ENTREPRENEURSHIP

Entrepreneurship is generally said to be the practice of starting new venture in response to

perceived opportunities. It helps in the establishment of small scale business which results
into large organizations capable of creating numerous job opportunities.
Concept of Entrepreneur, Entrepreneurship and
Entrepreneurship Development

Entrepreneur: The word „entrepreneur‟ is derived from the French word “entreprendre‟
which means “to undertake”. The term entrepreneur was first brought up by Richard
Cantillon, a French baker in 18th Century to mean, “A person who is uncertainty bearer”.
Richard Cantillon was the first person who used the term entrepreneur for economic
activities. J.B.Say another Frenchman, expanded Cantillon‟s ideas and said that
entrepreneur is “an organizer who combines various factors of production to produce a
socially viable product”.

• Entrepreneur is a person who launches his own venture.

• He organizes, manages and takes the risk of developing those new products or processes
for which the market demand exists but these are not currently being supplied in the
market.
• An entrepreneur bears the risk of a new venture if there is a chance to earn profits.
Entrepreneurship and Entrepreneurship Development
• Entrepreneurship is a creative and innovative response to the environment.
• It is also the process of setting up a new venture by entrepreneur.
• Entrepreneurship is the mixture of many qualities and skills such as imagination, risk
taking ability to harness factors of production i.e. land, labour, technology and various
other intangible factors.
Entrepreneurship is the ability of a person to minimize the use of resources and to put
them into the process and get the maximum benefit of out it. He should take into
consideration quality, excellence and consumer awareness for the sustainability of his
business.

Musselman and Jackson -

Entrepreneurship is the investing and risking of time, money and effort to start a business
and make it successful.

Schumpeter –
Entrepreneurship is an innovative function. It is a leadership rather than an ownership.
Characteristics of Successful Entrepreneur: The following are the important
characteristics of an entrepreneur:

1) Innovation the essence of Entrepreneurship: Entrepreneurship is an innovative

function as it involves doing things in a new and better way. Innovation is the process of
doing new things. It can be of a new product, a new source of raw material a new
market, a new method of production, not yet applied in a particular branch or,
manufacturing etc.

2) Economic Activity: Entrepreneurship is basically concerned with the economic

activities i.e. production and distribution of goods and services. It is also concerned with
the optimum utilization of available factors of production and resources.

3) Creation of Value: Entrepreneurship is virtually a creative and a purposeful activity. It

leads to creation of new products, services, approaches, resources, technologies, and
markets that contribute some value to a community or marketplace.

4) Risk Bearing: Risk is an inseparable element of entrepreneurship. An entrepreneur

assumes the uncertainty of future. In the pursuit of profit, there is possibility of loss also.
5) Dynamic Process: Entrepreneurship is a dynamic function. Flexibility is the tool
towards successful entrepreneur. An entrepreneur should adopt all the changes in the
environment which bring useful opportunities for business.

6) Special Skills and Leadership: An entrepreneurship calls for special skills to

handle the situations as it unfolds. An entrepreneur must have the ability to lead and
manage in every situation. Entrepreneurship involves the ability to create and build
something from practically nothing. It is the ability to build a founding team to
complement the entrepreneur's skills and talents. An entrepreneurship can grow and
flourish only if its founders have required managerial and leadership skills.

7) Human Relations: Entrepreneurship is the ability to work with other people and
signing responsibility is a key to success. It is the ability to make a team, the efforts
of which would result in gaining for the enterprise in every aspect.
Types of Entrepreneurship

As there are different types of entrepreneurs, there are also different types of businesses
they create. Below are the main different types of entrepreneurship.

1. Small Business Entrepreneurship: Small business entrepreneurship is the idea of

opening a business without turning it into a large conglomerate or opening many chains. A
single-location restaurant, one grocery shop, or a retail shop to sell the handmade goods
would all be an example of small business entrepreneurship.
These individuals usually invest their own money and succeed if their business turns a
profit, which they live off of. They don't have outside investors and will only take a loan if
it helps continue the business.

