1.

Concepts & Scope of Entrepreneurship:

2. Definitions of Entrepreneurship and Entrepreneur,
3. Characteristics of an Entrepreneur,
4. Entrepreneurial Development models and Theories,
5. Entrepreneurs Vs Managers Classification of Entrepreneurs;
6. Entrepreneurial Trait Tests;

Concept of Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business enterprise, along
with any of its uncertainties in order to make a profit. The most prominent example of entrepreneurship
is the starting of new businesses.

Entrepreneurship is the dynamic process of creating incremental wealth.

Entrepreneurship have altered the directions of national economies, industries& markets.

● Contribution to GNP & per capita income

● Employment Generation
● Balanced regional developments
● Promotion of exports & trade
● Improvement in standard of living
● Increased innovation
● Overall development of economy
02 Economists Noble prize winners are
● Dr Edmund S. Phelps (USA) says that creativity of entrepreneurs serves to transform the work
environment in firms developing &/ dealing innovation
● Dr. Muhammad Yunus (Bangladesh) came out with Grameen Bank concept
500 Fortune companies in world & India are basically entrepreneurs.

Evolution of the Concept of Entrepreneurship

● Richard Cantillon -1730 is regarded as founder of Entrepreneur term . As per him entrepreneurs
make conscious decisions about resource allocations, seeking higher yield for the money &
investment. Society is divided in 02 like Fixed income earners & non fixed income earners
(entrepreneurs)
● Adam Smith – 1776 To create effective capitalist system individuals must pursue selfish &
social interests.
● Jaen Baptist Say -1767 differentiated the entrepreneur & venture capitalist (professional money
manager & risk bearer)
● Francis Walker – 1876 Entrepreneur is a pioneer, leader & captain of firm so profit depends on
his efficiency & superior talent. His competencies are extremely important.
 ● Joseph Schumpeter – (1183-1950) developed theory of Economic development. As per him
entrepreneur is to reform or revolutionize the pattern of production with new technologies,
producing new commodities or producing any old commodity with new way, a source of supply
of material or a new outlet for products i.e. reorganising the industry. Basically the job to be
done.

Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make entrepreneurship
successful. A few of them are mentioned below:

● Ability to take a risk- Starting any new venture involves a considerable amount of failure risk.
Therefore, an entrepreneur needs to be courageous and able to evaluate and take risks, which is
an essential part of being an entrepreneur.
● Innovation- It should be highly innovative to generate new ideas, start a company and earn
profits out of it. Change can be the launching of a new product that is new to the market or a
process that does the same thing but in a more efficient and economical way.
● Visionary and Leadership quality- To be successful, the entrepreneur should have a clear vision
of his new venture. However, to turn the idea into reality, a lot of resources and employees are
required. Here, leadership quality is paramount because leaders impart and guide their
employees towards the right path of success.
● Open-Minded- In a business, every circumstance can be an opportunity and used for the benefit
of a company. For example, Paytm recognised the gravity of demonetization and acknowledged
the need for online transactions would be more, so it utilised the situation and expanded
massively during this time.
● Flexible- An entrepreneur should be flexible and open to change according to the situation. To
be on the top, a businessperson should be equipped to embrace change in a product and
service, as and when needed.
● Know your Product-A company owner should know the product offerings and also be aware of
the latest trend in the market. It is essential to know if the available product or service meets
the demands of the current market, or whether it is time to tweak it a little. Being able to be
accountable and then alter as needed is a vital part of entrepreneurship.

