CONCEPT OF ENTREPRENEURSHIP The term entrepreneurship is often used synonymously with the term Entrepreneur thou h!

they "re two sides of the s"me #oin! #on#eptu"lly they "re different$ Entrepreneurship is the indi%isi&le pro#ess flourishes! when the interlin'ed (imensions of indi%idu"l psy#holo i#"l entrepreneurship! entrepreneur tr"its! so#i"l en#our" ement! &usiness opportunities! )o%ernment poli#ies! "%"il"&ility of plenty of resour#es "nd opportunities #o%er" e tow"rds the #ommon ood! de%elopment of the so#iety "nd e#onomy$ Entrepreneurship is the pro#ess of identifyin in%estin opportunities in the m"r'et pl"#e! "rr"n in the resour#es re*uired to pursue these opportunities "nd the resour#es to e+ploit the opportunities for lon term "ins$ It we"lth &y &rin in to ether resour#es in new w"ys to in%ol%es #re"tin ,##ordin

st"rt "nd oper"te "n enterprise$ to Cole -Entrepreneurship is the purposeful "#ti%ity of "n roup of "sso#i"ted indi%idu"ls undert"'en to initi"te! r"ndi.e profit &y produ#tion or distri&ution of e#onomi# ins -Entrepreneurship is me"nt the fun#tion of "n " #"pit"l! hirin indi%idu"l or " m"int"in "nd " ,##ordin foreseein

oods "nd ser%i#es/$ to Hi in%estment "nd produ#tion opportunities! or "ni.in the supply of r"w m"teri"ls! findin site! introdu#in

enterprise to undert"'e " new produ#tion pro#ess! r"isin l"&our! "rr"n in new te#hni*ue! dis#o%erin

new resour#es or r"w m"teri"ls "nd sele#tin "nd resour#e o"l

top m"n" ers for d"y to d"y oper"tions of the enterprise/$ The "&o%e definitions hi hli hts ris' &e"rin ! inno%"tin or "ni.in "spe#ts "nd "n indi%idu"l or roup of people "#hie%e

throu h produ#tion or distri&ution of produ#ts or ser%i#es$ To #on#lude entrepreneurship is set of "#ti%ities performed &y "n entrepreneur thus! entrepreneur pro#eeds entrepreneurship$

T0PES OF ENTREPRENEURS Followin "re the #l"ssifi#"tion of entrepreneurs on the &"sis of #ommon #h"r"#teristi#s Entrepreneur I II III I1 ,$ Cl"ren#e ("nhof 2$ ,rthur H$ Cole C$ On the &"sis ($ On the &"sis Cl"ssifi#"tion Cl"ssifi#"tion of ownership of s#"le of enterprise 3$ , ressi%e4Inno%"ti%e 3$ Empiri#"l 3$ Pri%"te 3$ Sm"ll S#"le 5$ Imit"ti%e4 ,dopti%e 5$ R"tion"l 5$ Pu&li# 5$ 6"r e S#"le 7$ F"&i"n 7$ Co niti%e 8$ (rone ,$ Cl"ren#e ("nhof Cl"ssifi#"tion9 Cl"ren#e ("nh of #l"ssifies entrepreneurs into four types$ 3$ Inno%"ti%e9 Inno%"ti%e entrepreneur is one who "ssem&les "nd synthesis inform"tion "nd introdu#es new #om&in"tions of f"#tors of produ#tion$ They "re #h"r"#teri.ed &y the smell of inno%"ti%eness$ These entrepreneurs sense the opportunities for introdu#tion new ide"s new te#hnolo y! new m"r'ets "nd #re"tin new or "ni."tions$ Inno%"ti%e entrepreneurs "re %ery mu#h helpful for their #ountry &e#"use they &rin "&out " tr"nsform"tion in life style$ 5$ Imit"ti%e4 ,dopti%e9 Imit"ti%e entrepreneur is "lso 'nown "s "dopti%e entrepreneur$ He simply "dopts su##essful inno%"tion introdu#ed &y other inno%"tors$ These entrepreneurs imit"te the e+istin entrepreneurs "nd setup their enterprise in the s"me m"nner$ Inste"d of inno%"tin ! they :ust imit"te the te#hnolo y "nd methods inno%"ted &y others$ These entrepreneurs "re %ery helpful in less de%eloped #ountries "s they #ontri&ute si nifi#"ntly in the rowth of enterprise "nd entrepreneuri"l #ulture in these #ountries$ Further &y "doptin the te#hnolo y! whi#h is "lre"dy tested! they ener"te "mple employment "%enues for the youth "nd therefore they "re tre"ted "s

