MODULE-4

MODULE- 4:
Entrepreneurship : Introduction, Evolution of the concept of
Entrepreneurship, Entrepreneurship today, Types of
Entrepreneurs, Intrapreneurship, Entrepreneurial competencies,
Capacity Building for Entrepreneurs.
Identification of Business Opportunities : Introduction,
Mobility of Entrepreneurs, Business opportunities in India,
Models for Opportunity Evaluation.

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Entrepreneurship: Introduction

Historically, entrepreneurs have altered the direction

of national economies, industries, and markets.
In addition to increasing national income through job
creation, entrepreneurship has always served as a
bridge between innovation and the marketplace.
Many innovations have altered our pattern of living,
and many services have been introduced to alter or
create new service industries such as commercial
banking, medical treatment, logistics, information
systems, and insurance.
The following are some ways in which entrepreneurs
can participate in the development of an economy.
2
Entrepreneurship: Introduction

1) Contribution to GNP and per capita income :

Entrepreneurship contributes to economic stability
by introducing new products and services in the
market and encouraging effective resource
mobilization.
This helps in increasing the gross national product
as well as per capita income of the people in the
country.
Economic stability leads to increased institutional
investment for productive activities and is a sign of
economic growth.

3
Entrepreneurship: Introduction

2) Employment Generation :
The government is limited in its ability to create employment
opportunities for the country’s population.
Entrepreneurs play an effective role in reducing the
problems of unemployment in the country.
Entrepreneurs are not only self employed but also provide
employment to others.
Entrepreneurial activities lead to other activities, generating
a multiplier effect in the economy.
Eg. Information technology boom occurred in india, leading
to several successful entrepreneurial ventures, providing
employment to many, leading to launch of a number of
engineering colleges, development of real estate and
hospitality ventures, and infrastructural facilities.
Such developments, in their turn, encourage further
entrepreneurship. 4
Entrepreneurship: Introduction

3) Balanced regional development :

The development of enterprises in less
developed regions promotes balanced
regional development in the country.
In addition, entrepreneurship stimulates the
distribution of wealth and income to more
and more individuals (such as stakeholders)
and geographical areas, thus benefiting larger
sections of society.

5
Entrepreneurship: Introduction

4) Promotion of export and trade :

Entrepreneurship promotes the country’s
export trade and earns foreign exchange.
When required, this earning can help combat
the country’s import dues requirements.
International trade brings economic strength
and techno-economic reliance.

6
Entrepreneurship: Introduction

5) Improvement in the standard of living :

Entrepreneurs bring a wide variety of products and
services into the market.
This increases competition in the market and
makes it possible for people to avail of a better
quality of products and services at lower and more
competitive prices, resulting in an improvement of
the country’s overall standard of living.
6) Increased Innovation :
With the liberalization of the Indian economy, the
increased competition in the domestic and
international market has encouraged entrepreneurs
to be more creative.
7
Entrepreneurship: Introduction

7) Overall development of the economy :

Entrepreneurs create new technologies, products,
processes, and services that become the next wave
of new industries, and these in turn drive the
economy.
Entrepreneurs are change agents in society.
They create wealth and value, and generate
employment in society.
This naturally leads to social and economic growth.

8
Evolution of the Concept of Entrepreneurship

How an entrepreneur is perceived and defined by society has

changed several times over the last few centuries.
The word entrepreneur originally stems from French and,
literally translated, means someone who undertakes a
difficult task.
An early example of an entrepreneur is Marco Polo, who
attempted to establish trade routes from Venice to the Far
East.
In Europe, during the Middle Ages, the term entrepreneur
was used to describe both an actor and a person who
managed large production projects, such as someone in
charge of great architectural works, such as castles and
fortifications, public buildings, abbeys, and cathedrals.
Later, in seventeenth-century Europe, an entrepreneur
began to be regarded as a person bearing risks of profit or
loss in a fixed contract with the government. 9
Entrepreneurship Today
The scope of what entrepreneurship involves will continue to
change and evolve with global economic, social, and political
changes.
Although there have been a number of generally acceptable
definitions, most of which vary in focus and scope, there is no
official definition of entrepreneurship.
However, increased academic interest in entrpreneurship is
bringing a sharper focus to bear upon the subject.
The process of creation of a business enterprise is called
entrepreneurship.
Entrepreneurship is the dynamic process of creating incremental
wealth.
The wealth is created by individuals who assume the major risks in
terms of equity, time, and/or career commitment or provide value
for some product or service.
The product or service may or may not be new or unique but value
must somehow be infused by the entrepreneur through receiving
and locating the necessary skills and resources. 10
Entrepreneurship Today :How do I become an Entrepreneur
The road to becoming an entrepreneur comprises
the following steps :
1) Generating business ideas and identifying business
opportunities (Observing trends, Finding gaps in the
market).
2) Conducting a feasibility analysis.
3) Making a business plan
4) Arranging funds
5) Setting up an enterprise and building a venture
team (Smooth management of the enterprise,
Nurturing growth, Exit strategies- planning for the
termination of one’s ownership of a company).

