ENTREPRENEUR

ORIGIN OF THE TERM

ENTREPRENEUR
ORIGIN OF THE TERM ENTREPRENEUR
• The term “Entrepreneur” is derived from the
french word known as “Entreprendre”, which
means to “Undertake”.

• It appeared in French Language also only in

the beginning of the 16th Century. The word
was originally used to mean an organizer of
musical and other entertainments.
 MEANING AND DEFINITION OF
ENTREPRENEUR
DIFFERENT VIEWS ON ENTREPRENEUR

As a Risk-Bearer As an Organizer As an Innovator

IMPORTANCE OF ENTREPRENEURSHIP
1. It helps in growth and development of the economy –
a) Generating Employment Opportunities,
b) capital formation,
c) improve in the standard of living of the people by
producing new and better product and services.

2. It helps in Balanced Regional Development – They bring

regional development by setting up industries in backward
areas, developing handicrafts, cottage industries, etc.,
IMPORTANCE OF ENTREPRENEURSHIP
3. It results in proper utilization of economic resources.

4. It creates employment opportunities

5. It helps in meeting the changing requirement of the

markets.

6. It also helps in distribution of products to large-scale

business houses, thus, support large business.
ATTRIBUTES AND CHARACTERISTICS OF A
SUCCESSFUL ENTREPRENEUR
 1. ACHIEVEMENT
MOTIVATION
 The entrepreneur has a
high need for
accomplishing his goals.

 He has a self-motivated
attitude.

 He is driven by a need to
achieve certain target.
2. VISION AND CLEAR
OBJECTIVE
 Vision – Big picture of what you want
to achieve.

 Where the entrepreneur wants to go

and what to achieve.

 Objectives – Objectives provide

specific milestones with a specific
timeline for achieving a goal.

 what type of product he have to

produce?

 What changes are needed?

 How to go with the changing

demands of the consumers?
 3. CREATIVITY
 An entrepreneur is a creative
thinker.

 He creates an idea in his mind

and then transforms it into
action which is characterized
by originality.

 It is an ability to produce
something new out of
imagination.
 4. INDEPENDENCE
 Entrepreneurs are the
persons who like to be
their own boss.

 They are interested to

make decisions and
avoid to work on the
guidance provided by
others.

 They are independent

to work on their own
 5. RISK BEARING
Entrepreneurs
undertake calculated
risk and take care of
the unforeseen
contingencies which
might arise out of
various
vulnerabilities.
 6. DYNAMISM
The Business environment
keeps on changing so the
entrepreneur keeps on
considering the changing
circumstance and keeps
on improving the things
for the betterment.

He is pragmatic in nature

 7. COMMITMENT,
DETERMINATION AND
PERSEVERENCE
Entrepreneurs are the
people who are
determined to achieve
their targets and
committed towards their
goals and continue to put
forth their efforts until
they succeed in their
work.
 8. ABILITY TO FIND AND
EXPLORE OPPORTUNITY
 Entrepreneurs are the people who
find the opportunity and explore
it and start with a creative mind
and visualize.

 turn their ideas into action.

 9. INITIATIVE
Entrepreneurs take a start
and begin a new thing or
produce a product or service.

They are the problem solvers

and possess the inclination
and courage to take up the
challenge and then proceed
with it taking into
consideration all the pros and
cons of the situation.
 10. TOLERANCE OF
AMBIGUITY AND
FAILURE
 Entrepreneurs face ambiguity
in every stage of business.

 There is uncertainty in every

step they proceed because
they are initiating a new
venture.

 But there is always a hope of

success and if there is any
failure, they learn from it and
then move forward.
 11. INTEGRITY AND
RELIABILITY
 These two attribute acts as a
pillar for building Trust and
Confidence.

 Builds Personal and Business

relationships and the goodwill
of the business and the
entrepreneur.
 12. PROBLEM SOLVER
 An entrepreneur is a Problem Solver.

 He identifies a problem and gathers

information on the problem to be solved,
identifies various alternatives available ,
approaches the problem and takes action
to solve the problem.

 Once the problem is solved, he analyzes

the results as well, which involves brain
storming during which a host of new ideas
are generated.
 13. TEAM BUILDING
 A team is a group of individuals
sharing a common goal.

 The purpose of team building is to

assist the team members in
becoming cohesive units of
individuals that can effectively work
together to achieve a goal.

 It helps in making the work place

more enjoyable, improving
communication and productivity.
 14. BUSINESS PLANNING
AND ABILITY TO MOBILIZE
RESOURCES
• When an entrepreneur visualizes
something, he further makes a plan to
achieve it.

