ENTREPRENEURSHIP

LECTURE NOTES 2

Prepared By Mr. Rahim

ENTREPRENEURSHIP DEVELOPMENT

ENTREPRENEURAL SKILLS

If you are thinking of starting a business, you

will need a broad array of entrepreneurial skills
to succeed in today's competitive market. You
must possess basic skills necessary to enable you
to start, develop, finance, and market your own
home business enterprises
There are a number of qualities and skills you need to
have, including personal attributes, business skills and
management capability.

While you may not have all of them right now, there
are five basic skills you really must have to run any
kind of business. These five skills are:

Prepared By Mr. Rahim

1.Sales and marketing skills
2.Financial know-how
3.Self-motivation skills
4.Time management skills
5.Administration skills

Prepared By Mr. Rahim

ROLE OF ENTREPRENEURSHIP
IN ECONOMIC DEVELOPMENT
Economic development essentially means a
process of upward change whereby the real
per capital 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.
The economic history of the presently advanced
countries like USA, Russia and Japan supports
the fact that economic development is the
outcome for which entrepreneurship is an
inevitable cause. It is now a widely accepted fact
that active and enthusiastic entrepreneurs can
only explore the potentials of the countries
availability of recourses such as labour, capital
and technology.
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 look for high achievements. He is the
catalyst for social change and works for the
common good.
They looks for opportunities, identifies them
and seizes 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.

Entrepreneurship helps in the process of

economic development in the following ways :
1) Employment Generation: Growing
unemployment particularly educated
unemployment is the problem of the nation. The
available employment opportunities can cater
only 5 to 10 % of the unemployed. Entrepreneurs
generate employment both directly and
indirectly. Directly, self employment as an
entrepreneur and indirectly by starting many
industrial units they offer jobs to millions. Thus
entrepreneurship is the best way to fight the evil
of unemployment.
2) National Income : National Income consist of the
goods and services produced in the country and
imported. The goods and services produced are for
consumption within the country as well as to meet
the demand of exports. The domestic demand
increases with increase in population and increase
in standard of living. The export demand also
increases to meet the needs of growing imports
due to various reasons. An increasing number of
entrepreneurs are required to meet this increasing
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. When the
industries are concentrated in selected cities,
development gets limited to these cities. A rapid
development is when the new entrepreneurism
grow at a faster rate, in view of increasing
competition in and around cities, they are forced
to set up their enterprises in the smaller towns
away from big cities. This helps in the
development of backward regions.
4) Dispersal of economic power : Industrial
development normally may lead to
concentration of economic powers in a few
hands. This concentration of power in a few
hands has its own evils in the form of
monopolies. Developing a large number of
entrepreneurs helps in dispersing the economic
power amongst the population. Thus it helps in
weakening the harmful effects of monopoly.
5) Better standards of living : Entrepreneurs
play a vital role in achieving a higher rate of
economic growth. Entrepreneurs are able to
produce goods at lower cost and supply
quality goods at lower price to the
community according to their requirements.
When the price of the commodities
decreases the consumers get the power to
buy more goods for their satisfaction. In this
way they can increase the standard of living
of the people.
6) Creating innovation: An entrepreneur is a
person who always looks for changes. Apart
from combining the factors of production, he
also introduces new ideas and new
combination of factors. He always tries to
introduce newer and newer technique of
production of goods and services. An
entrepreneur brings economic development
through innovation.
7) Entrepreneurship also helps in increasing
productivity and capital formation of a nation:
In short, the development of the
entrepreneurship is inevitable in the economic
development of the country. The Role played by
the entrepreneurship development can be
expressed in the following words: “Economic
development is the effect for which
entrepreneurship is a cause”
Functions of Entrepreneurship
Traits of The Successful
Entrepreneur
Business has changed significantly in recent
years as a result of computers and the
Internet - including web pages, e-mail and
everything else associated with the
worldwide web.
Telephone communication has also changed
the way we do business, with the advent of
cell phones and voice mail. However, even
with all these technological advancements,
the traits that make a person succeed in
business can be traced back to our
grandparents' days.
So before you decide to launch your own
business, first evaluate whether or not you
have the traits of an entrepreneur.
Goal-Setter
Most successful people continually set
goals. Many started at an early age; for
example, they may have set a goal to excel
in certain sport, or in a specific subject in
school.
If they wanted to buy something, and knew
that their parents couldn't afford it, or
wouldn't spend the money, they earned
the money themselves.

They may have set up lemonade stands,

mowed lawns for neighbors, or delivered
newspapers. As they became older, they
developed other goals and worked to
achieve them.
They always have a vision for their future
and never lose sight of it. As time goes on,
they continue revising and setting new
goals. If you want to succeed in business,
get in the habit of setting goals.
.

Knowing Your Strengths and Weaknesses

Another trait of successful entrepreneurs
is they know their strengths and
weaknesses
Rather than letting their egos get in the way,
they admit when they need to learn new
skills or take other steps to improve
themselves or their business.