11
Entrepreneurship Today :Adv. of being an Entrepreneur
There are many advantages of being an entrepreneur. Some
of them are listed below :
1) An entrepreneur is an independent person who makes
his/her own decisions and acts on them.
2) An entrepreneur has enough scope for innovation.
3) An entrepreneur often has the opportunity of realizing
dreams and achieving excellence while simultaneously
contributing to the welfare of society.
4) An entrepreneur usually has immense job satisfaction.
5) An entrepreneur can bring about the socioeconomic
transformation of a region by generating employment for
others and creating wealth.
6) An entrepreneur can make a significant contribution to the
development of the country.

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Types of Entrepreneurs
Innovation is one of the most important characteristics of an
entrepreneur.
Entrepreneurs may be classified on the basis of functional
characteristics, personality types or schools of thought.
Let us look at how entrepreneurs may be classified according to
functional characteristics.
1) Innovative entrepreneur :
❖ Innovative entrepreneurs are innovative in their approach to
business and introduce new products, new production methods, or
discover new markets or new forms of organization in their
enterprise.
2) Imitative or adoptive entrepreneur :
❖ Entrepreneurs belonging to this category imitate products,
production methods, and new forms of organization in their
enterprise.
❖ This category of entrepreneurs can be found especially in
developing and underdeveloped countries, partly due to a
lack of investment in research and development. 13
Types of Entrepreneurs
3) Fabian Entrepreneur :
❖ Fabian entrepreneurs are not proactive in nature and
do not respond very much to changes in the
environment.
❖ Instead, they change only when there is a threat to
the existence of their enterprise.
4) Drone entrepreneur :
❖ Drone entrepreneurs are conservative and
complacent in nature and like to maintain the status
quo.
❖ These entrepreneurs may incur losses and have to
close down their enterprises.

14
Intrapreneurship
Intrapreneurship or corporate entrepreneurship, is the process
by which teams within an established company conceive,
foster, launch, and manage a new business that is distinct from
the parent company but leverages the parent’s assets,
capabilities, market position and other resources.
Intrapreneurs are employees within an organization who use
their entrepreneurial spirit to introduce new products, new
processes, new methods, and new forms within the
corporation.
Intrapreneurship describes the innovation that occurs inside
established companies through the efforts of creative
employees.
Example, Arthur Fry, an employee of 3M, invented Post-it note
pads, which turned out to be very profitable product for 3M.
The company’s policies and work environment have fostered
intrapreneurship, resulting in a win-win strategy for both 3M
and its employees. 15
Intrapreneurship
Intrapreneurship is a top-down approach, wherein the top
management plays the role of a facilitator and empowers
employees to effectively utilize resources and try out new
ideas.
The top management must devise and put in place a system
that would unleash employees’ potential and build a reward
and recognition mechanism for them.
Table 1.1 lays out the differences between entrepreneurs and
intrapreneurs.

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Intrapreneurship

Table 1.1 Entrepreneur Versus Intrapreneur

SL. Criteria Entrepreneur Intrapreneur
No.
1 Dependency Independent in his Dependent on the
operations entrepreneur/owner
2 Fund raising Raises funds required for Funds are not raised
the enterprise
3 Risk taking Fully bears the risk involved Does not fully bear the risk
in the business involved in the business
4 Operation Operates from outside Operates within the
organization
5 Primary Goal-oriented, self-reliant, Access to corporate
motive and self-motivated resources and also
responds to corporate
rewards and recognition

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 Difference Between a Manager and an Entrepreneur
The role of an entrepreneur is different from the role of a manager.
The most exciting part of entrepreneurship is being one’s own boss.
Differences between a manager and an entrepreneur are :
1) The entrepreneur starts a venture and is the owner of the
enterprise, whereas manager is an employee in an enterprise.
2) The entrepreneur starts an enterprise and creates wealth and
generates profit.The manager receives a salary for the services
rendered to the enterprise.
3) An entrepreneur is an employer whereas a manager is an
employee.
4) An entrepreneur is a job provider whereas a manager is a job
seeker.
5) An entrepreneur assumes more risk and uncertainty than a
manager does.
6) Entrepreeurs take mainly strategic decisions, whereas managers
take operational decisions.