Importance of Entrepreneurship:
● Creation of Employment- Entrepreneurship generates employment. It provides an entry-level
job, required for gaining experience and training for unskilled workers.
● Innovation- It is the hub of innovation that provides new product ventures, market, technology
and quality of goods, etc., and increase the standard of living of people.
● Impact on Society and Community Development- A society becomes greater if the employment
base is large and diversified. It brings about changes in society and promotes facilities like
higher expenditure on education, better sanitation, fewer slums, a higher level of
homeownership. Therefore, entrepreneurship assists the organisation towards a more stable
and high quality of community life.
● Increase Standard of Living- Entrepreneurship helps to improve the standard of living of a
person by increasing the income. The standard of living means, increase in the consumption of
various goods and services by a household for a particular period.
● Supports research and development- New products and services need to be researched and
tested before launching in the market. Therefore, an entrepreneur also dispenses finance for
research and development with research institutions and universities. This promotes research,
general construction, and development in the economy.
Meaning of Entrepreneur
The entrepreneur is defined as someone who has the ability and desire to establish, administer and
succeed in a startup venture along with risk entitled to it, to make profits.
The best example of entrepreneurship is the starting of a new business venture. The entrepreneurs are
often known as a
● source of new ideas or innovators,
● and bring new ideas in the market by replacing old with a new invention.
● It can be classified into small or home business to multinational companies.
In a nutshell, anyone who has the will and determination to start a new company and deals with all the
risks that go with it can become an entrepreneur.
To our understanding this entrepreneur undergoes uncertainties building on decisions at each phase of
business life cycle. These decisions are clearly a result of an evolution by the individual, the
endowments and the business environment, which is always volatile, uncertain, complex and
ambiguous (VUCA). 

How to be an entrepreneur
1. Generating an idea, observing trends & filling the gap in the market
2. Conducting a feasibility report
3. Making a business plan to achieve goal
4. Arranging the funds – VC /Debt Finance
5. Setting up of an enterprise & building a venture team – smooth management>nurturing growth
(organically & inorganically)>exit strategies

An entrepreneur is a person who takes the risk of setting up his/ her own venture for perceived rewards.
He/she initiates the idea, formulates a plan, organizes resources and puts the plan into action to achieve
his/her goal.
Some of the essential qualities, entrepreneurs must possess are briefly described below:
(1) A strong desire to be a winner (NEED TO ACHIEVE)
Most people dream of success and achievement, but do not take any action towards achieving these
dreams. People with entrepreneurial bent of mind, on the other hand, have a strong desire to achieve a
higher goal and make their dreams come true. For them winning is achievement.

(2) A quality of stick-to-it (PERSEVERANCE)

Once committed to a goal and a course of action, entrepreneurs become absorbed in it. Difficulties and
problems that beset any project do not deter them; they work hard until the whole project is successfully
accomplished.
(3) Moderate and calculated risk-taking
Entrepreneurs are not high risk-takers. They are not gamblers. They choose a moderate risk rather than play
wild speculative gamble. They love a moderate risk situation, high enough to be exiting, but with a fairly
reasonable chance to win,

(4) Alertness to opportunities - Seizing and converting them to your advantage (ABILITY TO FIND AND
EXPLORE OPPORTUNITIES)
Entrepreneurial persons are quick to see and seize opportunities. They show an innovative turn of mind and
convert difficulties into opportunities. But they are realistic too. They plan and anticipate carefully how to
achieve their goals in realizing an opportunity.

(5) Analytical Ability

If an entrepreneur has analytical ability he can effectively analyze situations, problems and difficulties and
identify right solutions them and this makes the running and management of the enterprise smooth and
successful.

(6) Using Feedback

Entrepreneurs like to have immediate feedback of their performance. They like prompt and accurate data
and it does not make any difference whether the information they get is favorable. In fact, they are
stimulated by unfavorable news to pour more energy into attaining their objectives.

(7) Hope for success

Achievement oriented people tend to be optimistic even in unfamiliar situations. The odds may not be clear
but the circumstances may be appealing. Entrepreneurial persons in such situations see no reason why they
cannot win through their abilities. They go ahead undeterred, sometimes even without guidelines and
frequently make the best of whatever opportunities there are. As they begin to understand their
environment they begin to calculate their chances very closely. Thus, paradoxically they present a picture of
boldness in the face of the unknown and prudence in the face of the familiar. They usually win by applying
their special insight and skill.

