facebook.com/ialwaysthinkprettythings 36. 4. Entrepreneurship networks : refers to association formed by successful entrepreneur where by becoming member of such association freshers will get some guidance and assistance to start up their own business. E.g. TiE : the indus entrepreneurs was founded in silicon valley in 1992bysuccessfulentrepreneursand professionalsin country.National entrepreneurship network ( NEN ) founded in 2002 is the non profit initiative working to inspire and educate emerging entrepreneurs in company. https://www.facebook.com/ialwaysthinkprettythings 37. STAGES IN ENTREPRENEURIAL PROCESSIdentify an opportunityEstablish vision Persuade othersGather resources Create new venture, product or market Change/ adapt with timehttps://www.facebook.com/ialwaysthinkprettythings 38. Identify an opportunity : is an first step towardssetting up an enterprise. Entrepreneur beforeidentification of an opportunity should do propermarket analysis about market situation, economicconditions and understand taste preference ofcustomers. Establish vision : is second step towardsestablishing an enterprise. In the processentrepreneur is required to establish long termvision and accordingly plan in mission which willserve as roadmap to achieve company vision.Objectives established by entrepreneur should beflexible in nature to adjust according to changingsituation.https://www.facebook.com/ialwaysthinkprettythings 39. Persuade others : even though the idea of entrepreneurship is initiated by individual person, it requires team effort to covert an idea into reality. Entrepreneur is required to convince skilled employees to work on business plan, make investors and marketers understand credibility of business to enhance status and goodwill of company in business market. Gather resources :nextsteptowards entrepreneurship requires gathering of required resources to start business. Resources includesa. Finance resources : it refers to getting required capital through financial institutions, raising capital through general public by issue of shares, raising required finance though other resources such as self investment, finance through family and friends.https://www.facebook.com/ialwaysthinkprettythings 40. b. Operating resources refers to tangible and intangible resources which includes machinery, raw material, company image, operating procedure, transportation etc.c. Human resources refers to skilled labour force in organization and other decision in relation to human resource such as training and development of employees, decision to hire permanent or temporary employees, amount of investment to be made of human resource in organization.https://www.facebook.com/ialwaysthinkprettythings 41. d. Information resources : it is very important on part of organization to collect information about competitors, customers taste and preference, recent development in area of business company will be operating. The company has to maintain valid and accurate management information system in order to suffice to the information needs of company.https://www.facebook.com/ialwaysthinkprettythings 42. create new venture : once the entrepreneur hasarranged in for resources mentioned above, nextstep involves creation and establishment of newventure. Which requires fulfilment of variouslegal formalities. Change and adapt with time : initial plandeveloped by entrepreneur may not be suitablefor long run. So business plan is required to beupdated on regular basis to cope up with recenttrends or updation in market.https://www.facebook.com/ialwaysthinkprettythings 43. ROLE OF ENTREPRENEURSHIP INECONOMIC DEVELOPMENT1. Create employment opportunities : unemployment is major problem faced by developing and under developing countries around the world. As small scale industries are labour intensive in nature they generate more employment opportunities rather then large scale industries in country.2. Inspire others towards entrepreneurship : team created by entrepreneurship provides opportunity for employee cum tem mates to have first hand experience in process of setting up an venture creating possibility for team mate to come up with his own SSI in future. https://www.facebook.com/ialwaysthinkprettythings 44. 3. Create knowledge spill over : entrepreneurship serves as mechanism by which knowledge over to the firm in which it is commercialized. New firm gets the benefit by the experience and knowledge gained by the founder in the company.4. Augment the number of enterprise : augment refers to making basic comparison and trying to find out area in which competitors are ahead. Entrepreneurship not only leads to formation of new business but also brings into picture idea or new concept in market exploring almost all the available areas in market creating tuff competition in market thus leading to supply of quality products in market. https://www.facebook.com/ialwaysthinkprettythings 45. 5.Provide diversity in the firms : entrepreneurship activity in particular region often results into creation of variety of firms in country. These firms operates into diverse activities and these diversity fosters economic development in the country. https://www.facebook.com/ialwaysthinkprettythings 46. ENTREPRENEURSHIP AND ITS BARRIERS1. Macro economic environment : macroeconomic environment in which SSI operates is dependent on policies of the government in supporting private participation in business. Macro means large and it refers to various factors existing in the environment which effect the working of company. E.g. instability in government of country which leads to change in legal legislation o continuous basis.2. Legal and regulatory environment : for entrepreneurship is formed by registration and licence procedure, commercial and contractual laws, real estate regulations and laws. If the administration procedure and laws are unclear, time consuming and cumbersome then it proves to be barrier in operation of SSI.https://www.facebook.com/ialwaysthinkprettythings 47. 3. Corruption and unfair competition : a corrupt can lead to unfair competition, which in turn can become major hurdle to entrepreneurship activity in country. Excessive approvals and regulations and approval from government required by entrepreneurs may make the government officials corrupt they develop attitude to take bribe for quicker completion of work.4. Financial obstacles : start up ventures are usually dependent upon capital to be sourced from financial institution. But it is general tendency of financial institution to be reluctant in providing finance to SSI rather then LSI as LSI given in more amount of interest compare to SSI.https://www.facebook.com/ialwaysthinkprettythings 48. 5. Tax burden : in many regions governmentcharges tax to SSI at similar rate as to LSI whichSSI cannot afford to pay as the revenue generatedby SSI is comparatively less.6. Challenges in attracting talent : to generateimproved quality of product in the companyhuman resource in company should be efficientin nature. It is possible only when company isable to attract efficient employee to joincompany, but candidates these days expect in forhigher salary which SSI cannot afford to paybecause of the same SSI has to compromise withaverage candidates in the company.https://www.facebook.com/ialwaysthinkprettythings 49. 7. Difficulty to source raw material : for timely production of product in the market it is important to have proper supply of raw material, but supplier in market give second preference to SSI in market compare to LSI as they order in bulk rather then SSI in market.8. Expensive to access proprietary technology : as investment amount of SSI is industry is less they cannot afford to do heavy investment in technology which again has adverse effect on quality and quantity of product produced by the company.https://www.facebook.com/ialwaysthinkprettythings 50. https://www.facebook.com/ialwaysthinkprettythings