Entrepreneurship Development and Management In

Extension 3(2+1)

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1. Entrepreneur
CONCEPT
Entrepreneur is an Economic Agent who plays a vital role in the economic development of a
country. Economic development of a country refers steady growth in the income levels. This
growth mainly depends on its entrepreneurs. An Entrepreneur is an individual with knowledge,
skills, initiative, drive and spirit of innovation who aims at achieving goals. An entrepreneur
identifies opportunities and seizes opportunities for economic benefits.
The word “Entrepreneur” is derived from the French verb ‘entrepredre’. It means ‘to undertake’.
In the early 16th century the Frenchmen who organized and led military expeditions were
referred as ‘Entrepreneurs’. In the early 18th century French economist Richard Cantillon used
the term entrepreneur to business. Since that time the word entrepreneur means one who takes
the risk of starting a new organization or introducing a new idea, product or service to society.
MEANING
An entrepreneur can be regarded as a person who has the initiative skill and motivation to set up
a business or enterprise of his own and who always looks for high achievements. He is the catalyst
for social change and works for the common good. They look for opportunities, identify them
and seize them mainly for economic gains. An action oriented entrepreneur is a highly calculative
individual who is always willing to undertake risks in order to achieve their goals.
According to J.B. Say, “An Entrepreneur is the economic agent who unites all means of
production; land of one, the labour of another and the capital of yet another and thus produces
a product. By selling the product in the market the pays rent of land, wages to labour, interest on
capital and what remains is his profit”. Thus an Entrepreneur is an organizer who combines
various factors of production to produce a socially viable product.
According to Joseph Schumepeter, “An entrepreneur in an advanced economy is an individual
who introduces something new in the economy, a method of production 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 market and the like”.
According to Cantillon “An entrepreneur is the agent who buys factors of production at certain
prices in order to combine them into a product with a view to selling it at uncertain prices in
future”. To conclude an entrepreneur is the person who bears risk, unites various factors of
 Richard Cantillon, an Irish man living in France introduced the term ‘entrepreneur’, called
father of Entrepreneurship.

production, to exploit the perceived opportunities in order to evoke demand, create wealth and
employment.
Theories of Entrepreneur
1600 – Entrepreneur came from a French verb – Entreprendre – to undertake.
1700 – Entrepreneur is the person bearing Risk or Profit in a fixed price contract (Risk)
1803 – J. B. Say – Entrepreneur shifts economic resources out from an area of lower to higher
productivity & greater yields (Value Addition)
1934 – Joseph Schumpeter – Entrepreneur is innovator and develops untried technology
(Productivity & Innovation)
1961 – David McClelland – Entrepreneur is highly motivated, energetic, moderate risk taker
(Need for achievement)
1964 – Peter Drucker – Entrepreneur searches for change, responds to it & exploits as
opportunity (Opportunity Focused)
FUNCTIONS OF ENTREPRENEURS
An entrepreneur is an opportunity seeker. He is also the organizer and coordinator of the agents
of production. He has to execute many a good function while establishing a small scale enterprise.
He not only perceives the business opportunities but also mobilizes the other resources like 5
M’s-man, money, machine, materials and methods. However, the main functions of the
entrepreneurs are discussed further.
1. Idea generation: This is the most important function of the entrepreneur. Idea generation can
be possible through the vision, insight, observation, experience, education, training and exposure
of the entrepreneur. Idea generation precisely implies product selection and project
identification. Ideas can be generated through environmental scanning and market survey. It is
the function of the entrepreneurs to generate as many ideas as he can for the purpose of
selecting the best business opportunities which can subsequently be taken up by him as a
commercially-viable business venture.
2. Determination of objectives: The next function of the entrepreneur is to determine and lay
down the objectives of the business, which should be spelt out on clear terms. In other words,
entrepreneur should be very much clear about the following things:
(i) The nature of business
(ii) The type of business
This implies whether the enterprise belongs to the category of a manufacturing concern or a
service -oriented unit or a trading business, so that the entrepreneurs can very well carry on the
venture in accordance with the objectives determined by him.
3. Raising of funds: Fund raising is the most important function of an entrepreneur. All the
activities of a business depend upon the finance and its proper management. It is the
responsibility of the entrepreneur to raise funds internally as well as externally. In this matter,
he should be aware of the different sources of funds and the formalities to raise funds. He should
have the full knowledge of different government sponsored schemes such as PMRY, SGSY, REGP,
etc. by which he can get Government assistance in the form of seed capital, fixed and working
capital for his business.
4. Procurement of raw materials: Another important function of the entrepreneur is to procure
raw materials. Entrepreneur has to identify the cheap and regular sources of supply of raw
materials, which will help him to reduce the cost of production and face the competition boldly.
5. Procurement of machinery: The next function of the entrepreneurs is to procure the
machineries and equipments for establishment of the venture. While procuring the machineries,
he should specify the following details:
(a) The details of technology
(b) Installed capacity of the machines
(c) Names of the manufacturers and suppliers
(d) Whether the machines are indigenously made or foreign made
(e) After-sales service facilities
(f) Warranty period of the machineries
All these details are to be minutely observed by the entrepreneurs.
6. Market research: The next important function of the entrepreneur is market research and
product analysis. Market research is the systematic collection of data regarding the product
which the entrepreneur wants to manufacture. Entrepreneur has to undertake market research
persistently in order to know the details of the intending product, i.e. the demand for the
product, the supply of the product, the price of the product, the size of the customers, etc. while
starting an enterprise.
7. Determination of form of enterprise: The function of an entrepreneur in determining the form
of enterprise is also important. Entrepreneur has to decide the form of enterprise based upon
the nature of the product, volume of investment, nature of activities, types of product, quality of
product, quality of human resources, etc. The chief forms of ownership organizations are sole
proprietorship, partnership, Joint Stock Company and cooperative society. Determination of
ownership right is essential on the part of the entrepreneur to acquire legal title to assets.
8. Recruitment of manpower: Entrepreneur has to perform the following activities while
undertaking this function:
(a) Estimating manpower need of the organization
(b) Laying down of selection procedure
(c) Devising scheme of compensation
(d) Laying down the rules of training and development
9. Implementation of the project: Entrepreneur has to work on the implementation schedule or
the action plan of the project. The identified project is to be implemented in a time-bound
manner. All the activities from the conception stage to the commissioning stage are to be
accomplished by him in accordance with the implementation schedule to avoid cost and time
overrun, as well as competition. Thus, implementation of the project is an important function of
the entrepreneur.
To conclude with, all these functions of the entrepreneur can precisely be put into the following
categories:
(i) Innovation
(ii) Risk bearing
(iii) Organization and
(iv) Management
CHARACTERISTICS OF ENTREPRENEUR
Entrepreneur is a key figure in economic progress. He is the person who introduces new things
in the economy. He is considered as the business leader and not as simple owner of capital. He
is a person with telescopic faculty, drive and talent who perceives business opportunities and
promptly seizes them for exploitation. M.M.P. Akhouri, formerly Executive Director, National
Institute for Entrepreneurship and Small Business Development (NIESBUD), New Delhi, describes
entrepreneur “as a character who combines innovativeness, readiness to take risk, sensing
opportunities, identifying and mobilizing potential resources, concerns for excellence and who is
persistent in achieving the goal.” To be successful, an entrepreneur should have the following
characteristic features.
1. Hard work: Willingness to work hard distinguishes a successful entrepreneur from
unsuccessful one. The entrepreneur with his/ her tedious, sweat-filled hours and
 perseverance revive their business even from on verge of failure. In nut-shell, most of the
successful entrepreneurs work hard endlessly, especially in the beginning and same
becomes their whole life.
2. Desire for High Achievement: Entrepreneurs have got strong desire to achieve higher
goals. Their inner self motivates their behaviour towards high achievement: most of the
people dream of success but do not take any action towards achieving these dreams.
Entrepreneurs with high n-Ach factor act continuously to achieve the goal and make their
dreams come true. For them, winning is achievement.
3. Highly optimistic: The successful entrepreneurs are not disturbed by the present
problems faced by them. They are optimistic for future that the situation will become
favourable to business in future. Thus, they can run their enterprise successfully in future.
4. Independence: Most of the entrepreneurs start on their own because they dislike to work
for others. They prefer to be their own boss and want to be responsible for their own
decisions.
5. Foresight: The entrepreneurs have a good foresight to know the future business
environment. In the other word, they well visualize the likely changes to take place in
market, consumer attitude, technological development, etc. and take timely actions
accordingly.
6. Good Organiser: Different resources required for production are divorced from each
other. It is the ability of the entrepreneurs that brings together all resources required for
stating up an enterprise and then to produce goods.
7. Innovative: Successful entrepreneurs are innovators. They constantly put their efforts in
introducing new products, new method of production, opening new markets and
recognizing the enterprise.

DISTINCTION BETWEEN AN ENTREPRENEUR AND A MANAGER

Point for Distinction Entrepreneur Manager
1. Goal An entrepreneur starts a venture by But the main aim of a manager is to
Management setting up a new enterprise for his render his service in an enterprise
personal gratification already set up by someone.
2. Status Entrepreneur is the owner of A manager is the servant in the
enterprise enterprise.
3. Risk An entrepreneur bears all risks and A manager being a servant does not
uncertainty involved in the bear any risk involved in the
enterprise. enterprise.
4. Rewards Entrepreneur for his risk bearing role A manager receives salary as reward
he receives profits. It is not only for service rendered which is fixed
and regular can never be negative
 uncertain and irregular but can at
times be negative.
5. Innovation As an entrepreneur, individual need A manager needs to execute plans of
to be innovative to meet changing an entrepreneur
needs of customer demands

Intrapreneur: the entrepreneurs emerging from within the confines of organization are called
‘intrapreneur’. The intrapreneurs are top executives encouraged to catch hold of new ideas to
convert them into products. Intrapreneurship serves as a seed-bed for the development of
innovative entrepreneurship. Innovation is the hallmark of entrepreneurship.
Extrapreneur: a person who is passionate about an idea and convinces others to make it happen
Ultrapreneur: Individual who needs to have different mindset about establishing and operating
a company.
Mobile Entrepreneur: Entrepreneur leaves the venture when it reaches it final stage of venture
creation and looks for a new opportunity to create another one
Eg. Sam Pitoda, who revolutionized Tele-Communication in India
Managerial Entrepreneur: Entrepreneur who continue in the same venture by assuming the
responsibility of managing and maintaining the venture, rather than continuing in the innovative
and creative role
Eg. Md. Yunus, founder of Grameen Bank in Bangladesh
Empire Builder: Entrepreneur goes on creating a chain of new ventures one after another and
builds a sort of empire.
Eg. G.D. Birla, J.N. Tata, Dr. V. Kurien of Amul