" ent of e#onomi# de%elopment$ 7$ F"&i"n9 The F"&i"n entrepreneur is timid "nd #"utious$ He imit"tes other inno%"tions only if he is #ert"in th"t f"ilure to do so m"y d"m" e his &usiness$ They "re %ery mu#h s'epti#"l in their "ppro"#h in "doptin inno%"tin the #h"n in en%ironment$ They lo%e to rem"in in the e+istin or new te#hnolo y in their enterprise$ They "re not "d"pt"&le to &usiness

with the " e;old te#hni*ues of produ#tion$ They only "dopt the new te#hnolo y when they re"li.e th"t f"ilure to "dopt will le"d to loss or #oll"pse of the enterprise$ 8$ (rone9 These entrepreneurs "re #onser%"ti%e or orthodo+ in outloo'$ They ne%er li'e to et rid of their tr"dition"l &usiness "nd tr"dition"l m"#hinery or systems of the &usiness$ They "lw"ys feel #omfort"&le with their old f"shioned te#hnolo y of produ#tion e%en thou h the en%ironment "s well "s the so#iety h"%e under one #onsider"&le #h"n es$ Thus! drone entrepreneurs refuse to "dopt the #h"n es$ They "re l" "rds "s they #ontinue to oper"te in their tr"dition"l w"y "nd resist #h"n es$ His entrepreneuri"l "#ti%ity m"y &e restri#ted to :ust one or two inno%"tions$ They refuse to "dopt #h"n es in produ#tion e%en "t the ris' of redu#ed returns$ 2$ ,rthur H$ Cole Cl"ssifi#"tion9 ,rthur H$ Cole #l"ssifies entrepreneurs "s 3$ Empiri#"l9 He is "n entrepreneur h"rdly introdu#es "nythin re%olution"ry "nd follows the prin#iple of rule of thum&$ 5$ R"tion"l9 The r"tion"l entrepreneur is well informed "&out the ener"l e#onomi# #onditions "nd introdu#es #h"n es whi#h loo' more re%olution"ry$ 7$ Co niti%e9 Co niti%e entrepreneur is well informed! dr"ws upon the "d%i#e "nd ser%i#es of e+perts "nd introdu#es #h"n es th"t refle#t #omplete &re"' from the e+istin s#heme of enterprise$

C$ Cl"ssifi#"tion on the 2"sis of Ownership9 3$Pri%"te9 Pri%"te entrepreneur is moti%"ted &y profit "nd it would not enter those se#tors of the e#onomy in whi#h prospe#ts of monet"ry rew"rds "re not %ery &ri ht$ 5$ Pu&li#9 In the underde%eloped #ountries initi"ti%e to sh"re enterprises$ ($ Cl"ssifi#"tion 2"sed on the S#"le of Enterprise9 3$ Sm"ll s#"le9 This #l"ssifi#"tion is espe#i"lly popul"r in the underde%eloped #ountries$ Sm"ll entrepreneurs do not posses the ne#ess"ry t"lents "nd resour#es to initi"te l"r e s#"le produ#tion "nd introdu#e re%olution"ry te#hnolo i#"l #h"n es$ 5$ 6"r e s#"le9 In the de%eloped #ountries most entrepreneurs de"l with l"r e s#"le enterprises$ They posses the fin"n#i"l "nd ne#ess"ry enterprise to initi"te "nd introdu#e new te#hni#"l #h"n es$ The result is the de%eloped #ountries "re "&le to sust"in "nd de%elop " hi h le%el of te#hni#"l pro ress$ In re#ent ye"rs! some new #l"ssifi#"tions h"%e &een m"de re "rdin entrepreneurs! whi#h "re dis#ussed further$ 3$ Solo oper"tors9 These entrepreneurs prefer to set up their &usiness indi%idu"lly$ They introdu#e their own #"pit"l! intelle#t "nd &usiness "#umen to run the enterprise su##essfully They oper"te their &usiness m"inly in the form of proprietorship type of #on#ern$ 5$ ,#ti%e p"rtners9 Entrepreneurs of this type :ointly put their efforts to &uild enterprise poolin to ether their own resour#es$ They "#ti%ely p"rti#ip"te in m"n" in the d"ily routine of the &usiness #on#ern$ ,s su#h! the &usiness houses or the firms whi#h "re m"n" ed &y the "#ti%e p"rtners &e#ome more su##essful in their oper"tion$ 7$ In%entors9 These entrepreneurs prim"rily in%ol%e themsel%es in Rese"r#h "nd (e%elopment <R "nd (= "#ti%ities$ They "re #re"ti%e in o%ernment will t"'e the

