Pg.

ENTREPRENEURSHIP
DEVELOPMENT
(OBSTACLES AND SOLUTIONS)

DIPESH D. UIKE
B.E., M.B.A.
Professor, Dr. Ambedkar Institute of Management Studies and Research,
Rashtrasant Tukadoji Maharaj Nagpur University,
Nagpur - 440 010, Maharashtra, India.

First Edition : 2012

MUMBAI  NEW DELHI  NAGPUR  BENGALURU  HYDERABAD  CHENNAI  PUNE  LUCKNOW  AHMEDABAD
 ERNAKULAM  BHUBANESWAR  INDORE  KOLKATA  GUWAHATI
 Pg.3

© AUTHOR
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 Pg.4

To
My Parents
&
My Wife
 Pg.5

P REFACE
The entrepreneurs play an important role in the economic development of a country. They
generate wealth and employment for the country. So for economic development, a nation cannot
depend on just government activities. America, Japan and European countries are the developed
and fast growing economic countries in the world. The entrepreneurs of these countries have a
major part in the development of these countries. If a nation wants to develop and progress, the
importance of entrepreneurs cannot be neglected. Most of the literature, magazines, articles and
research have focused on the importance of entrepreneurs’ development for the development of
the nation.
Several textbooks have been written on entrepreneurship development. However, none has
focused in deep on the obstacles faced by the new entrepreneurs. This book has been written
specifically to focus on the obstacles that are faced and are facing by the new entrepreneurs who
want to become an entrepreneur but they face so many obstacles in this process and therefore very
few become entrepreneurs. Description of all the obstacles are given in this book so that the new
entrepreneurs can get an idea about obstacles prior to open the business and ultimately can take
benefits from this book. The book combines important issues and challenges, with a strong emphasis
on their impact on new entrepreneurs’ business.
While preparing this book, I have collected relevant material from direct interaction with new
small entrepreneurs who are running their business, books, government publications, journals, articles
by eminent scholars. My friends who are running their business, other friends from Management
College have offered me valuable suggestions and support in the preparation of the manuscript. My
sincere thanks are due to all of them.
The academic encouragement received from my college DAIMSR, my director Mr. Sujit Metre,
my parents Mr. D.F. Uike and Mrs. Sheela D. Uike, my wife Mrs. Shweta D. Uike and my friends in
preparing this book is acknowledged with great respect.
I request colleagues in the teaching profession, my entrepreneur friends, students and all
others who are interested in the study of entrepreneurship development to send their valuable
suggestions for the further improvement of the book.

Nagpur,
Date Dipesh D. Uike
[email protected]
 Pg.6

CONTENTS
Chapter 1: Entrepreneur and Entrepreneurship 1-46
Who is an Entrepreneur? 2
Characteristics of an Entrepreneur 4
Who can be an Entrepreneur? 11
Why to Become an Entrepreneur? 12
Reasons to Start a Business 13
What is Entrepreneurship? 14
Need For Entrepreneurship 16
Benefits of Entrepreneurship 17
Intrapreneurship 21
Role of Entrepreneur in Economic Development 23
Developing an Entrepreneurial Environment 24
Women Entrepreneurship 24
Six Stages of Entrepreneurship 34
McClelland’s Achievement Motivation 38
Maslow’s Theory of Motivation 40
Expectancy Theory of Motivation 42
Chapter 2: First Generation Entrepreneurs 47-61
Six E’s for the New Entrepreneurs 48
First Generation Entrepreneurs 48
First Generation Entrepreneurs (FGEs) –
Constructing Businesses In India 49
First Generation Entrepreneurs’ Lessons
They Have Learnt 52
Notes from a First Generation Entrepreneur 53
Young and First Generation Entrepreneur - The Issues 54
Traits of First Generation Entrepreneurs 55
An Entrepreneur’s Challenge 56
Chapter 3: Entrepreneurs’ Personality and Motivation 62-78
Important Types of Personality 64
Entrepreneurs’ Personality 68
What is a ‘Lifestyle Entrepreneur? 70
Entrepreneur’s Advisor 73
How can new entrepreneurs learn from
the experiences of others? 74
Chapter 4: Entrepreneurs’ Achievement and Business Failure 79-90
Desire of Achievement 80
Role of Achievement in Business Failure 82
The Achievement Motive 83
Fear of Failure 84
The Fear of Success 84
Conquering the Internal Factors 85
Characteristics of a Detrimental Self Esteem People 86
Typical Traits 87
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Personality of Low Self Esteem 88

Right Traits for Achievement 89
The Reasons for Failure 89
Chapter 5: Entrepreneurs’ Motivation 91-108
Motivation for Overcoming Obstacles 92
Factors of Motivation 93
Entrepreneurship and Self Motivation 94
Why An Entrepreneur gets Motivated? 96
Support Systems for an Entrepreneur 97
Success Attributions 98
Recharge Yourselves for New Entrepreneurial Guts 99
Entrepreneurs’ Association 100
Consequences of Doing Unpleasant work 101
My Research Opinion:
Entrepreneurs And Qualities – Is It Enough? 104
Chapter 6: Creativity And Innovation 109-133
What is Creativity 110
What is Creative Thinking 111
Characteristics of the Creative Personality 112
What is not Creative 112
The Myths of Creativity 113
Creativity and Business Development 115
Defining Innovation 116
How to Find Innovation 118
How Creative Entrepreneurs Succeed 119
Obstacles to Creativity 120
Overcoming Barriers to Creative Thinking 122
Why is Idea Generation Important? 124
New Product Development (NPD) 127
How to Evaluate Your Business Idea 128
Chapter 7: Entrepreneurs’ Thoughts on Business Start Up 134-168
Reasons Not To Become an Entrepreneur 135
Bad Reasons to Become an Entrepreneur 137
How To Be a Better Entrepreneur 138
Reasons for Becoming an Entrepreneur 139
What to Think When Starting a Business 143
Business Success Factors 145
Types of Business Ownerships 147
Corporate Social Responsibility 158
Chapter 8: Business Opportunities Transformation Obstacles 169-187
Business Opportunity Success and Failure 170
Fail To Estimate Certain Outlooks and Requirements 171
Failed Business Categories 171
Entrepreneurs’ Failure to Manage Business 172
The Core Cause of Transforming Opportunities
Failure in Entrepreneurship 174
Adding Value to Your Home Business 179
Qualities of Business Partner 179
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Supporting for Business Opportunities 180

Business Transformation Failure 180
Interact Carefully with Partners 180
What Could Be The Solution
Factors to Consider for New Small Businesses 181
Practical Approach for New Entrepreneurs 183
Chapter 9: Selecting Business Related Obstacles 188-212
Choosing to Run Your Own Business 189
Assessment of Entrepreneurial Opportunity 190
Choosing a Business to Start 192
Already Existing Business 193
Choosing a Business to Start 196
Business Coach Selection 201
So What Could Be The Solution
Guidelines for Your Business 202
Try Bootstrapping 203
Deciding Your Home Business 205
Predicting the Success of a New Business 207
Keep Your Business Running Optimally
With Business Coaching 208
What Business Coaches Perform 209
Chapter 10: Building Business Infrastructure Related Obstacles 213-234
In-house Business Problems 214
Getting New Land/Shop for Business 215
A New Business Needs a Support? 216
Management Techniques Difficulties 217
Take Land/Shop on Lease 218
Take Land/Shop on Rent 218
Searching Right Environment 218
Ensure that Entrepreneurs have Access to the Right Skills 219
Ensure that Entrepreneurs have Access to “Smart” Capital 220
Enable Networking and Exchange 220
Arranging Machinery 220
Arranging Business Vehicles 220
Arranging Generator for Electricity 221
Absence of Supporting Hand 221
Difficulty to find Land/Shop in Market Area 221
Transportation Facilities 221
How can the Government Help? 222
So What Could Be The Solution
Finding the Best Location 223
Knowing What to Ask 225
Creating an Office Where You Can Work 226
Good Merchant Relationships 226
Insurance for Small Business 226
Leasing Equipment 227
Preparing for Disaster Recovery 227
The Role of Government in Supporting Entrepreneurship 227
Setting up a IT Network Infrastructure for a Business 229
 Pg.9

Business Incubators and Facilitators in India 230

Chapter 11: Technology Access Obstacles 235-266
Changing Technology 236
Why You Need a Website 239
Developing a Privacy Policy 241
Requirements of Online Business 242
Young Entrepreneurs - Online Business Fears 242
Large-scale Trends That Impact Business 244
Impact of e-Commerce on Entrepreneurs 246
So What Could Be The Solution
Entrepreneurs’ Mission for New Technology -
New Business 249
NSIC (National Small Industries Corporation Ltd) 250
National Research Development Corporation (NRDC) 255
Buy Small Business Computers 256
Trusting Up With Technology 257
Using Technology to Get Customers 258
National Science and Technology Entrepreneurship
Development Board (NSTEDBI) 259
Chapter 12: Getting Business Knowledge Obstacles 267-290
Where to look for Business Issues 268
Improper Information of Knowledge Source 269
Improper Business Information 269
Start Business with Partial Knowledge
from Relatives or Friends 269
Improving a new Business Idea 270
The Importance of Market Research and Testing 270
Big Businesses vs. Small Businesses 270
Seek Opinions from Family, Friends and Business Partners 270
Ask Potential Customers 271
Feasibility Studies 271
Assess the Competitors 271
Not having a Business Plan 272
Not Knowing when it’s Time to get help 272
Hiring the Wrong People 272
Fundamentals of Building a Successful Business 272
To Start a New Business is Easy 274
Setting-up to Start an Entrepreneur Business 276
Discovering the New Idea 277
So What Could Be The Solution
Various Sources of Business Knowledge 277
Mentorship Entrepreneurs Success 278
Starting a Successful Home-based Business 279
Requirements of Starting a New Business 281
E-commerce Business Strategy for New Business 284
Searching the Right Business Coach 285
Importance of Right Business Coach 286
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Chapter 13: Business Plan 291-316

What is Business Plan? 292
Contents of Business Plan 293
Documents to be included in Business
Financial Analysis Papers 299
Imaginary Example: Restaurant Sample
Business Plan Outline 300
Miscalculations in Business Plan 307
Features To Be Considered In Business Plan 311
Top Ten Do’s and Don’ts 312
Chapter 14: Big Companies Related Obstacles 317-325
Unable to do Effective Promotion and Advertising 318
Tough Competition 319
Lack of R & D Facilities 319
Unable to Maintain the Quality of the Products 320
Unable to Penetrate Big Companies Net 320
Lack of Business Experience 320
Protecting the Patent System for Entrepreneurs 320
How to Compete Against Larger Companies 321
Start thinking Big 321
Bring Passion / Excitement into you 321
Think outside the Box 321
Keep Yourselves Ahead 322
Find Your Niche in the Market 322
Use Internet to your Advantage 322
Provide what the Big Companies can’t or don’t 322
Importance of Best Practices 323
Chapter 15: Financial Obstacles 326-355
Financial Resources 328
Raise Capital with the Help of Grants 328
Getting Finance 329
Non Availability of Capital 330
Improper Estimation of the Cost 330
Research Estimated Costs 331
Product Development And Commercialization 331
Website and Technology Expenses 331
Office Expenses 332
Marketing and Advertising Costs 332
Basic Living Salary for Business Founders 332
Other Employee Payroll and Benefits 332
Monthly Insurance Costs 333
Legal and Professional Fees 333
Travel Expenses 333
Obtaining Short Term and Long Term Loans 334
Financial Information Utilization 334
Building Relationship with Lender 336
Small Business Funding Myths 337
So What Could Be The Solution
Small Business Finance 339
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Government Funding and Schemes 340

Small Business Loan 344
Financing the Business 345
Business Financial Problems 347
Money Shortage Way-out 348
Crisis Financing Alternatives 349
Influential way-out to Money Problems 351
Chapter 16: Employees Related Obstacles 356-379
Partial Knowledge of Employees 358
Employees’ High Salary Expectation 358
Ignorance to Job Consultants 358
Employees’ Retention Problem 359
Employment, Health and Safety Regulations 359
Motivating Employees 359
A Solid Hiring Plan 359
The Do-No-Wrong Effect 360
Getting Employees for the New Business
– What Goes Wrong 360
Wrong Ways of Employee Hiring 363
Ways of Hiring the Perfect Employee 364
So What Could Be The Solution
Appointing the Right Person 367
“Getting Acquainted” 368
Motivation and Involvement 369
Make Employees Happy 369
Searching Good Employees 370
Making a Good Hire 371
Need of a Recruiter in Small Business 373
Qualities of Home-Based Business Employees 374
Ways for Recruiting Online 375
Chapter 17: Customers Related Obstacles 380-411
Attracting Customers to Your Business? 382
Market Research Importance in a New Business 389
Role of Public Relations Campaign 391
The Importance of Customer Service Support 392
So What Could Be The Solution
Attracting Customers to Your Trade Show Display 395
Marketing thoughts for Small Businesses 396
Interest Your Clients 396
Using Customer Segmentation as a Marketing Tool 397
Get New Patrons for Your Business 398
Innovative Marketing Ideas for Small Businesses 399
Endorse Your Facebook ‘Like’ Promotional Tools 400
Finding New Customers 401
Good Customer Service and Satisfaction 402
Attracting New Customers 403
Great Customer Service 404
Control Further Costs Unless It
Adds Value to Your Customer 406
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Appreciate Your Customers 407

Chapter 18: Suppliers Related Obstacles 412-434
Where Is Supplier? 413
Don’t Pay Bill 413
Quotes/Proposal 414
Understand Everything 414
Who Are Quality Suppliers? 414
Improper Dealing with Supplier 414
Suppliers’ Retention Problem 415
Supplier Side Delay of Material 415
Bargaining Power of Suppliers 415
How to Find and Work with Suppliers 416
Changing Your Supplier Relationships 417
Making a Suppliers’ Change 418
Dealing Successfully With Suppliers and Advisors 419
Finding Suppliers for Successful Business 421
So What Could Be The Solution
Make a Good Relationship with Suppliers 421
The Characteristics of a Good Supplier 424
Find Good Quality Mass Suppliers 425
Discover Good Suppliers for Your Business 425
Dealing with Suppliers 427
Where to Find Good Building Material Supplies? 429
Relationships with Your Suppliers 429
Chapter 19: Surviving Business Obstacles 435-455
Reliability - A Keystone of Entrepreneurship 436
Fears of Surviving Business 439
Small Businesses Failure 440
Troubles Faced For Business Survival 443
Working Capital Loans – Support to Get Success 447
So What Could Be The Solution
Overcoming Obstacles to Starting a Business 448
Learn to Delegate Tasks 449
Important Learning 450
Role of Finance in Small Business Success 451
Chapter 20: Marketing Obstacles 456-482
Marketing Problems 457
Making A Way into New Markets 462
Marketing Issues for Young Progressing Business 466
Marketing Rules for the Encouraged Entrepreneur 468
So What Could Be The Solution
Top Marketing 469
Coupons for Attracting Buyers 472
Creating a Marketing Plan 473
Exposing Products to a Trade Show 475
Small Business Promotion 478
Chapter 21: Profit Earning Obstacles 483-505
Critical Situation to Profitability 484
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Obstacles to Success in the Business 487

Think More than Attracting the Customers! 490
So What Could Be The Solution
Maximize Profit for Your Online Business 492
Approach to Maximize Business Revenue 492
Maximizing Earnings 494
Profitable e-commerce Solutions
for Maximizing Business 496
Lucrative Financial Plan 496
Elegant Money-Saving Tactics 497
Chapter 22: Government Policies/Grants Obstacles 506-519
Complex Document Procedures 507
Instantaneous Change in Policies 507
Document Process Delay 508
No Information about Government Policies 509
Cumbersome Government Attitude 509
Corruption/ Bribe 509
Red-Tapism 511
Poor Infrastructure 511
Providing the Growth Drivers 511
Registration of Company 512
Registering the Property 513
The Official Costs of Starting a Business Are High 513
List of Industries In Respect Of Which Industrial
Licensing Will Be Compulsory 514
Governmental Measures to Help
First Generation Entrepreneurs 515
Some of the other governmental measures for
small and medium enterprises include 516
Chapter 23: Family Responsibility Obstacles 520-534
Importance of Family Responsibility 521
Family Pressure for Earning 521
No Money/ little Assistance 521
No Supporting Hand 521
No Time for Family 523
No Encouragement for the Business 523
Less Prone to Take Risk 523
Force to take Family Business only 523
Family Support to Entrepreneur 523
Tradition of Single Family 524
Traditional Attitude of Family 524
Women Entrepreneurs Family Problems 524
So What Could Be The Solution
Working with Family Members 525
Prepare Yourself for Business 527
Engaging Family in Your Startup Business 528
Taking Loan From Friends and Family 529
Young Entrepreneurs’ Family Balance 530
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Chapter 24: Cultural Obstacles 535-546