2. Entrepreneurship
CONCEPT OF ENTREPRENEURSHIP
The term ‘entrepreneurship’ is often used synonymously with the term ’Entrepreneur’ though,
they are two sides of the same coin, conceptually they are different. Entrepreneurship is the
indivisible process flourishes, when the interlinked dimensions of individual psychological
entrepreneurship, entrepreneur traits, social encouragement, business opportunities,
Government policies, availability of plenty of resources and opportunities coverage towards the
common good, development of the society and economy.
MEANING AND DEFINATION
Entrepreneurship is a dynamic activity which helps the entrepreneur to bring changes in the
process of production, innovation in production, new usage of materials, creator of market etc.
It is a mental attitude to foresee risk and uncertainty with a view to achieve certain strong motive.
It also means doing something in a new and effective manner.
Entrepreneurship is the process of identifying opportunities in the market place, arranging the
resources required to pursue these opportunities and investing the resources to exploit the
opportunities for long term gains. It involves creating wealth by bringing together resources in
new ways to start and operate an enterprise.
Defination: According to Cole “Entrepreneurship is the purposeful activity of an individual or a
group of associated individuals undertaken to initiate, maintain and aggrandize profit by
production or distribution of economic goods and services”.
Innovation and Risk-Bearing are regarded as two basic elements involved in
entrepreneurship. Innovation, i.e., doing something new or something different is a necessary
condition to be called as an entrepreneur. The entrepreneurs are constantly on the look out to
do something different and unique to meet the changing requirement of the customers. They
may not be inventors of new products or new methods of production, but they possess the ability
to foresee the possibility of making use of the inventions for their enterprises. E.g. tetra package
of fruit juice, so consumer can carry and store for longer time, small package/ sachets of different
essential items for the rural consumer etc.
Risk-Bearing: “ Fall seven times, stand up eight”
The enterprise may earn profits or incur losses because of various factors like increasing
competition, changing consumer preferences, shortage of raw materials and so on. Therefore,
an entrepreneur needs to be bold enough to assume the risk involved in the enterprise. In fact,
he needs to be a risk taker not risk avoider.
GROWTH OF ENTREPRENEURSHIP IN INDIA
The growth of entrepreneurship in India divided into two eras:
Entrepreneurship during Pre-Independence:
 The evidence of entrepreneurship found since the ages of Rigveda, as metal handicraft
entrepreneurship and this craftmanship nurture as their duty for the society
 By introducing caste system in village society divided into different categories and among
the artisans were treated as village servants comes under the lower most category
 In around 1600 A.D., India established its trade relationship with Roman Empire
 Few townships emerged around Indian river basins (means of transportation) like
Banaras, Allahabad, Gaya, Puri, Mirzapur. With the support of Royal Patronage artisan
industries flourished over the period, many workshops as Kharkhanas established, many
 evidences we can found in the history like, Bengal was famous for corah, Lucknow for
chintzes, Ahmedabad for dhotis and dupattas, Nagpur for silk-bordered cloths, Kashmir
for shawls and Banaras for metal wares.
India enjoyed this prestigious status of the queen of the international trade with the help of
handicrafts basically small and cottage sector till the eighteenth century. After that there was
decline was seen may be as;
1. Disappearance of Indian royal courts, who patronized the crafts earlier
2. The lukewarm attitude of British colonial government towards Indian crafts
3. Imposition of heavy duties on the imports of the Indian goods in England
4. Low-priced British made goods produced on large scale
5. Development of transport in India facilitating the easy access of British made products
even in the remote areas.
6. Change in taste and habits of Indians, developing craziness of foreign products
7. Unwillingness of the Indian craftsmen to adopt to the changing tastes and needs of the
people
 Manufacturing entrepreneurship in India emerged as the latent and manifest
consequence of East India company’s advent in India
 In 1673, East- India Company established its first ship-building industry in Surat, from
where onwards Persis (well-known for their business orientation able to set rapport with
the company) built vessels for the company.
 In 1677, Manjee Dhanjee was given a contract for building the first large gun-powder-mill
in Bombay for the East India company.
 In 1847, Ranchodlal Chotalal, a Nagar Brahman, was the first Indian taken an initiative to
set up a textile manufacturing unit but failed in his first attempt and finally succeed to set
a unit at Ahmedabad in 1861.
 In 1852, a Parsi foreman of a gun factory belonging to the company established a steel
industry in Bombay
 In 1854, Cowasjee Nanabhoy Davar a Parsi man set up first cotton textile manufacturing
unit in Bombay.
 In 1880, Nawrosjee Wadia opened another textile mill in Bombay.
 In 1911, Jamshedjee Tata, the first Parsi entrepreneur established first steel industry in
Jamshedpur by his own.
 Till 1915, there was 96 textile mills were set up out of which 41 belongs Parsis, 23 by
Hindus, 10 by Muslims and 22 by British citizens.
In the first wave of entrepreneurial growth in India started with Parsi entrepreneurs followed
by Jains and Vaishyas of Ahmedabad and Boroda in the 19th century, but lagged behind mainly
 improvement of business climate in the country side areas and the conservative attitude
restrict to change from commercial to industrial entrepreneurship.
The second wave of entrepreneurial growth in India began after the First World War with the
Swadeshi movement in the 20th century. In this decade, Gujaratis and Marwari Vaishyas
gained importance than Parsis and start controlling India’s Entrepreneurial Activities.
 In 1936, Carr, Tagore & Co. started management of Calcutta Steam Tug Association. This
was happened with the influence of Dwarkanath Tagore form joint stock companies and
invent a distinct management method managed by a ‘firm’ rather than ‘individual’.
Entrepreneurship during Post-Independence:
 In 1948, Indian independent government came forward with first industrial policy which
was revised from time to time.
Government took three important measures in industrial resolutions:
i. To maintain a proper distribution of economic power between private and public
sector
ii. To encourage the tempo of industrialization by spreading entrepreneurship from the
existing centres to other cities, towns and villages,
iii. To disseminate the entrepreneurship acumen concentrated in a few dominant
communities to a large number of industrially potential people of varied social strata.
 Since, 3rd five-year plan govt. started giving incentives and concessions in the form of
capital, technical know-how, markets and land to the potential entrepreneurs
 Several institutions like Directorate of Industries, Financial Corporations, Small-Scale
Industries Corporations and Small Industries Service Institute were set up to support new
entrepreneurs.
 As a result, there was tremendous growth was observed over the period from 1966 with
121,619 number of registered entrepreneurs to 190,727 in 1970.
 The family entrepreneurship units like Tata, Birla, Mafatlal, Dalmia, Kirloskar, and other
grew as large-scale business entrepreneurs.

SCOPE OF ENTREPRENEURSHIP DEVELOPMENT

I. To Identify Entrepreneurial Activities
The entrepreneurial activities ‘and opportunities could be identified by the planner of the
Government. The Government through various economic policies and programmes like
‘Globalisation’, ‘Privatisation’, ‘Liberalisation’, ‘Free Export and Import of Goods and Services’
inviting NRI’s capital introduction of innovation in the stock market activities, and the
establishment of SSI identifies entrepreneurship opportunities.
II. Imparting Training to Develop Entrepreneurial Talents
Entrepreneurs can be made by means of allowing them to undergo rigorous training. The level of
entrepreneurship development especially in all underdeveloped countries depends upon the
extent with which the aspiring men are given training. Through training, they can be able to
improve their power of achievement and power of affiliation.
III. To Develop Infrastructural Facilities
Entrepreneurship development could be possible through the setting up of both social and
economic infrastructural facilities for the aspiring entrepreneurs. The infrastructural facilities
like, impart entrepreneurship education at the school and university level to develop the
entrepreneurial traits among students, conduct the ‘Entrepreneurship Development
Programmer’s through the setting up of Entrepreneurship Training Institutions at the taluk/block
level in all parts of the country, financial institutions especially the commercial banks situated in
rural areas shall take utmost care in identifying the aspiring entrepreneurs and offer not only the
required financial assistance but also the required managerial techniques so as to enable them
to establish new business and withstand in the market, etc.
IV. Ascertain the demand and Supply of Entrepreneurs
It is true that the economic growth depends upon the existence of the technical progress. The
level of technical progress in turn depends upon the existence of the entrepreneurs.
Disequilibrium between demand & supply affects the economic growth. Excess supply of
entrepreneurs over demand leads to exploitation of natural resources beyond the required level
of course it leads to ‘super development’. The supply of entrepreneurs could be enhanced
through motivation. As propounded my McClelland, any society with generally high level of
achievement will produce more real entrepreneurs who can accelerate the growth of the
economy. Max Weber suggested that entrepreneurship is the outcome of the existing social
conditions of the society.
ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
“Economic development is the effect for which entrepreneurship is a cause”
Economic development essentially means a process of upward change whereby the real per
capita income of a country increases over a period of time. Entrepreneurship has an important
role to play in the development of a country. It is one of the most important inputs in economic
development. The number and competence of entrepreneurs affect the economic growth of
the country.
1. Employment Generation: It provides immediate large-scale employment. Thus, it helps
reduce the unemployment problem in the country, i.e., the root of all socio-economic
problems.
2. National Income: An increasing number of entrepreneurs are required to meet the
increasing domestic as well as export demand for goods and services. Thus,
entrepreneurship increases the national income.
3. Balanced Regional Development: The growth of Industry and business leads to a lot of
Public benefits like transport facilities, health, education, entertainment etc. Industries
are concentrated in selected cities; development gets limited to these cities. But with
set up enterprises in the smaller towns helps in the development of backward regions.
4. Dispersal of economic power: It stimulates the equitable redistribution of wealth,
income and even political power in the interest of the country.
5. Entrepreneurship not only create employment but also provide better standards of
living of many unemployed people, rural folks and slows a ray of hope.
6. It mainly focused on creating innovation which encourages entrepreneurs come up with
new ideas, products and technologies.
7. Entrepreneurship promotes capital formation by mobilizing the idle saving of the public
8. It encourages resource mobilization of capital and skill which might otherwise remain
unutilized and idle.
9. Backward and forward linkages to stimulate the process of economic development in
the country
10. Promotes country’s export trade i.e., an important ingredient to economic
development.

3.Factors Affecting Entrepreneurial Growth

The emergence and development of entrepreneurship is not a spontaneous one but a
dependent phenomenon of economic, social, political, psychological factors often
nomenclature as supporting conditions to entrepreneurship development.
1. Economic factors:
i. Capital: It is one of the most important prerequisites to establish an enterprise.
Availability of capital facilitates the entrepreneur to bring together the land,
machine and raw material to combine them into produce goods. So, capital can
be called as lubricant to the process of production.
ii. Labour: The quality rather quantity of labour is another influential factor of
emergence entrepreneurship. It is noticed that cheap labour is often less mobile
or even immobile.
iii. Raw materials: In absence of raw materials, neither any enterprise can be
established nor an enterprise can emerged.
 iv. Market: The size and composition of market both influence entrepreneurship in
their own ways. Monopoly in a particular product in market becomes more
influential for entrepreneurship than a competitive market. German and Japan
as the prime examples where rapid improvement in market was followed by
rapid entrepreneurial appearance.
2. Non-economic factors: Sociologist and psychologist advocate that economic factors
may be necessary conditions, but they are not sufficient conditions for the appearance
of entrepreneurship.
i. Social conditions:
a. Legitimacy of Entrepreneurship:

4. Entrepreneurial Motivation
CONCEPT
The term ‘motivation’ derived from word ‘motive’. Motive may be defined as an inner state
of our mind that moves or activates or energizes and directs our behaviour towards our
goals. Motives are expressions of a person’s goals or needs.
According to Dalton E. McFarland, “motivation refers to
the way in which urges, drives, desires, striving
aspirations or needs direct, control or explain the
behaviour of human-being”.
There are three basic elements of the process motivation
i.e., i) motive, ii) behaviour, iii) goal,
Goals are a form of self-regulation adopted by humans
to achieve specific aims,
Behaviour is an organism’s activities in response to
external or internal stimuli, including objectively
observable activities, introspectively observable activities, and nonconscious processes.
Psychologists often classify behaviors into two categories: overt and covert. Overt behaviors
are those which are directly observable, such as talking, running, scratching or blinking.
Covert behaviors are those which go on inside the skin. They include such private events as
thinking and imagining.
MOTIVATION THEORIES:
Human motivations are often triggered by human needs and human nature. Maslow’s Need
Hierarchy Theory and McClelland’s Acquired Need Theory are relevant to explain
entrepreneurial motivation
Maslow’s Need Hierarchy Theory: The human needs are classified into five sequential need
clusters from lower to higher and once the lower order needs are satisfied than those no
longer motivates the individual, these are;
i. Physiological Needs: Entrepreneurs being a human need to meet their physiological
needs for survival. Hence, they are motivated to work in the enterprise to have
economic rewards to meet the basic needs.
ii. Safety and security needs: These needs find expression in such desires as economic
security and protection from physical dangers.
iii. Social needs: Man is a social animal. An entrepreneur is motivated to interact with
fellow entrepreneurs, his employees and others.
iv. Esteem needs: these needs refer to self-esteem and self-respect. Incase of
entrepreneurs, the ownership and self-control over
enterprise satisfies their esteem needs by providing
them status, respect, reputation and
independence.
v. Self-Actualisation: The term ‘self-
actualisation’ was coined by Kurt Goldstein and
means to become actualized in what one is
potentially good at. An entrepreneur may achieve
self-actualization in being a successful
entrepreneur.
The process of need satisfying behaviour goes on till
the last need. For, entrepreneur it is mostly social,
esteem and self-actualisation needs which motivate
them to work more and more for satisfying them.
McClelland’s Acquired Need Theory:
According to David McClelland, a person acquires three types of needs as a result of one’s
life experience.
i. Need for Affiliation: these refer to needs to establish and maintain friendly and ward
relations with others.
ii. Need for power: these mean the one’s desire to dominate and influence others by
using physical objects and actions.
iii. Need for achievement: This refers to one’s desire to accomplish something with own
efforts. This implies one’s will to excel in his/ her efforts.