#h"r"#ter "nd feel h"ppy in in%entin methods of produ#tion

new produ#ts! te#hnolo ies "nd

8$ Ch"llen ers: Entrepreneurs of this type t"'e #h"llen es to est"&lish &usiness %enture "s m"r' of "#hie%ement$ They 'eep on impro%in their st"nd"rd "nd f"#e &oldly the odds "nd "d%ersities th"t #ome in their w"y$ They use their &usiness "#umen "nd t"lent to #on%ert the odds into opportunities there&y m"'in profit$ ,##ordin to them! if there is no #h"llen e in life! there is no #h"rm in life$ Ch"llen es m"'e them &old! "nd thus! they ne%er hesit"te to plun e themsel%es into un#ert"inties for e"rnin profit$ >$ 2uyers <entrepreneurs=9 These entrepreneurs e+plore opportunities to pur#h"se the e+istin units whi#h m"y &e sei.ed or "re in runnin #ondition$ If the units they pur#h"se "re si#' they turn them "round usin their e+perien#es! e+pertise "nd &usiness "#umen$ 2y pur#h"sin these units they m"'e themsel%es free from the h"ssles of &uildin infr"stru#tures "nd other f"#ilities$ ?$ 6ife timers9 These entrepreneurs &elie%e th"t &usiness is the p"rt "nd p"r#el of their life$ They t"'e up the &usiness to reunite su##essfully "s " m"tter of e o s"tisf"#tion$ They h"%e " stron "re in#luded under this #"te ory$ FUNCTIONS OF ENTREPRENEURS ,n entrepreneur is "n opportunity see'er$ He is "lso the or "ni.er "nd #oordin"tor of the " ents of produ#tion$ He h"s to e+e#ute m"ny " ood fun#tions while est"&lishin " sm"ll s#"le enterprise$ He not only per#ei%es the &usiness opportunities &ut "lsomo&ili.es the other resour#es li'e > @s; m"n! money! m"#hine! m"teri"ls "nd methods$ Howe%er! the m"in fun#tions of the entrepreneurs "re dis#ussed further$ desire for t"'in person"l responsi&ility$ F"mily enterprises whi#h thri%e due to hi h person"l s'ill

3$ Ide" ener"tion9 This is the most import"nt fun#tion of the entrepreneur$ Ide" ener"tion #"n &e possi&le throu h the %ision! insi ht! o&ser%"tion! "nd e+posure of the entrepreneur$ Ide" "nd m"r'et e+perien#e! edu#"tion! tr"inin Ide"s #"n &e

ener"tion pre#isely implies produ#t sele#tion "nd pro:e#t identifi#"tion$ ener"ted throu h en%ironment"l s#"nnin sur%ey$ It is the fun#tion of the entrepreneurs to ener"te "s m"ny ide"s "s he #"n for the purpose of sele#tin the &est &usiness opportunities whi#h #"n su&se*uently &e t"'en up &y him "s " #ommer#i"lly;%i"&le &usiness %enture$ 5$ (etermin"tion of o&:e#ti%es : The ne+t fun#tion of the entrepreneur is to determine "nd l"y down the o&:e#ti%es of the &usiness! whi#h should &e spelt out on #le"r terms$ In other words! entrepreneur should &e %ery mu#h #le"r "&out the followin thin s9 <i= The n"ture of &usiness <ii= The type of &usiness This implies whether the enterprise &elon s to the #"te ory of " m"nuf"#turin #on#ern or " ser%i#e ;oriented unit or " tr"din &usiness! so th"t the entrepreneurs #"n %ery well #"rry on the %enture in "##ord"n#e with the o&:e#ti%es determined &y him$ 7$ R"isin of funds9 Fund r"isin is the most import"nt fun#tion of "n entrepreneur$ ,ll the "#ti%ities of " &usiness depend upon the fin"n#e "nd its proper m"n" ement$ It is the responsi&ility of the entrepreneur to r"ise funds intern"lly "s well "s e+tern"lly$ In this m"tter! he should &e "w"re of the different sour#es of funds "nd the form"lities to r"ise funds$ He should h"%e the full 'nowled e of different o%ernment sponsored s#hemes su#h "s P@R0! S)S0! RE)P! et#$ &y whi#h he #"n et )o%ernment "ssist"n#e in the form of seed #"pit"l! fi+ed "nd wor'in #"pit"l for his &usiness$ 8$ Pro#urement of r"w m"teri"ls9 ,nother import"nt fun#tion of the entrepreneur is to pro#ure r"w m"teri"ls$ Entrepreneur h"s to identify the

