Entrepreneurship In The New

Millennium

Module - 01
Entrepreneurship – Meaning and Concept
• Entrepreneurship is the act of being an entrepreneur.

•French word ‘Entrependre’ and German word ‘uternehmen’ both

referring to individuals who undertakes an ‘endeavor’.

•Hence, anyone who exhibits the characteristics of self-development,

creativity, self-decision making and risk taking.

• According to oxford dictionary Entrepreneur is ‘one who organizes and

manages enterprise involving high risk’. But researches indicates that
entrepreneurs need not necessarily be high risk takers, however, they
reduce risk and increase likelihood of success.
Entrepreneur – Different Perspective-Nature
• An Economist defines an entrepreneur as one who brings
resources, labour, material and other assets in to combinations
that make their value greater than before and also one who
introduces changes, innovations and a new order.
•A Psychologist defines an entrepreneur as a person who is
typically driven by a psychological force, which create a desire to
obtain or attain something.
•As per sociologist a person whose actions would determine social
status & contribute to societal dev.
•As per Management expert a person who has a vision and
generates action plan to achieve it.
 Concept - Changing Definition
1. Richard Cantillon (1755)
• Entrepreneur is a person bearing risk.
• First person to recognize the role of entrepreneur
in economy as a economic function than social
function.
• Stated farmer as a entrepreneur, who promises to
pay fixed sum of money to landowner, with out
assurance of the profit he will drive.
• Function of entrepreneur and not his personality
 2. Jean Baptiste Say (1800)
• An Agent combining all factors of production.
• Special personal qualities
•Unlike, Cantillon, Say did not emphasize uncertainty in
his definition.
•Analyzed central function of the entrepreneur
independent of any other social framework
 3. Frank Knight (1921)
• Recipient of pure profits. Pure profit is bearing the cost of
uncertainty.
•Discusses uncertainty and risk.
•Involves primary and secondary part
a. Primary problem or function is deciding what to do and
how to do
b. Doing things and actual execution of activity, becomes in
real sense a secondary part.
 Drucker’s Views on Entrepreneur
“Innovations is the specific tool of entrepreneurs, the
means by which they exploit changes as an opportunity for
a different business or a different service.
It is capable of being presented as a discipline, capable of
being learned and practiced. Entrepreneurs need to search
purposefully for the sources of innovation, the changes
and their symptoms that indicate opportunities for
successful innovation. And they need to know and apply
the principles of successful innovations.”
• Innovation at work, must be market focused /driven,
Entrepreneurial Characteristics – Indian Perspective
1. Vision : Dream and visualizing the ways and means to
achieve, visualizing market demands, socio-economic
and technological environment
• Without the vision of making a big mark on the mobile
industry Dhirubhai and now Anil Ambani could not
have made what Reliance Communication (An Anil
Dhirubhai Ambani Group) is today.
2. Knowledge : Conceptual knowledge and technicalities
of technological, operational, financial & market
dynamics.
• Without sound knowledge of computers Naryan
murthy could not have made Infosys.
3. Desire to Succeed
• Constantly work to achieve higher goals.
• Without a desire to succeed constantly Mukesh Ambani
would not have planned to ventured into Retail, Real
Estates and Biotech.
4. Independence
• Needs independence in work and decision making
without following rules of thumb and make their own
rules and destiny.
• Without a desire for independence, Sabeer Bhatia would
not have quit his job to start enterprise own his own and
created Hotmail.com and Arzoo.com
5. Optimism
• Highly optimistic about achieving their vision.
• Without optimism Narayanmurthy (who took loan
from his wife as not having enough finances) would
not have left a lucrative job and created Infosys.
6. Value Addition
• Not rule of thumb , but a constant desire to introduce
something new to existing business.
• Create, innovate or even add value to the existing
products.
• Without addition of ‘life time free incoming calls’ Tata
Indicom would not have been able to create space in
already saturated mobile markets.
7. Leadership
Exhibits qualities of a leader -Good Planners, Organizers,
Good Communication Skills, Empathetic toward their
employees, good decision-makers, initiative to
implement plans, result oriented
8. Hard working
• At time also called as workaholics.
• Continuous efforts to achieve success and know that
there is no substitute for hard work
9. Desire to control over their own fate
• Do not move in herds like sheep but pave own paths.
• Do not believe in luck or destiny but create their own
destiny.
 10. Risk-Taking Ability
• Frank Night has identified risk-taking ability as the most integral
element in defining entrepreneurial characteristics.