Motivating Factors:
Sharma classified all the factors responsible for motivating entrepreneurs

1. Internal factors:
a. Desire to do something new
b. Educational background
c. Occupational background or experience
2. External factors:
a. Government assistance and support
b. Availability of labour and raw material
c. Encouragement from big business houses
d. Promising demand for the product.
Another classification by Murthy et al. entrepreneurial motivation to start a business
entrepreneurship:
1. Ambitious factors
2. Compelling factors
3. Facilitating factors

5. Theories of Entrepreneurship
Theory is a well-substantiated explanation acquired through the scientific method and
repeatedly tested and confirmed through observation and experimentation.
Entrepreneurship is a multidisciplinary area governed by human factors, ever
changing society pursuing simultaneously, economic objectives, social objectives,
psychological objectives. Theory of Entrepreneurship is woven into sociological, cultural,
psychological, political and managerial fiber with them it forms an economic web.

The Economic Theory

 Economic incentives are the main motivators. Economic incentives include; the
taxation policy, industrial policy, sources of finance and raw material, infrastructure
availability, investment and marketing opportunities - access to information about
market conditions and technology etc.
Associate person: Richard Cantillon, an Irish French Economist viewed entrepreneurs as a
risk taker.
The Sociological Theory
Associate person: Jean Baptiste
 Entrepreneurship is likely to get a boost in a particular social culture. The
(entrepreneurial) behaviour of individuals in a society is influenced by society’s values,
Religious beliefs, Customs, Taboos, etc.The entrepreneur merely performs a role as
per the expectations of the society. As per Jean Baptiste say, an aristocratic
Industrialist Entrepreneur combines land of one, labour of another and the capital of
yet another to produce a product. By selling the product he pays interest on the
capital, rent on land and wages to labourers and what remains is profit. First time
distinction between the capitalist as the financer and the entrepreneur as the
organiser.
Entrepreneurship Innovation Theory
Associate person: Joseph Schumpeter.
 This theory ignores earlier two abilities, which were till then considered key for an
entrepreneur is Organising Abilities & Risk-Taking Abilities. According to Joseph
Schumpeter, a 20th century Austrian Economist An entrepreneur is a person who is willing
and able to convert a new idea or invention into a successful innovation.
Entrepreneurship resulted in new industries, even though it entailed combining the
existing inputs in a new way.
Psychological Theory
 Entrepreneurship gets boost when society has sufficient supply of individuals with
necessary psychological characteristics. These psychological characteristics include:
Need for Achievement, A vision foresight, Ability to face opposition. These characteristics
are formed during the individual’s upbringing by high standards of excellence, self-
reliance and low father dominance
Theory of Achievement
Associate person: David McClelland
 As the basis of entrepreneurial personality, he emphasized the importance of
achievement motivation through which, entrepreneur fulfills Economic and Social
Development. The need for achievement was found highest among entrepreneurs
through an experiment.
The Kakinada Experiment conducted by McClelland in America, Mexico and India (Kakinada).
Young adults were selected and put through a 3 months training to induce achievement
motivation. In the course content: trainees asked to control their thinking and be positive,
trainees imagined themselves in need of challenges and success and to set achievable goals
& imitate their role models, positive impact on performance, traditional beliefs do not
inhibit.
McClelland identified two characteristics of entrepreneurship: (i)Doing things in a new
and better way (ii) Decision making under uncertainty, that means people with High
Achievement Orientation (Need to Succeed) are more likely to become entrepreneurs.
Merely, people are not influenced by money or external incentives and profits are only a
measure of success and competency.
Status Withdrawal Theory
Associated person: E. Hagen
 This theory provides that a class which lost its previous prestige or a minority group tends
to show aggressive entrepreneurial drive. If a group feels that their values and status are
not respected by society, they turn to innovation to get respect of society.
Entrepreneurship is a function of status withdrawal. Four events which can produce status
withdrawal, i.e. (i) Displacement of a traditional elite group by physical force, (ii) Denigration
of values, symbols due to change in attitude of superior class, (iii) Inconsistency of static
symbol due to change in economic power, and (iv) Non-acceptance of expected status on
migration to a new society.
Entrepreneur as a creative problem shooter. Hagen visualized an innovative personality i.e.,
Retreatist, Ritualist, Reformist, Innovator. And, innovation requires creativity and such
creative individuals cause economic growth.
Theory of Social Change
Associated person: Max Weber
 Ethical value system protestant ethic and the spirit of capitalism, religion and its impact
on entrepreneurial culture. Weber opined that spirit of rapid industrial growth depends
upon, rationalized technology acquisition of money, rational use of money for
productivity, multiplication of money. These elements depend upon specific value
orientation of individuals generated by ethical values.
Theory of Social Behaviour
Associated person: Kunkel
 It presents a behavioral model. Supply of entrepreneurs is a function of social, political
and economic structure. Individuals perform various activities of which some are
accepted by society while others are not. Four structures in society i.e., limitation
structure, demand structure, opportunity structure, labour structure are often held
responsible for entrepreneurial growth.
Theory of Leadership
Associated person: Hoselitz
 Entrepreneurship is a function of managerial skill and leadership means ability to lead
and manage. Social conditions should ensure the development of enterprise-oriented
personalities. Here, Hoselitz emphasized on the role of culturally marginal groups into
entrepreneurship growth.
Theory of Model Personality
Associated person: Cocharn
 This is a sociological theory of entrepreneurial supply. Cocharn emphasises cultural
values, role expectation and social sanctions as the key element. Entrepreneur’s
performance is influenced by his attitude towards his occupation, role expectation held
by sanctioning groups, operational requirements of the job and society’s values, most
important for attitude and role expectation.
Theory of Systematic Innovation
Associated person: Prof. Drucker
 Systematic innovation consists in the purposeful and organised search for changes and
in the systematic analysis of the opportunities such changes might offer for economic or
social innovation. Systematic innovation means seven sources for innovative
opportunity. The first four sources lie within the enterprise, i.e.,
(1) The unexpected success, the unexpected failure, the unexpected outside event;
(2) The incongruity between reality as it actually is and reality as it is assumed to be or ought
to be;
(3) Innovation based on process need;
(4) Changes in industry structure or market structure that catch every one unaware.
And, the second set of sources for innovative opportunity, a set of three involves changes
outside the enterprise of industry;
(1) Demographics (Population changes);
(2) Changes in perception, mood and meaning;
(3) New knowledge, both scientific and nonscientific.
Lines between these seven source areas of innovative opportunities are blurred, and
considerable overlap between them.
6. Entrepreneurial Competencies
A competence is an underlying characteristic of a person which lead to his/ her effective or
superior performance in a job. A job competence is a good combination of one’s knowledge,
skill, motive etc., which one uses to perform a given job well. The underlying characteristics
possessed by an entrepreneur which result in superior performance are called the
entrepreneurial competencies or trait.
Knowledge means collection and retention of information in one’s mind. Knowledge is
necessary for performing a task but not sufficient.
Skill is the ability to demonstrate a system and sequence of behaviour which results I
something observable, something one can see.
Motive is an urge to achieve one’s goal. This continuous concern of goal achievement directs
a person to perform better and better.
Major Entrepreneurial Competencies
As per the research of Entrepreneurship development institute of India (EDI), Ahmedabad
identified a set of entrepreneurial competencies or characteristics that results in superior
performance.
1. Initiative: It is the entrepreneur who initiate a business activity.
2. Looking for opportunities: Entrepreneur looks for opportunity and takes appropriate
actions as and when it arises
3. Persistence: Entrepreneur follows the Japanese proverb “fall seven times; stand up
eight”. Repeated efforts to overcome obstacles that get in the way of reaching goals.
4. Information seeker: Takes individual research and consult experts to get information to
help reach the goal.
5. Quality consciousness: Entrepreneur takes way strong urge to excel to beat the existing
standard.
6. Committed to work: Does every sacrifice to get task completed.
7. Efficiency seeker: Makes always tenacious efforts to get the task completed within costs
and time.
8. Proper planning: Formulates realistic and proper plans and then executes rigorously to
accomplish the task.
9. Problem solver: Always tries to find out ways and means to tide over the difficult times.
10. Self-confidence: A strong believer in his strength and abilities.
11. Assertive: Good in asserting his issues with others for the cause of employees
12. Persuative: Able to successfully persuade others to do what he actually wants from the.
13. Efficient monitor: Personally, supervises the work so that it is done as per the standards
laid down.
 14. Employee’s well-wisher: Has great concern and also takes necessary measures to improve
the welfare of the employees working in the enterprise.
15. Effective strategy: Introduces the most effective strategies to effect employees to
achieve the enterprise goal whatsoever it may be.

Developing Competencies: To develop and sharpen entrepreneurial competency one can

follow the procedure which includes:
1. Competency Recognition: Acquisition of a new behaviour begins with understanding and
recognition of what a particular behaviour means.
2. Self -Assessment: Next step towards acquiring a particular competence is to see whether
one possess the particular competence or not. If yes, then to see how frequently one
exhibits the same in his particular life.
3. Competency Application: One needs to practice the same on continuous basis in various
activities in order to make a new behaviour a part of one’s personality. This is because
practice makes one perfect.
4. Feedback: After understanding, internalizing and practicing a particular competence, one
needs to make an introspection of the same in order to sharpen and strengthen one’s
competency.

7. Entrepreneurship Development Programmes (training/workshop)

EDPs helps to develop entrepreneurial motive, increase level of competency. Entrepreneurs is

the ‘spark plug’ who transforms the economic scene. It is said that economy is an effect for
which entrepreneurship is the cause.

Entrepreneurship Development Process

• Identifying and carefully selecting those who could be trained as entrepreneurs.

• Developing their entrepreneurial capabilities

• Ensuring that each potential entrepreneur has a viable industrial project

• Equipping the entrepreneurs with basic managerial understanding.

• Helping them to secure necessary financial, infrastructural and other assistance so that
an industrial venture materializes within the shortest possible time.

Objectives of EDPs:
 i. Develop & strengthen the entrepreneurship qualities, i.e., motivation or need for
achievement
ii. Analyze the environment set up of small-scale industry and small business
iii. Select a product
iv. Formulate project for the product
v. Understand the process & procedure involved in setting up a small enterprise
vi. Know the source of help & support (experts & financial facilities) available for starting a
small-scale industry
vii. Acquire the necessary managerial skills required to run a small-scale industry
viii. Know the pros and cons in becoming an entrepreneur
ix. Appreciate the needed entrepreneurship discipline

Course content & Curriculum should be in an EDP

1. General introduction to entrepreneurship
2. Motivation training
3. Managerial skills
4. Support system and procedure
5. Fundamentals of project feasibility studies
6. Plant visit

Entrepreneurship develop programmes is kind of training programme

Training: organic farming/ vermicompost/ bee-keeping/ mushroom
Trainee: farmers/ farm women/ rural youth/ Agri-students
Trainer: experts (SMS/ AP/)
Examples of an EDPs on Mushroom production can be;
• Introduction about the topic mushroom
• How to grow/ package of practise- method demonstration
• Success stories- result demonstration
• Market information/ structure/ channels
• Practical classes- hands-on training
• Loan/ banking / credit/ subsidies/ plans & programmes
 PHASES of EDP/ training
1. Pre-training phase
2. Training phase
3. Post-training phase
a. Pre-training phase
Step 1: Selection of entrepreneurs
Step 2: Arrangement of infrastructure
Step 3: Tie- up guest faculties/ experts
Step 4: Arrangement inauguration of programmes
Step 5: Selection of necessary tools
Step 6: Arrangement of public media
Step 7: Development of application form
Step 8: Finalising the training syllabus
Step 9: Pre-potential survey
b. Training phase
Thinks to do 1: To change attitude of the participants
Thinks to do 2: To motivate to plunge into entrepreneurship career
Thinks to do 3: Perceptible change in his/her attitude/ outlook, skill, role
Thinks to do 4: Behavioural change
Thinks to do 5: Check the possessing of knowledge of tech, resource
Thinks to do 6: Include skill-based activity
c. Post training phase/ follow –up activity
Thinks to do 1: Review of pre-training work
Thinks to do 2: Review the process of training programme
Thinks to do 3: Review past training approaches
Thinks to do 4: Review about prospects of training programme