• He frames the process of achieving the

target, lays down the budget, make
strategies to see if there is any
competition, and then takes the
requisites action.

• He always follows the principles of

management while preparing a plan for
future.

• He mobilizes all the resources i.e. men,

material, money machinery, market and
method effectively and efficiently to
make a final product or service.
 15. LEARNING FROM
EXPERIENCE AND
OPEN TO FEEDBACK
A successful
entrepreneur is a person
who learns from his
experiences and then
moves forward.

He is open to receive any

feedback whether it is
positive or negative and
then makes the changes
and improvement
accordingly
 16. LEADERSHIP
 Leadership is one of the core
competencies of an entrepreneur.

 They need to provide the necessary

motivation and inspiration to the team
they are heading in order to achieve the
goals.

 They must have the capability to drive

the team towards the goal.

 They need to ensure that the team is

functionally strong in certain values like
inner morale, discipline and active
participation of the members of the
team.
 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development

1. Employment generation: - Entrepreneurship is the best way to

erase unemployment. As they generate employment

opportunities by starting many industrial units and offering jobs

to millions.

• Entrepreneurs – Provide employment opportunities on a large

scale.

• Provide employment opportunities to artisans, technically qualified

persons and professionals.

 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development
2. Optimization of Capital:

• Small Scale Industries raise less capital as compared to large scale

business houses and provide quick returns on investment due to

shorter gestation period.

• They also raise capital by mobilizing small savings of people and

putting them into productive use by investing the money in the

business.
 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development
3. Balanced Regional Development:

• Setting up industries in rural and backward areas.

• To reduce overcrowding in cities by providing employment in rural

areas which in turn lead to better standard of living of people in

rural areas.

• Development leads to the better transport facilities, health facilities,

education and entertainment facilities. This helps in development of

backward regions.
 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development
4. Utilization of local resources:

• Setting up of industries in small and backward areas, they use the

savings, artistry and ability, capability and raw materials, etc.

• Thus they make the effective utilization of local resources and

provide employment to the people and also promote the

traditional skills.
 Role of Entrepreneurs in Indian Economy and Developing Economies with reference to
Self-Employment Development
5. Export Promotion:

• To promote exporting the handicraft items to the neighbouring

countries.

• It not only develops the small scale industries. But also develops the

economy by raising in the production of goods and services.

• The pressure on Country’s Balance of Payment is also reduced with

the help of Small Scale Industries. As they contribute a significant

percentage in India’s total export.

 Role of Entrepreneurs in Indian Economy and Developing Economies with
reference to Self-Employment Development
6. Consumer Satisfaction:

• Entrepreneurs identify the needs of the consumers and then

produce goods.

• Produce a large amount of consumer durables and offer vast

choices to the consumers.

• Also provides goods and services which necessitates on a large

scale which leads to consumer satisfaction.

 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development
7. Better Standards of Living:

• Help in attaining economic development.

• Provide goods and services to the customers at less cost and of

good quality as per their needs.

• If the goods are available at lower cost than the demand , the

purchasing power of consumer increases. This helps in raising the

standard of living.
 Role of Entrepreneurs in Indian Economy and Developing Economies with reference to
Self-Employment Development

8. Ancillaries to Large Business Houses:

• Entrepreneur play as feeder to large business houses by

manufacturing components and accessories which are raw material

for large scale units.

9. Distribution of Economic Power:

• Entrepreneurs help in equitable distribution of income among

people by providing self-employment and also help in developing

backward areas.
 Role of Entrepreneurs in Indian Economy and Developing Economies with reference to Self-
Employment Development

• Big business houses may enjoy monopoly which further leads to

concentration of economic power in few hands.

• Promotion and advancement of entrepreneurship helps in distribution of

economic power which in turn debilitates the negative effects on monopoly.

10. Creating Innovation: Entrepreneur – role as an innovators is of great importance

• Entrepreneur is a change agent – introduces new blend of factors of

production, new mixture of products in a market

• Brings development in the economy and explores new opportunities

available in the market.

 Role of Entrepreneurs in Indian Economy and Developing
Economies with reference to Self-Employment Development

• Helps in competing the international market and keep on

introducing the new technology and products.

• Entrepreneurship is the cause of economic development.

 Concept of Women Entrepreneurship

• Women entrepreneurs may be defined as a women or

group of women who initiate, organize and run a business

enterprise.

• In terms of Schumpeterian concept of innovative

entrepreneurs, women who innovate, imitate or adopt a

business activity are called “Women Entrepreneurs”.

 Functions of women entrepreneurs

Women entrepreneurs have to perform all those functions

that any entrepreneur would do to start and run the

enterprise. They also have to generate, screen ideas,

conduct market analysis, feasibility analysis (technical,

financial, marketing and commercial viability) and project

preparation, raise capital, procure material and men for

production and for day-to-day operations.