Cultural Attitude 536
Sensitive to Emotional Resemblance 536
Caste System 536
Not taking into Account the Religion,
region or Background of your Counterpart 538
Missing the Social Nuances 538
Cultural Values 538
Culture Diffusion 539
Barriers to Entrepreneurs 540
Some Tips for Entrepreneurs 541
So What Could Be The Solution
Promoting Entrepreneurship Culture 542
Decisive Success Factors for Entrepreneurship 543
Chapter 25: Personal Competence Obstacles 547-570
Need of Entrepreneurial Competences
for Successful Business 548
Weaknesses of Entrepreneurs 550
Entrepreneurial Development Role 553
The Not to Have Qualities for Entrepreneurs 555
Recognizing the Entrepreneur Within 558
So What Could Be The Solution
Thinking like an Entrepreneur 560
Entrepreneurial Competencies Entrepreneurs Must Have 560
The Role of Prior Work Experience 561
Developing Entrepreneurial Capability 561
Astonishing Businessman 562
Entrepreneurial Proficiencies in Business 563
Entrepreneurial Leadership Personality 565
Bibliography 571-573
List of Tables 1
Difference between an entrepreneur and an Intrapreneur 1
Maslow’s hierarchy of needs 1
Entrepreneurs Traits 1
Factors Influence Entrepreneurs 1
List of Business Incubators in India 1
List of Figures 1
Maslow’s hierarchy of needs 1
Factors Influence Entrepreneurs 1
Index 574-580
 Pg.1

CHAPTER – I

E NTREPRENEUR
AND
E NTREPRENEURSHIP
LEARNING OBJECTIVES
On completion of this chapter, you should be able to:
☺ Explain who is an entrepreneur and what his characteristics are.
☺ Describe why to become an entrepreneur.
☺ Describe entrepreneurship.
☺ Describe need for entrepreneurship.
☺ Describe benefits of entrepreneurship.
☺ Describe intrapreneur and Intrapreneurship.
☺ Describe role of entrepreneur in economic development.
 2 Entrepreneurship Development (Obstacles and Solutions)

1.1 W HO IS AN E NTREPRENEUR ?
An entrepreneur is considered as a person whose main purpose is to set up his own business
or industry. Entrepreneur is a person who always wants his own business instead of working in
other business. He takes initiative to open his own business, always looks for an opportunity, tries
to come up with the innovative idea and wants to achieve his goals by doing his best. He always
comes up with the new idea that is unique to the society and benefits to the society. His focus is on
to transform the opportunity into economic gain. Entrepreneurs are very important for the nation as
those are the persons who perfectly exploit the resources of the country and generate wealth for
the nation that ultimately help the citizens of that country to get the employment. He is the one who
knows the perfect combination of human resources and non-human resources that will be required
for the production. Entrepreneur turns the environment of the country into the good one.

BOX 1

Small and Medium Enterprises (SMEs) play a vital role for the growth of Indian economy by
contributing 45% of industrial output, 40% of exports, employing 60 million people, create
1.3 million jobs every year and produce more than 8000 quality products for the Indian and
international markets. SME’s Contribution towards GDP in 2009 was 17% which is expected
to increase to 22% by 2012. There are 26.1 million MSME Units in India and 12 million
persons are expected to join the workforce in the next three years. SMEs are the fountain
head of several innovations in manufacturing and service sectors, the major link in the supply
chain to corporate and the PSUs. By promoting SMEs, the rural areas of India will be
developed.
SMEs are now exposed to greater opportunities than ever for expansion and diversification
across the sectors. Indian market is growing rapidly and Indian entrepreneurs are making
remarkable progress in various Industries like Manufacturing, Precision Engineering Design,
Food Processing, Pharmaceutical, Textile and Garments, Retail, IT and ITES, Agro and Service
sector.
Source: Information received from “SME Chamber of India”.

However, we tend to think of entrepreneurs as people who have a talent for seeing opportunities
and the abilities to develop those opportunities into profit-making businesses.
Are entrepreneurs born or made? The debate still rages, but the current consensus is that
successful entrepreneurs share a constellation of personality traits. In other words, some people
are naturally more entrepreneurial than others.
A common misperception about entrepreneurs is that entrepreneurs are wild risk-takers.
Entrepreneurs do take risks, but only calculated ones. One of the abilities which the successful
entrepreneurs share is the ability to evaluate risks. But remember, you don’t need to have all the
traits associated with entrepreneurship to be a successful entrepreneur. The main quality you need
is a determination to make your business venture successful. The rest of the qualities necessary to
being a successful entrepreneur, you can learn. Anyone who has ever looked at problems and
seen it as an opportunity is a likely prospect. The same goes for anyone who feels as if his ambition
is held in check by corporate red tape. But it takes more than just cleverness and frustration with
the status quo to get an entrepreneurial venture off the ground.
While there’s no single entrepreneurial archetype, certain common traits indicate an
entrepreneurial personality. For instance, the entrepreneurial adult first often appears as an
 Entrepreneur and Entrepreneurship 3
entrepreneurial child. And although it’s far from a necessary ingredient for entrepreneurship, the need
to succeed is often greater among those whose backgrounds contain an extra struggle to fit into
society.
In addition, contrary to popular belief, entrepreneurs aren’t generally high-risk takers when they
can’t affect the outcome of the situation, they tend to set realistic and achievable goals and when
they do take risks, they’re usually calculated ones based on facts and experience, rather than
instincts. Entrepreneurs are driven not by the need to make money, but by the need to make their
dreams a reality. More often than not, money is a by-product of an entrepreneur’s motivation rather
than the motivation itself.
Entrepreneurs are participants, not observers; players, not fans. And to be an entrepreneur
is to be an optimist, to believe that with the right amount of time and money, you can do anything.
The entrepreneur word is derived from the French word Entreprendre which means to
undertake, i.e., the person who is ready to accept the challenges, risks, whatever will come to his
way while starting a new business. In early sixteenth century, the Frenchmen who organized and
led military expeditions were referred to as entrepreneurs. A French economist Richard Cantilon
used the word entrepreneur for first time for business activities. According to Cantilon “An
entrepreneur is a person who buys factor services at certain prices with a view to selling its product
at uncertain prices”. Thus to Cantilon an entrepreneur is a person who takes risk to open a business.
According to Jean Baptiste, another French economist, “An entrepreneur is the economic
agent who unites all means of production, the labour force of the one and the capital or land of the
others and who find in the value of the products which results from their employment, the
reconstitution of the entire capital that he utilizes and the value of the wages, the interest and the
rent which he pays as well as profit belonging to himself”. An Entrepreneur is an economic agent
who better knows all the means and their perfect combination that will be useful for the production.
In the words of J.A. Schumpeter, “The entrepreneur in an advanced economy is an individual
who introduces something new in the economy, a method of production is not yet tested by experience
in the branch of manufacture concerned, a product with which consumers are not yet familiar, a
new source of raw material or of new markets and the like”. According to him an entrepreneur is an
innovator, who brings new things into the economy; Innovation may be a new product, new methods
of production, creating new markets, new sources of raw materials, new processes adopted into
the organization that are not at all adopted by any organization.
The Entrepreneurs: Some Important Definitions
1. Peter F. Drucker defines an entrepreneur as one who always searches for changes,
responds to it and exploits it as an opportunity. Innovation is the basic tool of
entrepreneurs, the means by which they exploit change as an opportunity for a different
business or service.
2. Gillian Murphy, leader of San Joaquin Delta College Small Business Development
Center, says: “An entrepreneur is not static but fluid...continues to seek opportunities
and/or different methods of operation.”
3. Author of the book, “Low-Risk, High-Reward: Starting and Growing Your Small
Business with Minimal Risk”, Bob Reiss, presented a holistic definition of an
entrepreneur. “He was a person who can recognize a good opportunity and will pursue
it whether or not resources are available. The entrepreneur is also confident, adaptable
and determined to succeed, even when there are setbacks”.
4. An entrepreneur, Daile Tucker, said that, “Entrepreneurs compete with themselves
and believe that success or failure lies within their personal control or influence.”
 4 Entrepreneurship Development (Obstacles and Solutions)

5. Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates
technologies innovated by others, are very important in developing economies.
6. Schumpeter: According to him entrepreneurs are innovators who use a process of
shattering the status quo of the existing products and services, to set up new products,
new services.
7. David McClelland: An entrepreneur is a person with a high need for achievement [n-
Ach]. He is energetic and a moderate risk taker.

1.2 C HARACTERISTICS OF AN E NTREPRENEUR

Entrepreneur is not a simple man who lives normally like the other people but he is one who
continuously thinks something for his progress, challenges, business, new ideas etc. Most of the
characteristics of the entrepreneur are his achievement motivation. A successful entrepreneur must
be the combination of qualities like innonvation, initiation, leadership, self-confidence, creativeness
and so many qualities that ultimately help the entrepreneur to achieve his goals. The following are
the characteristic features of a successful entrepreneur:
Do you have what it takes?
If you think you want to be your own boss and run your own business, but are not sure you
have the right qualifications to be an entrepreneur, read on. What are the characteristics of an
entrepreneur? How does an entrepreneur think? Is your personal profile similar to that of a successful
entrepreneur?
Until recently, entrepreneurs were not widely studied. There was a general lack of knowledge
and information about what made them tick. Most business universities now offer courses in
entrepreneurship. As a result, business professionals have learned a lot about what it takes to
become a successful entrepreneur. Although no one has found the perfect entrepreneurial profile,
there are many characteristics that show up repeatedly. The following cover several important
characteristics of entrepreneurs for you to consider and dispel the entrepreneurial myths.
1.2.1 Entrepreneurial Characteristics
A series of interviews were conducted with distinguished entrepreneurs. They were asked
what characteristics they felt were essential to success as an entrepreneur. Good health was a
characteristic mentioned by every entrepreneur interviewed. Entrepreneurs are physically resilient
and in good health. They can work for extended periods of time and while they are in the process of
building their business, they refuse to get sick.
In small businesses, where there is no depth of management, the leader must be there. You
may not be able to afford a support staff to cover all business functions and therefore you will need
to work long hours. We all know people who use part of their sick leave each year when they are
not sick. Entrepreneurs are not found in this group. At the end of the eight-hour day, when everyone
else leaves for home, the entrepreneur will often continue to work into the evening, developing new
business ideas.
Self-control
Entrepreneurs do not function well in structured organizations and do not like someone having
authority over them. Most believe they can do the job better than anyone else and will strive for
maximum responsibility and accountability. They enjoy creating business strategies and thrive on
the process of achieving their goals. Once they achieve a goal, they quickly replace it with a greater
goal. They strive to exert whatever influence they can over future events.
 Entrepreneur and Entrepreneurship 5
In large, structured organizations, entrepreneurs are easy to recognize by the statements
they make: “If they wanted that job done right, they should have given it to me.” A dominant
characteristic of entrepreneurs is their belief that they are smarter than their peers and superiors.
They have a compelling need to do their own things in their own way. They need the freedom to
choose and to act according to their own perception of what actions will result in success.
Self-confidence
Entrepreneurs are self-confident when they are in control of what they’re doing and working
alone. They tackle problems immediately with confidence and are persistent in their pursuit of their
objectives. Most are at their best in the face of adversity, since they thrive on their own self-confidence.
Sense of urgency
Entrepreneurs have a never-ending sense of urgency to develop their ideas. Inactivity makes
them impatient, tense and uneasy. They thrive on activity and are not likely to be found sitting on
bank fishing unless the fish are biting. When they are in the entrepreneurial mode, they are more
likely to be found getting things done instead of fishing.
Entrepreneurs prefer individual sports, such as golf, skiing or tennis, over team sports. They
prefer games in which their own brawn and brain directly influence the outcome and pace of the
game. They have drive and high energy levels, they are achievement-oriented and they are tireless
in the pursuit of their goals.
Comprehensive awareness
Successful entrepreneurs can comprehend complex situations that may include planning,
making strategic decisions and working on multiple business ideas simultaneously. They are
farsighted and aware of important details and they will continuously review all possibilities to achieve
their business objectives. At the same time, they devote their energy to completing the tasks
immediately before them.
Accounting reports illustrate this characteristic. Accountants spend hours balancing the
accounts and closing them out. For them, the achievement is to have balanced books. The
entrepreneur only wants to know the magnitude of the numbers and their significance for the operation
of the business.
Realism
Entrepreneurs accept things as they are and deal with them accordingly. They may or may
not be idealistic, but they are seldom unrealistic. They will change their direction when they see that
change will improve their prospects for achieving their goals. They want to know the status of a
given situation at all times. News interests them if it is timely and factual and provides them with
information they need. They will verify any information they receive before they use it in making a
decision. Entrepreneurs say what they mean and assume that everyone else does too. They tend
to be too trusting and may not be sufficiently suspicious in their business dealings with other people.
Conceptual ability
Entrepreneurs possess the ability to identify relationships quickly in the midst of complex
situations. They identify problems and begin working on their solution faster than other people.
They are not troubled by ambiguity and uncertainty because they are used to solving problems.
Entrepreneurs are natural leaders and are usually the first to identify a problem to be overcome. If
it is pointed out to them that their solution to a problem will not work for some valid reason, they will
quickly identify an alternative problem-solving approach.
 6 Entrepreneurship Development (Obstacles and Solutions)

Status requirements
Entrepreneurs find satisfaction in symbols of success that are external to themselves. They
like the business they have built to be praised, but they are often embarrassed by praise directed at
them personally. Their egos do not prevent them from seeking facts, data and guidance. When they
need help, they will not hesitate to admit it especially in areas that are outside of their expertise.
During tough business periods, entrepreneurs will concentrate their resources and energies on
essential business operations. They want to be where the action is and will not stay in the office for
extended periods of time.
Symbols of achievement such as position have little relevance to them. Successful
entrepreneurs find their satisfaction of status needs in the performance of their business, not in the
appearance they present to their peers and to the public. They will postpone acquiring status items
like a luxury car until they are certain that their business is stable.

Interpersonal relationships
Entrepreneurs are more concerned with people’s accomplishments than with their feelings.
They generally avoid becoming personally involved and will not hesitate to sever relationships that
could hinder the progress of their business. During the business-building period, when resources
are scarce, they seldom devote time to dealing with satisfying people’s feelings beyond what is
essential to achieving their goals.
Their lack of sensitivity to people’s feelings can cause turmoil and turnover in their organization.
Entrepreneurs are impatient and drive themselves and everyone around them. They don’t have the
tolerance or empathy necessary for team building unless it’s their team and they will delegate very
few key decisions.
As the business grows and assumes an organizational structure, entrepreneurs go through
a classic management crisis. For many of them, their need for control makes it difficult for them to
delegate authority in the way that a structured organization demands. Their strong direct approach
induces them to seek information directly from its source, bypassing the structured chains of authority
and responsibility. Their moderate interpersonal skills, which were adequate during the start-up
phases, will cause them problems as they try to adjust to the structured or corporate organization.
Entrepreneurs with good interpersonal skills will be able to adjust and survive as their organization
grows and becomes more structured. The rest won’t make it.

Emotional stability
Entrepreneurs have a considerable amount of self-control and can handle business pressures.
They are comfortable in stress situations and are challenged rather than discouraged by setbacks
or failures. Entrepreneurs are uncomfortable when things are going well. They’ll frequently find
some new activity on which to vent their pent-up energy. They are not content to leave well enough
alone. Entrepreneurs tend to handle people’s problems with action plans without empathy. Their
moderate interpersonal skills are often inadequate to provide for stable relationships. However, the
divorce rate among entrepreneurs is above average.