•View risk as Career risk, financial risk, psychological risk(Stress).

 CHARACTERISTICS OF AN
ENTREPRENEUR
1. Calculated Risk-taker
2. Innovator
3. Organiser
4. Creative
5. Achievement Motivated
6. Technically Competent
7. Self-confident
8. Socially Responsible
9. Optimistic
10. Equipped with Capability to drive
 11. Blessed with Mental Ability
12. Human Relations Ability
13. Communication Ability
14. Decision-Making
15. Business Planning
16. A venture Capitalist
17. Visionary
18. Entrepreneur make significant differences
19. Ability to Spot and Exploit Opportunities
20. Courage to Face Adversities
21. Leadership---An essential trait of the entrepreneur
 Classification of Entrepreneurs
• Entrepreneurs are broadly classified according to the types
of business, use of profession skills, motivation, growth and
stage of development.
•Clearence Danhof classifies entrepreneurs on the basis of
stage of economic development; some other have classified
on the basis of their functions and characteristics.
•In fact, differentiating between entrepreneurs is to study
similarity in grouping, differences in various groups and
factors and consequences of entrepreneurship in different
population.
1. According to timing of venture creations
a. Early Starters
• Start venture with little or no full-time work experience
• Often from family business
• Suhas Gopinath started his company Gopals Inc. at the age
of 14, in USA as Indian laws do not permit a minor to run a
company.
b. Experienced
• Spent a few yrs in family business or a large company.
• Usually, the venture is related to the same business as
previously engaged in.
• Narayan Murthy together with his like minded
professionals started Infosys at the age of 35 years
c. Mature

• Very senior professionals, some at the level of CEO

• Very high confidence and desire to do things in a
way that may not be totally acceptable to their
employers.
• Ashok Soota and Subroto Bagchi quit Wipro to start
Mindtree.
• BVR Subbu, ex-CEO of Hyundai India, recently
started a venture that brought the plant of Daewoo
in India.
2. According to type of business
a. Business Entrepreneurs :

• Conceive an idea for a new product/service and then

create business to materialize idea in reality.
• Tap both production and material resources to develop
new business opportunity.
• Oftenly small business entrepreneurs with small business
units
• eg. Printing press, advertising agency, textile processing
house, readymade garments or confectionary.
b. Trading Activities not manufacturing work
• Identifies potential markets, stimulates demand and creates
interest and demand among buyers to go in for his product.
• Can be engaged in both domestic &overseas trade.
• Whole sale trade, retail trade, Mall trading, exporters, importers,
stock trading, real estate.

c. Industrial Entrepreneur
• Ability to convert economic resources and technology into
profitable venture
• Essentially a manufacturer, identifies potential needs and starts
industrial units for new products.
d. Corporate Entrepreneur
• Individual who plans, develops & manages a corporate body.
• Corporate body is a form of business organisation, one body
of many individuals, large corporations, which are registered
as separate legal entity under some statute or act
• Eg. Company regd under companies act, or trust under trust
act.
e. Agricultural entrepreneur
• Agricultural activities such as raising & marketing of crops,
fertilizers and other inputs of agriculture.
• Motivated to raise the productivity through mechanization
and technology.
• Plantation, horticulture, dairy, forestry, floriculture, animal
husbandry, poultry, seeds.
3. According to use of technology
a. Technical Entrepreneur
• Essentially an entrepreneur of craftsman type, develops
high quality goods due to craftsmanship.
• Concentrates more on production than marketing.
• Introduction techniques, innovations for production.