2. Scalable Startup: These are companies that start with a unique idea; think Silicon
Valley. The hopes are to innovate with a unique product or service and continue growing
the company, continuously scaling up as time moves on. These types of companies often
require investors and large amounts of capital to grow their idea and reach multiple
markets.
.
3. Large Company: Large company entrepreneurship is a new business division created
within an existing company. The existing company may be well placed to branch out into
other sectors or it may be well placed to become involved in new technology.
CEOs of these companies either foresee a new market for the company or individuals
within the company generate ideas that they bring to senior management to start the
process.

4. Social Entrepreneurship: The goal of social entrepreneurship is to create a benefit to

society and humankind. They focus on helping communities or the environment through
their products and services. They are not driven by profits but rather by helping the world
around them.
1. Corporate Entrepreneurship
Corporate entrepreneurship (also known as intrapreneurship) is a process of creating new
products, ventures, processes, or renewal within large organizations.
It is typically carried out by employees working in units separate from the organization who
create and test innovations that are then assimilated back inside the broader organization.
Corporate entrepreneurs tend to explore new possibilities and seek ways in which the
organization’s current structure and process can enable innovation.
Similar to external entrepreneurs, corporate entrepreneurs identify opportunities, build
teams, and create something of value in order to enhance competitive position and
organizational profitability.
2. Entrepreneurs Inside
Entrepreneurs inside consist of employees who think and act entrepreneurially within
organizations. Although this sounds similar to corporate entrepreneurs (employees who
work for large, established organizations), there is an important difference: entrepreneurs
inside can exist and function in any type of organization, big or small, including government
agencies, nonprofits, religious entities, self-organizing entities, and cooperatives.
These types of entrepreneurs often need to gain inside support from senior managers or
other team members for their initiatives, which can be difficult if those people tend to resist
new ideas, or are keen to simply “stick to the company brief” rather than pushing
boundaries.
One of the biggest groundbreaking initiatives of 2014 was the launch of the “inglorious
vegetable” by entrepreneurs working inside the French supermarket chain
Intermarché as a way of reducing food waste.
3. Buying a Franchise
A franchise is a type of license purchased by an entrepreneur (franchisee) from an existing
business (franchisor) that allows the entrepreneur to trade under the name of that business.
Franchising can be a beneficial way for entrepreneurs to get a head start in launching their
own businesses, as they do not have to spend the same amount of time on marketing,
building the brand, developing processes, and sourcing product.
A franchise is often referred to as a turnkey operation. In other words, the franchisee turns
the key to open the door and is ready for business.
A franchisee not only pays the franchisor a lump sum to buy the franchise but also has to
pay royalties, which are a share of the proceeds based on sales revenue.

Top Franchise Business in India

Patanjali
Domino’s
Lenskart
First Cry
Lakme Business
DTDC Courier
Bikanervala
4. Buying a Small Business
Buying a small business is another way to enter the world of entrepreneurship. In
this arrangement, the entrepreneur is buying out the existing owner and taking
over operations. For some entrepreneurs this is a less risky approach than starting
from scratch.

5. Family Enterprising
A family enterprise is a business that is owned and managed by multiple family
members typically for more than one generation. What makes family enterprising
part of the portfolio of entrepreneurship types is that each generation has an
opportunity to bring the organization forward in new, innovative ways.
An entrepreneurial agenda to move the family business forward is essential to
business survival, as demonstrated by the fact that the survival rate of family
businesses transitioning from the first to the second generation is less than 30%.
However, another 50% of family businesses don’t survive when they move from
the second to third generation.
This may be because the family owners become stuck in the old ways of doing
things and are unwilling to change their business structure as a result.
6. Serial Entrepreneurs
serial entrepreneurs, also known as habitual entrepreneurs, are people who start
several businesses, whether simultaneously or one after another.
Not satisfied with just focusing on one business, serial entrepreneurs are
constantly looking out for the next big thing or exploring ways to implement their
diverse range of ideas.
Example: Elon Musk is best known for Tesla, but before joining the electric car
giant, he was a successful serial entrepreneur. He made and sold his own video
games, founded Zip2, a digital content company that helped other newspapers
and print media get online, and joined and expanded PayPal. While Musk has
revolutionized Tesla, he’s also working on his next venture, SpaceX.