 Basic functions of women entrepreneurs
a) Innovation

b) Risk-Bearing

c) Organization and Management

General Functions of women entrepreneurs

a. Exploration of the prospects of starting a new business enterprise.

b. Undertaking of risks and the handling of economic uncertainties

involved in business.

c. Introduction of innovations

d. Coordination, administration and control

 Some of the reasons for there being few women entrepreneurs

I. Work/Home role conflict – family size, demands of younger

children, support from the family, etc.
II. Closing the funding Gap – Lack of funds due to the non
availability of the collateral security.
III. Changing preparation – minor proportion of the women
entrepreneurs have formal education and training of running
an enterprise.
IV. Raw Materials, Labour Issues – 60% of all women
entrepreneurs are in service sector (restaurants, boutiques,
hotels, cultural, educational institutes, retail trade, etc.)
 Some of the reasons for there being few women entrepreneurs

V. Psycho-Socio factors:
i. Poor self image
ii. Inadequate motivation
iii. Discriminating treatment in society
iv. Cultural values
v. Lack of courage and self confidence
vi. Lack of social acceptance
vii. Unjust social-economic and cultural system
viii. Lack of freedom of expression
ix. Afraid of failures and criticism
x. Susceptible to negative attitudes
xi. Non-persistent attitude
 Problems of Women Entrepreneurs

1. Problem of Finance

2. Scarcity of Raw-Material

3. Stiff Competition

4. Limited Mobility

5. Family Ties

6. Lack of Education

7. Male-Dominated Society

8. Low Risk-Bearing Ability

 INTERNAL FACTORS INFLUENCING ENTREPRENEURSHIP

Environme
Demographic Personal Social Personal Cultural
Factors
ntal
Factors Factors Qualities Factors
Factors

1. Technical
1. Age 1. Commu 1. Unemploym
skills 1. Need for
2. Gender nity ent
2. Managerial success
3. Order of 2. Parental 1. Dynamism 2. Resources
skills 2. Risk-taking
epitome 2. Collectivism 3. Political
birth 3. Entreprene 3. Desire for
3. Individualism Scene
4. Education urial skills 3. Support freedom
4. Avoiding 4. Opportunity
5. Nationality 4. Leadership of 4. Accepting
Ambiguity for
skills family of
6. Cultural uncertainty
Developmen
5. Personal
Background values 4. Culture t
 EXTERNAL FACTORS INFLUENCING
ENTREPRENEURSHIP
• II. External Factors:
The external factors that influence a person to become an
entrepreneur consist of the following:
1. Social Environment
2. Cultural Environment
3. Technological Environment
4. Economic Environment
5. Legal Environment
6. Political Environment
 MSMED Act
• The MSMED (Micro, Small, and Medium
Enterprises Development) Act, officially
known as the Micro, Small, and Medium
Enterprises Development Act, 2006, is an
important piece of legislation in India aimed at
promoting and enhancing the competitiveness
of micro, small, and medium enterprises
(MSMEs). Here are key aspects and provisions
of the MSMED Act
• Definition of MSMEs:

• The Act categorizes enterprises into micro,

small, and medium based on their investment
in plant and machinery or equipment, and
turnover. These criteria were revised in 2018
to align with the changing economic scenario.
• The MSMED Act provides for the voluntary registration of
MSMEs, which can be done online through the Udyam
Registration Portal. Registration facilitates access to various
benefits and schemes provided by the government.
• Credit Facilitation:

• The Act emphasizes the need for banks and financial

institutions to give priority to the credit needs of MSMEs
and encourages them to provide collateral-free loans to
these enterprises.
 SMERA Overview
• SMERA (Small and Medium Enterprises Rating
Agency) is an Indian credit rating agency that
focuses on providing credit ratings and other
services to Small and Medium Enterprises
(SMEs). It was established to assess the
creditworthiness of SMEs and help them
access finance more easily. Here's an overview
of SMERA:
• Establishment and Background:

• SMERA was established in 2005 with the objective

of addressing the credit rating needs of SMEs in
India.
• It was founded by SIDBI (Small Industries
Development Bank of India), Dun & Bradstreet
Information Services India Private Limited, various
public and private sector banks, and other financial
institutions.
• Credit Ratings for SMEs:

• SMERA specializes in providing credit ratings for

SMEs, which play a crucial role in helping these
businesses access loans and financial assistance
from banks and other financial institutions.
• Credit ratings are assigned based on the
financial health, operational performance, and
other relevant factors of SMEs