1.2.2 Entrepreneur Profile

For the business that wants to develop the business skills for telltale personality traits that
most entrepreneurs exhibit is a great place to start. The personality traits to look out for include:
 Entrepreneur and Entrepreneurship 7

Determination to succeed
All entrepreneurs are by their nature strong willed. They know what they want and are relentless
in their pursuit of goals. In a business, these individuals are usually very easy to identify. They will
have drive and enthusiasm and are not easily discouraged by setbacks.
Risk taking
Often, the entrepreneur is typically described as a risk taker. Some of the most successful
business people took huge risks in the early days of their businesses. They are open to taking a
level of risk that is most likely to possess a level of entrepreneurial attitude. The risk taking capability
is one of the most important factors in the life of the entrepreneurs. They take the risk because they
are very much confident about the outcome. They apply all the tools to know about the results.
They do through R & D to reach near to the success.
Common sense
Coupled with risk taking is a level head that may take risks, but risks that have been carefully
calculated. Entrepreneurs do take risks, but these are not haphazard. Common sense still prevails.
They take risk with the help of all information, knowledge of market trends, their competitors. They
do continuous research and after deep analysis they form conclusion.
Decision makers
One of the strongest entrepreneurial traits to identify in family members is the ability to make
clear and concise decisions. Strong entrepreneurial tendencies will always make fast decisions
that they always stick to.
Hard working
All entrepreneurs are adept at getting their hands dirty. They work long hours until they have
achieved their goals. Those family members in your business that are strong willed and self starters
are clearly in possession of personality traits that could translate into the development of leading
business people.
1.2.3 Entrepreneur Characteristics: Personal Qualities of An
Entrepreneur
What makes an entrepreneur is a complex question. It includes factors from the environment
in which an individual was raised, his or her family situation and his or her personality traits. This
question has been the subject of a great deal of both study and research. The following discussion
is a summary of my own observations plus some of the conclusions of others.
About 20 or 25 years ago if you asked almost any expert to describe a successful entrepreneur,
you would probably have been given a list similar to this:
Male
Only child
About 35 to 45 years old
Bachelor’s or Master’s degree in Engineering
Born in the Midwest
Father owns a hardware store
However, much recent research and many of my own observations seem to indicate that
there are qualities commonly found in successful entrepreneurs and there are things that you can
do if you are concerned about any you may lack.
 8 Entrepreneurship Development (Obstacles and Solutions)

1.2.4 Personal Qualities Common in Successful Entrepreneurs

Motivations to achieve
In almost every case, successful entrepreneurs are individuals who are highly motivated to
achieve. They tend to be doers, people who make things happen. They are often very competitive.
Many researchers have concluded that the most consistent trait found in successful entrepreneurs
is the sheer will to win, the need to achieve in everything they do. They don’t want to come in third,
they don’t want to come in second, but they want to come in first.
Nonconformity
Entrepreneurs tend to be independent souls, unhappy when forced to conform or toe the
line. They are people who find it difficult to work for others, who want to set their own goals. It is
hard to imagine anyone who is more nonconformist than Steve Jobs and Steve Wozniak, the founders
of Apple Computer or Bill Gates, founder of Microsoft.
Hard work
The successful entrepreneurs are very handworkers. They are not the lazy people. They
believe in smart work. They think logically and then act. They continuously make planning. They
never sit idle. They always try to progress expand the business.
Strong leadership
Starting a new company can be a harrowing experience full of uncertainty and risk. Successfully
bringing a small organization through these trying periods requires a lot of leadership skills.
Street smarts
We all know owners of some very successful businesses who were lucky to finish high
school and never even considered college. Yes, they always seem to make the right moves. Call it
common sense, instinct, whatever you want. Successful entrepreneurs seem to have intuitive good
judgement when making complex business decisions.
1.2.5 The Key Steps to Becoming Successful in Today’s Society
Learn how you can start living successfully as an entrepreneur. Before you start your journey,
let’s first define “entrepreneur,” and examine some of the characteristics of an entrepreneur in
today’s world. The definition of “entrepreneur” is a person who organizes, operates and assumes
the risk for a business venture. What are some of the typical characteristics that make up an
entrepreneur in today’s world?
Entrepreneurs have passion for what they do in life.
Entrepreneurs express a great amount of enthusiasm in their line of work.
Entrepreneurs are goal-oriented in their quest to reach their desired outcomes.
Entrepreneurs have a creative imagination when it comes to their ideas in business.
Entrepreneurs have a positive attitude when it comes to building their business and
business relationships.
Entrepreneurs are very quick decision-makers in their business endeavors and ideas.
These are some of the amazing characteristics of an entrepreneur.
After applying the steps below, you will have a good understanding of the entrepreneur
personality test. The entrepreneur personality test is a test for you to discover the mindset you have
now, compared to the new entrepreneurial mindset that you will be creating. Also, your new
entrepreneurial mindset will help you to understand the importance of a network of business
opportunities. It is important for you to start networking with other like-minded individuals to help
assist you in accomplishing your business goals. Most of the wealthy entrepreneurs today are
 Entrepreneur and Entrepreneurship 9
living successfully due to the many benefits of having a small business as an entrepreneur that’s
home-based in the state they live in now. So let’s go into the key steps of what it takes to become
successful.
Prepare yourselves to new entrepreneurial mindset:
Before you can become successful, you have to create a new mindset to achieve the things
you want in your life. You have to think thoroughly on that. Examine your current mindset; know
your mental and physical level of becoming entrepreneur and how that way of thinking has gotten
you to where you’re at right now. Be honest with yourself when looking over your current results,
because this will give you an accurate measure of the choices that you have made over the years.
Only then will you begin to see for yourself that it is time for you to work on your new mindset in
order to start living the life you want to experience, regardless of your current circumstances. Find
out the successful entrepreneurs, read about them and know what they do and how they have
reached to their business height. Once your new entrepreneurial mindset is in motion, you will start
making very creative choices to move you faster to your desired goals.
Read success stories of different entrepreneurs. Books will also help you for achieving your
goals. Attain business seminars, get information from business news, business journals etc. Maintain
and keep your new entrepreneur mindset growing everyday. Your level of awareness will increase
greatly with the new mindset that you are creating to go after the things you want in your life. Having
an open mind as an entrepreneur will also help you make better decisions quickly and become
more creative.
Clearly write down what exactly you want:
Keeping in mind about your ideas and thoughts will not work unless you write it down. You
should clearly write down the following:
What is your business purpose?
What you want from your business?
As an entrepreneur what you want to achieve?
How are you going to achieve those?
This will help you in recalling what you want to do in near future and therefore you will move
in the right direction.
Write down all of your new ideas in detail as an entrepreneur:
Now think on your ideas. What exactly you want. Describe it in detail. Take sufficient time to
think on your ideas. Write down all information about your ideas. Whether it may be small or big
write down all relevant information. The ideas that you are writing down now are the ones that you
have been thinking about in your mind that you want to create and achieve in your physical presence
now. For example, if you have a burning desire in your heart to start your own fruit center, restaurant,
hotel or create a product for people to buy, then write down all of your ideas in every detail. Write
down how big the fruit center is going to be, where it is going to be located, what coluru the building
is going to be, where will be the parking facility, how many customers can come into your centre, how
many people you will staff. This is a perfect example of how you can start writing down all of your
ideas as an entrepreneur.
Write your short, middle and long-term goals:
A short-term goal is something you want to achieve in one day, one week or one month. A
middle-term goal is something you want to achieve in ninety days to six months. A long-term goal is
something you want to achieve in one year or more. Write down what you want to achieve as an
entrepreneur. Your goals must be the realistic one. Try to keep such goals which you can achieve.
Do not try to jump directly on very hard goals. Keep simple goals first, after achieving those, then
 10 Entrepreneurship Development (Obstacles and Solutions)

set some hard goals. Be creative when writing down your goals because this is your life that you will
be experiencing in the near future.
Improve your personality every day:
If you want to become a successful entrepreneur then you must continuously improve your
personality. Try to bring all the qualities of the successful entrepreneurs. How they communicate,
how confident they are! How they use their logic and intelligence to solve the problems? With the
new mindset you have now, you should continue to feed your mind everyday with personal
development. There are so many institutes that provide personality development courses. You
must join the class of personality development. It will really help you to update your personality.
Read a good book on personal growth, listen to meditation music, have a conversation with a
positive person and people or obtain a personal development program to help keep your mind on
track in accomplishing your goals. So you see this is some great stuff to add as a part of your daily
life and it will certainly help move you in the right direction.
Keep your new mindset positive:
Positive thinking is the base of entrepreneurship. If you want be a successful entrepreneur
then you must think positively. You must have positive attitude. Eliminate the word impossible from
your dictionary. For a successful entrepreneur nothing is impossible. They never become sad from
situation, they learn from their failures. Instead of winding the business they come up with more
perfect planning to win the situation. To get positive attitude always be with the people who have
positive mindset. Make good friends from where you can gain useful learning. Hanging around
individuals that have the same entrepreneurial concepts that you will keep your mindset in a positive
state and on the right track to achieve your goals. You can hang around like-minded individuals by
either listening to a group of individuals on the phone via conference calls, attending seminars,
being part of an online forum of positive people like yourself and keeping in contact with the positive
like-minded people you have formed a relationship with, on your journey in achieving your goals.
Visualize the end result of your goal in your mind:
Visualize the end result of your goal that you have decided to achieve within a specific time
frame. For example, if you have decided to own your own fruit center, then you could spend few
minutes in the day visualizing about every aspect of your fruit center as if you currently owned it in
the present moment. Then tally all the activities of your business with the goals and ideas that you
have written down. By comparison you will have idea about your business progress. You will have
a track of your business activities and about your goals and continue to dwell on that end result a
few minutes of everyday until it became a part of his experience in life.
Never give up on your new ideas and goals until you see them manifest in your life:
Do yourself a huge favour right now and go ahead make the decision to never give up on
your new ideas and goals until you see them manifested in your life as an entrepreneur. Many
unsuccessful entrepreneurs in today’s society give up their goals and ideas at the first sign of
temporary defeat. There is no such thing as failure, only temporary defeat in life, period. When a
successful entrepreneur has a temporary defeat, he remains calm, relaxed and confident in his
quest to achieve his goal because he understands that every temporary defeat is backed by a great
or equal number of successes in his life. That’s why many successful entrepreneurs always get
what they want in life; they never give up on what they want.
Take action on your new ideas and goals as an entrepreneur:
Take action everyday on your new ideas and goals as an entrepreneur. You deserve the best
that life has to offer, so the only gap between knowing what to do and doing it is action. Take action
 Entrepreneur and Entrepreneurship 11
everyday regardless of your current circumstances in life. As an entrepreneur with a new mindset,
you are the leader and it’s time for you to start living successfully as an entrepreneur in today’s world.

1.3 W HO CAN BE AN E NTREPRENEUR ?

Anyone can become an entrepreneur who wants to become. Becoming an entrepreneur requires
all those factors that form an entrepreneur. If a person wants to become an entrepreneur then he has
to change his mindset first, the mindset of being protective, always plays under security, don’t want
to take risk, not ready to do much hard work. Such kind of person can never be an entrepreneur he
always sticks to his traditional path. But an entrepreneur is always ready to take risk, creative mind,
confidence and the most important thing is he is motivated to achievement, he wants to achieve
something in his life that lead him to success. Some entrepreneurs have entrepreneurial qualities
from the childhood itself but the person who wants to generate those qualities can also generate it by
proper training and exposing to the entrepreneurial environment.
The people who do jobs bind themselves to that organization only, they have very narrow place,
their boundary is fixed to that organization only, but the entrepreneur never binds himself to a small
boundary, his scope is large and because of this, his chances of getting benefits increases and he
enjoys reputation, social status though the chances of getting failure is also there but his hunger of
achievement motivates him to accept challenges and risks and his entrepreneurial qualities and
skills support him to overcome the barriers.
Do you think you’re an Entrepreneur?
Follow these secrets of prosperity to guide you on your entrepreneurial quest.
Ability to solve problem – To “think on your feet”. You will not accept failure and will continue
forward with ACTION. Learn from the best their lessons of failure and how they trudged through
the thick mire of adversity until they ultimately broke through. The entrepreneurs are the best problem
solver. They are expert in solving the problem. They take the help of creativity, technology and art
to solve the problems.
Change the way you think – You are the creator of your life. Learn how to plant different
seeds of thoughts in your mind. The entrepreneurs are not the common people. They think differently.
They have different perception, different attitude towards the world. They see the opportunity where
the common people cannot see any opportunity. They convert the opportunity into reality. They
utilize the resources in a better way to accomplish their tasks.
No complacency – To accept life as it is and do nothing more to improve. Transformation
through change is necessary to become a successful entrepreneur. The entrepreneurs never get
satisfaction. They enjoy the success but then they set their other targets to achieve. They never
follow the single goal. Once they achieve the first goal they shift to the other goal. They always try
to spread their business and do all that is necessary for the business. They are always active and
think continuously.
No room for failure – Giving up leads to destruction. A majority of very successful self-made
entrepreneurs have not had a “soft place to fall” nor a safety net to rely.

1.4 W HY TO B ECOME AN E NTREPRENEUR ?

I’ve always wanted to do this
For some strange reason, ever since I was a kid I have always wanted to build my own
business. The question for me always was “when” and not “if”. Somehow, other than a brief dalliance
 12 Entrepreneurship Development (Obstacles and Solutions)

with the idea of becoming a fighter pilot, I’ve never really floundered on what I want to do for a living. It’s
always been business.
For a higher purpose
It’s not just about the money. It’s also about listening to a different piper’s tune. It’s about
wanting to do something very different from the mainstream. I have grandiose dreams of being able
to inspire a lot of other would-be entrepreneurs out there to take the leap of faith and begin their
own ventures. Directly or indirectly I have always wanted to promote entrepreneurship within India,
because that’s what pumps up the economy - the pursuit of the creation of wealth. It creates
opportunities for financial empowerment of all sectors of society and it helps create a shared goal
and shared vision of what a country should strive to achieve.
Because it’s very creative
The process of starting a business, building and nurturing it is very creative. It requires
constant ideation and forces you to keep the creative juices flowing. More so, when things are
going good and there is a tendency to rest on one’s laurels.
For the sheer challenge of it
Most of the people select it because they like challenges. They want to face the challenges
and want to overcome the challenges. They want to become entrepreneur because they think that
they can fulfill their desire by becoming an entrepreneur.
For the creation of wealth
Oh yes! There’s no denying the fact that the creation of wealth is one of the primary goals of
any enterprise and most entrepreneurs dream of material wealth and possessions. But there’s
more to it than just money. Creation of wealth is not just cash in the bank or assets, but also good
will, reputation, camaraderie, experience and most importantly intellectual capital.
Desire for achievement and self-fulfillment
For many, having a business of their own is a childhood dream or a lifelong aspiration. The
natural desire to fulfill this ambition will drive some people to pursue their aspirations to become
entrepreneurs. Having your own business can bring a lot of satisfaction and a deep sense of
achievement. This is especially true for people who have an inborn entrepreneurial spirit: they are
excited by the challenge and they enjoy taking risks.
Willingness to invest their current resources
People who are already wealthy may find that setting up a business can be a very good way
of creating more wealth and generate a steady flow of income.
For the independence
The independence to do what I wanted to do and to do it in a way where my principles and
values would not be compromised. Where my potential would not be capped by the potential of a
boss. They want to become the entrepreneur because they cannot work under any boss, they have
their own plans what they want to implement. They do not want to go for a job because they do not
get the complete freedom for their work and always have to follow the boss’s instruction.
Need for money
The current state of the economy has resulted in a dramatic increase in the unemployment
rate. Many of the people who lost their jobs are forced by the circumstances to search for new ways
of earning a living and supporting their family. For some, setting up a business can be the way to
regain their financial stability.
 Entrepreneur and Entrepreneurship 13
Because I am crazy
That hardly needs much explanation, but a certain amount of eccentricity is almost essential
to a successful business.
Need for financial independence and security
Setting up and managing your own business can be a tricky and stressful endeavor; however,
it can prove to be very profitable. Having your own business can provide total financial independence
and this is an enormous accomplishment for most people, especially when the economy is in a
period of decline.
Because it’s cool
Yes, running your own business is definitely cooler than slogging it out in the corporate
machinery. Which is not to say that it doesn’t have its ups and downs and an entirely different set of
problems and stressful situations?
Frustration with their current workplace or career
Some people become frustrated with their past achievements and feel like their current career
path is not going the way they expected or fulfilling their goals. This is when they make the brave
decision to give up on their current job and take on the difficult challenge of setting up their own
business.
Because I’m inspired
Whether it is Akio Morita or Warren Buffet or Richard Branson, self-made capitalists have
always been a tremendous inspiration. Most of the people want to become an entrepreneur because
they are inspired by the successful entrepreneurs. They also want to follow the path of the success
what is followed by the successful entrepreneurs. They also want to open their business. They are
motivated by the stories of the entrepreneurs, how they have faced the challenges and become the
successful businessmen. They think that they can also overcome the problems and can pen a big
business.