7. Social Entrepreneurs
Social entrepreneurs are individuals who recognize a social problem and use
entrepreneurial principles to organize, create, and manage a venture to make
social change.
Social entrepreneurs are individuals with innovative solutions to society’s most
pressing and daunting social problems. They are ambitious and persistent,
tackling major social issues and offering new ideas for wide scale change.
Examples: ???????
 The Five Skills Most Important To The Practice of Entrepreneurship

1. The Skill of Play

The skill of play frees the imagination, opens up our minds to a wealth of
opportunities and possibilities, and helps us to be more innovative as
entrepreneurs.
2. The Skill of Experimentation
The skill of experimentation is best described as acting in order to learn: trying
something, learning from the attempt, and building that learning into the next
iteration.
In the context of entrepreneurship, experimentation means taking action, such as
getting out of the building and collecting real-world information to test new
concepts, rather than sitting at a desk searching databases for the latest research. It
involves asking questions, validating assumptions, and taking nothing for granted.

3. The Skill of Empathy

The skill of empathy is understanding the emotion, circumstances, intentions,
thoughts, and needs of others. Empathy is being able to relate to how others are
feeling because you have been in a similar situation yourself. Why is empathy so
important for an entrepreneur? Developing empathy is essential for truly
understanding the reality of being an entrepreneur as well as evaluating your own
ability to become an entrepreneur. Empathy allows entrepreneur to connect with
potential stakeholders in a more meaningful way, which could help to identify
unmet needs, leading to the creation of new products and services.
4. The Skill of Creativity
The skill of creativity requires a general openness to the world and relates to
unleashing our creative ability to create and find opportunities and solve
problems. Creating opportunities is also based on some of the principles: the
amount of resources you have, the ability to collaborate rather than compete, the
effort to build relationships, the knowledge regarding how much you can afford to
lose, and the willingness to leverage the knowledge that results from possible
failures along the way.

5. The Skill of Reflection

The skill of reflection helps make sense of all of the other actions required of play,
empathy, creativity, and experimentation. It helps codify our learning from
practicing the four other skills. Reflection makes us aware of feelings of
discomfort, helps us to critically analyze our own feelings and the knowledge we
possess, provides us with new perspectives, and allows us to evaluate outcomes
and draw conclusions.
Eight components of the practice of Entrepreneurship
1. Identify your desired impact on the world: This is a simple statement that
connects to your curiosity, drive, and motivation. To be successful at creating and
building a new business, a new strategy, a new product, or anything radically new
requires desire—you have to have a strong feeling to achieve something larger
than yourself.

2. Start with means at hand: Answer the following questions: Who am I? What
do I know? Whom do I know? The composite answer will help you understand
your current resource base—the resources you have available today that you can
use for immediate action.

3. Describe the idea today: The idea is identified by connecting your means to
your impact statement. What can you start to do today with what you have today?

4. Calculate affordable loss: Leaving one’s comfort zone is always perceived as

risky, but risk is relative. What is considered high risk to one may not seem high
risk to another; therefore, it can be quite difficult to calculate risk and use it as a
valid decision-making criterion. Rather than calculate risk, think about taking
action in terms of what you are willing to lose.
5. Take small action: Nothing drastic . . . the first action is just a small start to get
you going. No excuses here. You can do it. Once you calculate your affordable loss,
you control all the risk.

6. Network and enroll others in your journey: The Practice of Entrepreneurship

is about collaboration and co creation rather than competition. Sharing your ideas
and enrolling others in your journey will increase your resource base, expand the
possibilities available, and validate your idea.

7. Build on what you learn: Assess performance of your action. Keep in mind that
assessment is not about “killing” your new idea; it’s about making the idea better.
There is no right or wrong answer at this stage, just better. Expect and embrace
setbacks, and celebrate the learning. When Thomas Watson, the founder of IBM,
was asked about the key to success he responded, “Increase the rate of failure.”

8. Reflect and be honest with yourself: One question always arises: How do I
know when I should stop or keep going? The answer is easy. Quit only if you no
longer have the desire inherent in your impact statement, or if you have exceeded
your affordable loss.
The Role of Social Entrepreneurship

social entrepreneurship as the process of sourcing innovative solutions to social

and environmental problems.
What’s the difference between social entrepreneurs and traditional entrepreneurs?
Social entrepreneurs and business entrepreneurs share some similarities:
both types found new organizations, identify opportunities, create and implement
innovation solutions or services, find information and resources, form connections,
and create marketing initiatives to promote offerings.