(8) Independence
It is found that most entrepreneurs start off on their own because they do not like to work for other
people. They like to be their own masters and want to be responsible for their own decisions.

(9) Systematic Planning

Most successful people tend to set a goal for themselves and make systematic plans to achieve that goal
within a certain time limit.

(10) Coping with Stress

As a central figure in your enterprise, you will have to cope with many situations at the same time and make
right decisions, which may involve a lot of physical and emotional stress. All this can be done if you have the
capacity to work long hours and keep cool under a lot of tension.

(11) Positive self-Concept

An achiever directs his fantasies towards the accomplishment of worthwhile goals and sets standards of
excellence in what he is doing. This is based upon the awareness of his strength and weaknesses. He uses
positive knowledge to support his thinking. He is rarely negative.
No entrepreneur has all these qualities. But most of them possess at least some of them. So the first step
for a person aspiring for entrepreneurship is making an inventory of the traits he possesses. This
selfawareness analysis will help define your strengths and help overcome your weaknesses.
Rewards
But the path is not strewn with roses, there are hard work, difficulties and problems and then though you
may be your own master, you are dependent not merely on the financial institutions but even your
suppliers and customers. The hours of work can be flexible but they might also be long and continuous.
There are risks and frustrations too. If you are prepared and willing, then take the plunge.

Finally we can say that Individuals who are willing to take the risks of making their own profits and
assuming their own losses are entrepreneurs.
Entrepreneurial Competencies (Key Characteristics)
The success of a small-scale industrial venture depends on - inherent viability of the project, the way the
project is planned, implemented and managed. As far as the planning, implementation and management of
a small- scale enterprise are concerned, it is the entrepreneur who carries out most of the functions. It is
he/she who acts as a driving force behind the performance of these tasks. And, in order to carry them out
efficiently, the entrepreneur needs to have certain knowledge, skills and appropriate personality profile. All
these put together could be termed as 'competencies'.
What do we mean by competence?
Competence is a combination of knowledge, skills and appropriate motives/traits that an Individual must
possess to perform a given task.
Knowledge means collection of information and retention of facts that an individual possesses. But mere
possession of knowledge is not sufficient to perform a task. One needs, besides knowledge, to have skills to
translate the knowledge into action.
Skill is the ability to demonstrate a system and sequence of behavior that are functionally related to
attaining a performance goal. Motives & Traits:
Motive is a recurrent concern for a goal, which drives, directs and selects behavior of a person. A trait is a
characteristic way in which a person responds to an equivalent set of stimuli. A trait includes thoughts and
psychological activities related to a general category of events. . .
What are competencies? :
Let us first know what a competency means. Competence is an underlying characteristic of a person, which
results in effective and/or superior performance in a job. It may be motive, traits, skills or a body of
knowledge or a combination of these, which one uses.
Competencies are of two kinds:
1. Hard-skill competencies
2. Soft-skill competencies
By hard skill competencies we mean those skills which are acquired through academic education through
work experiences e.g. an engineer engaged in designing a gear, use his technical knowledge and skills.
However, there could be a difference in a successful engineer and not so successful engineer; such
difference occurs because of the possession of 'soft-skills'. The successful one would think of improving on
the design, process, etc. and that is on account of the fact that he/she possesses certain soft skills.

¬ Creativity and innovation

¬ Leadership & team building
¬Opportunity seeking & initiative
¬ Risk taking (moderate and calculated) & decision making ability
¬ Tolerance of ambiguity & uncertainity
¬Motivation to excel/ Need to achieve
¬ Problem solving.
¬ Goal Orientation
¬ Self-efficacy & adaptability
¬ Internal locus of control
¬ Persistance, persuation & networking
An entrepreneur has to struggle, overcome difficulties and hurdles in his/her path and reaches the goal.