1.5 R EASONS TO S TART A B USINESS

What drives people to become entrepreneurs-to start companies? It’s a question with many
answers. Often these individuals are not entirely sure themselves and the answers to the question
are apt to change over time as their perceptions change.
People start business for two reasons: first reason is personal reason. They want to open
business for their own satisfaction i.e., they want to do something for their own; for example, to
earn fame, to bring creative products or services etc. The second reason is general reason. They
want to earn profit; huge business scope etc.
Personal Reasons:
Inequity between contribution and reward
People who are by nature high achievers tend not to get along well in large organizations.
They want rewards based upon accomplishment, not on seniority, conforming to the culture or
political clout. The person who just made a major contribution does not want to be told, “Be patient-
your turn will come.”
Fame and recognition
It is the opinion of some that, this is an important reason why people start companies. Most
of the people open the business because they want to become famous in the world. They want that
people should know them. They see in their daily life that how the entrepreneurs have earned the
 14 Entrepreneurship Development (Obstacles and Solutions)

fame. They also want to become like that and they are motivated by the life and business of the big
entrepreneurs. People also want recognition from the world. They want to show their talent,
intelligence to the world. They try to do something unique for the society and they want that people
should remember them for their act.
Participation in all aspects of a business
Nothing is more exciting than to be broadly involved in the operation of a business. The
entrepreneur helps conceive the product or service, helps design it, goes out and gets orders,
makes sure the factory runs well, helps the customer put it into operation and finally sees the effect
that all of this has on the profits of the firm. What a thrill!
Personal financial gain
For some people this is very important, for others less so. Gains can come more quickly and
can be much greater than when working for someone else; this is not a negligible consideration.
For most people becoming an entrepreneur is the only way available to make a lot of money.
Joy of winning
Entrepreneurs are the ultimate achievers. They like to win. Starting a company is a good way
to satisfy the achievement instinct. Starting a new company, working for a new company, being
involved in any way with a new company is just plain fun. It is satisfying and exciting. We spend
more hours at our job than at anything else we do. Why shouldn’t we enjoy it?
Entrepreneurs come from all the paths of life. The diverse motivations of people that become
entrepreneurs account for a large number of businesses being opened at any given time. The
same diversity of reasons to become an entrepreneur also explains why some businesses are a
huge success, while others fail. Nevertheless, the amount of people who get involved in business
is growing quite rapidly and having a positive effect on the economy.

1.6 W HAT IS E NTREPRENEURSHIP ?

According to Peter Drucker Entrepreneurship is defined as ‘a systematic innovation, which
consists in the purposeful and organized search for changes and it is the systematic analysis of the
opportunities such changes might offer for economic and social innovation.’
Entrepreneurship is a discipline with a knowledge base theory. It is an outcome of complex
socio-economic, psychological, technological, legal and other factors. It is a dynamic and risky
process. It involves a fusion of capital, technology and human talent. Entrepreneurship is equally
applicable to big and small businesses, to economic and non-economic activities. Different
entrepreneurs might have some common traits but all of them will have some different and unique
features.
If we just concentrate on the entrepreneurs then there will be as many models as there are
ventures and we will not be able to predict or plan, how and where and when these entrepreneurs
will start their ventures.
Entrepreneurship is a process. It is not a combination of some stray incidents. It is the
purposeful and organized search for change, conducted after systematic analysis of opportunities
in the environment. Entrepreneurship is a philosophy- it is the way one thinks, one acts and therefore
it can exist in any situation be it business or government or in the field of education, science and
technology or poverty alleviation or any others.
What is Entrepreneurship? An entrepreneur is an individual who owns a firm, business or
venture and is responsible for its development. Entrepreneurship is the practice of starting a new
business or reviving an existing business, in order to capitalize on new found opportunities.
 Entrepreneur and Entrepreneurship 15
Generally, entrepreneurship is a tough proposition as a good number of the new businesses
fail to take off. Entrepreneurial activities differ based on the type of business they are involved in. It is
also true that entrepreneurial ventures create a number of new job opportunities. A large number of
entrepreneurial projects look for venture capital or angel funding for their startup firms in order to
finance their capital requirements. Besides, government agencies and some NGOs also finance
entrepreneurial ventures.
Entrepreneurship, therefore, is about helping other people achieve their goals. It’s not about
you. Successful entrepreneurs focus on others. Take Derek Sivers, for example. As the leader of a
successful touring band, he needed a way to make his CDs available to fans everywhere, all the
time — not just at concerts.
But Derek and his group were unattached to a major label and big sellers like CD Now and
Amazon required bands to have in-place agreements with large distributors. What was a hard-
working, independent musician to do?
Derek decided to set up his own modest online sales channel and soon friends from other
bands were asking for help selling their music. Within a couple of years, the store, renamed CD
Baby, was distributing the work of more than 90,000 artists. To date, its paid out is more than $70
million to the 200,000 independent artists it now represents. Derek focused on helping others.
Successful entrepreneurs like Derek undertake ventures that benefit many people. Ventures
are successful to the degree that they generate social benefits. About Microsoft’s products or business
practices, who can deny that the company enabled personal computing for a billion citizens? Success
as an entrepreneur isn’t about you — it’s about helping others achieve goals you care about.
Entrepreneurship is often associated with uncertainty, particularly when it involves creating
something new for which there is no existing market. Even if there is a market, it may not translate
into a huge business opportunity for the entrepreneur. A major aspect in entrepreneurship is that
entrepreneurs embrace opportunities irrespective of the resources they have access to.
Entrepreneurship involves being resourceful and finding ways to obtain the resources
required to achieve the set objectives. Capital is one such resource. Entrepreneurs need to think
out-of-the-box to improve their chances of obtaining what they need to succeed. According to
management experts, vast majority of entrepreneurs desire to be in control of their own life and
they can’t find this beyond entrepreneurship. Studies have demonstrated that people derive great
satisfaction from their entrepreneurial work.
A number of entrepreneurs are of the opinion that managing their own business offers far
greater security than being an employee elsewhere. They feel entrepreneurship enables them to
acquire wealth quickly and cushion themselves against financial insecurity. Additionally, an
entrepreneur’s future is not at peril owing to the faulty decisions of a finicky employer. So, while
some people feel that being employed is less risky, entrepreneurs feel that they are better off
starting a business of their own.
Today, there is the increasing awareness about entrepreneurship. People aren’t confining
themselves to one business. They are following one business with another. Such entrepreneurs
are referred to as “serial entrepreneurs.” Sometimes these entrepreneurs become angel investors
and invest their money in startup companies. As a person gains greater insight into business and
entrepreneurship, his chances of succeeding in business improve.
Entrepreneurs are a different set of people. They often see things that others fail to notice.
They endeavor to bring about change and foster growth. They believe in themselves.
Entrepreneurship propels them to strive and move forward, to get to where they want to be.
 16 Entrepreneurship Development (Obstacles and Solutions)

Enterprise
Entrepreneur is a person who starts an enterprise. The process of creation is called
entrepreneurship. The entrepreneur is the actor and entrepreneurship is the act. The outcome of
the actor and the act is called the enterprise. An enterprise is the business organization that is
formed and which provides goods and services, creates jobs, contributes to national income, exports
and overall economic development.
What entrepreneurship is not?
Successful entrepreneurs told the same thing, “It’s not about the money.”
What, then, is entrepreneurship about? Exploiting a market opportunity? Fame? Fortune?
Proving yourself?
First, some tips as to what entrepreneurship’s not about:
Entrepreneurship is not about you.
It’s not about you getting rich.
It’s not about you proving something to the world.
It’s not about you struggling to overcome the odds.
Rather, entrepreneurship is about you helping other people to achieve their goals. This is
obvious when you think about it. Business is all about satisfying customers, right? Well, to satisfy
customers, you need to help them save money, solve annoying problems, experience more
satisfaction or pleasure or earn a better living. Put simply, in order to succeed as an entrepreneur,
you must help other people.

1.7 N EED FOR E NTREPRENEURSHIP

According to A.H. Cole, “Entrepreneurship is the purposeful activity of an individual or group
of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or
distribution of economic goods or services”.
Entrepreneurship promotes small business in the society. Government has accepted the
fact that small firms have a crucial role to play in the economic development of the country. Most
economists today agree that entrepreneurship is a necessary ingredient for stimulating economic
growth and employment opportunities in all societies. Small businesses are an essential part of our
future economic prosperity because of the following reasons;
Employment generation: entrepreneurial development is looked at as a vehicle for
employment generation through promotion of small business. India, being far more developed and
forward looking country than some of the third world countries, can provide lead to entrepreneurial
development activities. However, India can benefit from the well- documented success experiences
of developed countries like USA, Japan and UK in the field of employment generation and small
business promotion. Steady growth in consumer spending, expanding retail sales, a strong housing
market, continued expansion of the service sector, low rates of inflation and of labor cost increases
and falling interest rates contributed to a healthy environment for small business. In India, the
government policies, political and economic environment greatly encourage the establishment of
new and small enterprises. Self- employment and small scale industry schemes have been further
liberalized during the last decade.
Small business dynamism: great dynamism is one of the qualities of the small and medium
enterprises. This quality of dynamism originates in the inherent nature of the small business. The
structure of small and medium enterprises is less complex than that of large enterprises and therefore
facilitates quicker and smoother communication and decision- making. This allows for the greater
 Entrepreneur and Entrepreneurship 17
flexibility and mobility of small business management. Also, small enterprises, more often make it
possible for owners, who have a stronger entrepreneurial spirit than employed mangers, to undertake
risk and challenges.
Balanced economic development: small business promotion needs relatively low
investment and therefore can be easily undertaken in rural and semi-urban areas. This in turn
creates additional employment in these areas and prevents migration of people from rural to urban
areas. Since majority of the people are living in the rural areas, therefore, more of our development
efforts should be directed towards this sector. Small enterprises use local resources and are best
suited to rural and underdeveloped sector. This in turn will also lead to dispersal of industries,
reduction in concentration of economic power and balanced regional development.
Innovations in enterprises: business enterprises need to be innovative for survival and
better performance. It is believed that smaller firms have a relatively higher necessity and capability
to innovate. The smaller firms do not face the constraints imposed by large investment in existing
technology. Thus they are both free and compelled to innovate. Entrepreneurship development is
accelerating the pace of small firm’s growth in India. An increased number of small firms are expected
to result in more innovations and make the Indian industry compete in the international market.

1.8 B ENEFITS OF E NTREPRENEURSHIP

Entrepreneurs enjoy the freedom of making their own business decisions and becoming
their own bosses. In addition, they also gain the stability and control that could never be achieved
as a regular employee. Compared to being regular employees, entrepreneurs enjoy much excitement
beginning from the planning stage of the business up to development and realization. Thrill-seekers
obviously love being entrepreneurs as they are exposed to too much risk. You should never forget,
that all business risks that you agree on taking, should be calculated. Most people who are employed
generally feel that they are not being compensated for the work they do. In addition, they must
follow the salary structure set by their employers. Entrepreneurs, on the other hand, earn money
that is commensurate to their efforts
1.8.1 Advantages of Being a Successful Entrepreneur
Becoming a successful entrepreneur takes a lot of time, patience and perseverance.
Successful entrepreneurs are extremely passionate about their business; they create a vision,
focus on their strengths and work hard to accomplish their goals. Often they are strong social
networkers and shameless self promoters who strive to become the expert in their trade. Once they
have achieved that expert status, they begin reaping the benefits of a successful entrepreneur.
No set timetable
Successful entrepreneurs work flexible schedules and are free to come and go as they please.
They do not have to punch a time clock every day nor do they have to sit behind a desk for eight
hours. Because of the flexibility they are often able to spend more quality time with their friends and
family. They have complete freedom to do anything what they want. They can any time move out of
the day, if they feel they have some other important work to do.
Passion for their career
Successful entrepreneurs often build their business around something they love to do. For
example, someone who cares about car and mechanics may open their own auto repair shop.
Because it is something they are passionate about they are more like to work harder and succeed.
They live their dream. They are happy with their business. They can achieve what they want because
they are not the employee of any one; they are free to do what they want to do with their business.
 18 Entrepreneurship Development (Obstacles and Solutions)

Job satisfaction
Successful entrepreneurs have the satisfaction of using their skills, interests and creativity to
make money. They do not have a set job description and can work on whatever project interests
them the most. They are the satisfied one for at least what they want they do that. They do not work
under any influence and therefore they are not restricted by any one. They implement new ideas;
they do not have to take the permission of the others for their work.
Increased self confidence
Successful entrepreneurs often build their business from the ground up. Seeing it succeed
increases their self confidence and gives them a strong sense of accomplishment. They feel proud
of themselves. They overcome the problems; they face the challenges after that too they get success
in their business. It gives them the complete satisfaction with increase in the confidence. They now
become relaxed; they do not fear about any challenge and have a faith that they will overcome the
problems.
Giving back to the community
Successful entrepreneurs are able to give back to their communities by building symbiotic
relationships with local business owners as well as increasing local job opportunities. They may
also bring a sense of prestige and recognition to their community. They are the job creator. Their
business runs many families. They produce the products for the customers. They fulfill the needs of
the people in a society. They give satisfaction to the society. They come up with the new ideas to
solve the problems of the people.
Job security and friendly work environment
Because successful entrepreneurs are their own boss, they do not have to worry being laid
off or losing their job. Also if something in their work environment displeases them, they can easily
make adjustments to improve the situation. They are not dependent to anyone. They are independent
person. They survive by themselves. They run their own business, create the environment of peace,
they give facilities to their employees from medical insurance to education of the employees’ children.
They create the happy environment in the society.
Financial Freedom
Successful entrepreneurs work hard to achieve financial freedom. Their salary is based on
their efforts and not on what an employer offers them. Countless small business owners have been
able to build their business into a secure financial empire. Financial freedom can also be obtained
when an entrepreneur sells a successful small business. If the work is no longer rewarding and
challenging, they can sell the business, reap the benefits and come up with a new business idea.
Excitement
Due to its high capacity for risk, there is a lot of adventure. What they do’ they enjoy it very
much? They come up with the new and new strategies apply them in the market and remain excited
about the outcome. They are very hopeful about the outcome. They always form the strategies like
the strategies formed by the military officers. They get enjoyment after defeating the others but they
are also ready to get defeated.
Rules and regulations
Work in a current job is difficult to do because of all the “red tape” and consistent administrative
approval is needed. In a job someone has to follow all the rules and regulations. Those may be
wrong but as an employee the person has to follow the rules. But in a business they form their
rules; they have a complete authority to make the rule. They are free to work.
 Entrepreneur and Entrepreneurship 19
Originality
Some people feel that they can offer a new service/product that no one else has offered before.
The entrepreneurs have a complete freedom to implement their ideas. They come with their creative
ideas and produce a new product that has not been produced by anyone. They do not follow others,
idea. They have their own idea and product.
Competition: Employees feel they can offer their current company’s product / service at a
lesser expense to the public.
Independence
Some people wish to be their own boss and make all the important decisions themselves.
They are not connected by anyone else. They take their own decisions. They feel satisfied in taking
their decisions. They do what they want. They run the complete business independently.
Salary potential: Generally, people want to be paid for the amount of work they do in full;
they do not want to be “short-charged.”
Flexibility
Entrepreneurs can schedule their work hours to spend quality time with family or for any
other reason. They can do many tasks at the same time. They are not attached to only one place.
They can handle many projects. They can freely move to other places for their other work.
Rational salary: They are not being paid what they’re worth and would rather work on their
own and earn the money they should be earning for their efforts.
Freedom
Entrepreneurs can work whenever they want, wherever they want and however they want.
They can implement their ideas at any time. They are the boss, they have complete authority. They
are not required to work at the same place for the long time. They can run simultaneous business.
They can handle more than one project at the same time. The employee does not have such
freedom.