However, the main difference between traditional and social entrepreneurship lies
in its intended mission. Traditional entrepreneurs create ventures with a goal of
making a profit, and they measure performance by the profits they generate.
In contrast, social entrepreneurs create ventures to tackle social problems and bring
about social change; they measure performance by advancing social and
environmental goals.
Defining Social Entrepreneurship
Social entrepreneurship is becoming a popular way of conducting business while
making a social and economic impact. In the face of tough competition, it is difficult
for social entrepreneurs to find the right balance between “doing good” and earning
enough financially to live on, as well as growing the business. This makes social
entrepreneurship difficult to define.
Types of Social Entrepreneurship
1. Social purpose ventures: businesses created by social entrepreneurs to resolve a
social problem and make a profit. The aim of social purpose ventures is to resolve a
social problem and make a profit.
Organic clothing company PACT is a good example of a social venture: it
designs, manufactures, and distributes premium cotton cloths without using
pesticides, fertilizers, or chemicals. As a participant in the Fair Trade movement,
PACT uses family farms in India and pays a higher price on the cotton to help
sustain the farms and the local communities.
Jeff Denby, founder of PACT, says, “By focusing on the people who make our
products, from the farmers who grow the organic cotton to the workers who
stitch the garments, PACT is fulfilling its mission to use apparel production as a
means of making the world a better place.”

Example:
2. Social Consequence Entrepreneurship: Social consequence entrepreneurship
describes a for-profit venture whose primary market impact is social.

Example:
Sword & Plough hires army veterans to recycle surplus military materials such as
parachutes, sleeping bags, and tents into fashionable bags and accessories. The
company was launched in 2013, benefiting from $312,000 in funding, thanks to a
powerful Kick starter campaign.
It donates 10% of its profits to veterans’ organizations. As of 2015, Sword &
Plough had created almost 40 jobs for US veterans, as well as 10 nonveteran
roles. It has recycled over 20,000 pounds of discarded military material, and sold
more than 6,000 products globally.
Through their innovative products, the founders aim to bridge the gap between
civilians and the military by raising public awareness of veterans and the
challenges facing servicemen every day. Sword & Plough is just one of many for-
profit companies in existence today that “does well [i.e., makes money] by doing
good.”
3. Enterprising Nonprofits
Enterprising nonprofits are a form of social entrepreneurship where both the
venture mission and the market impact are for social purposes. This means that any
profits made must be channeled back into the organization. Unlike with social
purpose ventures, profit may not be distributed to the owners of the enterprising
nonprofit. Enterprising nonprofits: a form of social entrepreneurship where both
the venture mission and the market impact are for social purposes.
While there may be some differences between nonprofit entrepreneurs and
traditional for-profit (also called enterprising) entrepreneurs, both types create their
own ventures out of a desire to fill a gap and meet a need. There are two types of
enterprising nonprofits: earned-income activities, and venture philanthropy.
i) Earned-income activities: the sale of products or services that are used as a
source of revenue generation.
ii) Venture philanthropists share their experience with nonprofit entrepreneurs
to help grow and scale the company to drive social change. This might take
the form of marketing and communications, executive coaching, human
resources, or providing access to other contacts and potential funders.
Typically, financial support is provided for three to five years with the goal of
enabling the nonprofit to become financially independent by the end of this
period.
Hybrid Models of Social Entrepreneurship: A hybrid model of social
entrepreneurship describes an organization with a purpose that equally emphasizes
both economic and social goals.