b. Non-technical Entrepreneur
• Not concerned with technical aspect of production, but
developing alternative distribution strategies to promote
their business.
c. Professional Entrepreneur
• Interested in establishing a business but does not
have interest in managing or operating once it
established.
• Professional entrepreneur sells out running
business and starts another venture with the sales
proceeds.
• Such an Entrepreneur is dynamic who conceives
new ideas to develop new projects.
4. According to Motivation
a. Pure Entrepreneur
• Motivated by psychological and economic
rewards.
• Undertakes entrepreneurial activities for personal;
satisfaction in work, ego or status.
b. Induced Entrepreneur
• Induced to take entrepreneurship due to policy
measures of the govt that provides assistance,
incentives, concessions and overhead facilities to
start ventures.
c. Motivated Entrepreneur
• Desire for self-fulfillment is the motivation
• Making and marketing new products for
consumers
• If successful, further motivated by reward in term
of profit.
d. Spontaneous Entrepreneurs
• Start business out of their natural talents
• Initiative, boldness and confidence as motivation
• Strong conviction and confidence in their ability.
5. According to Growth
a. Growth Entrepreneur
• Takes up a high growth industry
• Chooses an industry which has sustained growth
prospects.
b. Super-Growth Entrepreneur
• Those entrepreneur who have shown enormous
growth of performance in their venture.
• The growth performance is identified by the
profitability and liquidity of funds.
6. According to stage of development
a. First-generation Entrepreneur
• One who starts not from family business
• Innovator, combining different skills and
technologies to produce marketable products or
service.
b. Modern Entrepreneur
• One who undertakes those ventures which go
well along with changing demand and suit in the
current marketing needs.
c. Classical Entrepreneur
• Concerned with customer and marketing needs
through the development of self-supporting
ventures.
• Stereotype who aims to maximize economic
returns at a consistent level with the survival of
the firm with or without the element of the
growth.
7. Classification based on Socio-cultural Variables
a. Entrepreneurs from business family
• Few socio-cultural groups have dominated
business scene in India, prominently , Marwadi,
Gugrati, Parsee, Sindhi communities. Tatas, Birlas,
Wadias and Singhanias are all from business
community.
• Entrepreneurship is easier for someone from
business family or business community as having
solid support structure.
b. Women entrepreneurs
• Progressive laws & incentives have boosted women
presence in entrepreneurial activities in diverse fields.
• Kiran Majumdar Shaw founded Biocon, which is now
a leading Biotech firm in India.
c. Social Entrepreneurs
• As per Ashoka – Innovators, a global non-profit
organization, a social entrepreneur is one who
recognizes the part of society which is stuck and
provides new ways to get it unstuck.- child upliftment,
environment, women empowerment, blind, social
unprivileged.
• Verghese kurien of Amul, Rippan Kapur of CRY, Jeroo
Billimoria of childline(toll free help)
8. Other Categories
a. Innovative Entrepreneurs
• Aggressive assemblage of information and
analysis of results from combination of factors.
• Aggressive in experimentations and one who see
and explore opportunity.
b. Adoptive or Imitating Entrepreneurs
• Readiness to adopt successful innovation.
• Follow innovators,imitate techniq & technologies.
c. Fabian Entrepreneurs
• Great caution and scepticism in practicing change.
• Shy & lazy, no will to introduce change or new
method.
d. Drone Entrepreneurs
• Refusal to adopt and use new opportunities to
make changes in production methods.
• Traditional ways, products losses its marketability
and operations becomes uneconomical.
e. Aspiring Entrepreneurs
• Have dream of starting a business, yet not made
the leap from their current employment into the
uncertainty of a startup.
f. Lifestyle Entrepreneurs
• Develop an enterprise that fits their individual
circumstances and style.
• Basic intention is to earn an income for
themselves & their families.
g. Mompreneurs
• Homemaker entrepreneur
h. IT Entrepreneurs
• DBMS, WWW, hotmail, kundli, portals, KIOSKs.
i. Entrepreneurs - intra+entrepreneur
• Person within large corporations who takes direct
resp -onsibility for turning an idea into profitable
finished products through innovations & assertive risk
taking
 INTRAPRENEUR
The term ‘intrapreneur’ was coined in the United States of
America in the late seventies.
Gifford Pinchot defined intrapreneurs as the persons who resigned
from their well paid executive positions to launch their own
ventures. Gifford devised the way by which such executives
could be retained in the industry and their entrepreneurial urge
was also satisfied by their bosses.
So a system was devised whereby such executives would operate as
entrepreneurs with full independence and autonomy
but with
in the organisation.
 Difference between entrepreneur and
intrapreneur
1. An entrepreneur is an independence person who starts his
venture and bears full risk of his failure and enjoys the fruit of
his success whereas intrapreneur is partially independent and
is sponsored by the corporation in which he is working. He is
also not liable to bear the losses in case of his failure.
2. An entrepreneur raises the finance from various sources and
also guarantees their return whereas an intrapreneur does not
own responsibility to raise the capital or to return it.
3. An entrepreneur has no relation with any organisation
whereas an intrapreneur operates within the organisation
where he is working.
 Benefits of Entrepreneurship
The opportunity to:
• Create your own destiny
• Make a difference
• Reach your full potential
• Reap impressive profits
• Contribute to society and to be recognized
for your efforts
• Do what you enjoy and to have fun at it
Potential Risks of Entrepreneurs
Managing Risk
 Three points to consider:

• Managing risk is at least as critical to success as is the core

plan
(This stuff matters)

• Most new entrepreneurs do not manage risk… they

gamble on success
(Most people do it badly)

• There are simple ways to incorporate managing risk into

your plan
(It’s easy to do it well)
 The Revenue J Curve

This is why we like to build high-growth businesses!

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

time
 The growth curve we expect, with
costs
We know there will be extra costs:
 technology has to be reworked

 recruitment costs are higher than expected

 margins are lower than expected

 compliance costs are higher than expected

 etc

time
 The growth curve we get
It just takes longer!
 Sales take longer to close

 Product completion is late

 Key team members have to be replaced

 etc

time

All too often, the extra time and extra cash required is too
much, and the company flatlines… (below breakeven!)
 Global company

Typical Risk Profile distributes our

product

Government
project gives a
sudden sales lift
$
Partner found to
share dev costs

time

Key developer
leaves project Competitor
Product fails key sues us for
Beta test infringing IP
 Extreme bootstrap risk profile:
Early risk is very low because cash outflow and activity are minimal
Future risk is much higher because you don’t have the resources to:
-Thoroughly scope the market opportunity
-Understand competitors
$ -Modify dysfunctional founder behaviours
-Ensure product is optimally designed
- Get to market quickly
-Etc

time
Bootstrapping defers risk, and
often increases it in the long run
Many bootstrapped start-ups ‘fade-away’ as
they get to the risky stage because they have no
capability to manage that risk
 Managing risk is at least as important as
core strategy

Core
Move the risk curve as high
strategy
as possible
$

time
Most entrepreneurs don’t manage risk well

• We know this because:

– Many young companies fail because of bad events
they could have prepared for, but didn’t; and
– few young companies ‘get lucky’ (upside
preparedness); and
– few young companies achieve their profitability
forecasts (core strategy)
MOST YOUNG COMPANIES WHICH SURVIVE
DO SO BY WEATHERING THE STORMS OF
ADVERSITY WHICH SWEEP OVER THEIR
UNPREPARED BUSINESSES
 Risk is variability in outcome
• The goal:
– Take out, or minimize all downside risk factors
– Enhance the likelihood of upside risk events occurring
• The Process:
– Create your business plan
– Analyse the plan’s risk factors (implied or stated)
– Develop strategies to mitigate downside risk, and
enhance upside events
– Add the new strategies to the plan!
 Decide how active you need to be in
managing each risk factor
• Determine probability of occurrence and potential
impact.
– If both are high, then detailed risk planning is required.
– Otherwise, broad-brush plans may suffice.