1.8.2 Disadvantages
Salary
Starting your own business means that you must be willing to give up the security of a
regular paycheque. The entrepreneurs do not get regular salary. They are dependent on the business
for their payment. They are not secured about the salary. They will earn if the business will do well
otherwise they will suffer. Here the employees have an advantage over entrepreneurs.
Benefits
There will undoubtedly be fewer benefits, especially when considering that your business
will be just starting off. Definitely in the starting stage of the business, entrepreneurs cannot be the
confident ones. If they run it very well then they will achieve success, otherwise there is a fear of
business failure. They have to take many efforts to survive the business. They are not the free
person, at the initial stage of the business they work for even 12 hours or more.
Work schedule
The work schedule of an entrepreneur is never predictable; an emergency can come up in a
matter of a second and late hours will have to be put in. They do not have fix schedule. They can
go anywhere whenever it becomes urgent to go for business work. They cannot say that they will
come home at sharp 5 evening.
 20 Entrepreneurship Development (Obstacles and Solutions)

Administration
The entrepreneurs have to take the burden of making decisions. They are the only higher
authority in the business and therefore they are responsible for the decisions and their consequences.
They are ready to accept the failure if business suffers from their decisions. They have to manage
their employees also that is not the easy task. They have to better utilize the resources without any
wastages because already they have limited resources. All the decisions of the business must be
made on your own; there is noone ranked higher than you on the chain of command in YOUR
business. So as an entrepreneur he has the burden of whole business progress.
Incompetent staff: Often times, you will find yourself working with an employee who “doesn’t
know the ropes” as well as you do due to lack of experience.
Procedures: Many times during your entrepreneurial life, you will find that many policies do
not make sense, nor will they ever make sense
1.8.3 Benefits of Entrepreneurship and Entrepreneur Risks
According to Diane Wells an online entrepreneur and author, the following are the benefits of
entrepreneurship.
In times when opportunities to earn money from jobs are less, you got to make opportunities
for yourself through entrepreneurship. The benefits of entrepreneurship towards the economy and
towards the entrepreneur himself or herself are tremendous. Starting out small and working your
way up is always a good idea when it comes to entrepreneurship; small entrepreneurial activities
are what keeps world economies afloat and not few big businesses. And the benefits of
entrepreneurship towards an individual are no less than life changing.
First, entrepreneurship can be your ticket towards financial independence. How much you
make really depends on you; you set your own goal and by it you determine how much you
compensate your efforts. Of course there are necessary things you need in place before you could
realize total financial independence, but working towards your goal is another exciting thing that
you could do for yourself as a person. A study by Michael T. Childress and others in 1998
(Entrepreneurs and Small Business - Kentucky’s Neglected Natural Resource) found that
entrepreneurs make more money and pay more money to their employees, than working in big
businesses or corporations.
Second, entrepreneurship allows flexibility in your life. Once the necessary things are set in
place and operation is properly delegated, the entrepreneur can start to experience flexibility in
work schedule than working for somebody else. After all, one of the top benefits of entrepreneurship
is that you are your own boss. When all aspects of your business are fully functional, you can start
to do other things that you love. You can finally make time for your sport, hobby and most of all, for
your family.
Moreover, entrepreneurship can open endless possibilities for the entrepreneur. Working
for somebody else often force people to do jobs they don’t like; entrepreneurship can free you from
the drudgery of imposed tasks. In fact, your business should be a self-expression, a form of outlet
for your creativity and the things that you love to do. It’s simply doing the things that you love to do
and making money while doing it. No longer will you be in the mercy of seniority and office politics
to rise and achieve growth. Entrepreneurship will bring you to new heights that not even your
limitations can hold you back if your determination is solid.
Other more noble benefits of entrepreneurship are that you’re helping to provide
opportunities for other people and contribute to the society through responsible business. In fact,
small business owners are respected people in the community because they are responsible for
spurring community development starting at creating local jobs. Jobs provided by entrepreneurs
 Entrepreneur and Entrepreneurship 21
are even more fulfilling in terms of pay and recognition compared to jobs in high-rise offices. You’re
not only providing for yourself and your family, you’re also providing for the community in your own
little way. No economy in the world can survive without the ingenuity, creativity and labour provided
by entrepreneurs.
The best part about entrepreneurship is that it doesn’t discriminate: men, women, young,
old, educated or not, everyone can become an entrepreneur through hard work and dedication to
continuous learning and improvement.

1.9 I NTRAPRENEURSHIP
What is intrapreneurship? Difference, features and examples of Intrapreneurs
Entrepreneurship is the practice of embarking on a new business or reviving an existing
business by pooling together a bunch of resources, in order to exploit new found opportunities.
What is Intrapreneurship? Intrapreneurship is the practice of entrepreneurship by employees
within an organization.
1.9.1 Difference between an Entrepreneur and an Intrapreneur
Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and insight.
As the intrapreneur continues to expresses his ideas vigorously, it will reveal the gap between the
philosophy of the organization and the employee. If the organization supports him in pursuing his
ideas, he succeeds. If not, he is likely to leave the organization and set up his own business.
1.9.2 Example of Intrapreneurship
A classic case of intrapreneurs is that of the founders of Adobe, John Warnock and Charles
Geschke. They both were employees of Xerox. As employees of Xerox, they were frustrated because
their new product ideas were not encouraged. They quit Xerox in the early 1980s to begin their own
business. Currently, Adobe has an annual turnover of over $3 billion.
Examples of Intrapreneurs
A lot of companies are known for their efforts towards nurturing their in-house talents to
promote innovation. The prominent among them is “Skunk Works” group at Lockheed Martin. This
group formed in 1943 to build P-80 fighter jets. Kelly Johnson was the director of the project, a
person who gave “14 rules of intrapreneurship”.
At “3M” employees could spend their 15 per cent time working on the projects they like for
the betterment of the company. On the initial success of the project, 3M even funds it for further
development.
Genesis Grant is another 3M intrapreneurial program which finances projects that might
not end up getting funds through normal channels. Genesis Grant offers $85,000 to these innovators
to carry forward their projects.
Robbie Bach, J Allard and team’s XBOX might not have been feasible without the Microsoft’s
money and infrastructure. The project required 100s of millions and quality talent to make the
product.
1.9.3 Features of Intrapreneurship
Entrepreneurship involves innovation, the ability to take risk and creativity. An entrepreneur
will be able to look at things in novel ways. He will have the capacity to take calculated risk and to
accept failure as a learning point. An intrapreneur thinks like an entrepreneur looking out for
 22 Entrepreneurship Development (Obstacles and Solutions)

Table 1.1: Difference between an entrepreneur and an intrapreneur

Entrepreneur Intrapreneur

“An Entrepreneur is someone who has the skills, “An Intrapreneur is someone who manages that
passion and financial backing to create wealth from business with entrepreneurial flair in line with the
new business opportunities and is willing to take full expectations of the shareholders.”
responsibility for its success or failure.”
The Entrepreneur is typically a visionary who spots The Intrapreneur has passion and drive but also has
an opportunity in the marketplace and has the the operational skills of running the “clockwork” of
passion, guile and contact base to set the wheels in the business to enable a good idea to be turned into
motion. commercial reality. He is the “inside entrepreneur”.
Entrepreneur refers to a person who undertakes and Intrapreneur - The spirit of entrepreneurship within
operates a new enterprise or venture. an existing organization.
An entrepreneur takes substantial risk in being the On the contrary, an intrapreneur is an individual
owner and operator of a business with expectations employed by an organization for remuneration, which
of financial profit and other rewards that the business is based on the financial success of the unit he is
may generate. responsible for.

Entrepreneurs take personal financial risk. Intrapreneurs have a different mindset. They can
perform many similar acts to entrepreneurs, but they
tend to do so without taking the personal financial
risk.

Entrepreneurs lose houses. Intrapreneurs lose career development points.

Entrepreneurs are the boss. Intrapreneurs are the employees.

opportunities, which profit the organization. Intrapreneurship is a novel way of making organizations
more profitable where imaginative employees entertain entrepreneurial thoughts. It is in the interest
of an organization to encourage intrapreneurs. Intrapreneurship is a significant method for companies
to reinvent themselves and improve performance.
In a recent study, researchers compared the elements related to entrepreneurial and
intrapreneurial activity. The study found that among the 32,000 subjects who participated in it, five
percent were engaged in the initial stages of a business start-up, either on their own or within an
organization. The study also found that human capital such as education and experience is connected
more with entrepreneurship than with intrapreneurship. Another observation was that intrapreneurial
startups were inclined to concentrate more on business-to-business products while entrepreneurial
startups were inclined towards consumer sales.
Another important factor that led to the choice between entrepreneurship and intrapreneurship
was age. The study found that people who launched their own companies were in their 30s and
40s. People from older and younger age groups were risk averse or felt they have no opportunities,
which makes them the ideal candidates if an organization is on the lookout for employees with new
ideas that can be pursued.
Entrepreneurship appeals to people who possess natural traits that find start ups arousing
their interest. Intrapreneurs appear to be those who generally would not like to get entangled in
startups but are tempted to do so for a number of reasons. Managers would do well to take employees
who do not appear entrepreneurial but can turn out to be good intrapreneurial choices.
 Entrepreneur and Entrepreneurship 23

1.10 R OLE OF E NTREPRENEUR IN E CONOMIC D EVELOPMENT

We Need Entrepreneurs — How Vital They are to Our Economy
The Great Recession has made it abundantly clear how important are entrepreneurs. We need
their creativity to start businesses and create jobs. We do not do enough to cultivate this special
breed of vital change agents on which our economic future depends.

Entrepreneurs are the lifeblood of any economy. Policies have to favour risk-taking and have to
reward those with the energy and zeal to start businesses. Without entrepreneurs, there are no jobs.
The large enterprises of today were all started by single entrepreneurs willing to take risks to claim
the rewards from risk-taking. Americans sometimes take for granted that there is gainful employment,
but the Great Recession of 2008 made it abundantly clear that no one can take employment for
granted. There are simply not always jobs available. It is imperative to continually increase the
supply of jobs for a stable and productive society of working citizens.
Can the government create jobs? Actually no, although the politicians do try to “sell” their
legislation by claiming they are creating jobs. In fact, the best the government can do is take
money from citizens and pay a government official to do something that the private sector was not
willing to pay for. Does this create a job? It does create a government job, but it does not create a
‘net’ number of new jobs. This is so because when the government takes money from citizens,
they have less to spend for their activities. Thus, they will not spend that extra tax money at the
hardware store, the movies, a restaurant, fixing a car, etc. Jobs will be lost or not added at the
hardware store, a restaurant, the movies, the car repair shop, etc.

An entrepreneur on the other hand creates a new product or service that citizens voluntarily
wish to buy. They shift their expenditures to this new product or service and the entrepreneur hires
people to satisfy the demand for the new product or service. Everyone is made better off because
everyone chooses voluntarily what to buy and sell. Rather than being forced into giving up a meal
at a restaurant in order to hire a new government official, a person wants to give up that meal to buy
the new product or service from the entrepreneur. A person who loses their job at the restaurant
might work for the entrepreneur in the new business. If the business is successful, it will add more
and more jobs, creating a demand for employees. With greater demand for employees, their wages
will rise. Google was just two employees about 15 years ago, now it has many thousands of
employees in a new industry that did not exist 15 years ago. It was created by entrepreneurs.

What do we need to do to stimulate entrepreneurial activity to create more jobs? One, allow
entrepreneurs to keep more of what they earn — lower tax rates. Create incentives for starting a
business. Two, stimulate employment by making employees less expensive. If every business
has to pay huge employer taxes (social security, Medicare, unemployment insurance, workers
compensation) and be subject to lawsuit for the smallest of infractions, then those are disincentives
to hiring workers in the U.S. Reduce those legal costs to hiring. Third, reduce government mandated
paperwork. The government requires a lot of paperwork to run a business. That takes time and
detracts from the time for running a business. Starting a business is already more than a full time
job; layering on useless paperwork is a big disincentive to the vital economic function of entrepreneur.

We need entrepreneurs to do their magic more now than ever. Let’s give them room and
stay out of their way so that they can create great businesses and help us through this economic
downturn.
 24 Entrepreneurship Development (Obstacles and Solutions)

1.11 D EVELOPING AN E NTREPRENEURIAL E NVIRONMENT

The nature versus nurture debate with entrepreneurs’ development still rages. What is clear;
however is that the environment within a family business can have a major impact on the development
of entrepreneurial skills of family members? Use checklist below to help you develop an environment
within your family business that supports any family members that may want to start their own
businesses in the future:
Dynamic business environment
For any entrepreneur to flourish in your family business, the business itself should be as
dynamic as possible. Forward thinking businesses that are constantly evolving and adopting new
business practices and technologies give any family member that has a start-up business in mind
a template they can use for their enterprise.
Can do attitude
Encouragement is often cited as one of the single most important aspects of a young
entrepreneur’s development. Management and colleagues within a family business should encourage
family members that want to start-up on their own to move forward with their plans. Anything is
possible attitude, is key to developing the skills of new entrepreneurs.
Training and help
Some entrepreneurial skills are innate, but many can be taught. Sometimes family businesses
will shun training as this could mean a valued family member then leaves the business. Training
should be offered where possible. Standing in the way of a family member developing their own
business start-up plans will only cause resentment and ultimately damage the family business
overall.
Mentoring and support
Entrepreneurs tend to identify in others similar personality traits to their own. If several family
members have these traits it is only natural that they will be attracted to each other to form new
start-up businesses. Look for ways in which these family members can be mentored by either other
family members or by people and organizations outside of the family business itself.
Developing Entrepreneurial Skills
Research has indicated that the family business is one of the most effective environments to
develop the skills that all entrepreneurs need to succeed. What’s more, family businesses have
been shown to be the ideal place for female entrepreneurs to thrive. It is not surprising that research
has revealed these results. Family businesses tend to be hotbeds of business activity. The skills
that new entrepreneurs need are developed within the safe environment of the family business.

1.12. W OMEN E NTREPRENEURSHIP

Women Entrepreneurs may be defined as the women or a group of women who initiate,
organize and operate a business enterprise.
OECD (Organisation for Economic Co-Operation and Development) (1998) has referred
women entrepreneur as equally to someone who has started a one-woman business, to someone
who is a principal in a family business or partnership or to someone who is a shareholder in a
publicly held company which she organizes and runs. Marcellina et al. (2002) has defined women
enterprises as ones that were planned, started, owned and managed by women.
 Entrepreneur and Entrepreneurship 25
Government of India has defined women entrepreneurs as an enterprise owned and controlled
by a women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per
cent of employment generated in the enterprise to women. Like a male entrepreneur a woman
entrepreneur has many functions. They should explore the prospects of starting new enterprise;
undertake risks, introduction of new innovations, coordination administration and control of business
and providing effective leadership in all aspects of business.

1.12.1. Women’s Small Enterprise Development and Its Affecting

Factors
There are different factors influencing woman to become an entrepreneur. Such factors can be
divided into two: (1) the push and (2) the pull factors (Robinson, 2001). The push factor is allied with
negative environment and the pull factor is attributed to the push factor may result from low income,
low job satisfaction or lack of job opportunities and strict working hours. The pull factor, however, may
result from the need of fulfilling the desire to help others and self accomplishment. Dhaliwal (1998)
found the push factor to be evident in the developing countries. Empirical evidence on the push and
pull factors revealed that women entrepreneurs in the developed countries were influenced by the
need for achievement, while women entrepreneurs in the developing countries were influenced by a
combination of push and pull factors (Orhan and Scott, 2001). Women are influenced by socio-
cultural complexities to become an entrepreneur in developing countries (Nilufer, 2001). Because of
such complexities in the factors influencing women entrepreneurship development in developing
countries, many international organizations adopted strategies to overcome such complexities.
A study conducted by International Labour Organization (ILO) (2006) has found four personal
and four external factors that influence women entrepreneurs’ success.
Personal factors comprise: (1) motivation and commitment; (2) abilities and skills; (3) ideas
and markets; and (4) resources.
While external factors consist of: (1) business development organizations; (2) broader
enabling environment; (3) economic/market environment; and (4) socio-cultural context.
The business development organizations factor considers the roles of government, NGOs,
private sector, membership organizations and donors.
The broader enabling environment factor mulls over regulations, policies, institutions and
processes.
The economic/market environment factor ponders opportunities and threats (e.g., inflation,
interest rates, economic trends etc.).
The socio-cultural context factor considers attitudes, aspirations, confidence etc.
Ulrich (2006) has examined five factors and found that all of them influence youth
entrepreneurship development. The five factors include: (1) entrepreneurship education and training,
(2) socio-cultural, legitimacy and acceptance, (3) access to finance, (4) business assistance and
support and (5) administrative and regulatory framework.
1.12.2. Problems of Women Entrepreneurs in India
Women in India are faced many problems to get ahead their life in business. A few problems
can be detailed as;
1. The greatest deterrent to women entrepreneurs is that they are women. A kind of
male dominant social order is the stumbling block to them in their way towards business
success. Male members think it a big risk financing the ventures run by women.
2. Changing the perceptions about the likely success of women-owned businesses depends
26 Entrepreneurship Development (Obstacles and Solutions)

on increasing women’s visibility in leadership positions within the greater business