To further explain the hybrid model, let’s take a look at two organizations with the
same goal: to solve the problem of poor eyesight in developing countries. The first
organization is the Centre for Vision in the Developing World, a traditional
nonprofit that channels donations toward self-refraction glasses that enable the
wearer to make simple adjustments at a low cost to increase vision quality. The
product eliminates the need for an optometrist or prescriptions.
The second organization, Vision Spring, aims to solve the same problem but has a
network of over 20,000 salespeople to sell glasses to people in their local
communities who have limited access to eye care. Unlike the Centre for Vision in
the Developing World, the Vision Spring model sustains itself financially through
the sales of the glasses, rather than through donations.
Better World Books is another example of a hybrid model, which earns money by
taking donations of new and unwanted books and selling them online. The
venture was originally begun in 2002 by three students at the University of Notre
Dame who wanted to sell their textbooks online to earn extra money. The
students then decided to donate a portion of the sales from each book they sold to
literacy campaigns.
Since then, Better World Books has set up relationships with almost 4,000
libraries to collect unwanted books of many different types and genres. It has also
launched an initiative that provides drop boxes in certain locations, allowing
people to drop off unwanted books. The collection bins even come with sensory
technology that tells Better World staff when the bins are full, so they can empty
them quickly
Differences Between Social Entrepreneurship And Corporate Social
Responsibility
Corporate social responsibility (CSR) describes the efforts taken by
corporations to address the company’s effects on environmental and social
wellbeing in order to promote positive change. While social entrepreneurship may
sound similar to the corporate social responsibility (CSR) model, they are not the
same.
The difference lies in the primary objective. In essence, CSR adds social objectives while
still pursuing the main goal of making a profit. In contrast, many social entrepreneurship
models, including the hybrid model, place equal emphasis on social and economic goals.
An organization with a CSR strategy could reduce spending on its CSR program if it is
struggling to meet revenues, whereas a social enterprise would prioritize its social goals
even in the face of a reduction in profits.
CSR Makes Good Business Sense
 START UP
The term startup refers to a company in the first stages of operations. Startups are
founded by one or more entrepreneurs who want to develop a product or service
for which they believe there is demand. These companies generally start with
high costs and limited revenue, which is why they look for capital from a variety
of sources such as venture capitalists.

Startups are companies or ventures that are focused on a single product or service
that the founders want to bring to market. These companies typically don't have a
fully developed business model and, more crucially, lack adequate capital to
move onto the next phase of business. Most of these companies are initially
funded by their founders.

The initial funding is provided by the founders themselves, their families, and or
their friends. Once the startup business grows, the investors and lenders may join
into source the budget.

Startup business has boomed in recent years and has become the new norm,
especially during the COVID-19 crisis.
Features of “Startup”
Any company which fall into below list of category will be called as “Startup”
and eligible to be recognised by the DPIIT to avail the benefits from the
Government of India.
Age of the Company – The Date of Incorporation should not exceed 10 years
Type of Company – Should have been Incorporated as a Private Limited
Company or a Registered Partnership Firm or a Limited Liability Partnership
Annual Turnover – Should not exceed Rs.100 crore for any of the financial
years since its Incorporation
Original Entity – The company or Entity should have been formed originally by
the promoters and should not have been formed by splitting up or reconstructing
an existing business
Innovative & Scalable – Should have plan for development or improvement of a
product, process or service and/or have a scalable business model with high
potential for the creation of wealth & employment
 Start ups Small Business

Innovations Innovations are the most Small business does not make
important things for a startup. any claims as to uniqueness.
Example: one may develop a Example: hairdressing salon,
new class of goods (wearable restaurant, law office,
device), a new business model
(Airbnb) or a technology no one
knows as of yet (3D printing).
Scopes A startup, as a rule, does not Small business makes progress
put any limitations on its growth within limits established by a
and focused on winning over as businessperson oneself
much market share as possible
Profit A top target is to create a Small business is focused on
product, which consumers will getting earnings and, if possible,
like and will take on a market. If a profit from the very first day
this aim will be achieved, profit
of the company will be millions
Rate of growth Small business, of course, Startup should always grow
should grow fast but a high- and within the shortest possible
priority task is to make a profit time creating a reproducible
business model
 Start ups Small Business

Finance Crowd funding is becoming In order to start one’s own

more and more popular. business, as a rule, private
Financial borrowings savings, investments on the part
from business angels, venture of one`s family, friends, banking
capitals, and investors remain credits and/or investor funds
the most common version. will do
Technologies Technologies are oftentimes the There are no special
main product of startup technologies required

Lifecycle 92% of enterprises are shut 32% of enterprises are shut

down during the first three years down in the first three years,
which is not bad comparing to
startups
Team and management Manager should develop a For a small business as many
leader and managing qualities workers are usually hired
from the very beginning as long
as startup should grow as fast as
possible
 Start ups Small Business

Way of life Considering it, there is Small business,

no time to lose. So, a compared to startups,
balance between work takes less of a risk and
and personal life is out of duties
the question. Work, work
and work again!
Exit strategy Usually moves towards Two versions here: make
next stage via a large it a family business or to
deal on sale or IPO – sell it.
Initial public offering.