This is especially crucial in light of rapid

changes in technology. You must realize that
learning is a life-long process, and
continually strive to improve your skills and
knowledge.
Maximizing Opportunities
Successful entrepreneurs are always looking
for opportunities. Whether they are already
in business or just getting started, they have
an attitude that expects opportunities, and
they invest the time necessary to find the
opportunities that will work for them. Even
those already running a successful business
remain open to new possibilities.
Taking advantage of opportunities does not mean
acting impulsively. It is important to evaluate
each opportunity with questions such as:
1) Is this really as good as it sounds?
2) Is this something I really want to be doing?
3). Do I have the required skills, or can I develop
them?
4) Will this help me to reach the financial goals I
have set for myself?
5) What impact will this have on my family?
Enjoy your Business
The successful entrepreneur has fun in their
occupation. While they might not enjoy every
aspect of their business, overall they enjoy their
work. One reason for that enjoyment is the
sense of satisfaction in knowing that the
business is theirs, and that they are building for
the future.
Know Your Business/ Know Your Competition
You must know your business inside out to
succeed. That includes learning everything you
can about your competition, and understanding
how your own business measures up against
competitors. It also includes knowing exactly
where your business stands in the context of the
financial goals you have established
Effectively Manage Budgets and Finances
Successful people know how to effectively
manage budgets and finances. They know how
much they have borrowed, the interest rates
they are paying, and anything else that can affect
their business. They always save for a rainy day.
Understanding the principle that they must
spend money to make money, they postpone
personal expenditures such as a new house, car
or vacation, until they can afford it.
Never Settle for Second Best
Another trait of top entrepreneurs is they never
settle for second best. Striving for excellence,
they set standards for themselves as well as
their products and services. If they work with an
outside company and that company sends them
a sub-standard product, they return it. They look
for the best products and workmanship in the
price category they have established.
If they realize they haven't done a good job or
haven't done it right, they will do it again or take
other actions to ensure the customer is satisfied.
For this reason, their customers remain loyal.
Remember, repeat business is one of they keys
to long-term success. If you don't make a good
impression the first time, you are not likely to
get a second chance.
Hard Work
Successful people willingly work long hours
because they know it is necessary to move
the business forward. This is especially true
in the first few years after launching a new
business. An owner wears many hats:
selling, bookkeeping, handling customers,
setting up appointments, meeting
deadlines, and so forth.
Get Help When Necessary
Another trait of top business people is they know
when to get help. Realizing they are not experts
in everything, they will contact other
professionals when warranted. They also realize
when the times comes that they can longer do it
all, and they delegate responsibility to an outside
source, independent contractor, or hire an
employee.
 SELF AND WAGE EMPLOYMENT OF ENTREPRENEURSHIP

Self-Employment is a situation in which an

individual works for himself instead of
working for an employer that pays a salary or
a wage. A self-employed individual earns his
income through conducting profitable
operations from a trade or business that he
operates directly.
• Advantage
• You can set your own hours
• Don’t need educational degrees or
certificates
• You are your own boss and can make
your own decisions
• You do the work you like
• Disadvantage
• You have to work many hours each day to
make any money
• Business income varies, but business
expenses are more constant (e.g., utilities,
supplies, marketing)
• You usually need capital to get started
• Responsibility for business success is
stressful
Wage Employment is a situation in which
others work as an hourly employee. They are
paid a certain amount per hour they work. ...
Many part time students work their way
through college by wage employment.
• Advantage
• You receive wages on a regular basis
• You can have opportunities for promotion
• Social contact with co-workers
• Less stressful, you can leave your work
behind at the end of the day
• Disadvantage
• You cannot set your own schedule
• Your work hours may not be convenient
for you
• You have no control over work conditions
• You have limited opportunities to make
decision
Entrepreneurship comes with its share of
ups and downs.

The most obvious advantage is the

opportunity to be your own boss. Being
in charge and making the important
decisions regarding your business can be
fulfilling, but it can also be challenging.
 CONTROL. You choose the work you
like to do and that makes the most of
your strengths and skills. The result can
be more job satisfaction.
EXCITEMENT. Entrepreneurship can be
exciting and many entrepreneurs
consider their work highly enjoyable.
Each day is filled with new opportunities
to challenge your abilities, skills, and
determination.
FLEXIBILITY. Entrepreneurs can
schedule their work hours around other
commitments, including spending
quality time with their families.
 FREEDOM. Freedom to work
whenever they want, wherever they
want, and however they want draws
many to entrepreneurship. Most
entrepreneurs don’t consider their
work actual work because they are
doing something they love.
 RATIONAL SALARY. As an
entrepreneur, your income is directly
related to your efforts and the success
of your business.
CONS

ADMINISTRATION. While making all

the decisions can be a benefit, it can also
be a burden. Being an entrepreneur
comes with a lot of paperwork that can
take up time and energy.
COMPETITION. Staying competitive is
critical as a small business owner. You
will need to differentiate your business
from others like yours in order to build a
solid customer base and be profitable.
LONELINESS. It can be lonely and scary
to be completely responsible for the
success or failure of your business.
NO REGULAR SALARY. Being an
entrepreneur often means giving up the
security of a regular paycheck. If
business slows down, your personal
income can be at risk.
WORK SCHEDULE. The work schedule
of an entrepreneur can be unpredictable.
A major disadvantage to being an
entrepreneur is that it requires more
work and longer hours than being an
employee
The End

Thank you
Prepared By Mr. Rahim