community. In an assessment of women’s presence as CEOs or Directors of large
business enterprises, it has been anticipated that the exodus of women to entrepreneurial
growth firms might be because women believe that they have greater representation in
strategic leadership positions in privately-held or family-owned firms as they provide
better opportunities for leadership than available to women in publicly-traded companies.
3. The financial institutions are skeptical about the entrepreneurial abilities of women. The
bankers consider women loanies as higher risk than men loanies. The bankers put
unrealistic and unreasonable securities to get loan to women entrepreneurs. The financial
institutions discourage women entrepreneurs on the belief that they can at any time
leave their business and become housewives again.
4. Another significant need of many women business owners is obtaining the appropriate
assistance and information needed to take the business to the next level of growth.
Women entrepreneurs required assistance and training in implementing the business
idea, identifying initial sources of financing and advertising/promotion. The
entrepreneurs, who were already established, had a somewhat different set of needs
including financing for expansion and increasing sales.
5. Women hardly interact with other women who are successful entrepreneurs. This results
in a negative impact on their networking skills.
6. The women entrepreneurs are suffering from inadequate financial resources and
working capital. The women entrepreneurs lack access to external funds due to their
inability to provide tangible security. Very few women have the tangible property in
hand.
7. Socio-cultural Barriers: Women’s family and personal obligations are sometimes a
great barrier for succeeding in business career. Women’s family obligations also bar
them from becoming successful entrepreneurs in both developed and developing
nations. The overlapping of the family and the firm is not significant for women business
owners. As the boundaries between the firm and the family tend to be indistinct, women
operating family businesses face a unique set of issues related to personal identity,
role conflict, loyalties, family relationships and attitudes towards authority. “Having
primary responsibility for children, home and older dependent family members, few
women can devote all their time and energies to their business” Additionally, family
businesses owned by women are at a disadvantage financially and are forced to rely
on internal resources of funding rather than outside sources.
8. Lack of Confidence: women lack confidence in their strength and competence. The
family members and the society are reluctant to stand beside their entrepreneurial
growth. Women are very critical when it comes to themselves – can I really do this, am
I good enough, maybe I have to learn more, others can do it better. It is quite interesting
that many successful women have been educated in only girls colleges and schools,
which often deliver a safe environment to try out ones personal strengths, learn to
overcome weaknesses and be proud of oneself. The confidence to travel across day
and night and even different regions and states are less found in women compared to
male entrepreneurs. This shows the low level freedom of expression and freedom of
mobility of the women entrepreneurs.
9. Married women have to make a fine balance between business and home. More-over
the business success depends on the support the family members extended to women
in the business process and management. Very few societies accept fathers taking
over the role of staying home and taking care of the children. Once these children are
old enough to take care for themselves, they have to bear an additional responsibility of
 Entrepreneur and Entrepreneurship 27
taking care of elder parents. If they want to become entrepreneurs, the society expects
them to be able to do both: take care of family and home and do business.
10. Market-oriented risks – Stiff competition in the market and lack of mobility of women
make the dependence of women entrepreneurs on middlemen indispensable. Another
argument is that women entrepreneurs have low-level management skills. They have
to depend on office staffs and intermediaries, to get things done, especially, the
marketing and sales side of business. Here there is more probability for business
fallacies like the intermediaries take major part of the surplus or profit. Marketing means
mobility and confidence in dealing with the external world, both of which women have
been discouraged from developing by social conditioning. Even when they are otherwise
in control of an enterprise, they often depend on males of the family in this area.
11. Discrimination – it is hard to believe but women are still treated differently in our society.
Women do get lower salaries compared to men doing the same job; women do not
have access to men dominated networks who take their decisions about successors
in the company during golf plays or meetings.
12. Motivational factors – Self motivation can be realized through a mind set for a successful
business, attitude to take up risk and behavior towards the business society by
shouldering the social responsibilities. Achievement motivation of the women folk found
less compared to male members. The low level of education and confidence leads to
low level achievement and advancement motivation among women folk to engage in
business operations and running a business concern.
13. Missing networks – through centuries business men have build up their networks but
women still have to learn to catch up.
14. The male-female competition is another factor, which develop hurdles to women
entrepreneurs in the business management process. Despite the fact that women
entrepreneurs are good in keeping their service prompt and delivery in time, due to
lack of organizational skills compared to male entrepreneurs women have to face
constraints from competition. In spite of constitutional equality, in practice the attitude
of men is not only tradition-bound but even of those who are responsible for decision-
making, planning and research is not equality. They still suffer from male Reservations.
This attitude of reservation creates difficulties and problems at all levels i.e., Family
support, training, banking, licensing and marketing.
15. Women are hesitant to find out the access to cater their needs in the financial and
marketing areas. In spite of the mushrooming growth of associations, institutions and
the schemes from the government side, women are not enterprising and dynamic to
optimize the resources in the form of reserves, assets mankind or business volunteers.
16. Knowledge of latest technological changes, know how and education level of the person
are significant factors that affect business. The literacy rate of women in India is found
at low level compared to male population. Many women in developing nations lack the
education needed to spur successful entrepreneurship.
17. Low-level risk taking attitude is another factor affecting women folk decision to get into
business. Low-level education provides low-level self-confidence and self-reliance to
the women folk to engage in business, which is continuous risk taking and strategic
cession making profession.
18. High production cost of some business operations adversely affects the development
of women entrepreneurs. High cost of production undermines the efficiency and stands
in the way of development and expansion of women’s enterprises. Government
assistance in the form of grant and subsidies to some extent enables them to tide over
the difficult situations. However, in the long run, it would be necessary to increase
 28 Entrepreneurship Development (Obstacles and Solutions)

efficiency and expand productive capacity and thereby reduce cost to make their ultimate
survival possible, other than these, women entrepreneurs also face the problems of labour,
human resources, infrastructure, legal formalities, overload of work, lack of family support,
mistrust etc.
19. Lack of right public/ private institutions: Most public and private incentives are misused
and do not reach the woman unless she is backed by a man. Also many trade
associations like ministries, chambers of commerce do not cater to women expecting
women’s organizations to do the necessary thing. At a government level, the licensing
authorities and labour officers and sales tax inspectors ask all sorts of questions like
what technical qualifications you have, how will you manage labourers , how will you
manage both house and business, does your husband approve, etc.
1.12.3. Progress of Women Entrepreneurship
Entrepreneur Dr. Kiran Mazumdar-Shaw, Chairman and Managing Director of
Biocon Ltd.
The business and managerial skills of Dr. Kiran Mazumdar-Shaw has made her one of
the richest business entrepreneurs in India. She ranks among the elite ranks of the
Indian business fraternity and is a member of premier business organizations like CII,
IIM Bangalore and others.
Ekta Kapoor, creative head of Balaji Telefilms
The daughter of star actor Jeetendra and sister of Tushar Kappor, Ekta Kapoor is
known in almost all Indian households for her K series serials. She is one of the front
runners of Indian television industry and has been responsible for the huge profits of
her company Balaji Telefilms. Balaji has made crores of profit under her.
Sunita Narain, an environmentalist and political activist
A renowned social activist fighting for the importance of the Green concept of
sustainable development, Sunita Narain has made India proud. She has been currently
chosen as the director of the Society for Environmental Communications. She was
also awarded the prestigious Padma Shri award in 2005.
Neelam Dhawan, Microsoft India managing director
A major name in the Indian business scene, Neelam Dhawan is the managing director
of the Microsoft’s sales and marketing operations. She is well known for implementing
business strategies which have earned enormous profits for Microsoft.
Naina Lal Kidwai
Naina Lal Kidwai was listed by Fortune magazine as the World’s Top 50 Corporate
Women. She is the first Indian woman to crack the prestigious Harvard Business School.
She is one of the top ten business women and the first woman to head the operations
of HSBC in India was awarded the Padma Shri award for her work.
Sulajja Firodia Motwani
Sulajja Firodia Motwani, a known name in Indian business is currently the Joint
Managing Director of Kinetic Engineering Ltd and manages the overall operations and
business development strategies. She has been nominated as the business ‘Face of
the Millennium’ by magazine India Today and also as the ‘Global Leader of Tomorrow’
by the World Economic Forum.”
Mallika Srinivasan, Director of TAFE India
Named as the one of the top ten business women of the year in 2006, Mallika Srinivasan
 Entrepreneur and Entrepreneurship 29
is the director of TAFE India. Her skills and strategies have helped the company earn
profits from a meagre ` 85 core to a mammoth ` 2,900 cores. She is also a leading
figure in social services.
Dr. Jatinder Kaur Arora
Dr. Jatinder Kaur Arora has made India proud through her scientific research for
development of women. Presently serving the prestigious post of a joint director in the
Punjab State Council for Science and Technology, she was honoured with the national
award for her brilliant works.
Zia Mody, Senior Partner
Zia Mody was listed as one of the top 25 most powerful business women by Business
Today. Her strategies have helped AZB and Partners earn great profits. She has also
been awarded as the Best Knowledge Manager by Financial Express.
Ritu Nanda, CEO, Escolife
The daughter of ace film personality, Raj Kapoor, Ritu Nanda has made her presence
felt as one of the prominent business women of India. Currently serving as the CEO of
Escolife, she was awarded the Best Insurance Advisor and entered the Guinness
Book of Records for selling 17,000 pension policies in a day.

1.12.4. How to Develop Women Entrepreneurs?

Right efforts in all areas are required in the development of women entrepreneurs and their
greater participation in the entrepreneurial activities. Following efforts can be taken into account
for effective development of women entrepreneurs.
1. Consider women as specific target group for all developmental programmes.
2. Empower rural women economically, socially, politically and thereby promote
sustainable development;
3. Promote popular participation and bottom-up approach in decision making;
4. Develop skills, improve knowledge, promote culture and consultation in decisional
process;
5. Strengthening the public administration to make the regulatory and administrative
environment more conducive for women entrepreneurs.
6. Setting up labour organizations for all working women and reorganizing the existing
organizations to act more effectively and for the better representation of women within
them.
7. Give poor rural women a sense of belonging and the opportunity to benefit from and
contribute to the development of country;
8. Women’s education would be made a policy priority and women’s integration in the
development process would be enhanced in order to maximize social welfare and
women’s share within it.
9. Give the youth a sound knowledge of the local technology, tradition and culture that
are sustainable for economic development.
10. Re-structuring the existing institutions and programmes, such as credit and guarantee
cooperatives, in such a way as to increase their capacity and tendency to provide
credit to the growing number of small enterprises; in case of the failure of this strategy
in increasing the number of women entrepreneurs, supporting the institutions owned
by women.
11. Holding regular consultations with key factors like women entrepreneurs, women
entrepreneurs’ associations, financial institutions, etc., to review progress and identify
30 Entrepreneurship Development (Obstacles and Solutions)

new bottlenecks.
12. Examining differential impacts of governmental policies, programmes and actions on
their performance. Whether those policies and programmes are affecting women
positively or negatively.
13. Another measure that may be considered in line with the target of enhancing women’s
entrepreneurship is about the development of specific programmes towards job
experience acquisition for the unemployed and the measure is specified to target women
and youths, whose participation in the labour market is most desired.
14. Better educational facilities and schemes should be extended to women folk from
government part.
15. Human resource development for increased competitive entrepreneurship, technology
absorbing capacities and women’s control over asset management.
16. Adequate training programme on management skills to be provided to women
community. Vocational training to be extended to women community that enables them
to understand the production process and production management. Skill development
to be done in women’s polytechnics and industrial training institutes. Skills are put to
work in training-cum-production workshops.
17. Policies, laws and overall regulatory environment are frequently seen as barriers and
disincentives to expansion and growth. However, they need to be promoted in such a
way that women entrepreneurs see the advantages of and benefits that come with
compliance.
Identifying those instruments that act as barriers to expansion and growth;
Modifying or dismantling these instruments;
Taking account of the social and cultural contexts affecting policy implementation
and redress inequalities and abnormalities;
Making use of IT and associations so as to minimize the administrative burdens
on women entrepreneurs;
18. Trying to “push” more women entrepreneurs into growth situations as well as ensuring
that laws and regulations do not stand in their way. Facilitating and “pulling” the women
entrepreneurs into situations where they can actively pursue growth strategies.
Providing incentives for expansion and growth after removing barriers and
disincentives
Promoting strong links and synergies with existing major economic players
Promoting and rewarding programmes that serve women entrepreneurs
19. Training on professional competence and leadership skill to be extended to women
entrepreneurs. Training in entrepreneurial attitudes should start at the high school
level through well-designed courses, which build confidence through behavioral games.
20. Counseling through the aid of committed NGOs, psychologists, managerial experts
and technical personnel should be provided to existing and emerging women
entrepreneurs. Continuous monitoring and improvement of training programmes.
21. Making provision of micro credit system and enterprise credit system to the women
entrepreneurs at local level.
22. Ministry should provide outlets to women in trade shows to display products made by
women.
23. District Industries Centres and Single Window Agencies should make use of assisting
women in their trade and business guidance.
24. Programmes for encouraging entrepreneurship among women are to be extended at
local level.
 Entrepreneur and Entrepreneurship 31
25. More governmental schemes to motivate women entrepreneurs to engage in small scale
and large-scale business ventures.
1.12.5. The Needs of Women Entrepreneurs in India
1. More and better access to finance/credit is mentioned very frequently. Give a woman
1000 rupees and she can start a business. Give her another 1000 rupees and she will
be able to feed not only for her family, but for her employees as well.
2. Access to business support and information, including better integration of business
services.
3. Access and vigilance on the latest information science and technology to match the
basic characteristics of entrepreneurs and the fundamental character of the Indian
woman is necessary to show that a lot of potential among Indian women for their
entrepreneurial skills. This potential can be considered as suspended and for use in
manufacturing and services for the development of the nation.
4. The challenges and opportunities for women in the digital age are growing, as job
seekers turn to job creation. They are growing as a designer, interior designers,
exporters, publishing, clothing and always looking for new modes of economic
participation. They have better access to local and foreign markets.
5. Day care centres and nurseries for children and also for the elderly;
6. Even as women are receiving education, they face the prospect of unemployment. In
this background, self employment is regarded as a cure to generate income .The
Planning commission as well as the Indian government recognizes the need for women
to be part of the mainstream of economic development. Women entrepreneurship is
seen as an effective strategy to solve the problems of rural and urban poverty.
7. Positive image-building and change in mentality amongst women, whereby women
see themselves as capable achievers and build up confidence.
8. Self-motivation is the keyword: For establishing successful businesses learn to take
risk and change their attitude towards business society by taking up social
responsibilities. Understand the government business policies and get monetary help
from public and private institutions.
9. Breaking through traditional patterns and structures that inhibit women’s advancement.
10. Develop confidence: Women in India lack self-assurance in their potency and
proficiency. However, over the last few years the outlook of Indian women is changing
and they are fast emerging as potential entrepreneurs.
11. Role modeling of women in non-traditional business sectors to break through traditional
views on men’s and women’s sectors.
12. Understanding of Business Administration: Women should be highly educated and
trained in their area of knowledge so that they can attain expertise and understanding
of all the major operational aspects of business administration. This will assist a woman
to take balanced decisions beneficial for expanding her business network. For example,
someone may have a tailoring shop but doesn’t know how to sell its services to the
military. So it is necessary to help them out in filling out the tenders, getting their
organization registered, etc. It’s a form of marketing support.
13. Women companies are fast-growing economies in almost all countries. The latent
entrepreneurial potential of women have changed little by little by the growing
awareness of the role and status of economic society. Skills, knowledge and adaptability
of the economy led to a major reason for women in business.
14. To give them more involvement and participation in legislation and decision-making
processes.
 32 Entrepreneurship Development (Obstacles and Solutions)