Problems of Entrepreneurship Development Process

 Trainer motivations are not up to the mark in motivating the trainees to start their
own enterprise
 ED organizations lack in commitment and sincerity in conducting the EDPs.
  Non-conductive environment and constraints make the trainers-motivator’s role
ineffective
 The antithetic attitude of the supporting agencies like banks and financial
institutions serves as stumbling block in the success of EDPs.
 Selection of wrong trainee/ participants also leads to low success rate of EDPs.
Effectiveness of EDPs in motivating the entrepreneurship:
1. Activity level of the entrepreneurship
2. New enterprise established
3. Total investments made
4. Investments in fixed assets made
5. Number of people employed
6. Number of jobs created
7. Increase in profit
8. Increase in sales
9. Quality of product/services improved
10. Quicker repayment of loans

Generation, incubation and commercialization of business ideas and innovation

It’s always very difficult to initiate business and it’s even more difficult to maintain it
smoothly. This process of establishment of business begins with generation of innovative
ideas followed by the incubation of those ideas and finally leads to the commercialization of
the same ideas. All these three steps are inter related.
GENERATION OF IDEA
All Entrepreneurs need to have ideas to initiate their entrepreneurial ventures. The process
of generating ideas is itself an innovative process. The question is from where an
Entrepreneur can get the idea. Different researchers have tried to find out the source of an
entrepreneur’s ideas. The sources for idea are as under:
Common sources:
 Individual interests or hobbies
 Work experiences, knowledge, and skills.
 Existing products and current services, surrounding the environment.
How To Generate Ideas
(1) Environmental scanning: Entrepreneurs should make use of available information to
catch the current developing trend in business and for that he should keep reading local,
national, international; news papers, magazines, journals, commercial articles, and
should keep watching commercial news on TV. Moreover, it may look like a difficult task
but the potential entrepreneurs should do it passionately to get in touch with theEcurrent
scenario.
(2) Use of Creativity to problem solving: entrepreneurs should use their creativity to have
solution of unusual problem. Creative thinking means to link new concepts in
extraordinary manner.
For example, here are a few specific techniques:
The checklist method, in which an entrepreneur makes use of different questions or
statements and thereby develops new ideas.
Free association, in which an entrepreneur develops a new idea through a series of word
associations;
Attribute listing, in which an entrepreneur develops a new idea by looking at the constructive
and unconstructive attributes of a product or service.
Any of the above mentioned methods help generate potential entrepreneurial
ideas.
(3) Brainstorming: One of the most popular approaches to generating ideas is brainstorming.
It is an idea-generating process for getting dynamic solutions that gives a large number of
alternatives. Brainstorming is a simple technique that can be done with friends or
colleagues. In a brainstorming session, a group of people get together, mostly in a relaxed
atmosphere, where everyone feels free to broaden their minds and imagine beyond the
ordinary. A group leader presents the issue or problem to be solved and ensures that all
participants identify with it. Then members put up as many ideas as they can in a specified
time by explaining them orally. Participants are motivated to come up with as many ideas
possible and to build on one another’s ideas. In brainstorming sessions, discussion is
nonstop as participants propose a good number of ideas. No participant is allowed to
criticize the ideas of other participants during the brainstorming session. Moreover, all
ideas delivered by the participants get recorded and are further put for discussion. The
purpose of brainstorming is to open up as many alternatives as possible. It can lead to
strong arguments and counterarguments but it is certainly a fruitful way to generate
abundant ideas.
(4) Focus groups: These groups of people’s present information about projected products or
services in a prearranged setting. In a focus group, a moderator focuses the group
 discussion on number of issues. For example, a focus group might look at a proposed
product and answer specific questions asked by the moderator. Secondly, the focus group
might be given a moral general issue to discuss and the moderator simply leads the
discussion based on interpretations made by the group. Thus, a focus group can provide
an outstanding technique to generate innovative ideas.
(5) The Role of Intuition: Intuition is a cognitive process through which we knowingly or
unknowingly make decisions on the basis of our knowledge and experience. It is perhaps
a sudden outcome of the mind. Even though structured or systematic approaches to
generating ideas are important, intuition also plays an important role. Intuition is certainly
a powerful source of new ideas if you learn how to use it effectively. However, the best
approach of all could be to combine the structured with the intuitive as both of them
complement each other. We should listen to that intuition and use more structured
approaches to modify our ideas.
IDEA INCUBATION
Idea incubation means to exercise the ideas in reality. It begins with basic elements by the
one who considers the particular idea as the best to be used. He/she involves others in the
process and proves the idea to be perfect. Finally, the idea results into a new product
believing that it is capable enough to avail fund successfully and is also commercially useful.
Numerous companies promote idea incubation by grouping workforce collectively in
cooperative environments. Cooperative groups work best for idea incubation so as to identify
strengths and weaknesses of the idea, and thereby product which is more refined and
stronger can be gained. Several companies offer their services as professional idea
incubators. These companies use a trained staff that can think innovatively. There are lots of
Idea incubation firms which provide support to product development throughout the process
from the initial vague concept to viable manufacture. Successful idea incubation can result
into all types of products. Finally, what requires is strong leadership and administrative skills
along with entrepreneurial guts. Once an idea is incubated, it needs to be further developed
and commercially presented. This depends a lot on the team leader who can motivate the
employees to use the idea in productive way.
Business incubators are programme,s intended to speed up the successful improvement of
entrepreneurial companies. Incubators differ in the way of their services, in their
organizational constitution, and more or less in the types of consumers they serve. Successful
completion of a business incubation programme increases the probability that a new
company will continue in business for the long period.
The incubation process:
• Help with business fundamentals
 • Networking management
• Promotional support
• Speedy Internet access
• assist with financial management
• Access to bank loan, funds and security programmes
• Deal with presentation skills
• Linkage with higher education resources
• Links to strategic partners
• Access venture capital
• Comprehensive business training programmes
• Advisory boards and mentors
• organization panel identification
• Technology commercialization assistance
• Intellectual asset management
Entrepreneurs who wish to enter a business incubation program must apply for admission.
Acceptance criteria vary from program to program, but in general only those with feasible
business ideas and a workable business plan are admitted. It is this factor that makes it
difficult to compare the success rates of incubated companies against general business
survival statistics. Although most incubators offer their clients office space and shared
administrative services, the heart of a true business incubation program is the services it
provides to start-up companies. The amount of time a company spends in an incubation
program can vary widely depending on a number of factors, including the type of business
and the entrepreneur's level of business expertise. Life science and other firms with long
research and development cycles require more time in an incubation program than
manufacturing or service companies that can immediately produce and bring a product or
service to market.
COMMERCIALIZATION
It is the process of introducing a new product into the market. It’s the most important aspect
of business as the success of any product depends a lot on the way it’s being commercialized.
Commercialization of a product is possible with only the following three facts:
1. The launching period: The time to launch any product in the market should be decided
after observing the market condition and consumers’ interests.
2 Place to launch its product: A product can be launched at a single place or at many places
at a time. This depends a lot on the company’s resources, in terms of capital, administrative
intelligence and operational capacities. Smaller companies usually launch in attractive cities
or regions, while larger companies launch their products at national r international level at a
time. Multinational companies do launch their products at international level as they have
that capacity as far as finance and skilled staff is concerned.
3. To decide primary target consumer group: This primary consumer group should consist
of innovators, early adopters, heavy users and/or opinion leaders. This will guarantee the
success so as to be used in nearer future by other buyers in the market place. Thus,
commercialization of new product is perhaps the most important aspect that needs to be
taken care for the success of new product

Environment scanning and opportunity identification - Researching/ Managing

competition - Ways to define possible Competitors.
Environment Scanning: Environmental scanning is the process of analyzing the internal as
well as external environment of an organization. It does so, for the identification of strength,
weaknesses, opportunities, threats, trends etc., for developing new strategies and objectives
of an organization.
Environmental scanning also helps the firm to make new strategies as well as policies as per
the changing environment.
Important factors which should be considered for the environment scanning, they are:
Events: Generally, events are the important occurrences that takes place in the different
environmental sectors of the business.
Trends: Basically, trends are referred as the general course of action with which the events
takes place. Hence, with the help of trends, the organization identifies the various changes
in the strength of events in a particular area of an organization.
Issues: Generally, issues are referred to the various concerns occur in response to events and
trends. Once, organizations identify the issues which appear in environmental scanning it
can take corrective action.
Expectations: Expectations are basically those demands which are made by the interested
groups for the concern of the issues.
Major Techniques for Environmental Scanning
(1) SWOT analysis: Strength, Weakness, Opportunity and Threat
(2) PEST analysis: Political, Economic, Social and Technological Analysis
(3) ETOP analysis: Environmental Threat and Opportunity Profile analysis
(4) QUEST analysis: Quick Environmental Scanning Technique analysis
(5) SAP: Strategic Advantage Profile
 Opportunity identification: Finding a problem in the market that needs a solution in the
form of a product or service. Opportunity identification can come from a technology
improvement that allows a company to better serve its customer, or from a perceived
discrepancy between what is currently available in the market and what the customer wants.
Opportunity identification is the first stage in the product innovation process.
Competitive Research involves identifying your competitors, evaluating their strengths and
weaknesses and evaluating the strengths and weaknesses of their products and services. By
looking at your biggest competitors, you can see how your own products and services stack
up and what kind of threat they pose to your business. It also helps you identify industry
trends you may have been missing.
Four benefits to doing competitive research are:
(1) Understanding your market.
(2) Improving your marketing.
(3) Identifying market gaps.
(4) Planning for the future.
What is Competitor?
Competitor is any person or entity that is in the same or similar industry, or which offers a similar
product or benefit to the customer. The presence of competitors make the market competitive,
driving down the prices and margins on goods and services, as the competitors attempt to gain
a larger market share by competing on prices i.e. lowering its prices more than its rival.
Example of Competitors
1. Direct competition: Pepsi and Coca-Cola have been in competition in the food and beverage
industry. In the aeroplane industry, Boeing and Airbus are competing in the same space. The
same goes for Unilever, Procter & Gamble and Nestle competing in the FMCG industry.
2. Indirect competition: A coffee brand like Nescafe with always face competition from tea brands
as an indirect competition.
3. Replacement competition: Pizza Hut offers pizzas & McDonalds offers burgers, but they are
offering food to the same audience.
Agri-entrepreneurship: Concept, Characteristics, Nature and importance for sustainable
Livelihoods;

Agrientrepreneurship is defined as generally sustainable, community oriented, directly marketed

agriculture. Agricultural entrepreneurs/Agripreneurs are those entrepreneurs who undertake
agricultural activities as raising and marketing of crops, fertilizers and other inputs of agriculture.
They are motivated to raise agriculture through mechanization, irrigation and application of
technologies for dry land agriculture products. They cover a broad spectrum of the agricultural
sector and include its allied occupations.

Gray (2002) defines these farm entrepreneurs as individuals who manage with the intention and
the capability of expanding their farm businesses. Agri-Entrepreneur is a person who identifies
and pursues a market opportunity in the face of risk which may result in new businesses, products
or services within the field of agriculture including food, the environment and natural resources
(National FFA Organization).

Characteristics of an Agrientrepreneur/Entrepreneur

Initiative: An agrientrepreneur/entrepreneur must have an innovative aptitude, pick the right

opportunity, and initiate action. If he/she does not initiate action at the right time the
opportunity may be lost. Hence, the ability of an entrepreneur to take initiative is the key to the
success of the venture to a great extent.

Wide Knowledge: An agrientrepreneur/entrepreneur should have wide knowledge of the

economic and non-economic environment of business like the market, consumer attitudes,
technology, etc. In the absence of such adequate knowledge, the decisions taken by him may be
poor and will not contribute to the profitability of his business in the long run.