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 Entrepreneurial Competencies

The term entrepreneurial competencies refers to the key

characteristics that should be possessed by successful
entrepreneurs in order to perform entrepreneurial functions
effectively.
Enrepreneurs are often unique people.
They often see things that others fail to notice.
They endeavour to bring about change and foster growth.
They believe in themselves.
Entrepreneurship drives them to move forward and reach where
they want to be.
Entrepreneurs are men and women of all sizes, ages, shapes,
religions, colours, and backgrounds.
However, most successful entrepreneurs do share the
competencies given below :

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 Entrepreneurial Competencies

1) Creativity and innovation :

❖ Creativity is the ability to develop new ideas and to discover
new ways of looking at problems and opportunities; thinking
new things.
❖ On the other hand, innovation is the application of creative
solutions to problems or opportunities to enhance or to enrich
people’s lives, or doing new things.
❖ A person may therefore conceive of something new and envision
how it will be useful, but not necessarily take the necessary
action to make it a reality.
❖ Drucker thus describes the entrepreneur as an innovator.

20
 Entrepreneurial Competencies

2) Leadership and team building :

❖ Leadership is the basic quality of an entrepreneur.
❖ This spirit keeps him paces forward in any field.
❖ The quality of leadership should be demonstrated in networking
and problem-solving ability, generating resources, and building
teams.
❖ Good business leaders are great visionaries.
❖ An entrepreneur should have an ability to build a team.
❖ A team is a group of individuals with a common mission,
focussed and aligned to achieve a specific task or set of
outcomes.
❖ A good team will be able to share knowledge, core competency
and goals.
❖ Collaboration and consensus bring about a synergetic effect in
the enterprise.
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 Entrepreneurial Competencies
3) Opportunity seeking and initiative :
❖ Entrepreneurs can pursue opportunities in any industry at any
time.
❖ Let us take the example of Captain Gopinath, whose first
venture was in the field of sericulture but who soon identified an
opportunity in the airline business.
❖ Later, Captain Gopinath launched a cargo airline and managed to
rope in Reliance Industries as an invester into his express cargo
business.
❖ In short, he is constantly identifying new opportunities across
various industries.
❖ Along with able to identify business opportunities, an
entrepreneur needs to have the urge to take initiatives.
❖ The initiative to start a business can’t be enough-entrepreneurs
must have the initiative to continue to grow and expand not only
the business but their own minds.
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 Entrepreneurial Competencies
4) Risk-taking and decision-making ability:
❖ Great business ideas have sometimes started as a hunch that
enterprising individuals have acted upon.
❖ There is always the risk of loss in any endeavour, and
entrepreneurs have just the right amount of confidence to take
calculated risks to achieve their objective.
❖ However, an entrepreneur’s risk-taking does not depend on luck,
but on sheer effort and hard work.
❖ Risk-bearing and decision-making call for absolute clarity of
thought and action.
❖ The focus should always be on market.
❖ A good entrepreneur should avoid excessively high as well as
low risk situations.
❖ Low-risk investment often provides a return not exceeding 10
per cent, moderate risk of 20 per cent and a high risk up to 100
per cent.
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 Entrepreneurial Competencies
5) Tolerance of ambiguity and uncertainty:
❖ Budner defined an ambiguous situation as “one which cannot be
adequately structured or categorized by an individual because of
the lack of sufficient clues”.
❖ Tolerance of ambiguity is the ability to respond positively to
ambiguous situations, and this is an important quality for
entrepreneurs to have because they continually face more
uncertainty in their everyday environment than do managers of
established organizations.
❖ Apart from being tolerant of ambiguity and uncertainty,
entrepreneurs also need to be comfortable with conflict.
❖ Start-up entrepreneurs usually do not receive revenue in the
beginning.
❖ To make matter worse, lack of customers is a common feature.
❖ For an entrepreneur of a start-up company, change is the way of
life.
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 Entrepreneurial Competencies
6) Motivation to excel:
❖ Entrepreneurs are motivated primarily by the desire to create
something new, the desire for autonomy, wealth and financial
independence, the achievement of personal objectives, and the
propensity for action (“doing”).
❖ The excitement and the thrill of starting a new venture is
another major motivator.
❖ Importantly, most entrepreneurs stress that the objective was
never money for its own sake.
❖ They wanted to leave a legacy in the form of a profitable
long-lasting business.