15. Women entrepreneurs in India are handicapped in the matter of organizing and running
businesses on account of their generally low levels of skills and for want of support
system. The transition from homemaker to sophisticated business woman is not that
easy. But the trend is changing. Women across India are showing an interest to be
economically independent. Women are coming forth to the business arena with ideas
to start small and medium enterprises. They are willing to be inspired by role models-
the experience of other women in the business arena.
16. Removing of any legislation which impedes women’s free engagement.
17. The role of women entrepreneurs is especially relevant in the situation of large scale
unemployment that the country faces. The modern large scale industry cannot absorb
much of labour as it is capital intensive. The small scale industry plays an important
role, absorbing around 80 per cent of the employment.
18. Awareness-raising at the governmental as well as private level to truly and really create
entrepreneurial opportunities and not just programs that stay on paper.
19. While women entrepreneurs have demonstrated their potential, the fact remains that
they are capable of contributing much more than what they already are. In order to
harness their potential and for their continued growth and development, it is necessary
to formulate appropriate strategies for stimulating, supporting and sustaining their efforts
in this direction. Such a strategy needs to be in congruence with field realities and
should especially take cognizance of the problems women entrepreneurs face within
the current system
1.12.6. Reasons of Women Entrepreneurship
In spite of the growing number of female entrepreneurs, the share of female entrepreneurs is
still significantly low when compared to their participation rate. However, there are several factors
responsible for increasing the level of female entrepreneurship in India:
1. Nature of Entrepreneurship: Women enter into entrepreneurial activity because
regular employment does not provide them with the flexibility, control or challenge
offered by business ownership.
2. Empowerment: Indian women are becoming more empowered now-a-days.
Legislations are being progressively drafted to offer them more opportunities at various
levels.
3. Social Conditions: For women, in particular, the relatively high involvement in
necessary entrepreneurship indicates that self-employment is used as a way to
circumvent institutional and cultural constraints with respect to female employment,
as well as a way to provide supplemental family income.
4. Literacy and Education: Increased levels of education have played a crucial role in
initiating the process of entrepreneurship. It is not only the illiterate that are starting
the businesses but those with education and skills are also exploiting profit opportunities.
5. Multitask oriented: Women are known for juggling many tasks at the same time and
still producing excellent results. A woman can talk on the phone, open and read her
email and schedule what else she needs to finish for the rest of the day all at the same
time. Men have more trouble with this multitasking thing; therefore sometimes they
miss many opportunities.
6. Being patient with the process: This is an extremely important attribute for
entrepreneurs to have. Too often we hear of visionary entrepreneurs who tried to start
 Entrepreneur and Entrepreneurship 33
their businesses and after a few months gave up. Very often we find these entrepreneurs
gave up on their dreams too soon. They became impatient with the process. Women
know naturally that you must wait in order to receive positive outcomes.
7. Branding and marketing themselves: Women are natural marketers. They are so
passionate and enthusiastic about what they choose to do that they just do not stop
talking about it. They don’t forget to emphasize the benefits of their services to their
potential customers. They understand how to emphasize the positive.
8. Collaborator: Women entrepreneurs are becoming more and more successful because
they are natural collaborators and love doing project together. When they find likeminded
women whom they like and think they can accomplish something with by combining
their talents they do it. A collaborative spirit and attitude reigns with women a competitive
attitude is rarely seen and considered unsavory when witnessed. Women do work
they love to do and they feel great when they can do it with other women.
9. Structural Shift: One of the primary drivers is a structural shift. Women are now a
greater part of the economic make-up of society; there are more women in the workforce.
They are resourceful, leaving the workforce to stay home and raise a family, re-entering
when the kids are grown or working a flex schedule when their kids go to school.
10. It’s the Blend: One of the biggest reasons women entrepreneurs are now in the
forefront is their desire to blend career and life ambitions. Their personal goals are
oftentimes meshed with career goals. They put their passions into practice and it shines
through in entrepreneurial endeavors. For them it’s not just a job, it’s a significant part
of who they are.
11. Relating To Customers’ Needs: One of the biggest reasons women entrepreneurs
are so successful is they are more conscious of their customers’ needs. Men for the
most part are not customers they’re consumers. It is the big difference. As a woman
they shop for price of course, but what is just as important is the buying experience. If
the service is poor or they can’t relate to the employees then it doesn’t matter what it
costs. It’s all about word of mouth and customer loyalty.
12. Integrity of Relationships: Women’s ability to nurture the whole relationship is what
makes them great as entrepreneurs. They naturally listen to understand, so they can
connect across business boundaries to give solid integrity to relationships. Whether
they are talking to a major account, negotiating with a vendor or coaching an employee,
it’s more than just about that one issue. Their want of making a wide and deep
relationship is one thing of many that makes them great entrepreneurs.
13. Resourcefulness of Women: There are a growing number of work-at-home moms
starting a business from their homes while taking care of their families. Most do it to
augment the income of their families, without leaving their homes. Others want to do
something economically and financially productive with their time if a corporate career
is out of the question at this point. Still others have stumbled upon an opportunity that
can be done while staying at home to be with their children.
14. Women Are Social: Entrepreneurs now have to be engaged in social media to be
successful. By nature, women are social. They can leverage social media in ways that
can help jumpstart new businesses quickly and cheaply. Whether it is engaging
customers via Twitter, blog, forum or Facebook, they are good at gathering people
and starting conversations.
 34 Entrepreneurship Development (Obstacles and Solutions)

1.13. S IX S TAGES OF E NTREPRENEURSHIP

There are six stages of an entrepreneurial venture that founders of companies will encounter.
The six steps are as follows:
1. Idea Certainty
2. Business Idea
3. Business Concept
4. Venture
5. Business
6. Sustainable Business

Stage 1: Idea Certainty

Every entrepreneur must address certainty to be an entrepreneur. He must be confident
enough to become an entrepreneur. This is important if you want to become an entrepreneur and
want to open your business. It should be the first step; however, many entrepreneurs wait until the
Venture stage to address it. This can lead to serious problems. In the Idea Certainty stage, an
entrepreneur needs to figure out whether he is able to face the issues of the entrepreneurship. He
should not fear or demotivate by facing so many problems. Lots of problems will come on the way
but your certainty will decide your progress to the next stage.
Entrepreneurs must ask few questions to themselves:
– Am I ready to open a business?
– Am I ready to become an entrepreneur?
– Am I willing to lose the money of investors who may be my friends and family?
– Am I ready to face failure?
– Am I ready to spend my 24 hours?

Stage 2: Business Idea

The Business Idea stage is the stage where you think what exactly you want to do. Everyone
has an idea for a business what they want to make real. Everyone see dream about their ideas. It
is the foundation stage of business. It ultimately decides the failure and success of the business.
The Idea stage is the basis for every other stage so it should be taken seriously.
Entrepreneurs must trust in their business:
You must be truly committed to your idea. Entrepreneur must believe in their idea because
their belief will decide the success of the idea. You must take all your efforts to make your idea the
productive one. Remember, the Idea stage is the point in the venture where the entrepreneur is
typically most enthusiastic. They are yet to be confronted with the real situation. Thinking idea and
making it real is very difficult task but you can make it real by your efforts, knowledge and creative
work.
Evaluate your idea from every corner:
You must be careful enough to evaluate your idea before implementing it. You should evaluate
the idea with respect to finance and your capability to execute the idea. You must also consider
customers for evaluating your ideas, ultimately they are going to make your idea a successful one.
You must have a thorough knowledge of what are the requirements of your idea execution in terms
of resources, expertise required and technology and how much you are committed to your idea.
You can imagine any idea but the important thing is that are you able to execute it.
 Entrepreneur and Entrepreneurship 35

Stage 3: Business Concept

It is the structure that you are going to develop for business. In the Business Concept stage,
you take your idea and employ a certain intellectual firmness which includes:
— Doing market research and survey
— Applying successful business model
— The team of expertise, technician required for execution
— Appointment of the advisors, scholars for their valuable suggestions
Entrepreneurs must do market research
As an entrepreneur you want to be optimistic and believe in your product idea, but
entrepreneurs often overlook one important aspect of their business: market research. The
fundamental questions to consider before you start a business include: Is there a buyer for your
product? If there is, then how many buyers are there? What is the ultimate maximum number of
buyers in the market today? In five years? ten years? And most importantly, how much revenue you
could generate from these buyers?
Investigating these questions is called market research and is something every entrepreneur
must do to substantiate their product idea before starting the venture. Use a common-sense
approach. Part of the process is a description of the marketplace or market model, which includes
actual customer spending rupees, today and projected for the future. Certainly buying market
research from a market research firm is an option, but often their research does not relate you a
new product idea and could even be useless if the market for new product does not exist yet.
Besides, it costs money!
Consider a good business model
Your business model will explain who your customers are, what they value and how you’ll
profit from providing them that value in your product or service. In other words, how are you going
to make money? Business models depend on developing qualities that help the business succeed:
finding high-value customers, sustaining customers, offering satisfactory services to customers
and delivering significant margins. Great business models also avoid unsatisfactory services to the
customers, lagging in the market competition and problems generating funding for growth.
Bring together the required teams to execute the business
Entrepreneurs must find out the required skilled teams that will need to execute on this
business concept. As the business will progress accordingly, the need of the skilled team will be
required because as the business expands new tasks, new methods of doing business also get
into the business.
Start involving advisors
Taking advice from the advisors and experts are very essential in business. They are the
perfect person who will tell you about the way your business must follow. They are the experienced
one in their field and better know about the problems and their consequences.
Don’t wait to get fund
Most entrepreneurs get frustrated and give up in this stage because they wrongly believe
that the Business Concept stage is the period during which they will receive their first investment.
Getting investment for your business is not very easy as the investors also want to earn the profit
and they are very strict in evaluating your business ideas. Investors are interested in the overall
growth of your business not in short term but also in long term too.
Stage 4: Venture
Unless you personally have deep pockets, such as inherited wealth, figuring out where you’re
going to get the money to start your own business and getting the financing in place beforehand is
 36 Entrepreneurship Development (Obstacles and Solutions)

going to be one of the most important components of planning your business. This is the most
challenging stage of the business and for many entrepreneurs the most fun...well at least in the
beginning. The Venture stage is characterized by significant investment. A business that has
performed studies and research into their chosen market and is ready to take their product into the
public is prepared to receive start-up capital from venture capitalists. Start-up money can help with
the initial marketing push, helping to distribute your product in the market. This investment typically
comes in two forms: money and time. In most cases, as the entrepreneur, it is “your” money and
“your” time; and those can often be significant.
Finding adequate business start up money is especially critical because there’s no guarantee
that your business is going to make money right away and certainly no guarantee that your new
business will bring in enough money for you and your family to live on. You can’t start a business
without start-up capital, the total amount of money you need to open your doors for business and to
keep them open until sufficient revenue can be depended on. No matter what the economic situation,
someone somewhere, eyes bright with potential, is looking to start a new business. Funds are often
the biggest hurdle to what could otherwise be a lucrative opportunity.
You can get fund from your family and friends, they will always be willing to help those with
who they have personal relationship. Family and friends will always give you money blindly if you
are trustworthy.
Personal savings: There’s nothing like having your own money saved, to put into
your startup. You have the satisfaction of having saved it on your own and the knowledge
that you don’t owe anyone.
Approaching private investors otherwise known as angels is an option you might want to
consider when raising fund to finance your business. Angels are rich individuals that use their
wealth to encourage young entrepreneurs with viable business ideas in their community. If you
have an angel in your community, you can consider taking your business idea to them.
Get a bank loan: If you have a solid business plan and the lender agrees, this can
often be the cheapest (interest rate-wise) loan sources available.
In some states and countries of the world, the government of that region maps out a certain
amount of money to encourage the development of small and medium scale enterprises.
This money is given out as grants to those it may concern. Governments grants can be a source of
fund for you if you are a citizen of that region and you are able to fulfill the stipulated requirements.

Determine the legal structure

The first step in setting up a business is figuring out what type of legal structure you want.
There are several options which include:
– Sole Proprietorship
– General Partnership
– Limited Partnership (LP) and Limited Liability Partnership (LLP)
– Corporation
– Company (Private or Public)
– Limited Liability Corporation (LLC)

Determine the short-term business objective and goals

Objectives should be clear and concise. Goals do not have to be specific enough for you to
act on, but should give you a future target or list of things you want to work on. Objectives, however,
need to be SMART — specific, measurable, action-oriented, realistic and timely — to accomplish
the goals set for your business.
 Entrepreneur and Entrepreneurship 37
Specific objectives should be as detailed as possible. In order for the objectives to be measurable,
you should state them in terms of rupees or quantities. Objectives are clear targets of performance
you can use to evaluate the operation. Action oriented objectives state which actions need to be
taken and who will take them. Objectives should be realistic but challenging, with set deadlines in
order to be timely.
Determine team decision making process
You must form a team according to the business need and skills required. This will enable
you in proper management and as the teams are specialized in their field and can take better
decisions in complex situation. You must have a criterion in decision making process and you must
also appoint a person who will be the ultimate decision maker.
Make Initial Investment
The VENTURE stage is typically where the entrepreneur makes a meaningful investment.
This investment may come in the form of money and/or time. In this stage the entrepreneur has to
invest money from their pocket. At the initial stage you have to invest money and do not expect that
someone will come to invest money in your business.
Identify Customers, Employees and Investors
In the VENTURE stage your first customers, employees and investors are likely to be those
people who trust on your business and ready to engage themselves with your business. Find out
the customers who believe in your products or services. Their trust will win the trust of other
customers. Find out the employees who are intelligent and knowledgeable who by their hard work
will grow your business. Win the trust of the investors by explaining them how your business is
going to be a successful business and how you are going to give a big ROI.
Entrepreneurs should protect Intellectual Property
The venture stage is when you should make the investment in protecting your intellectual
property. This includes: patents, copyrights and trademarks. The patent process is fairly long and
expensive. You also have a discreet period of time after the process or product is publicly released
to patent it.

Stage 5: Business
This stage of the entrepreneurial process is the actual establishment and opening of the
business. During this stage, the entrepreneur goes from being just a visionary to a visionary with a
business to run. One way to examine the changing managerial activities of the entrepreneur is to
look at the different roles filled by the entrepreneur as the business develops. As the founder of the
organization, the entrepreneur sets the philosophy of the organization, establishes the strategic
focus and educates new employees. In this role, the entrepreneur lays the groundwork for the
emerging corporate culture. In addition, most entrepreneurs serve as the primary promoters for
their new start-ups. They must act as the new venture’s chief spokesperson in contacts with financial
backers, prospective clients, employees, suppliers and others. In addition, as founders (or founding
team members) of organizations, entrepreneurs are often called upon to provide counsel or advice
to community members or employees. The roles that an entrepreneur must fill are demand flexibility
and creativity. In order to successfully manage a new venture, an entrepreneur must be comfortable
in all the roles.
Take decision on Buy vs. Build
At this stage you start evaluating growth in a different way. You don’t need to build everything
yourself. Sometimes buying is the best option and sometimes building is the best option. Select the
one requires less cost. You start to consider acquisition as a viable growth options. Once again, this
requires different competencies within the organization.
 38 Entrepreneurship Development (Obstacles and Solutions)

Evaluate Financing Options

The best thing about the Business stage is that the financing options are much more plentiful.
There are a number of potential sources of finance to meet the needs of small and growing
businesses:
Existing shareholders’ and directors’ funds (“owner financing”)
Overdraft financing
Trade credit
Equity finance
Business angel financing
Venture capital
Factoring and invoice discounting
Hire purchase and leasing
Merchant banks (medium to longer term loans)

Consistency in Business
Consistency is a necessary ingredient in success. It’s strange, because most people do not
seem to know its true power. When it wears off things can get rough that is when you truly want to
know you’re doing something you love. For consistency in business you have to continuously
evaluate your resources, way of doing business, competitors and your customers.
Succession Planning
In order to reach the Sustainable Business stage, the business must be able to survive the
founder. This requires succession planning at the CEO / founder level as well as in other key
managerial roles. The business needs to be building its “bench” in order to get to the next level.

Stage 6: Sustainable Business

Although most entrepreneurs are satisfied to build a Business, they should strive to become
a Sustainable Business. There are unique challenges to creating a sustainable business and it can
be defined in different ways. It is typically characterized by time. Ventures those last 10+ years
may be thought of as sustainable; however, the real challenge is for a business to outlast the
involvement of its founders. That is a more relevant definition of a sustainable business.
The concept of sustainable development has received growing recognition, but it is a new
idea for many business executives. For most, the concept remains abstract and theoretical. Protecting
an organization’s capital base is a well-accepted business principle. Yet organizations do not generally
recognize the possibility of extending this notion to the world’s natural and human resources. If
sustainable development is to achieve its potential, it must be integrated into the planning and
measurement systems of business enterprises. And for that to happen, the concept must be
articulated in terms that are familiar to business leaders.