• Remember:
– If you could manage out all downside risk factors, you
would automatically succeed in building your business…
– you can’t… so manage in some upside risk as well, to
maximise your likelihood of success.
 Sample of downside risk factors
Product Risk Probability Impact
•The technology doesn’t functionally perform as expected
•Product development is late
•Core technology becomes obsolescent
•Product failure rates are too high

Financial Risk Probability Impact

•It takes longer to raise funds than expected
•Operational cash burn is higher than budgeted
•Revenues stay too long in receivables
•Core technology prices increase

Market Risk Probability Impact

•Competitors release superior or earlier product
•Competitors gain control of the target customers
•Competitors claim IP infringement

Operational Risk Probability Impact

•Key staff leave
•Product delivery dates are missed
•IT systems fail
Three points we considered:

• Managing risk is at least as critical to success as is the core plan.

(Success is heavily influenced by how we manage risk)

• Most new entrepreneurs do not manage risk… they gamble on

success.
(Most ‘risk mitigation strategies’ are really just comments in a
plan)

• There are simple ways to incorporate managing risk into your plan.
(Work out what risks are important to manage, and plan as
comprehensively for them as you do for your core strategy)
Managing risk turns you from a
gambler to an entrepreneur
 Types of Start-ups
1. Lifestyle firm
Is privately held and usually achieves only modest growth due to
the nature of the business, the objectives of the entrepreneur, and
the limited money devoted to research and development. This types
of firm may grow after several years to 30-40 employees. A
lifestyle firm exists primarily to support the owners and usually has
little opportunity for significant growth and expansion.

2. Foundation companies
Is created from research and development and lays the foundation
for anew business area. This firm can grow in 5-10 years from 40
to 400 employees.
This type of start-up rarely goes public, it usually draws the interest
of private investors only, not the venture-capital community.
3. High-potential venture
Is the one that receives the greatest investment interest and
publicity. While the company may start out like a foundation
company, its growth is far more rapid. After 5-10 years, the
company could employ around 500 employees. This firm also
called gazelles and are integral to the economic development of
an area.
 Myths of entrepreneurship
1. Entrepreneur s are born not.
2. They are academic and social misfits
3. They fit an ideal profile
4. All you need is money and luck to be an entrepreneur
5. A great idea is only ingredient in a recipe for success.
6. My best friend will be a great business partner.
7. Having a boss is a great fun.
8. I can make lots of money.
9. I’ll definitely become successful
10.Life must be much simpler if I work for myself.
#1. Entrepreneurship is a “young person’s game;” most
first-time entrepreneurs are either in college or right out
of it

FALSE
In fact, the average age of a first-time entrepreneur starting a technology
business is 39! And since this is an average, that means that just as many
start-up founders are older as are younger.
#2. Successful entrepreneurs are those who come up
with the most creative, original ideas for their businesses
FALSE
•It depends on what you mean by “creative” and “original.”
• According to some studies, anywhere from 70% - 90% of the ideas for a new
business come from an entrepreneur’s previous employment or existing
business contacts.
•In other words, the more experience you get working for someone else, the
more likely you are to come up with an idea for a new business.
#3. Most entrepreneurs are motivated by money or
“greed”
FALSE
•And not just “false,” but way, way off.
•Most entrepreneurs are motivated by a desire to work for themselves, and a
passion for solving problems – particularly difficult, entrenched human
problems.
• Even the most successful entrepreneurs will tell you that if you’re “in it for
the money,” get out now; it’s much easier to make money working for
someone else!