Traits of entrepreneurs: Risk Taking, Leadership, Decision making, Planning, Coordinating and
Marketing;

Entrepreneurship is the oldest form of business organization. It is in fact entrepreneurs that bring
innovation into our economy with new products and services. They drive a nation’s economy
towards development and progress.

Risk Taking: A risk is an integral part of any new business. But it is an especially important factor in
entrepreneurship because here the entrepreneur bears the entire risk of the business. So it is
necessary that the entrepreneur has an adventurous and risk-taking personality.

Leadership: One of the other important qualities of a successful entrepreneur is leadership. All
good entrepreneur are good leaders.

Decision making: To be successful, an entrepreneur has to make difficult decisions and stand by
them. As a leader, they’re responsible for guiding the trajectory of their business, including every
aspect from funding and strategy to resource allocation.
 Planning: Planning is strategizing the whole game ahead of time. It basically sums up all the
resources at hand and enables you to come up with a structure and a thought process for how
to reach your goal.

Coordinating: Coordination is the function of management which ensures that different

departments and. groups work in sync. Therefore, there is unity of action among the employees,
groups, and. departments

Marketing: Entrepreneurial Marketing is a marketing process that includes business planning,

identifying the needs and wants of consumers, building brand awareness, designing a compelling
message to promote the product, and maintaining customer relationship.

Types of entrepreneurs:

TYPES OF ENTREPRENEURS
Following are the classification of entrepreneurs on the basis of common characteristics

A. Clarence Danhof Classification:

1. Innovative: Innovative entrepreneur is one who assembles and synthesis information and
introduces new combinations of factors of production. They are characterized by the smell of
innovativeness. These entrepreneurs sense the opportunities for introduction new ideas new
technology, new markets and creating new organizations. Innovative entrepreneurs are very
much helpful for their country because they bring about a transformation in life style.
2. Imitative/ Adoptive: Imitative entrepreneur is also known as adoptive entrepreneur. He
simply adopts successful innovation introduced by other innovators. These entrepreneurs imitate
the existing entrepreneurs and setup their enterprise in the same manner. Instead of innovating,
they just imitate the technology and methods innovated by others. These entrepreneurs are very
helpful in less developed countries as they contribute significantly in the growth of enterprise
and entrepreneurial culture in these countries. Further by adopting the technology, which is
already tested, they generate ample employment avenues for the youth and therefore they are
treated as agent of economic development.
3. Fabian: The Fabian entrepreneur is timid and cautious. He imitates other innovations only if
he is certain that failure to do so may damage his business. They are very much skeptical in their
approach in adopting or innovating new technology in their enterprise. They are not adaptable
to the changing environment. They love to remain in the existing business with the age-old
techniques of production. They only adopt the new technology when they realize that failure to
adopt will lead to loss or collapse of the enterprise.
4. Drone: These entrepreneurs are conservative or orthodox in outlook. They never like to get rid
of their traditional business and traditional machinery or systems of the business. They always
feel comfortable with their old-fashioned technology of production even though the
environment as well as the society have undergone considerable changes. Thus, drone
entrepreneurs refuse to adopt the changes. They are laggards as they continue to operate in their
traditional way and resist changes. His entrepreneurial activity may be restricted to just one or
two innovations. They refuse to adopt changes in production even at the risk of reduced returns.
B. Arthur H. Cole Classification:
1. Empirical: He is an entrepreneur hardly introduces anything revolutionary and follows the
principle of rule of thumb.
2. Rational: The rational entrepreneur is well informed about the general economic conditions
and introduces changes which look more revolutionary.
3. Cognitive: Cognitive entrepreneur is well informed, draws upon the advice and services of
experts and introduces changes that reflect complete break from the existing scheme of
enterprise.
C. Classification on the Basis of Ownership:
1. Private: Private entrepreneur is motivated by profit and it would not enter those sectors of
the economy in which prospects of monetary rewards are not very bright.
2. Public: In the underdeveloped countries government will take the initiative to share
enterprises.
D. Classification Based on the Scale of Enterprise:
1. Small scale: This classification is especially popular in the underdeveloped countries. Small
entrepreneurs do not possess the necessary talents and resources to initiate large scale
production and introduce revolutionary technological changes.
 2. Large scale: In the developed countries most entrepreneurs deal with large scale enterprises.
They possess the financial and necessary enterprise to initiate and introduce new technical
changes. The result is the developed countries are able to sustain and develop a high level of
technical progress.
In recent years, some new classifications have been made regarding entrepreneurs, which are
discussed further.
1. Solo operators: These entrepreneurs prefer to set up their business individually. They
introduce their own capital, intellect and business acumen to run the enterprise successfully They
operate their business mainly in the form of proprietorship type of concern.
2. Active partners: Entrepreneurs of this type jointly put their efforts to build enterprise pooling
together their own resources. They actively participate in managing the daily routine of the
business concern. As such, the business houses or the firms which are managed by the active
partners become more successful in their operation.
3. Inventors: These entrepreneurs primarily involve themselves in Research and Development (R
and D) activities. They are creative in character and feel happy in inventing new products,
technologies and methods of production
4. Challengers: Entrepreneurs of this type take challenges to establish business venture as mark
of achievement. They keep on improving their standard and face boldly the odds and adversities
that come in their way. They use their business acumen and talent to convert the odds into
opportunities thereby making profit. According to them, if there is no challenge in life, there is
no charm in life. Challenges make them bold, and thus, they never hesitate to plunge themselves
into uncertainties for earning profit.
5. Buyers (entrepreneurs): These entrepreneurs explore opportunities to purchase the existing
units which may be seized or are in running condition. If the units they purchase are sick they
turn them around using their experiences, expertise and business acumen. By purchasing these
units they make themselves free from the hassles of building infrastructures and other facilities.
6. Life timers: These entrepreneurs believe that business is the part and parcel of their life. They
take up the business to reunite successfully as a matter of ego satisfaction. They have a strong
desire for taking personal responsibility. Family enterprises which thrive due to high personal skill
are included under this category.
According to the Type of Business
Entrepreneurs are found in various types of business occupations of varying size. We
may broadly classify them as follows:
Business Entrepreneur
Business entrepreneurs are individuals who conceive an idea for a new product or service and
then create a business to materialize their idea into reality. They tap both production and
marketing resources in their search to develop a new business opportunity. They may set up a
big establishment or a small business unit. Trading entrepreneur is one who undertakes trading
activities and is not concerned with the manufacturing work. He identifies potential markets,
stimulates demand for his product line and creates a desire and interest among buyers to go in
for his product. He is engaged in both domestic and overseas trade.
Industrial Entrepreneur
Industrial entrepreneur is essentially a manufacturer who identifies the potential needs of
customers and tailor product or service to meet the marketing needs. He is a production-oriented
person who starts in an industrial unit because of the possibility of making some new product.
Corporate Entrepreneur
Corporate entrepreneur is essentially a manufacturer who identifies the potential needs of
customers and tailor product or service to meet the marketing needs. He is a product-oriented
man who starts in an industrial unit because of the possibility of making some new product.
Corporate entrepreneur is a person who demonstrates his innovative skill in organizing and
managing a corporate undertaking. A corporate undertaking is a form of business organisation
which is registered under some statute or Act which gives it a separate legal entity.
Agricultural Entrepreneur
Agricultural entrepreneurs are those entrepreneurs who undertake such agricultural activities as
raising and marketing of crops, fertilizers and other inputs of agriculture.
According to the use of Technology.
Technical Entrepreneur
A technical entrepreneur is essentially an entrepreneur of “Craftsman type”. He develops a new
and improved quality of goods because of his craftsmanship. He concentrates more on
production than marketing. He does not care much to generate sales by applying various sales
promotional techniques. He demonstrates his innovative capabilities in matters of production of
goods and rendering services.
Non-technical Entrepreneur
Non-technical entrepreneurs are those who are not concerned with the technical aspects of the
product in which they deal. They are concerned only with developing alternative marketing and
distribution strategies to promote their business.
Professional Entrepreneur
Professional entrepreneur is a person who is interested in establishing a business but does not
have interest in managing or operating it once it is established.
According to Motivation
Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives.
An entrepreneur is motivated to achieve or prove his excellence in job performance. He is also
motivated to influence others by demonstrating his power thus satisfying his ego.
Pure Entrepreneur
A pure entrepreneur is an individual who is motivated by psychological and economic rewards.
He undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status.
Induced Entrepreneur
Induced entrepreneur is one who is being induced to take up an entrepreneurial task due to the
policy measures of the government that provides assistance, incentives, concessions and
necessary overhead facilities to start a venture. Most of the entrepreneurs are induced
entrepreneurs who enter business due to financial, technical and several other several other
provided to them by the state agencies to promote entrepreneurship.
Motivated Entrepreneur
New entrepreneurs are motivated by the desire for self-fulfillment. They come into being
because of the possibility of making and marketing some new product for the use of consumers.
If the product is developed to a saleable stage, the entrepreneur is further motivated by reward
in terms of profit and enlarged customer network.
Spontaneous Entrepreneur
These entrepreneurs start their business out of their natural talents and instinct. They are
persons with initiative, boldness and confidence in their ability which motivate them to
undertake entrepreneurial activity.
Growth Entrepreneur
Growth entrepreneurs are those who necessarily take up a high growth industry. These
entrepreneurs choose an industry which has substantial growth prospects.
Super-Growth Entrepreneur
Super-growth entrepreneur is those who have shown enormous growth of performance in their
venture. The growth performance is identified by the liquidity of funds, profitability and gearing.
According to Stages of Development
First-Generation Entrepreneur
A first-generation entrepreneur is one who starts an industrial unit by means of an innovative
skill. He is essentially an innovator, combining different technologies to produce a marketable
product or service.
Modern Entrepreneur
A modern entrepreneur is one who undertakes those ventures which go well along with the
changing demand in the market. They undertake those ventures which suit the current marketing
needs.
Classical Entrepreneur
A classical entrepreneur is one who is concerned with the customers and marketing needs
through the development of a self-supporting venture. He is a stereotype entrepreneur whose
aim is to maximize his economic returns at a level consistent with the survival of the firm with or
without an element of growth.

Stages of Establishing enterprise:

1. Idea Generation: every new venture begins with an idea. In our context, we take an idea to be
a description of a need or problem of some constituency coupled with a concept of a possible
solution. (A characterization of this phase is still work in process on this site.)
2. Opportunity Evaluation: this is the step where you ask the question of whether there is an
opportunity worth investing in. Investment is principally capital, whether from individuals in the
company or from outside investors, and the time and energy of a set of people. But you should
also consider other assets such as intellectual property, personal relationships, physical property,
etc.
3. Planning: Once you have decided that an opportunity, you need a plan for how to capitalize on
that opportunity. A plan begins as a fairly simple set of ideas, and then becomes more complex
as the business takes shape. In the planning phase you will need to create two things: strategy
and operating plan.
4. Company formation/launch: Once there is a sufficiently compelling opportunity and a plan, the
entrepreneurial team will go through the process of choosing the right form of corporate entity
and actually creating the venture as a legal entity.
5. Growth: After launch, the company works toward creating its product or service, generating
revenue and moving toward sustainable performance. The emphasis shifts from planning to
execution. At this point, you continue to ask questions but spend more of your time carrying out
your plans.

Identification of sound enterprise, steps to be considered against setting up an enterprise,

feasibility report:

Preparation of Feasibility Report: Feasibility report is the final conclusion drawn about the
business after conducting the feasibility study. The feasibility report includes the confirmation of
the proposed project. It gives the detail about technical, economic and financial, environmental,
socio-cultural and operational aspects of the project. It is a formal document prepared by the
experts. It gives the information on the authenticity of the feasibility study. The feasibility report
answer the question ‘the plan must be implemented or not’.

The feasibility report contains information on:

 a. It helps him to determine the viability of the venture.
b. It provides guidance to the entrepreneur in planning realistic goals.
c. It helps to identify possible roadblocks.
d. It is a pre-requisite to obtain finance.