25
 Entrepreneurial Competencies
7) Problem solving:
❖ Successful entrepreneurs are problem solvers.
❖ A formal problem-solving model helps entrepreneurs solve
problems in a logical manner.
❖ The model consists of six steps :
1) Define the problem.
2) Gather information.
3) Identify various solutions.
4) Evaluate alternatives and select the best option.
5) Take action.
6) Evaluate the action taken.

26
 Entrepreneurial Competencies
8) Goal Orientation:
❖ Goal setting is the process of setting both long-term and
short-term objectives for the successful performance of an
entrepreneur.
❖ A clear set of goals helps to measure the performance standards
of employees.
❖ In addition, everyone needs to feel that they have a worthwhile
goal to reach with the resources and leadership available.
❖ Without goals, different members may move in different
directions, which may give rise to difficulties.
❖ Firstly, goals must be defined and the purpose and necessity of
the specified goals must be explained to every team member.
❖ Goals must be measurable or as specific as possible so that
employees are able to feel a sense of achievement when a goal
is attained.
❖ Once goals are achieved, team members should receive
feedback on their performance. 27
 Entrepreneurial Competencies
9) Self-efficacy and adaptability:
❖ Self-efficacy is the belief in one’s ability to muster and implement
personal resources, skills, and competencies to attain a certain level
of achievement on a given task.
❖ In other words, self-efficacy can be seen as task specific
self-confidence.
❖ Self-efficacy for a specific task has been shown to be a robust
predictor of an individual’s performance in that task and helps to
explain why people of equal ability can perform differently.
❖ Successful entrepreneurs are adaptive and resilient.
❖ Change is inevitable, and there will be plenty of times when
entrepreneurs need to correct course and modify plans so that
business isn’t left behind.
❖ Entrepreneurs should not be afraid of failure.
❖ Mistakes and failure come with the territory of being successful
entrepreneurs, and if they are not making mistakes, they are
probably engaging in a very easy task, where there is little chance
28
of failure.
 Entrepreneurial Competencies
10) Internal locus of control:
❖ Do you control your destiny or are you controlled by it?
❖ Some people believe that they hold the power to control the
outcome of their actions.
❖ Other people feel that the outcome of their actions is
determined by external factors.
❖ Locus of control refers to how a person perceives the causes of
events in one’s life.
❖ Individuals high on the internal locus of control assume that any
success or failure they experience is due to their personal
actions and that they have the ability to influence events.
❖ When someone perceives events as under the control of others,
fate, luck, the system or their boss, they have an external locus
of control.
❖ Successful leaders and entrepreneurs typically show a high
internal locus of control.
29
 Entrepreneurial Competencies
11) Persistence, persuasion, and networking:
❖ Entrepreneurs display persistence, and are not discouraged into
quitting by difficulties and problems that come up in business or in
their personal life.
❖ Entrepreneurs with a track record of success are much more likely
to succeed than first-time entrepreneurs.
❖ In essence, they have exhibited persistence in selecting the right
industry and the right moment to start new ventures.
❖ Networking is something all successful entrepreneurs are good at.
❖ Networking is not an option but a pre-requisite for survival in this
world of intense competition.
❖ Businesses have always relied on networks of clients, suppliers,
associates and contacts to spread the word about their work and
their products.
❖ But it is not enough to simply network.
❖ A successful entrepreneur usually uses deliberate strategies to
persuade and influence others.
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 Capacity Building for Entrepreneurs
In order to become a developed nation, India needs more
entrepreneurs with a managerial mindset.
This is because in order to create wealth, the economy must create
jobs that, in turn, are fuelled by entrepreneurial activity.
This needs a supportive regulative environment, venture capital
activity, and a strong capital market.
So, in order to build an entrepreneurial society, we need to focus
on the following four areas.