Sources:
Scott Shane, The Illusions of Entrepreneurship, Yale University Press
Guest lectures, Lectures in Entrepreneurship course, University of Illinois, 2001-2008
#4. Most successful entrepreneurs – especially in high-
tech companies – have Ph.Ds in science
FALSE
•6% of U.S. born tech company founders have a high school diploma or less
•2% have an associates’ degree, some college, or a certification
•44% have a bachelors degree
•30% have a masters
•4% have an MD
•4% have a JD
•Only 10% of high-tech company founders have a Ph.D!
#5. Entrepreneurs are “born different”
FALSE
•In fact, a good number of people who become entrepreneurs never planned
to be.
•Although there are correlations between certain types of behavior or
psychological traits and entrepreneurship, it seems that as many successful
entrepreneurs learn these skills and acquire these attributes as are “born”
with them.
•And we know that some of the most significant personality traits associated
with entrepreneurship – such as “self-efficacy” - CAN be taught
#6. To be successful, an entrepreneur needs a degree
in business
FALSE
• Although many self-employed people have business degrees, there is a stronger
correlation between a degree in the sciences or engineering
• According to a recent study, 34% of U.S. founders of high-tech companies held
degrees in business, finance or accounting
• 47% held degrees in STEM-related fields (Science, Technology, Engineering, or
Mathematics
#7. Most entrepreneurs are millionaires

FALSE
•Most new businesses fail
•The average self-employed person earns less than they would working for
someone else
•Entrepreneurs work more hours, on average, than those working for someone
else
#8. You can’t be an entrepreneur without venture capital

FALSE
• only .03% of new companies are financed by venture capital
• the average amount of money used to start a business is between $15,000 -
$20,000
• the most common source of this money is the entrepreneur’s savings; not banks,
or even loans from friends and family
• 65% of entrepreneurs finance their companies use some form of personal debt
• fewer than 1 in 12 start-ups gets investment money (equity financing) from family
and friends
 #9: Entrepreneurs are happier than those who work for other people

TRUE
• But! It depends upon what measure you are looking at
• Remember, entrepreneurs work more hours than those working for someone else
• And, they tend to make less money
• And, most new businesses fail
• That said, self-employed people report HIGHER job satisfaction
• dramatically higher – 62.5% versus 45.9%
• Why? Autonomy, flexibility, greater impact and greater control.
 FACTORS AFFECTING
ENTREPRENEURIAL GROWTH
1. ECONOMIC FACTORS

a) Lack of adequate overhead facilities:

Profitable innovations require basic facilities like transportation, communication
power supply etc. They reduce cost of production and increase profit.

b) Non availability of capital

Inventions are capital oriented. In less developed countries most capital equipment
have to be imported which involves foreign exchange which acts as a difficult problem.

c) Great risk
Risk is high in case of less developed countries as there is lack of reliable information ,
markets for good and services is small etc.

d) Non availability of labor and skills

Though there is abundant labor supply there is generally scarcity of skills at all levels.’
2. SOCIAL FACTORS
A society that is rational in decision making would be favorable
for decision making. Education, research and training is given
less importance in less developed countries therefore there is
very little vertical mobility of labor.
3. CULTURAL FACTORS
Religious, social and cultural factors also influence the individual
taking up an entrepreneurial career, in some countries there is
religious and cultural belief that high profit is unethical. This
type of belief inhibits growth of entrepreneurship.
4. PERSONALITY FACTORS
• In less developed countries the entrepreneur is looked upon
with suspicion.
• Public opinion in the less developed nations sees in the
entrepreneur only a profit maker and exploited.
5. MOTIVATION

• Motivation is the act of stimulating someone or oneself

to get a desired course of action, to push the right
button to get the desired results.