Preparation of a business plan: It this step an entrepreneur prepares a good business plan, the
designs and creates the organisational structure for implementation of his plan. This plan is
further used to achieve the realistic goals. A business plan, as defined by Entrepreneur, is a
“written document describing the nature of the business, the sales and marketing strategy, and
the financial background, and containing a projected profit and loss statement.” It serves as the
blueprint for how you will operate your business. It is an effective means of defining your goals
and the steps needed to reach them.

Need and purpose of a business plan: A business plan spells out your purpose, vision and means
of operation. It also serves as your company's resume, explaining your objectives to investors,
partners, employees and vendors.

It serves the following purposes:

 Maintaining Business Focus.

 Securing Outside Financing.
 Understanding consumers and competitors.
 Fuelling Ambitions and Mapping Growth.
 Enlightening Executive Talent or to understand employee needs.

Product selection: Product selection refers to the process by which health programs, as a whole,
select, evaluate and ultimately procure the products that will be used and consumed
in service delivery.

Risk analysis: Risk analysis is the process of identifying and analyzing potential issues that could
negatively impact key business initiatives or projects. This process is done in order to help
organizations avoid or mitigate those risks.

Market analysis: is a thorough assessment of a market within a specific industry. You will study
the dynamics of your market, such as volume and value, potential customer segments, buying
patterns, competition, and other important factors.

Legal requirements: Legal Requirement means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any Governmental Body.

Project Management and Appraisal: Market, Technical, Financial, and Social Appraisal of
Projects:
Project management: It is the use of specific knowledge, skills, tools and techniques to deliver
something of value to people. The development of software for an improved business process,
the construction of a building, the relief effort after a natural disaster, the expansion of sales into
a new geographic market—these are all examples of projects.

Project Appraisal: Project appraisal is the effort of calculating a project's viability. Appraisal
involves a careful checking of the basic data, assumptions and methodology used in project
preparation, an in-depth review of the work plan, cost estimates and proposed financing, an
assessment of the projects organizational and management aspects, and finally the viability of
project.

Feasibility study is conducted in the following areas:

Market/ commercial Feasibility: It involves study of market situation, current market,

anticipated future market, competition, potential buyers, etc.

Technical Feasibility: This study involves study of technological aspects related to the business,
like location of the business, layout, infrastructure, plant and equipment, effluent treatment and
discharge, foreign collaboration, transportation, resource availability etc.

Financial Feasibility: Financial feasibility denotes the financial aspects of the business. This study
helps to understand requirement of start-up capital, sources of capital, returns on investment,
etc. It helps to assess the financial health of the business.

Socio- economic Feasibility: This study is important to determine the extent to which the project
is meeting its social economic objectives of development. It involves social cost-benefit analysis
for testing national profitability. It helps to know the contribution of the project towards
employment generation, income distribution, foreign exchange savings, development of
backward regions, etc.

Micro Enterprises: Profitable Agri-enterprises in India, Agro processing, KVIC industries;

Microenterprise also refers to micro business, which starts with a smaller amount of capital plus
employs a small number of people. Generally, microenterprise serves as a trademark of
developing the country as well as its economy. Many people found a shortage of jobs in the
formal sector; however, micro-enterprise help them to find a good job in a desirable sector. Apart
from creating jobs, they increase purchasing power, reduce production costs, and offer
convenience.

Profitable Agri-enterprises in India:

First of all, agriculture business has been categorized into three broad categories which are
described below: -

Productive Resources: - In this category, seed, feed, fertilizer, equipments, energy, machinery are
included that are main requirements means without them, nothing is possible in agriculture
sector.

Agricultural Commodities: - After getting the results (grown grains or spices), these are sold to
use as raw or processed commodities of food and fiber.

Facilitative Services: - Then, on products, you may need of some facilitative services such as
storage, processing, packing, transportation, marketing, credit, insurance and many more.

1. Agricultural Land
2. Grocery Shopping Portal
3. Tree Farm
4. Dry Flower Business
5. Beekeeping
6. Fruit and Vegetables Export
7. Dairy Business
8. Broom Production
9. Groundnut Processing
10. Medicinal Herbs Farming

Agro processing:

Some of the agro- inputs used in India is

1. In-organic fertilizers

2. Pesticides which includes insecticide, fungicide, nematicide and herbicide

3. Seeds which includes varieties, hybrids and genetically modified plant materials

4. Vegetatively propagated planting materials

5. Bio-fertilizers

6. Organic inputs which includes compost, vermi-compost, enriched farm yard manure, oil meals,
farm yard manure
7. Bio-pesticides

8. Bio-control agents

9. Plant Growth regulators

10. Micro-nutrients

11. Farm machinery and agricultural tools and implements

12. Animal feeds

13. Poultry feed

Type’s food processing industries:

 Primary processing industries

 Rice milling
 Roller Flour milling
 Pulse milling
 Oil milling
 Cereal based products (bread biscuits)
 Cocoa Products
 Soft drinks
 Alcoholic drinks
 Horticulture Fruits and vegetables
 Milk and milk products
 Meat processing
 Poultry processing
 Fish processing
 Food packaging

KVIC industries:

The Khadi and Village Industries Commission (KVIC) is a statutory body established by an Act of
Parliament (No. 61 of 1956, as amended by act no. 12 of 1987 and Act No.10 of 2006. In April
1957, it took over the work of former All India Khadi and Village Industries Board.

The broad objectives that the KVIC has set before it are...

• The social objective of providing employment.

• The economic objective of producing saleable articles.
 • The wider objective of creating self-reliance amongst the poor and building up of a
strong rural community spirit.

Functions of KVIC
The functions of the KVIC are as follows:

 To build a strategic reserve of raw materials and implements for supply to producers.
 To create common service facilities for processing of raw materials as semi-finished
goods and provisions of facilities for marketing of KVI products.
 To enhance the sale and marketing of Khadi and other products of village industries or
handicrafts.
 To be responsible for encouraging and promoting research in the production techniques
and equipment employed in the Khadi and Village Industries sector.
 To provide financial assistance to institutions and individuals for developing and guiding
Khadi and Village industries through the supply of designs, prototype and other
technical information.
 To assure genuineness of the products and to set standards for the quality of products
from the Khadi and Village Industries.

KVIC Schemes
The following are the schemes covered under the Khadi and Village Industries Commission
(KVIC).

 Prime Minister’s Employment Generation Programme (PMEGP)

 Market Promotion Development Assistance (MPDA)
 Interest Subsidy Eligibility Certificate (ISEC)
 Workshed Scheme for Khadi Artisans
 Strengthening the infrastructure of existing weak Khadi institutions and assistance for
marketing infrastructure
 Khadi Reform and Development Programme (KRDP)
 Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
 Honey Mission

Micro-financing

Meaning: Microfinance is a way to provide capital to low-income business owners who may be
excluded from traditional credit and lending options. Microfinance offerings include small loans
– called microloans, savings accounts (microsavings) and insurance policies (microinsurance)
Sources of Finances:

A source or sources of finance, refer to where a business gets money from to fund their
business activities. A business can gain finance from either internal or external sources.

Internal sources of finance

Internal sources of finance refer to money that comes from within a business. There are several
internal methods a business can use, including owners capital, retained profit and selling assets.

Owners capital refers to money invested by the owner of a business. This often comes from their
personal savings. Personal savings is money that has been saved up by an entrepreneur. This
source of finance does not cost the business, as there are no interest charges applied.

Retained profit is when a business makes a profit, it can leave some or all of this money in the
business and reinvest it in order to expand. This source of finance does not incur interest charges
or require the payment of dividends, which can make it a desirable source of finance.

Selling assets involves selling products owned by the business. This may be used when either a
business no longer has a use for the product or they need to raise money quickly. Business assets
that can be sold include for example, machinery, equipment, and excess stock.

External sources of finance

External sources of finance refer to money that comes from outside a business. There are several
external methods a business can use, including family and friends, bank loans and
overdrafts, venture capitalists and business angels, new partners, share issue, trade credit,
leasing, hire purchase, and government grants.

Family and friends - businesses can obtain a loan or be given money from family or friends that
may not need to be paid back or are paid back with little or no interest charges.

A bank loan is money borrowed from a bank by an individual or business. A bank loan is paid off
with interest over an agreed period of time, often over several years.

Banks, Small scale industries development organizations;

SIDBI (Small Industries Development Bank of India) is a wholly-owned subsidiary of IDBI

(Industrial Development Bank of India), established under the special Act of the Parliament 1988
which became operative from April 2, 1990
The Small Industries Development Organisation (SIDO), headed by the Additional Secretary &
Development Commissioner (Small Scale Industries), is one of the apex bodies of the Government
of India, Ministry of Small Scale Industries, to assist the Government in formulation of policies
and programmes, projects schemes.

Industrial Development Bank of India (IDBI Bank Limited or IDBI Bank or IDBI) was established
in 1964 by an act to provide credit and other financial facilities for the development of the
fledgling Indian industry. It is a development finance institution and a subsidiary of Life Insurance
Corporation.

IFCI, previously Industrial Finance Corporation of India, is a development finance institution

under the jurisdiction of Ministry of Finance, Government of India. Established in 1948 as a
statutory corporation, IFCI is currently a company listed on BSE and NSE. IFCI has seven
subsidiaries and one associate.

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services
statutory body headquartered in Mumbai, Maharashtra. SBI is the 43rd largest bank in the world
and ranked 221st in the Fortune Global 500 list of the world’s biggest corporations of 2020, being
the only Indian bank on the list. It is a public sector bank and the largest bank in India with a 23%
market share by assets and a 25% share of the total loan and deposits market.

ICICI Bank Limited is a privately owned Indian development finance institution with its registered
office in Vadodara, Gujarat, and corporate office in Mumbai, Maharashtra. It offers a wide range
of banking products and financial services for corporate and retail customers through a variety
of delivery channels and specialized subsidiaries in the areas of investment banking, life, non-life
insurance, venture capital and asset management. The bank has a network of 5,275 branches
and 15,589 ATMs across India and has a presence in 17 countries.

Entrepreneurship Development Institute of India, (Ahmedabad). The Entrepreneurship

Development Institute of India (abbreviated as EDII) is an autonomous body and not-for-profit
institute located Ahmedabad, Gujarat, India. Established in 1983, the institute offers master's
degree programmes in Entrepreneurship, a fellowship programme and a number of
entrepreneurship training programmes. The Institute's founding director was V. G. Patel. A
National Resource Institute in Entrepreneurship Education, Research, Training & Institution
Building. Promoted by IDBI Bank Ltd; IFCI Ltd, ICICI Ltd, SBI and Govt. of Gujarat. Pioneered the
Entrepreneurship Development Programme (EDP) Model. Leading the world’s largest study in
Entrepreneurship, ‘Global Entrepreneurship Monitor’ for its India chapter, since 2012. It Works
in the collaborative frame with State & National Government Departments & Ministries, such as
DST, Rural Development, Skill Development & Entrepreneurship, Textiles, Education, External
affairs.
Marketing for enterprises: Enterprise marketing can be defined as company-wide customer
relationship management (CRM) and lead generation efforts through integrated, multi-channel
marketing campaigns targeted toward large enterprises.

Concept:

Planning for marketing: Marketing planning guides the team towards achieving meaningful
results that support specific marketing initiatives as well as the overall company objectives.

Marketing launch plan: A marketing launch plan captures how you will bring a new product or
customer experience to market. Also called a go-to-market plan, it guides every aspect of a
launch, from messaging and channels to due dates for each cross-functional activity.

Digital marketing plan: A digital marketing plan lays out paid marketing activities and online
channels that will help you reach and communicate with your target audience. It includes
components such as advertising, search engine optimization, email, and social media.

Social media marketing plan: A social media plan identifies how you will interact with your target
audience on social platforms such as LinkedIn, Facebook, Twitter, and Instagram. This plan can
include a mix of paid advertising (such as sponsored content) as well as follower engagement
tactics.

Content marketing plan: A content plan describes how you will regularly publish material that is
relevant and provides real value to your audience. Blog posts, whitepapers, and other types of
content can help you find potential buyers and convert them to paying customers.

Target marketing: Target marketing is more of researching and understanding your targeted
customers’ needs on a particular segment of the market that is possible to buy your product or
service. It requires you to know your customers’ needs, desires, and pain points.

Factors to consider before you come up with your target marketing.