#he"p "nd re ul"r sour#es of supply of r"w m"teri"ls! whi#h will help him to redu#e the #ost of produ#tion "nd f"#e the #ompetition &oldly$ >$ Pro#urement of m"#hinery: The ne+t fun#tion of the entrepreneurs is to pro#ure the m"#hineries "nd e*uipments for est"&lishment of the %enture$ Ahile pro#urin the m"#hineries! he should spe#ify the followin det"ils9 <"= The det"ils of te#hnolo y <&= Inst"lled #"p"#ity of the m"#hines <#= N"mes of the m"nuf"#turers "nd suppliers <d= Ahether the m"#hines "re indi enously m"de or forei n m"de <e= ,fter;s"les ser%i#e f"#ilities <f= A"rr"nty period of the m"#hineries ,ll these det"ils "re to &e minutely o&ser%ed &y the entrepreneurs$ ?$ @"r'et rese"r#h9 The ne+t import"nt fun#tion of the entrepreneur is m"r'et rese"r#h "nd produ#t "n"lysis$ @"r'et rese"r#h is the system"ti# #olle#tion of d"t" re "rdin the produ#t whi#h the entrepreneur w"nts to produ#t! i$e$ the dem"nd for m"nuf"#ture$ Entrepreneur h"s to undert"'e m"r'et rese"r#h persistently in order to 'now the det"ils of the intendin the produ#t! the supply of the produ#t! the pri#e of the produ#t! the si.e of the #ustomers! et#$ while st"rtin "n enterprise$ B$ (etermin"tion of form of enterprise: The fun#tion of "n entrepreneur in (eterminin the form of enterprise is "lso import"nt$ Entrepreneur h"s to de#ide the form of enterprise &"sed upon the n"ture of the produ#t! %olume of in%estment! n"ture of "#ti%ities! types of produ#t! *u"lity of produ#t! *u"lity of hum"n resour#es! et#$ The #hief forms of ownership or "ni."tions "re sole proprietorship! p"rtnership! Coint Sto#' Comp"ny "nd #ooper"ti%e so#iety$ (etermin"tion of ownership ri ht is essenti"l on the p"rt of the entrepreneur to "#*uire le "l title to "ssets$ D$ Re#ruitment of m"npower: Entrepreneur h"s to perform the followin "#ti%ities while undert"'in this fun#tion9 <"= Estim"tin m"npower need of the or "ni."tion

<&= 6"yin down of sele#tion pro#edure <#= (e%isin s#heme of #ompens"tion <d= 6"yin down the rules of tr"inin "nd de%elopment E$ Implement"tion of the pro:e#t9 Entrepreneur h"s to wor' on the implement"tion s#hedule or the "#tion pl"n of the pro:e#t$ The identified pro:e#t is to &e implemented in " time;&ound m"nner$ ,ll the "#ti%ities from the #on#eption st" e to the #ommissionin st" e "re to &e "##omplished &y him in "##ord"n#e with the implement"tion s#hedule to "%oid #ost "nd time o%errun! "s well "s #ompetition$ Thus! implement"tion of the pro:e#t is "n import"nt fun#tion of the entrepreneur$ To #on#lude with! "ll these fun#tions of the entrepreneur #"n pre#isely &e put into the followin #"te ories9 <i= Inno%"tion <ii= Ris' &e"rin <iii= Or "ni."tion "nd <i%= @"n" ement 6ECTURE 59 ENTREPRENEURI,6 CH,R,CTERISTICS! (ISTINCTION 2ETAEEN ,N ENTREPRENEUR ,N( , @,N,)ER! ,)RI;ENTREPRENEURSHIP; CONCEPT! NEE( ,N( SCOPE CH,R,CTERISTICS OF ENTREPRENEUR Entrepreneur is a key figure in economic progress. He is the person who introduces new things in the economy. He is considered as the business leader and not as simple owner of capital. He is a person with telescopic faculty, drive and talent who perceives business opportunities and promptly seizes them for exploitation. @$@$P$ ,'houri! formerly Executive Director, National nstitute for Entrepreneurship and !mall "usiness Development #N E!"$D%, New Delhi, describes entrepreneur &as a character who combines innovativeness, readiness to take risk, sensing opportunities, identifying and mobilizing potential resources, concerns for excellence and who is persistent in achieving the goal.' (o be successful, an entrepreneur should have the following characteristic features.