1.14. M C C LELLAND ’ S A CHIEVEMENT M OTIVATION

In attempting to understand employee motivation, Abraham Maslow proposed a hierarchy of
needs. David McClelland furthered this idea in his learned needs theory. McClelland’s experimental
work identified sets of motivators present to varying degrees in different people. He proposed that
these needs were socially acquired or learned. That is, the extent to which these motivators are
present varies from person to person and depends on the individual and his or her background.
McClelland’s experiment — the Thematic Apperception Test (TAT) — consisted of showing
individuals a series of pictures and asking them to give brief descriptions of what was happening in
 Entrepreneur and Entrepreneurship 39
the pictures. The responses were analyzed in terms of the presence or absence of certain themes.
The themes McClelland and his associates were looking for revolved around the following motivators:
achievement, affiliation and power.
According to David McClelland, regardless of culture or gender, people are driven by three
motives:
Achievement;
Affiliation;
Power.
Since McClelland’s first experiment, over 1,000 studies relevant to achievement motivation
have been conducted. These studies strongly support the theory.
1. Achievement (nAch)
The need for achievement is characterized by the wish to take responsibility for finding
solutions to problems, master complex tasks, set goals, get feedback on level of success.
Specifically, achievement motivation is defined as a non-conscious concern for achieving
excellence through individual efforts. Such individuals set challenging goals for themselves, assume
personal responsibility for goal accomplishment, are highly persistent in the pursuit of these goals,
take calculated risks to achieve the goals and actively collect and use information for purposes of
feedback.
High achievement motivated managers are also strongly inclined to be personally involved
in performing their organizational tasks. However, they may also be reluctant to delegate authority
and responsibility. Thus, high achievement motivation may be expected to result in poor performance
of high- level executives in large organizations.
High achievement motivation is predicted to contribute to effective entrepreneurship and
effective leadership of small task-oriented groups.
Achievement motivation is positively related to the leadership of small task-oriented groups
and small entrepreneurial firms and negatively related to the effectiveness of high- level managers
in complex organizations or in political situations.
2. Affiliation (nAff)
The need for affiliation is characterized by a desire to belong, an enjoyment of teamwork, a
concern about interpersonal relationships and a need to reduce uncertainty.
Affiliative motivation is defined as a nonconscious concern for establishing, maintaining and
restoring close personal relationships with others. Individuals with high affiliative motivation tend to
be non-assertive, submissive and dependent on others.
Such managers are expected to manage on the basis of personal relationships with
subordinates. This may result in them showing favouritism towards some.
As managers, highly affiliative individuals are predicted to be reluctant to monitor the behavior
of subordinates, give negative feedback to others or discipline their subordinates. However, when
the power motive is higher than the affiliative motive, individuals are disinclined to engage in
dysfunctional management behaviors such as submissiveness, reluctance to monitor and discipline
subordinates and favoritism.
3. Power (nPow)
The need for power is characterized by a drive to control and influence others, a need to win
arguments, a need to persuade and prevail.
 40 Entrepreneurship Development (Obstacles and Solutions)

According to McClelland, the presence of these motives or drives in an individual indicates a

predisposition to behave in certain ways. Therefore, from a manager’s perspective, recognizing
which need is dominant in any particular individual affects the way in which that person can be
motivated.
Power motivation is defined as the concern for acquiring status and having an impact on
others. McClelland used power motivation as a measure of social influence behaviours. Clearly,
since most management activities require the use of social influence behaviors and since power
motivation measures an individual’s desire to influence, the power motive is important for leadership
effectiveness.
David McClelland proposed the Leader Motive Profile Theory (LMP theory) in which he argued
that a high power motivation, greater than the affiliation motive, is predictive of leader effectiveness.
Highly power-motivated individuals obtain great satisfaction from the exercise of influence.
Consequently, their interest in the exercise of leadership is sustained.
High power motivation is predicted to result in effective managerial performance in middle
and high-level positions. However, unless constrained in some manner, some power-motivated
managers may also be predicted to exercise power in an aggressive manner for self-aggrandizing
purposes, to the detriment of their organizations.

1.15. M ASLOW ’ S T HEORY OF M OTIVATION

Motivational theories dealing with the needs of employees fall under the general rubric
of Content Theories of Motivation.
Content theories Posit that workers’ behaviors are a function of the workers’ abilities to
satisfy their felt needs at the workplace. A basic assumption of all need theories is that, when need
deficiencies exist; individuals are motivated into action in order to satisfy them. The best known of
the Content Theories of Motivation is Maslow’s Hierarchy of Needs. (Abraham Maslow)
Maslow’s Hierarchy of Needs is based on the assumption that people are motivated by a
series of five universal needs. These needs are ranked, according to the order in which they influence
human behavior, in hierarchical fashion.

Self-
Actualization

Esteem Needs

Social Needs

Safety Needs

Physiological Needs

Fig. 1.1: Maslow’s hierarchy of needs

 Entrepreneur and Entrepreneurship 41
Table: 1.2: Maslow’s hierarchy of needs

Level Type of Need Examples

1 Physiological Thirst, sex, hunger

2 Safety Security, stability, protection
3 Love and Belongingness To escape loneliness, love and be loved
and gain a sense of belonging
4 Esteem Self-respect, the respect to others
5 Self-actualization To fulfill one’s potentialities

1. Physiological needs are deemed to be the lowest- level needs. These needs include
the need for food, oxygen, sex and drink.
So long as physiological needs are unsatisfied, they exist as a driving or
motivating force in a person’s life. A hungry person has a felt need. This felt
need sets up both psychological and physical tensions that manifest themselves
in overt behaviours directed at reducing those tensions (getting something to eat).
Once the hunger is sated, the tension is reduced and the need for food ceases to
motivate. At this point (assuming the needs for sex, drink and other physiological
requirements are also satisfied) the next higher order need becomes the motivating
need.
2. Thus, safety needs — the needs for shelter and security — become the motivators of
human behavior.
Safety needs include a desire for security, stability, dependency, protection, freedom
from fear and anxiety and a need for structure, order and law. In everyday life, we
may see this as a need to be able to fall asleep at night, secure in the knowledge
that we will awake alive and unharmed. In the workplace these needs translates
into a need for at least a minimal degree of employment security; the knowledge
That we cannot be fired on a whim and that appropriate levels of effort and
productivity will ensure continued employment.

3. Social needs include the need for belongingness and love.

Generally, as gregarious creatures, human have a need to belong. In the workplace,
this need may be satisfied by an ability to interact with one’s coworkers and perhaps
to be able to work collaboratively with these colleagues.

4. After social needs have been satisfied, ego and esteem needs become the motivating
needs.
Esteem needs include the desire for self-respect, self-esteem and the esteem of
others. When focused externally, these needs also include the desire for reputation,
prestige, status, fame, glory, dominance, recognition, attention, importance and
appreciation.

5. The highest need in Maslow’s hierarchy is that of self-actualization; the need for self-
realization, continuous self-development and the process of becoming all that a person
is capable of becoming.
 42 Entrepreneurship Development (Obstacles and Solutions)

1.16. E XPECTANCY T HEORY OF M OTIVATION

In recent years, probably the most popular motivational theory has been the Expectancy
Theory (also known as the Valence-Instrumentality- Expectancy Theory). Although there are a
number of theories found with this general title, they all have their roots in Victor Vroom’s 1964
work on motivation.
Alternatives and Choices
Vroom’s theory assumes that behavior results from conscious choices among
alternatives whose purpose it is to maximize pleasure and minimize pain. The key elements to this
theory are referred to as Expectancy (E), Instrumentality (I) and Valence (V). Critical to the
understanding of the theory is the understanding that each of these factors represents a belief.
Vroom’s theory suggests that the individual will consider the outcomes associated with various
levels of performance (from an entire spectrum of performance possibilities) and elect to pursue
the level that generates the greatest reward for him or her.
1. Expectancy: ”What’s the probability that, if I work very hard, I’ll be able to do a good
job?”
Expectancy refers to the strength of a person’s belief about whether or not a particular job
performance is attainable. Assuming all other things are equal, an employee will be motivated to try
a task, if he or she believes that it can be done. This expectancy of performance may be thought of
in terms of probabilities ranging from zero (a case of “I can’t do it!”) to 1.0 (“I have no doubt whatsoever
that I can do this job!”)
A number of factors can contribute to an employee’s expectancy perceptions:
the level of confidence in the skills required for the task
the amount of support that may be expected from superiors and subordinates
the quality of the materials and equipment
the availability of pertinent information
Previous success at the task has also been shown to strengthen expectancy beliefs.
2. Instrumentality: ”What’s the probability that, if I do a good job, that there will be some
kind of outcome in it for me?”
If an employee believes that a high level of performance will be instrumental for the acquisition
of outcomes which may be gratifying, then the employee will place a high value on performing well.
Vroom defines Instrumentality as a probability belief linking one outcome (a high level of
performance, for example) to another outcome (a reward).
Instrumentality may range from a probability of 1.0 (meaning that the attainment of the second
outcome — the reward — is certain if the first outcome — excellent job performance — is attained)
through zero (meaning there is no likely relationship between the first outcome and the second). An
example of zero instrumentality would be exam grades that were distributed randomly (as opposed
to be awarded on the basis of excellent exam performance). Commission pay schemes are designed
to make employees perceive that performance is positively instrumental for the acquisition of money.
For management to ensure high levels of performance, it must tie desired outcomes (positive
valence) to high performance and ensure that the connection is communicated to employees.
The VIE theory holds that people have preferences among various outcomes. These
preferences tend to reflect a person’s underlying need state.
 Entrepreneur and Entrepreneurship 43
3. Valence: ”Is the outcome I get of any value to me?”
The term Valence refers to the emotional orientations people hold with respect to
outcomes (rewards). An outcome is positively valent if an employee would prefer having it to not
having it. An outcome that the employee would rather avoid (fatigue, stress, noise, layoffs) is
negatively valent. Outcomes towards which the employee appears indifferent are said to have zero
valence.
Valences refer to the level of satisfaction people expect to get from the outcome (as opposed
to the actual satisfaction they get once they have attained the reward).
Vroom suggests that an employee’s beliefs about Expectancy, Instrumentality and Valence
interact psychologically to create a motivational force such that the employee acts in ways that
bring pleasure and avoid pain.
People elect to pursue levels of job performance that they believe will maximize their overall
best interests (their subjective expected utility).
There will be no motivational forces acting on an employee if any of these three conditions
hold:
(a) The person does not believe that he/she can successfully perform the required task.
(b) The person believes that successful task performance will not be associated with
positively valent outcomes.
(c) The person believes that outcomes associated with successful task completion will be
negatively valent (have no value for that person).

S UMMARY
In the words of J.A. Schumpeter, “The entrepreneur in an advanced economy is an individual
who introduces something new in the economy, a method of production is not yet tested by experience
in the branch of manufacture concerned, a product with which consumers are not yet familiar, a
new source of raw material or of new markets and the like”.
The characteristics that help an entrepreneur to become successful are Self-centre, Self-
confidence, Sense of urgency, Comprehensive awareness, Realism, Conceptual ability, Status
requirements, Interpersonal relationships and Emotional stability.
Personal qualities common in successful entrepreneurs are Motivations to achieve,
Nonconformity, Hard work, Street smarts and Strong leadership.
The key steps to becoming successful in today’s society are you must prepare yourselves to
new entrepreneurial mindset, Clearly write down what exactly you want, Write down all of your new
ideas in detail as an entrepreneur, Write your short-, middle- and long-term goals, Improve your
personality every day, Keep your new mindset positive, Visualize the end result of your goal in your
mind, Never give up on your new ideas and goals until you see them manifest in your life and Take
action on your new ideas and goals as an entrepreneur.
You can become an entrepreneur if you have the Ability to solve problem, Change the way
you think, No complacency and No room for failure.
Why one wants to become an entrepreneur? The reasons given by entrepreneurs are as I’ve
always wanted to do this, For a higher purpose, Because it’s very creative, For the sheer challenge
of it, For the creation of wealth, Desire for achievement and self-fulfillment, Willingness to invest
their current resources, For the independence, Need for money, Because I am crazy, Need for
 44 Entrepreneurship Development (Obstacles and Solutions)

financial independence and security, Because it’s cool, Frustration with their current workplace or
career, Because I’m inspired.
Entrepreneurs want to start a business, there are two reasons for that one is personal and
the second one is general. The personal reasons are Inequity between contribution and reward,
Fame and recognition, Participation in all aspects of a business, Joy of winning and Personal
financial gain. The general reasons are they want to earn profit; huge business scope etc.
What is Entrepreneurship? An entrepreneur is an individual who owns a firm, business or
venture and is responsible for its development. Entrepreneurship is the practice of starting a new
business or reviving an existing business, in order to capitalize on new found opportunities.
There is a need for entrepreneurship because of Employment generation, Small business
dynamism, Balanced economic development, and Innovations in enterprises.
The advantages of being a successful entrepreneur are No set timetable, Passion for their
career, Job satisfaction, Increased self confidence, Giving back to the community, Job security and
friendly work environment, Financial Freedom, Excitement, Rules and regulations, Originality,
Competition, Independence, Salary potential, Flexibility, Rational salary, and Freedom.
What is Intrapreneurship? Intrapreneurship is the practice of entrepreneurship by employees
within an organization.
The Difference between an entrepreneur and an intrapreneur is “An Entrepreneur is someone
who has the skills, passion and financial backing to create wealth from new business opportunities
and is willing to take full responsibility for its success or failure.” But “An Intrapreneur is someone
who manages that business with entrepreneurial flair in line with the expectations of the
shareholders.”
The Entrepreneurs have a very great role in Economic Development. Entrepreneurs are the
lifeblood of any economy. Policies have to favour risk-taking and have to reward those with the
energy and zeal to start businesses. Without entrepreneurs, there are no jobs. The large enterprises
of today were all started by single entrepreneurs willing to take risks to claim the rewards from risk-
taking.
Entrepreneurial Environment can be developed by Dynamic business environment, can do
attitude, Training and help, Mentoring and support, and Developing Entrepreneurial Skills.
OECD (Organisation for Economic Co-Operation and Development) (1998) has referred
women entrepreneur as equally to someone who has started a one-woman business, to someone
who is a principal in a family business or partnership or to someone who is a shareholder in a
publicly held company which she organizes and runs.
A study conducted by International Labour Organization (ILO) (2006) has found four personal
and four external factors that influence women entrepreneurs’ success. Personal factors comprise:
(1) motivation and commitment; (2) abilities and skills; (3) ideas and markets; and (4) resources.
While external factors consist of: (1) business development organizations; (2) broader enabling
environment; (3) economic/market environment; and (4) socio-cultural context.
The Problems faced by Women Entrepreneurs in India are skepticism about the
entrepreneurial abilities of women, lack of proper assistance, inadequate financial resources, Socio-
Cultural Barriers, Lack of Confidence, balance between business and home, Market-oriented risks,
Discrimination, Motivational factors, Missing networks, Lack of Knowledge of latest technological
changes, Low-level risk taking attitude, and Lack of right public/private institutions.
In spite of the growing number of female entrepreneurs, the share of female entrepreneurs is
still significantly low when compared to their participation rate. However, there are several factors
responsible for increasing the level of female entrepreneurship in India. Those factors are
 Entrepreneur and Entrepreneurship 45
empowerment, social conditions, literacy and education, multitask oriented, being patient with, the
process, branding and marketing themselves, collaborator, structural shift, it’s the blend, relating
to customers’ needs, integrity of relationships, resourcefulness of women, and nature of
entrepreneurship.
There are six stages of an entrepreneurial venture that founders of companies will encounter.
The six steps are Idea Certainty, Business Idea, Business Concept, Venture, Business, and
Sustainable Business.
According to David McClelland, regardless of culture or gender, people are driven by three
motives:
• Achievement;
• Affiliation;
• Power
Achievement – The need for achievement is characterized by the wish to take responsibility
for finding solutions to problems, master complex tasks, set goals and get feedback on level of
success.
Affiliation – The need for affiliation is characterized by a desire to belong, an enjoyment of
teamwork, a concern about interpersonal relationships and a need to reduce uncertainty.
Power – The need for power is characterized by a drive to control and influence others, a
need to win arguments, a need to persuade and prevail.
Maslow’s Hierarchy of Needs is based on the assumption that people are motivated by a
series of five universal needs. These needs are ranked, according to the order in which they influence
human behavior, in hierarchical fashion. These needs are Self-actualization, Self-Esteem, Love
and Belongingness, Safety and Physiological.
Expectancy Theory of Motivation - Vroom’s theory assumes that behavior results from
conscious choices among alternatives whose purpose it is to maximize pleasure and minimize pain.
The key elements to this theory are referred to as Expectancy (E), Instrumentality (I) and Valence
(V). Critical to the understanding of the theory is the understanding that each of these factors
represents a belief.

K EYWORDS
Entrepreneur: Peter F. Drucker defines an entrepreneur as one who always searches for
changes, responds to it and exploits it as an opportunity.
Entrepreneurship: It is the practice of starting a new business or reviving an existing business,
in order to capitalize on new found opportunities.
Enterprise: An enterprise is the business organization that is formed and which provides
goods and services, creates jobs, contributes to national income, exports and overall economic
development.
Intrapreneur: An Intrapreneur is someone who manages that business with entrepreneurial
flair in line with the expectations of the shareholders.
Intrapreneurship: It is the practice of entrepreneurship by employees within an organization.
Women Entrepreneurs: Women or a group of women who initiate, organize and operate a
business enterprise.
46 Entrepreneurship Development (Obstacles and Solutions)

Q UESTIONS
1. How will you define entrepreneur? What are the characteristics of an entrepreneur?
2. Why entrepreneurs start a business? What are the advantages and disadvantages of
being a successful entrepreneur?
3. What is entrepreneurship? What is the need for entrepreneurship? What are the benefits
of entrepreneurship?
4. What is intrapreneurship? What is the difference between intrapreneurship and
entrepreneurship?
5. What are the six stages of entrepreneurship?
6. What is motivation? What is the role of motivation in entrepreneurship?