Advantages of becoming Entrepreneur

● Independent environment
● Innovation scope
● Opportunity to fulfil dreams & excellence with contribution to welfare of society
● Job satisfaction
● Able to bring socioeconomic transformation by generating employment for others & creating
wealth
● Contribution to development of country

Types of Entrepreneurs
● Innovative Entrepreneurs - Innovative approach to business, introduce new
products/method/market/new form of organization
● Imitative/Adoptive entrepreneurs – imitate products, production methods & new form of
organizations. Generally seen in developing or under developed countries as there is lack of
investment in research & development.
● Fabian entrepreneurs – Not proactive & change only when threat is there.
● Drone entrepreneurs – Conservative & maintain status quo. Threat to close down.

Intrapreneurs in Corporates/ Corporate Entrepreneurs (Ref Book)

Top 8 Difference Between Businessman and
Entrepreneur

Businessman and Entrepreneur

It is a common assumption that businessman and entrepreneur are the same, but both words refer to
a different individual possessing a distinct approach to business. to put is in other words, a
businessman follows a set path engraved by some other person with an unoriginal idea, whereas an
entrepreneur thinks and believes in making his own path with new ideas.
In the future, an entrepreneur can become a businessman. However, between businessman and
entrepreneur, there is a thin line difference businessman is a market player, whereas, the
entrepreneur is a market leader. In the below article, we will help you understand the differences
between businessman and entrepreneur.

Who is a Businessman?
A businessman is an individual who operates or starts a business with the same old business idea.
The businessman chooses to do business that is high in demand or give him maximum profits in
return. The firm faces stiff competition because many companies already exist in the market having
the same business ideas. However, the risk factor is very less as the concept has been tried and
tested by other existing companies, so the chance of failure is low.

Who is an Entrepreneur?
An entrepreneur is an individual who has an exclusive idea to initiate and establish a new venture
and bring a change in the world. An entrepreneur is highly creative and innovative, takes a risk and
endures the unpredictability of business. The business started by entrepreneurs with a new concept
for the first time is known as Start-up. The entrepreneur is an integral part of the operation, who
builds and deploys the other functions of the operations i.e. labour, land, and capital. Later in the
future, the entrepreneur becomes a businessman.

Now, let us focus on Businessman vs Entrepreneur.

Businessman Entrepreneur
 Definition

A businessman is an individual who operates or starts a An entrepreneur is an individual with an exclusive

business with the same old business idea. idea to initiate and establish a new venture

Market state

Market player Market leader

Market

Makes his place in the market Creates a market

Risk factor

Less Approximately high

Procedure

Traditional/Ordinary Unconventional

Focus

Profit Employee, customer, and public

Competition

Extremely High Low

Difference Between Entrepreneur and Manager

Entrepreneur and manager, these two terms are often used in management parlance, although they
sound similar but are different in their functioning. Both of these help in proper organisation,
control and management of the enterprise.
The most prominent difference between the entrepreneur and manager is the position that they hold
in an organisation. An entrepreneur is the owner of the business concern while the manager is an
employee of the business concern.
This article serves as a ready reckoner for the students eager to learn the comparison between
entrepreneur vs manager.
Comparison Table
Parameters Entrepreneur Manager

An entrepreneur is a person who builds a By the term ‘manager’ we mean a person

new organisation by gathering data (i.e. who gets the things done through his
Meaning
land, labour and capital) for assistants, with the purpose of achieving
manufacturing purposes. business goals efficiently.

Focuses on Setting up a business Running the daily operations

Status in
Owner  Employee
organisation

Kind of benefit Salary earned from managing daily

Profit earned from running business
applicable business operations

Both modes have their own merits and demerits; here, the students can learn abut the role of
entrepreneur and manager.

Entrepreneur
Entrepreneur is referred to as the person who is responsible for building an organisation by
accumulating the various factors such as labour, land and capital. An entrepreneur takes all the
business risk with the objective of gaining profit.

Manager
The term manager represents a person who has the ability to get his work done with the help of
assistants. The objective of a manager is to achieve business goals in an effective way. The manager
serves the principal functions in a business organisation which are planning, directing, organising,
motivation, controlling, and coordination.