1. Identifying and assessing your market

2. Analyzing your customer base

3. Analyzing your competitors’ customer base

4. Identifying your unique selling proposition (USP)

Competition: Competition is the face-off between companies selling the same products and
services with the result is making a profit or achieving revenue.
 Market Surveys: Market survey is the survey research and analysis of the market for a particular
product/service which includes the investigation into customer inclinations. A study of various
customer capabilities such as investment attributes and buying potential. Market surveys are
tools to directly collect feedback from the target audience to understand their characteristics,
expectations, and requirements.

Purpose of Market Survey

 Gain critical customer feedback: The main purpose of the market survey is to offer marketing
and business managers a platform to obtain critical information about their consumers so that
existing customers can be retained and new ones can be got onboard.
 Understand customer inclination towards purchasing products: Details such as whether the
customers will spend a certain amount of money for their products/services, inclination levels
among customers about upcoming features or products, what are their thoughts about the
competitor products etc.
 Enhance existing products and services: A market survey can also be implemented with the
purpose of improving existing products, analyze customer satisfaction levels along with getting
data about their perception of the market and build a buyer persona using information from
existing clientele database.
 Make well-informed business decisions: Data gathered using market surveys is instrumental
in making major changes in the business which reduces the degree of risks involved in taking
important business decisions.

Types of Market Survey

1. Market Surveys for segmentation

2. Market Surveys for exploring various aspects of the target market:
3. Market Surveys to probe into purchase procedure
4. Market Surveys to establish buyer persona
5. Market Surveys to measure customer loyalty
6. Market Surveys to analyze a new feature or concept
7. Market Surveys for competitor analysis
8. Market Surveys to understand the impact of sales activities
9. Market Surveys to assess prices for new products/services
10. Market Surveys for evaluation of customer service

Marketing Strategies: A marketing strategy is a long-term plan for achieving a company's goals
by understanding the needs of customers and creating a distinct and sustainable competitive
advantage. It encompasses everything from determining who your customers are to deciding
what channels you use to reach those customers.

Product sales and Promotion: A sales promotion is a marketing strategy in which a business uses
a temporary campaign or offer to increase interest or demand in its product or service.

There are many reasons why a business may choose to use a sales promotion (or ‘promo’), but
the primary reason is to boost sales. Sales boosts may be needed to reach a quota as a deadline
approaches, or to raise awareness of a new product.

Types of sales promotion:

1. Competitions and challenges: Competitions or challenges usually take place on social

media, and serve to increase customer engagement as fans try to win a discounted or free
product. They usually also result in a large amount of free publicity if the competition or
challenge involves sharing the brand on a customer’s personal social media account.
2. Product bundles: Product bundles offer a collection of products for an overall discounted
rate, as opposed to buying the products individually. Product bundles give customers a
reason to buy a larger variety of products, which makes it more likely they will find a
product they like and want to buy again.
3. Flash sales: Flash sales are extremely short sales that offer extreme discounts for a limited
amount of time. These sales work through creating a sense of urgency and need around
your sale.
4. Free trials: Free trials or demos are one of the most common sales promotions and one
of the most promising strategies to grow a customer base. Businesses can offer either a
limited time with the product or a limited quantity of the product to a first-time buyer at
no charge to see if they like it.
5. Free shipping and/or transfers: Free shipping promotions attempt to curb the 70% of
customers who abandon their carts when they see the shipping costs. The small loss in
shipping fees is usually made up for in happy customer purchases.
6. Free products: Free product promotions work by offering a small free product with the
purchase of a larger, mainstream product. This boosts mainstream sales without costing
the company too much inventory or revenue.
7. Early-bird or first-purchaser specials: These specials offer discounts to first-time
purchasers as a way of welcoming them as customers. Customers are more likely to buy
at a discount and because the discount only works once, the company doesn’t lose a great
deal of revenue.
 8. BOGO specials: BOGO, or “buy one, get one free” promotions are primarily used to
spread product awareness. Customers can give their extra product to a friend or family
member and build a customer base through word of mouth.
9. Coupons and vouchers: Coupons and vouchers reward current customers for their brand
loyalty and encourage future purchases. This is especially effective in companies who use
punch cards which incentivize customers to make multiple purchases to earn a free
product.
10. Upsell specials: Upsell promotions are not as common as the others, but they can still be
extremely effective. Upsells give first-time customers a less expensive version of a
product to try, and then over time, the sales department works to convince them to
purchase the more expensive and more effective option.
11. Subscriptions: Subscriptions are not always considered sales promotion, since they tend
to be long-term purchases, but having different amounts of a product available at a
different price point is a sales promotion tactic. With a subscription, a customer pays a
larger fee upfront for a large amount of product that eventually comes out to less than
what they would pay for buying smaller amounts of product individually.
12. Donations: Donations are an excellent way for a company to build credibility and goodwill
within the customer base. Most donations work when the company contributes a portion
of each sale during a given period to a charitable cause.

Gender Issues in Entrepreneurship Development: Gender inequalities in entrepreneurship

include the following: access to credit, finance and capital; networking opportunities for women
entrepreneurs; horizontal gender segregation; reconciling work and family life; prejudices and
stereotypes about women in business.

Gender issues include all aspects and concerns related to women's and men's lives and situation
in society, to the way they interrelate, their differences in access to and use of resources, their
activities, and how they react to changes, interventions and policies. Followings are some gender
issues;

 Gender bias in education.

 The gender pay gap.
 Gender disparities in agriculture.
 Poor access to healthcare.
 The high price of collecting water.
 Child marriage and other forms of gender-based violence.
 Lack of representation for women and girls at the policy level.
 Concern and Gender Equality.
Management and importance; Extension management: Meaning, concept, nature and
importance; theories of management.

Management is universal in the modern industrial world and there is no substitute for good
management. It makes human effects more productive and brings better technology, products
and services to our society. It is a crucial economic resource and a life giving element in business.
Without proper management, the resources of production (men, machines and materials,
money) cannot be converted into production. Thus management is a vital function concerned
with all aspects of the working of an organization. Management is a must to accomplish desired
goals through group action. It is essential to convert the disorganized resources of men,
machines, materials and methods into a useful and effective enterprise. Thus management is the
function of getting things done through people and directing the efforts of individuals towards a
common objective

Meaning of Management

Management is the art of maximizing efficiency, as a social process, a method of getting things
done through others a plan of action and its direction by a co-operative group moving towards a
common goal.

Effective utilization of available resources to achieve same objective is management.

Management is a comprehensive function of Planning, Organizing, Forecasting Coordinating,

Leading, Controlling, Motivating the efforts of others to achieve specific objectives.

Management can precisely be called the rule-making and rule-enforcing body.

Definitions of Management:
According to Harold Koontz, Management is the art of getting things done through and with
formally organized groups “.

According to Peter F. Drucker, a multipurpose organ that manages a business and manages
managers and manages workers and works “.

According to J.Lundy, Management is what management does. It is the task of planning executing
and controlling “.

According to Lawrence Appley, Management is the development of people and not the direction
of things

According to F.W. Tylor , Management is the art of knowing what you want to do in the best and
cheapest way “.

Meaning of
Managemnt

deep co-ordination
art and science of an art of taking
of human resources what a manager
decision making work done through
and factors of does
and leadetship others
production
 Defination
Managemnt

Tradition Modern
al view view

Art of getting prime mover of

things done by organization
others making it functional
and productive
process of planning,
organizing, staffing,
leading and
coordinating process of creating
conductive and proper
internal environment in the
mobilising and utilising organization
physical and human process of coping with
resources for achieving changing external
organizational goal environment by
relating strengthes and
weakness of
organizations with it.

In nut shell it can be said that management as such is a science of managing men,
machines, money materials and methods. It embraces all duties and functions that pertains to
the initiation of an enterprise, its financing, the establishment of all major policies the provisions
of all necessary equipment, the entailing of general form of organization, under which enterprise
is to operate and the selection of the principal officers.

Characteristics of Management:

1. Management is a group activity: It is a group activity. Nobody can satisfy all his desires
himself. Therefore he unites which his fellow- beings and works in an organized group to
achieve what he cannot achieve individually. Massie has rightly called management as a
“Co-operative group “.
2. Management is Goal-oriented: According to Theo Haiman “Effective management is
always management by objectives." Group efforts are directed towards the achievements
of some predetermined goals. Management is concerned with establishment and
accomplishment of these objectives.
3. Management is a factor of Production: Management is not an end in itself. It is a means
to achieve the group objectives. It is a factor of production that is required the co-ordinate
 with the other factors of production for the accomplishment of predetermined goals and
objectives.
4. It is a Universal Character: Management is essential in all types of concerns. It
somewhere there is some human activity, management is must there. The basic principles
of management are universal. These can be applied in all types of concerns i.e. business,
social, religious, cultural, sports, educational a International technology.
5. Management is needed at all levels of the enterprise: On the basis of the nature of work
or target and the scope of authority, management is needed at all levels of the
organisations e.g., top level, middle level and supervisor level.
6. It is a distinct function: Management is a distinct function performed to fix and achieve
stated objectives by the use of manpower and other factors of production. Different from
the activities, techniques and procedures, the process of management consists of such
functions as planning, organizing, staffing, directing, coordinating, motivating and
controlling.
7. It is a Social Process: Management is taken as a social process. It has a social responsibility
to make reasonable use of scarce resources keeping in view the benefit of the community
as a whole.
8. System of Authority: Authority is the power to compel men to work in a specific manner.
Management cannot work in the absence of authority. There is a chain of authority and
responsibility among people working at different levels of the organization. There cannot
be an efficient management without well-defined lives of command a superior
subordinate relationship at the every levels of decision making.
9. It is a dynamic function: Management has to be performed continuously, in a rapidly
every changing business environment. It is constantly engaged in the molding of the
enterprise. It is also concerned about the change of environment itself so as to ensure the
success of enterprise. Hence it is on-going function.
10. Management is Intangible: It can be seen in the form of results and could not be actually
seen. For ex: when we are not able to produce desired quantity, we say it is the result of
poor management.
 11. It is Art as well as Science: Management is a science since its principles have universal
application. Management is an art as the results of management depends upon the
personal skill of managers. The art of the manager is essential to make the best use of
management science. Thus management is both science and art.
12. It is a Profession: It has systematic and specialized body of knowledge consisting of
principles, techniques, rules and laws. It can be taught as a specialized subject.

Significance of Management: Management plays a unique role modern society. Peter F.

Drucker has summarized the essence of management as “under developed countries are
under managed, it denotes the multidimensional significance of management. The
significance of management can be broadly classified into the groups.

o Advantages to the organization.

o Advantages to the society

Importance of Management: Management is overall the most important factor because no

business runs on itself, even no momentum. Every business needs repeated stimulus which can
only be provided by management. Thus, management is dynamic, life giving element without
which the “factors of production “will remain as were factors not become “Production’’. The
following points bring out the importance of management.

o Accomplishment of group goals.

o Efficient operations of business.
o Sound organization structure.
Management Function

There are five major functions of management, viz., planning, organizing, staffing, leading,
controlling. Management functions.

Most of the Management organizations have used managerial functions in achieving success
through the acronym POSDCORB. Four more functions have been added to the earlier seven
functions and thus the recent listing of management functions includes POSDCORB-COMEU.
 Planning – Organizing- Staffing- Directing- Coordinating- Reporting—Budgeting
Communication- Monitoring- Evaluation- Utilisation

Planning: Planning is a decision making process and it involves selecting and integrating the
courses of action that ill1 organisation and the individuals in it will follow to attain its objectives.
Planning is virtually deciding in advance as to what to do, how to do, when to do, who is to do,
and with what results. In Extension planning is done for possible future situations which are not
to occur but may occur, and this exercise is called contingency planning

Organising: It' is the establishing of effective behavioral relationships among persons. So that
they may work together efficiently and gain personal satisfaction of doing selected tasks in an
enterprise, for achieving selected objectives. The line and staff functions indicate the pattern of
distribution of authority in an organization.