31
 Capacity Building for Entrepreneurs
1) Create the right eco-system:
❖ There is a need to scale up and enrich the ecosystem.
❖ The various elements of the ecosystem for commercialization are
venture capitalists, institutional support systems, government
schemes, and incubators.
❖ An ecosystem is a system of interconnected stakeholders –
institutions and individuals whose linkages enable efficient
production, and the spread of new and economically useful
knowledge.
❖ There is a need to kill silos and capitalize on the power of
collaboration.

32
 Capacity Building for Entrepreneurs
2) Build skills:
❖ Experiential learning is a part of entrepreneurship.
❖ The five most important skills needed for an entrepreneur are
personal skills, communication skills, negotiation skills, leadership
skills, and sales skills.
❖ The education system in India can ensure that the curriculum in
schools, colleges, and universities is modified to address business
needs and to build centres of entrepreneurial excellence in
institutions that will actively support entrepreneurship.

33
 Capacity Building for Entrepreneurs
3) Provide access to capital:
❖ For a long time, Indian entrepreneurs have faced a shortage of
capital.
❖ Determining capital requirements, crafting financial and
fund-raising strategies, and managing the financial process are
critical to a new venture’s success.
❖ Government policy should be congenial for foreign investors,
financial institutions, venture capitalists, and angel investors to
enable them to invest in new ventures.

34
 Capacity Building for Entrepreneurs
4) Enable networking and exchange:
❖ In professional or business networking, people use their personal
contacts for succeeding in their businesses.
❖ A network serves to provide a lot of support to the entrepreneurial
enterprise in times of crisis.
❖ Some ways to network are through social networking Websites,
business associations, alumni networks, and during trade fairs.

35
 Identification of Business Opportunities : Introduction
A business opportunity may be defined as a set of favourable
circumstances in which an entrepreneur can exploit a new business
idea that has the potential to generate profits.
Business opportunities have the following four fundamental
features :
1) They create or add significant value to the customer.
2) They solve a significant problem by removing pain points or
meeting a significant want or need for which someone is willing to
pay a premium.
3) They have a robust market, margin, and money making
characteristics that will allow the entrepreneur to estimate and
communicate sustainable value to potential stakeholders.
4) They are a good fit with the founder(s) and management teams at
the time and marketplace along with an attractive risk-reward
balance.

36
 Identification of Business Opportunities : Introduction
Not all business ideas are found to be good business opportunities.
This simple five-step framework helps screen ideas and find out whether a
business idea truly represents a good business opportunity.
An opportunity is characterized by the following :
1) Urgency of the market need : The business idea should envision a
product or service that satisfies a market need or a need of the customer.
2) Adequate market size : A business usually targets a particular market
segment after assessing their demographic, geographical, and lifestyle
factors.
3) Sound business model : In simple terms, a business model is a broad
range of descriptions of various core aspects of business, such as
purpose, strategies, infrastructure, organizational structures, marketing
programmes, and operational processes and policies.
4) Potential brand value : The product/service being offered must be
differentiated from those being offered by competitors to maintain a
competitive advantage in the market.
5) An able management team : The ability and passion of team members to
use a business opportunity is important to success. The team should have
contacts among suppliers, competitors, and customers. 37
 Identification of Business Opportunities : Introduction
Having business ideas is central to the task of identifying business
opportunities. Let’s discuss some ways to generate business ideas.
1) Brainstorming :
❖ Brainstorming is a technique used to quickly generate a large number of ideas and
solutions to problems.
❖ The brainstorming session is conducted to generate ideas that might represent
business opportunities.
❖ Brainstorming works well individually as well as with a varied group of people.
❖ A group brainstorming session requires a facilitator, white board, and space to
accommodate the participating people.
❖ Brainstorming works well with 8-12 people and should be performed in a relaxed
environment.
❖ Participants are encouraged to share every idea that enters their mind with the
assurance that there is no right or wrong answer.
❖ Once the session starts, participants can informally present their ideas for possible
solutions.
❖ The facilitator writes down each idea for everyone to see.
❖ Once time is up, the best ideas are selected, based on criteria like
cost-effectiveness.
❖ Next, a score (say, zero to ten points) is given to each idea and idea with highest38
score may be used to solve the problem.
 Identification of Business Opportunities : Introduction
2) Survey Method :
❖ The survey method is used to collect information by direct observation of
a phenomenon or systematic gathering of data from a set of people.
❖ The survey method involves gathering information from a representative
sample population, that is, a fraction of the whole population under study
that presents an accurate proportional representation of that population.
❖ Surveys generate new products, services, and business ideas because they
ask specific questions and get specific answers.
3) Reverse Brainstorming :
❖ This is a method that is similar to brainstorming, with the exception that
criticism is allowed.
❖ It is, therefore, also called “negative brainstorming.”
❖ In this technique, the focus is on the negative aspects of every idea that
has been generated through brainstorming.
❖ Also called the “sifting” process, this process most often involves the
identification of everything that is wrong with an idea, followed by a
discussion of ways to overcome these problems.