https://apiumhub.com/tech-blog-barcelona/differences-startups-small-
business/
Debunking the Myths of Entrepreneurship
Truth #1: Entrepreneurship is not reserved for startups
In the traditional of view of startups, anyone who starts a business is called an
entrepreneur. The entrepreneur creates a business based on research to assess the
validity of an idea or business model. The business may be partially funded by
seed money from family members or investors, but usually the majority is funded
by the entrepreneurs themselves. If the business is successful, the startup does not
remain a startup. It can develop into an organization in its own right, be merged
with another organization, or be bought or acquired by another company.

Truth #2: Entrepreneurs do not have a special set of personality traits

In reality, there is no evidence to suggest that entrepreneurs have a special set of
personality characteristics that distinguishes them from the rest of us. Early
research identified four main traits that could be ascribed to entrepreneurs: a
desire for achievement, an innate sense of having the ability to influence events, a
tendency to take risks, and a tolerance for uncertainty. Yet there is no scientific
evidence to confirm whether these traits are a result of nature or nurture or any
proven patterns in the behavior of entrepreneurs versus non entrepreneurs.
This means that all of us have the ability to act and think entrepreneurially with
practice. We can change how we think.
Truth #3: Entrepreneurship can be taught (it’s a method that requires practice)
Many of the courses teach entrepreneurship as a linear process, which involves
identifying an opportunity, understanding resource requirements, acquiring resources,
planning, implementing, and harvesting (exiting a business). But the word process
assumes known inputs and known outputs, as in a manufacturing process.
Entrepreneurship is not predictable and, therefore, cannot adequately be taught as a
process. Instead, a method or practice approach advocated in this text represents a
body of skills that when developed through practice over time constitute a toolkit for
entrepreneurial action. The entrepreneurial method requires consistent practice so that
knowledge and expertise can be continuously developed and applied to future
endeavors.

Truth #4: Entrepreneurs are not extreme risk-takers

Contrary to the stereotype that entrepreneurs like to gamble when the stakes are high,
there is no evidence to suggest that entrepreneurs take more risks than anyone else
Risk is very personal and relative. Things always seem more risky from the outside
looking in because we really don’t know what calculations were made to take the next
step. In fact, most entrepreneurs are very calculated risk takers and gauge what they
are willing to lose with every step taken. They practice a cycle of act– learn–build that
encourages taking small actions in order to learn and build that learning into the next
action
Truth #5: Entrepreneurs collaborate more than they compete
Community plays an important role in entrepreneurship. Entrepreneurs draw on shared
experience and desire to learn from others facing similar challenges. It can be hard to
know what entrepreneurship is all about until you are actually in the throes of it, so it
becomes very important to have a support group of like-minded entrepreneurs willing to
help one another out with a “pay it forward” attitude—collaborating for the greater good.
Not only do successful entrepreneurs collaborate with other entrepreneurs, but they also
collaborate with their target customers to test new ideas, potential investors to build trust,
and family and friends for support. Entrepreneurs also have a tendency to collaborate with
competitors. One of the best-known examples of this is the collaboration of the late
Steve Jobs of Apple and Bill Gates of Microsoft on the creation of the Apple Mac—
leaders of two technology giants that were seemingly at war with each other.
Truth #6: Entrepreneurs act more than they plan
Research revealed that fewer than half of Inc. 500 founders wrote formal business
plans prior to launching their companies, and fewer than 30% had only basic
plans. So, how did they do it?
They acted—they went out and talked to other people, connected with their
customers, generated buzz about their product or service, and built a strong
network. With every action, they collected real data that informed the next step. In
short, they each practiced being an entrepreneur. Ultimately, investors will want to
know if the entrepreneurs have the capability to roll with the punches, take action,
and accept the constructive feedback they receive from coaching.

Truth #7: Entrepreneurship is a life skill

The meaning of entrepreneurship has transcended into something more than just
the ability to begin a new venture. Many individuals and institutions perceive
entrepreneurship as a life skill that helps people to deal with an uncertain future
by providing them with the methods to think, act, identify opportunities, approach
problems in a specific way, adapt to new conditions, and take control of personal
goals and ambitions.