MOTIVATING FACTORS
• Education background
• Occupational experience
• Family background
• Desire to work independently in manufacturing line
• Assistance from financial institution
• Availability of technology
• Other factors
 Role of Entrepreneurship in Economic
Development
The entrepreneur who is a business leader looks for
ideas and puts them into effect in fostering economic
growth and development. Entrepreneurship is one of the
most important input in the economic development of a
country. The entrepreneur acts as a trigger head to give
spark to economic activities by his entrepreneurial
decisions. He plays a pivotal role not only in the
development of industrial sector of a country but also in
the development of farm and service sector. The major
roles played by an entrepreneur in the economic
development of an economy is discussed in a systematic
and orderly manner as follows:
(1) Promotes Capital Formation:

Entrepreneurs promote capital formation by mobilizing

the idle savings of public. They employ their own as
well as borrowed resources for setting up their
enterprises. Such type of entrepreneurial activities lead
to value addition and creation of wealth, which is very
essential for the industrial and economic development
of the country.
(2) Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale

employment to the unemployed which is a chronic
problem of underdeveloped nations. With the setting up
Of more and more units by entrepreneurs, both on small
and large-scale numerous job opportunities are created
for others. As time passes, these enterprises grow,
providing direct and indirect employment opportunities
to many more. In this way, entrepreneurs play an
effective role in reducing the problem of unemployment
in the country which in turn clears the path towards
economic development of the nation.
(3) Promotes Balanced Regional Development:

Entrepreneurs help to remove regional disparities

through setting up of industries in less developed and
backward areas. The growth of industries and business
in these areas lead to a large number of public benefits
like road transport, health, education, entertainment, etc.
Setting up of more industries lead to more development
of backward regions and thereby promotes balanced
regional development.
(4) Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial

and business activity. Industrial development normally
lead to concentration of economic power in the hands of
a few individuals which results in the growth of
monopolies. In order to redress this problem a large
number of entrepreneurs need to be developed, which
will help reduce the concentration of economic power
amongst the population.
(5) Wealth Creation and Distribution:

It stimulates equitable redistribution of wealth and

income in the interest of the country to more people and
geographic areas, thus giving benefit to larger sections
of the society. Entrepreneurial activities also generate
more activities and give a multiplier effect in the
economy.
(6) Increasing Gross National Product and Per
Capita Income:

Entrepreneurs are always on the look out for

opportunities. They explore and exploit opportunities,,
encourage effective resource mobilization of capital and
skill, bring in new products and services and develops
markets for growth of the economy. In this way, they
help increasing gross national product as well as per
capita income of the people in a country. Increase in
gross national product and per capita income of the
people in a country, is a sign of economic growth.
(7) Promotes Country's Export Trade:

Entrepreneurs help in promoting a country's export-

trade, which is an important ingredient of economic
development. They produce goods and services in large
scale for the purpose earning huge amount of foreign
exchange from export in order to combat the import
dues requirement. Hence import substitution and export
promotion ensure economic independence and
development.
(8) Induces Backward and Forward Linkages:

Entrepreneurs like to work in an environment of change

and try to maximize profits by innovation. When an
enterprise is established in accordance with the
changing technology, it induces backward and forward
linkages which stimulate the process of economic
development in the country.
(9) Facilitates Overall Development:
Entrepreneurs act as catalytic agent for change which
results in chain reaction. Once an enterprise is
established, the process of industrialization is set in
motion. This unit will generate demand for various
types of units required by it and there will be so many
other units which require the output of this unit. This
leads to overall development of an area due to increase
in demand and setting up of more and more units. In
this way, the entrepreneurs multiply their
entrepreneurial activities, thus creating an environment
of enthusiasm and conveying an impetus for overall
development of the area.
 TIPS TO BECOME A SUCCESSFUL
ENTREPRENEUR
1. Acquire sufficient and all-round knowledge about an enterprise you intend
to start.
2. Be conservative in calculating income and lavish in calculating expenditure.
3. Don’t expect quick and easy returns from your venture.
4. Be prepared for delegation of work when needed.
5. Take moderate risks; neither too high nor too low.
6. Plan systematically and march ahead step by step according to the plan to
achieve your goal.
7. Time management is necessary to maximum utilisation of your resources.
8. Collect maximum information about your competitor on continuous basis.
9. Don’t avoid or run away from problems.
10. Take the help of experts and experienced persons or rntrepreneur,when in
doubt.