39
 Identification of Business Opportunities : Introduction
4) The Gordon Method :
❖ This is a creative technique developed by A.F.Osborn to develop new
ideas.
❖ This methos is similar to brainstorming.
❖ Collective discussion addresses every aspect of the planned product in an
uninhibited solution-oriented way.
❖ This discussion encourages a fresh, creative, and unusual approach to
developing a new product.
❖ For eg., to devise a new pen holder, the group discusses the “holding”
theme and examines all possible meanings of this word and all possible
examples of “holding” (such as items, nature, etc.).
❖ The group will later sit and study each idea to see if any of them may be
useful for the planning of a new pen-holder.

40
 Identification of Business Opportunities : Mobility of
Entrepreneurs
Entrepreneurial mobility is the movement of entrepreneurs from one
location to another (geographical mobility) or from one occupation to
another (occupational mobility) based on business opportunities.
Entrepeneurial mobility is usually caused by political, economic, cultural,
and social factors.
The various factors that influence entrepreneurial mobility are listed
below :
1) Political conditions :
❖ Entrepreneurial mobility is influenced by political factors.
❖ For eg., Tata motors’s shifting of the Tata Nano project from Singur, West
Bengal, to Gujarat clearly demonstrated that political conditions are more
congenial to business in Gujarat than in West Bengal.
2) Education :
❖ Education imparts knowledge and hones one’s analytical thought process.
❖ This may cause brain drain to more favourable environments, resulting in
the mobility of entrepreneurs.

41
 Identification of Business Opportunities : Mobility of
Entrepreneurs
3) Experience :
❖ Entrepreneurs with experience in business and industry are quick to
exploit opportunities.
❖ Their past experiences enable entrepreneurs to take up various types of
ventures in distant places, leading to entrepreneurial mobility.
4) Size of enterprise :
❖ The larger the size of the business, the greater is the entrepreneur’s
mobility.
❖ Large business houses want to grow organically and inorganically through
diversification, expansion, mergers, acquisitions, and joint ventures.
5) Availability of facilities :
❖ Availability of labour, land, water and power, and proximity to market,
transport, suppliers, clusters, and communication increases the mobility of
entrepreneurs.
❖ We can see more IT industries located in cities such as Bangalore and
Chennai due to the availability of knowledgeable workers and other
infrastructural facilities.
42
 Identification of Business Opportunities : Geographical
Mobility of Entrepreneurs
As mentioned earlier, geographical or locational mobility refers to the
movement of entrepreneurs from one location to other locations in search
of better business opportunities.
The factors responsible for geographical mobility of entrepreneurs are the
availability of raw material, new and emerging markets, skilled labour,
government incentives, better infrastructural facilities, and access to
resources.
When the dot-com bubble began forming during 1995-2000, many
entrepreneurs moved to Bangalore-the Silicon Valley of India-to start their
ventures.
There are three stages in the mobility of entrepreneurs.
In the initial stages, an entrepreneur sets up a venture at one place and
sticks to one place of working.
In the next stage, as the business grows, entrepreneurs start moving out
within a limited area of business development.
In the third stage, as the business expands and there is an increase in the
entrepreneurs’ resources and network size, there will be a greater degree
of mobility as they cross boundaries and start working in the global arena. 43
 Identification of Business Opportunities : Occupational
Mobility
As mentioned earlier, occupational mobility denotes movement or change
in occupation.
The occupation chosen by an entrepreneur is not always the same as that
of his/her family.
Studies have revealed that though business communities still constitute
the dominant source of entrepreneurship, people from technical
backgrounds, and those working in corporate and government jobs, are
also swelling the ranks of entrepreneurs.
This emerging class of entrepreneurs is characterized by better education
and technical knowledge.

