ENTREPRENEURIAL SKILLS II

Q1. What is meant by an entrepreneur?

Ans.
An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a source
of new ideas, goods, services, and business procedures.

Q2. State the main characteristics of an entrepreneur.

Ans.
Characteristics of an Entrepreneur:

 Leadership
 Risk-taking
 Innovativeness
 Goal-oriented
 Decision-maker
 Highly optimistic
 Motivator
 Self-confident
 Action-oriented
 Dynamic agent
 High achiever
 Trust in self

Q3. State the functions of an entrepreneur.

Ans.
The functions of an Entrepreneur include:

1. Innovation
2. Risk-taking
3. Decision-making
4. Organization and management
5. Size and scale of business unit
6. Appointment of managerial and other workforce
7. Arranging for factors of production and establishing coordination
8. Procuring raw material and machinery
9. Control and direction
10. Finding a suitable market
11. New inventions
12. Establishing relations with the government
13. Establishing contacts with competitors
C. Short Answer Questions

Q1. What is a business plan?

Ans. An entrepreneur conducts studies to assess the feasibility of the market as regards the proposed
products or services. He makes an assessment of the resources required to run the enterprise and the
problems that may possibly be faced. Such a blue print of an enterprise is termed as a business plan or
a project report.

Q2. Explain briefly Innovation as a characteristic of an entrepreneur.

Ans.
Innovativeness: Customer requirements and tastes keep on changing; therefore, production
should meet the customer's needs. Innovativeness is an important characteristic of an
entrepreneur, as they always try to outpace others by taking the initiative in doing new
things—such as exploring new products, new markets, new raw materials, and new methods
of production.

Q4. Do you think an entrepreneur is a leader? Discuss.

Ans.
An entrepreneur is essentially a leader. According to K.L. Sharma, entrepreneurs exhibit
leadership qualities in solving problems. They must lead a team to achieve goals. An
entrepreneur must possess universally accepted leadership qualities such as initiative, high
energy levels, self-confidence, human relations skills, motivational abilities, creativity, and a
keen desire to solve problems.

D. Long Answer Questions

Q1. Write an essay on the qualities of an entrepreneur.

Ans.
Qualities/Characteristics of a Successful Entrepreneur:
The success of small enterprises and their growth into leading industrial houses can be
attributed to the entrepreneurs themselves. The key personal characteristics in successful
entrepreneurs include:

1. Leadership: An entrepreneur is essentially a leader. They have to lead a team to

achieve goals and exhibit universally accepted leadership qualities such as initiative,
high energy, self-confidence, human relations skills, motivational skills, creativity,
and a problem-solving mindset.
2. Risk-taking: Entrepreneurs bear risks in business, which are often unpredictable. By
taking calculated risks, entrepreneurs seek commercial rewards from innovative ideas.
3. Innovativeness: An entrepreneur continually strives to meet customer demands by
exploring new products, markets, raw materials, and methods of production.
4. Goal-oriented: Entrepreneurs set goals to earn profits by producing goods and
services and continuously pursue new goals after achieving the previous ones.
5. Decision-making: Entrepreneurs must make many decisions, such as choosing the
right product, service, or market, and making critical choices between alternatives to
maximize profitability.
 6. Motivator: An entrepreneur motivates others to work towards common objectives
and creates a spirit of teamwork.
7. Self-confident: Confidence is key for an entrepreneur. A lack of self-belief can hinder
their ability to persuade others and achieve their goals.

Q2. What are the various functions of an entrepreneur?

Ans.
Entrepreneur:
An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The entrepreneur is commonly seen as an innovator and a
source of new ideas, goods, services, and business processes.

Functions of an Entrepreneur:

1. Innovation:
o Introducing new products
o Opening new markets
o Finding new sources of raw material
o Creating new organizational structures
2. Risk-taking:
Making choices between alternatives, with uncertain outcomes.
3. Decision-making:
o Stabilizing organizational goals
o Dividing work among subordinates
o Utilizing financial resources
o Making decisions about techniques, marketing, and relationships
4. Organization and Management:
o Planning the enterprise
o Coordinating and controlling operations
o Supervising and directing staff
5. Size and Scale of Business Unit:
o Deciding the scale of operations based on product demand and productivity.
6. Appointment of Managerial and Other Workforce.
7. Arranging for Factors of Production:
Ensuring proper coordination of land, labor, and capital to maximize output.

Q3. Discuss the importance of entrepreneurship.