Staffing: It is the process of selecting, maintaining and developing personnel in position, to fulfill
the organization objectives. The process is also referred to as human resource management. The
effective staffing requires well defined organisational roles, selection and placement of qualified
personnel, written job charts, in-service training and performance assessment

Directing: It is the continuous task of decision making and embodying decisions in instructions
for and serving as the leader of the enterprise. The effective directing/ leading requires
motivating Development the members to work for attaining the objectives: harmonizing goals of
the personnel with tllose of the enterprise, consistent communication and use of appropriate
informal organization.

Coordination: The term coordination refers to establishing harmonious relationships between

the efforts of individuals and groups in order to achieve the desired objectives. You are aware
that the coordination is essential even among the members of your family for its smooth running;
so, it is with an organisation as well. It is desirable to have cordial relationship and coordination
not only of the staff within an organization but also with other line organizations.
Reporting: As you are aware a report refers to a formal record of performance which generally
reflects file achievements or failures of a project or a programme. The report serves as a written
documents of what has been done and provides feedback information to the funding agency and
the general public.

Budgeting: Budgeting refers to the allocation of the funds for different sectors of the project1
programme. Budgeting aims at achieving better results with the least cost possible. Budgeting
allows for utilizing the resources and funds properly as per the directions of the funding agency.

Communication: In any extension organisation communication is very essential and it refers to

sending information for effective implementation of the programme, and receiving the feedback
information. In any organisation the communication flows downward-upward and horizontally.
The communication may be verbal or written.

Monitoring: Monitoring refers to keeping track of the ongoing programme and taking corrective
measures if it is not going according to the predetermined objectives. Such intervention by an
external agency provides for objective assessment of the performance.

Evaluation: Evaluation is the process of systematic and objective appraisal of an organisation an

extension programme or a project. Such evaluation can be done during the implementation of'
the programme or at the completion of the programme or a project. Both are equally important
for knowing the achievements of the programme against the targets fixed.

Utilisation: Here, the utilization refers to making use of the Monitoring and Evaluation Units in
the generation of valid data regarding the programmes for critical analysis and then taking
appropriate action to overcome the deficiencies if any.

Extension Management

Extension management organizations are characterized by many strategies, wide spans of

control, democracy, and autonomy.

Concept, Nature and importance

Managing people effectively in extension programmes is a skill that requires constant planning
and development. An extension programme manager can be defined as the person who is vested
with formal authority over an organization or one of its sub units. He or she has status that leads
to various interpersonal relations, and from this comes access to information. Information, in
turn, enables the manager to devise strategies, make decisions, and implement action
(Mintzberg, 1988).

Management is concerned with the optimum attainment of organizational goals and objectives
with and through other people. Extension management organizations are characterized by many
strategies, wide spans of control, democracy, and autonomy. Their management practices
cannot be reduced to one standard set of operating guidelines that will work for all organizations
continually. However, all managers of professional organizations face the same challenge: to
manage one's time, objectives, and resources in order to accomplish tasks and implement ideas
(Waldron, 1994).

Managers of extension programmes are painfully aware of the need for revision and
development of the new skill sets held by today's high performers. If change is not handled
correctly, it can be more devastating then ever before. High performers reflect, discover, assess,
and act. They know that a new focus on connecting the heads, hearts, and hands of people in
their organization is necessary. Astute managers know what needs to be done but struggle with
how to do it. Quite often they prefer to consider themselves as teachers or communicators rather
than managers. This results in under-utilization of the increasing amount of literature on
management theory and practice. The root of the problem is implementation. They must learn
how to motivate others and build an efficient team.

Management is the process by which people, technology, job tasks, and other resources are
combined and coordinated so as to effectively achieve organizational objectives. A process or
function is a group of related activities contributing to a larger action.

Management functions are based on a common philosophy and approach.

 1. Developing and clarifying mission, policies, and objectives of the agency or
organization
2. Establishing formal and informal organizational structures as a means of
delegating authority and sharing responsibilities
3. Setting priorities and reviewing and revising objectives in terms of changing
demands
4. Maintaining effective communications within the working group, with other
groups, and with the larger community
5. Selecting, motivating, training, and appraising staff
6. Securing funds and managing budgets; evaluating accomplishments and
7. Being accountable to staff, the larger enterprise, and to the community at large
(Waldron, 1994b).

Basic Element in Extension Management

Some of the elements that are important in Extension Management (Benor and Baxter - 1981;
Bhatnagar and Desai - 1987) need to be understood by everyone and these are:

Professionalizing: Any extension organisation must have technically qualified staff to understand
the problems of the farmers and guide them properly in adopting the agricultural technologies.
Hence, their professional competence needs to be enhanced through in-service training. Every
care has to be taken to select people of desired professional background depending upon the job
requirements. They have to also understand the needs aspirations, and attitude of farmers
towards technology in order to plan appropriate educational programmes/activities.

Organizational Structure; An Extension organization must have a sound organizational structure.

The single line of command is always helpful than the dual control especially at the operational
level. The single line of command is give greater emphasis in National Agricultural Extension
programme (T&V System) in India. Defective organizational structural leads too many
organizational problems,' making the agency ineffective.

Concentration of Efforts: The grass roots level extension workers would be more effective if they
coelenterate their work on any one area like, agriculture, horticulture animal husband^ or
fisheries. Otherwise, he/she may not be able to comprehend all the technical problems related
to these subject matter areas and provide solutions to farmers. The farmers always look for
expert knowledge and guidance. The World Bank has advocated only agriculture in T & V System.
The management of the system is easy if it has unified development goal.

Theories of Management

Modern management is characterized by two approaches, the systems and the contingency
approach. The systems approach views the organization as a total system comprised of
interacting subsystems, all of which are in complex interaction with the relevant external
environment (Lerman & Turner, 1992).
Systems theory
Organizations are pictured as "input-transformation-output systems" that compete for
resources. The survival and prosperity of an organization depend on effective adaptation to the
environment, which means identifying a good strategy for marketing its outputs (products and
services), obtaining necessary resources, and dealing with external threats.

Survival and prosperity also depend on the efficiency of the transformation process used by the
organization to produce its goods and services, on worker motivation, and on cooperation.
Efficiency of the transformation process is increased by finding more rational ways to organize
and perform the work and by deciding how to make the best use of available technology,
resources, and personnel. Top management has primary responsibility for designing an
appropriate organizational structure, determining authority relationships, and coordinating
operations across specialized subunits of the organization (Yuki, 1994). A system can survive only
when it delivers an output that can be exchanged for new inputs as well as for maintaining the
system. Similarly, an extension service is expected to produce some beneficial output.

Contingency theory

Theories that explain management effectiveness in terms of situational moderator variables are
called contingency theories. The contingency or situational approach recognizes that neither the
democratic nor the autocratic extreme is effective in all extension management situations.
Different traits are required in different situations. Table 1 describes the major features of five
contingency theories and the Vroom and Yetton (1973) normative decision model. The table
makes it easier to compare the theories with respect to content and validation.

 Path-Goal Theory examines how four aspects of behaviour influence subordinate

satisfaction and motivation.
 Leadership substitute theory identifies aspects of the situation that make leadership
behaviour redundant or irrelevant.
 Multiple linkage model uses a model of group performance with six intervening variables
to explain leadership effectiveness.
 Fiddler's LPC model deals with the moderating influence of three situational variables on
the leadership between a leader trait (LPC) and subordinate performance.
 Cognitive resources theory examines the conditions under which cognitive resources
such as intelligence, experience, and technical expertise are related to group
performance.

Approaches to Management:

a) Classical approach b) Behavioral approach, c) Quantitative approach, d) Systems

approach, e) Contingency approach.
a) Classical Approach:
(i) Scientific Management. Frederick Winslow Taylor is known as the father of scientific
management. Scientific management (also called Taylorism or the Taylor system) is a
theory of management that analyzes and synthesizes workflows, with the objective of
improving labor productivity.
(ii) Administrative Management. Administrative management focuses on the
management process and principles of management. Henri Fayol is the major contributor
to this approach of management thought.
(iii) Bureaucratic Management. Bureaucratic management focuses on the ideal form of
organization. Max Weber was the major contributor to bureaucratic management.

B) Behavioral Approach:
(i) Human Relations. The Hawthorne Experiments began in 1924 and continued through
the early 1930s. A variety of researchers participated in the studies, including Elton Mayo.
One of the major conclusions of the Hawthorne studies was that workers' attitudes are
associated with productivity.
 (ii) Behavioral Science. Behavioral science and the study of organizational behavior
emerged in the 1950s and 1960s. The behavioral science approach was a natural
progression of the human relations movement The behavioral science approach has
contributed to the study of management through its focus on personality, attitudes,
values, motivation, group behavior, leadership, communication, and conflict, among
other issues.
C) Quantitative Approach:
(i) Management Science (Operations Research) Management science (also called
operations research) uses mathematical and statistical approaches to solve management
problems.
ii) Production and Operations Management. This approach focuses on the operation and
control of the production process that transforms resources into finished goods and
services.
D) Systems Approach: The simplified block diagram of the systems approach is given
below.

e) Contingency Approach: The contingency approach focuses on applying management

principles and processes as dictated by the unique characteristics of each situation.

Henry Fayol's 14 Principles of Management:

The principles of management are given below:

1. Division of work: Division of work or specialization alone can give maximum productivity and
efficiency. Both technical and managerial activities can be performed in the best manner only
through division of labor and specialization.

2. Authority and Responsibility: The right to give order is called authority. The obligation to
accomplish is called responsibility.

3. Discipline: The objectives, rules and regulations, the policies and procedures must be honored
by each member of an organization.
 4. Unity of Command: In order to avoid any possible confusion and conflict, each member of an
organization must receive orders and instructions only from one superior (boss).

5. Unity of Direction: All members of an organization must work together to accomplish common
objectives.

6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is also

called principle of co-operation. Each shall work for all and all for each. General or common
interest must be supreme in any joint enterprise.

7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator
for good performance.

8. Centralization: There must be a good balance between centralization and decentralization of

authority and power. Extreme centralization and decentralization must be avoided.

9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all
members of the organization from the top to the bottom. Scalar denotes steps.

10. Order: Fayol suggested that there is a place for everything. Order or system alone can create
a sound organization and efficient management.

11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity
(i.e., justice) must be there.

12. Stability of Tenure: A person needs time to adjust himself with the new work and
demonstrate efficiency in due course.
13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is
strength.
14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial
planning and execution of predetermined plans

Levels of Management:

The 3 Different Levels of Management

 Administrative, Managerial, or Top Level of Management.
 Executive or Middle Level of Management.
 Supervisory, Operative, or Lower Level of Management.

Qualities and Skills of a manager:

According to American social and organizational psychologist Robert Katz, the three basic types
of management skills include

1. Technical Skills

Technical skills involve skills that give the managers the ability and the knowledge to use a variety
of techniques to achieve their objectives. These skills not only involve operating machines and
software, production tools, and pieces of equipment but also the skills needed to boost sales,
design different types of products and services, and market the services and the products.

2. Conceptual Skills

These involve the skills managers present in terms of the knowledge and ability for abstract
thinking and formulating ideas. The manager is able to see an entire concept, analyze and
diagnose a problem, and find creative solutions. This helps the manager to effectively predict
hurdles their department or the business as a whole may face.

3. Human or Interpersonal Skills

The human or the interpersonal skills are the skills that present the managers’ ability to interact,
work or relate effectively with people. These skills enable the managers to make use of human
potential in the company and motivate the employees for better results.

Organization and Environmental Factors

An organization is a group of people intentionally organized to accomplish a common or set of
goals.
Types of Business Organizations
a) Sole Proprietorships: These firms are owned by one person, usually the individual who has
day-to-day responsibility for running the business.
b) Partnerships: In a Partnership, two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners.
c) Corporations: A corporation, chartered by the state in which it is headquartered, is considered
by law to be a unique "entity", separate and apart from those who own it. A corporation can be
taxed; it can be sued; it can enter into contractual agreements.
d) Joint Stock Company: Limited financial resources & heavy burden of risk involved in both of
the previous forms of organization has led to the formation of joint stock companies these have
limited dilutives.
(i) Private limited company. (ii) Public limited company
e) Public Corporations: A public corporation is wholly owned by the Government centre to state.
It is established usually by a Special Act of the parliament.
f) Government Companies: A government company is any company i which of the share capital
is held by the central government or partly by central government & party by one to more state
governments.