44
 Identification of Business Opportunities : Business
Opportunities in India
Being the seventh-largest country in the world by area and the largest by
population, India has a growing market and is a land of opportunities.
The opportunities for importing, exporting, trading, investing, and
franchising are immense.
A potential entrepreneur needs to take into account the economy, the
consumer, and business trends.
One should also understand that what may be a good business
opportunity for one entrepreneur may not be a good opportunity for
another.
It is essential for entrepreneurs to pick opportunities that they are
passionate about.
There are several factors that create favourable business opportunities in
India:
1) India is a well-established democratic country with a free and fair judicial
system.
2) The country also has a well-established banking system consisting of
public and private banks and other financial institutions.
45
 Identification of Business Opportunities : Business
Opportunities in India
3) The country has a huge middle-class with enhanced purchasing power.
Coupled with a high-growth economy, this creates the potential for a huge
growth in manufacturing, services, and the retail sector.
4) India has vibrant trade links with the South Asian Association for Regional
Cooperation (SAARC) nations such as Sri Lanka, Pakistan, Nepal, Bhutan,
Bangladesh, and the Maldives.
5) India has a competitive advantage in the global market with the availability
of a huge pool of cheaper labour and knowledgeable workers to enhance
industrial productivity.
6) Economic reforms and policy changes have created an investment-friendly
environment.
7) The capital markets in India are one of the fastest-growing markets in the
world, attracting huge foreign investments. A lot of international companies
have started outsourcing and setting up international operations in the
country.
8) The country is self-sufficient in agriculture and rich in natural resources.
9) India is a part of BRICS group of nations comprising Brazil, Russia, China and
South Africa. India has developed vibrant trade links with these nations. 46
 Identification of Business Opportunities : Models For
Opportunity Evaluation
Business opportunity evaluation is the process of evaluating a business
opportunity and developing it into an effective business model.
The following section discusses two models to evaluate business
opportunity.
They are the RAMP Model and the Seven-domain Framework by John
Mullins.

47
 Identification of Business Opportunities : Models For
Opportunity Evaluation-The Ramp Model
While analysing your business idea, it can be passed through the RAMP test
to see if it is truly a valid business opportunity.
RAMP is an acronym for four factors – return, advantage, market, and
potential. Let us look at each factor.
1) Return on investment – Ask the following questions :
❖ Will your revenues be higher than your expenses? Is the business
profitable?
❖ How much time will the business take to break even?
❖ How much investment is needed to start the business? How are you going
to raise this investment?
❖ What is the exit strategy?
2) Advantages – Ask the following questions :
❖ What are the barriers to entry?
❖ What will be your distribution channel for selling your product?
❖ Do you have a proprietary advantage such as a patent or exclusive license
on what you will be selling?
❖ What is the cost structure taking into account things like suppliers and
sourcing? 48
 Identification of Business Opportunities : Models For
Opportunity Evaluation-The Ramp Model
3) Market – Ask the following questions :
❖ Is there a value proposition? What is the need you will fill or problem you
will solve?
❖ How do you define the targeted market? Are you selling to consumers?
Businesses? What are the demographic features of your targeted market?
❖ What per cent of the market do you believe you could gain? How fast is the
market for your product growing?
❖ How is the competition? What will be the price of your product?
4) Potential – Ask the following questions :
❖ Does the team have the potential to successfully launch and sustain the
business? What will be the nature of the business entity (eg., sole
proprietorship, partnership, cooperative, etc.)?
❖ Is the business concept compatible with the business mission of the team?
❖ What is the risk involved? What is the reward for the founders and
investors if the company succeeds?
❖ How will you differentiate your company from what is already out there?

49
 Identification of Business Opportunities : Models For
Opportunity Evaluation-Mullins’s Seven-domain
Framework
Successful entrepreneurship comprises three critical elements-market,
industry, and the key people that make up the entrepreneurial team.
John Mullins of the London Business School has developed a seven-domain
model for evaluating entrepreneurial opportunity. The domains are :
1) Market domain-macro level
2) Market domain-micro level
3) Industry domain-macro level
4) Industry domain-micro level
5) Team domain-aspirations
6) Team domain-capability of execution
7) Team domain-connections or networks
These seven domains address the following central elements in the
assessment of any entrepreneurial opportunity:
❖ Are the markets and the industry attractive?
❖ Does the opportunity offer compelling customer benefits as well as a
sustainable advantage over other solutions to the customer’s needs?
❖ Can the team deliver the results they seek and promise to others? 50
Thanks and Regards

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