Ans.
If we go through the business history of India, we come across many names who have
emerged as successful entrepreneurs, like Tatas, Birlas, Dalmia, Modi, Ambani, etc. These
business houses started as small-scale enterprises and have made their name in the list of
industrialists of world fame.The success of small enterprises and their growth to leading
industrial houses can be attributed to entrepreneurs themselves. Thus, it is important to
understand the success story of such entrepreneurs. There are definitely some common
personal characteristics in entrepreneurs. The entrepreneur is, in essence, an institution which
comprises all the people required to perform various functions. The task of such people is to
innovate, adjust or combine various factors of production, and expand in response to changes
in demand and market conditions. They must acknowledge the opportunities and must also be
in a position to make opportunities out of a given situation.

The importance of entrepreneurship can be understood from the following points:

1. It Gives Freedom:
An entrepreneur is his own boss or owner and has the freedom to take all decisions
independently.
2. It Can Be Exciting:
Entrepreneurship can be very exciting, with many entrepreneurs considering their
ventures highly enjoyable. Every day is filled with new opportunities that challenge
their determination, skills, and abilities.
3. It Allows You to Set Your Own Earnings:
The principal focus of entrepreneurship is wealth creation and improved livelihood
through the provision of goods and services. Entrepreneurial ventures generate new
wealth by creating new and improved products or services.
4. If offers Flexibility: As an entrepreneur you can schedule your work hours around
other commitments, including quality time you would spend with your family.
5. Status: Success in entrepreneurship brings a considerable fame and prestige within
the society.
6. It offers Ambition-fulfilment: Through entrepreneurship one can fulfil his ambitions
into original products or services.

Q4. State five myths of entrepreneurship.

Ans.
Myths of Entrepreneurship:

(i) It is Easy to Start a Business: This depends on the scale of the enterprise. Starting up a
large entrepreneurial venture is a challenging process. Small scale enterprises are easier to set
up. Moreover, the rate of failure of new ventures is quite high all over the world. Just about
one-third of all enterprises become profitable only after operating for several years.
(ii) Lot of Money is needed to Startup a New Venture: Again, this depends on the type and
scale of the business venture. There are ventures that can be started with a small amount of
money. Big ventures need a lot of investment.
(iii) A Startup cannot Borrow from the Banks: Today our government is promoting startup
ventures and offering them loans on easy terms under various government schemes such as
MUDRA (Micro-units Development and Refinance Agency) and MSME (Micro, Small &
Medium Enterprises) scheme.
(iv) Businesses either Flourish or Fail: This is not always the case. Some ventures initially
falter or have lackluster growth rates. However, with right re-planning and effort they may go
on to achieve a healthy growth.
(v) A Good Idea is the only Requirement for a Successful Enterprise: Remember that
even the best of ideas need proper execution to become a reality. Ideas are important, but so
are planning, talent, leadership, communication and a host of other factors..

Q5. Describe six advantages of entrepreneurship as a career.

Ans.
Advantages of Entrepreneurship as a Career:
 1. Independence: The entrepreneur is their own boss and makes all decisions.
2. Ambition Fulfillment: Entrepreneurs bring their ideas to life, fulfilling their
ambitions.
3. Excitement: Entrepreneurship involves adventure and new challenges.
4. Freedom: Entrepreneurs have the freedom to experiment with their ideas.
5. Wealth Creation: Successful entrepreneurs generate wealth for themselves and their
employees.
6. Status: Entrepreneurs gain fame and prestige through their successes.

Q6. Describe five disadvantages of entrepreneurship as a career.

Ans.
Disadvantages of Entrepreneurship as a Career:

1. Risk: Entrepreneurship involves significant financial risk, and failure can lead to
heavy debt.
2. Hard Work: Entrepreneurs work long hours and often face high stress.
3. Uncertain Income: Entrepreneurs may struggle to earn regular income, especially in
the startup phase.
4. Problem of Finance: Raising funds can be challenging, especially for first-generation
entrepreneurs.
5. Incompetent Staff: New entrepreneurs may struggle to hire and retain skilled
employees.

Q7. What is the role and significance of entrepreneurs?

Ans. The role and significance of entrepreneurs are discussed below

(i) Organiser of Society’s Productive Resources: An entrepreneur is the organises of
society’s productive resources. He is the person who assembles the unused natural, physical
and human
resources of the society, combines them properly, establishes effective coordination between
them and makes the economic activities dynamic.
(ii) Helpful in Capital Formation: An entrepreneur is helpful in capital formation or we
know that increase in the rate of capital formation is quite essential for the economic
development of any country.
(iii) Increase in Employment Opportunities: An entrepreneur creates maximum
employment opportunities in the society by way of establishing new industries, developing
and expanding the existing industries and by undertaking innovative activities.