3$ Need to "#hie%e9 Entrepreneurs have got strong desire to achieve higher goals. (heir inner self motivates their behaviour towards high achievement) most of the people dream of success but do not take any action towards achieving these dreams. Entrepreneurs with high n*+ch factor act continuously to achieve the goal and make their dreams come true. ,or them, winning is achievement. 5$ Independen#e9 -ost of the entrepreneurs start on their own because they dislike to work for others. (hey prefer to be their own boss and want to be responsible for their own decisions. 7$ Ris';&e"rin 9 Entrepreneurs are the persons who take decisions under uncertainty and thus they are willing to take risk, but they never gamble with the results. (hey choose moderate risk rather than play wild gamble. (hey, therefore, undertake calculated risk which is high enough to be exciting, but with a fairly reasonable chance to win. 8$ 6o#us of #ontrol9 +ccording to .otter/s locus of control theory, an individual perceives the outcome of an event as being either within or beyond his personal control. Entrepreneurs believe in their own ability to control the conse0uences of their endeavour by influencing their socio*economic environment rather than leave everything to luck. >$ Perse%er"n#e9 Entrepreneur has got the 0uality of sticking to 1ob he decides to undertake. 2nce committed to a specific goal and course of action, entrepreneurs become absorbed to it. (hey personally solve the problems that come across their way while setting up the pro1ect. (hey also work sincerely until the whole pro1ect is successfully implemented. ?$ Positi%e self;#on#ept9 Entrepreneurs are always positive in their action. "eing an achiever, he directs his fantasies and dreams towards achievement of worthwhile goals and sets extraordinary standard of excellence in what he is doing. (his is based upon his awareness of !32( analysis, i.e. his strengths, weaknesses, opportunities and threats. He utilizes his positive knowledge to support his thinking. He never exhibits any negative attitude. B$ ,&ility to find "nd e+plore opportunities9 Entrepreneurs are always alert to opportunities. (hey are very much 0uick to see and grab opportunities. (hey exhibit an innovative turn of mind and convert the problems into viable opportunities. (hey plan intellectually and anticipate carefully how to achieve their goals in realizing an opportunity. D$ Hope of su##ess9 Hope of success is a significant 0uality of entrepreneurial personality. Entrepreneurs set their goals with a hope of success rather than fear of failure. (his is because they set their goals on the basis of facts and their ability to maneuver them to their advantage. E$ Fle+i&ility9 -ost of the successful entrepreneurs measure the pros and cons of a decision and tend to change if the situation demands. (hey never feel reluctant to revise their decisions. (hey are the persons with open mind without rigidity. 3F$ ,n"lyti#"l "&ility of mind9 Entrepreneurs are unaffected by personal likes and dislikes. (hey stand beyond these types of pre1udices as they are realistic in their approach. +t the time of their need they select experts rather than friends

and relatives to assist them. (hey usually avoid emotional and sensitive attitude towards their business or problem. 33$ Sense of effi#"#y9 Entrepreneurs are always oriented towards action for accomplishment of their goals. "eing confident of their abilities, they find themselves as problem solvers rather than problem avoiders. (hey chalk out their goals for future and make planning to achieve them. 35$ Openness to feed&"#' "nd le"rnin from e+perien#e9 !uccessful entrepreneurs like to have immediate feedback of their performance. (hey modify their plans on the basis of the feedback they receive from the environment around them. (hey learn from their experience and never get discouraged having received unfavorable information. 2n the contrary, they are stimulated by unfavorable information to involve themselves sincerely in their own tasks to reach their desired goals. 37$ Confrontin un#ert"inty9 !uccessful entrepreneurs are always optimistic and take every odd as the opportunity. (hey maneuver their environment in such a way that the works get accomplished rationally. (hus, they win by the application of their extraordinary insight and skill. 38$ Interperson"l s'ills9 Entrepreneurs are always comfortable while dealing with people at all levels. (hey interact with raw material suppliers, customers, bankers, etc. for different activities. +s successful entrepreneurs, they should be persons who like working with others possessing the much needed 0uality of interpersonal skill to deal with people. 3>$ Need to influen#e others9 2nce the entrepreneurs set their goals, they have to play the roles of manager too. ,or influencing others #n 4ower%, a low need to establish emotional relationship #low n +ffiliation%, and a high need to discipline one/s own self #to inhibit over expression of their personality% are essential. 3?$ Stress t"'ers9 Entrepreneurs are capable of working for long hours and solving different complexities at the same time. +s the captain of an industry or an enterprise, an entrepreneur faces a number of problems and in right moment he takes right decisions which may involve physical as well as mental stress. He can face these challenges if he has the capability to work for long hours and keep himself cool under monotony. 3B$ Time orient"tion9 Entrepreneurs anticipate future trends basing upon their past experience and exposure. (hey stick to the time pragmatically while doing their 1obs. 3D$ Inno%"tors9 !uccessful entrepreneurs are innovators. (hey constantly put their efforts in introducing new products, new method of production, opening new markets and recognizing the enterprise. 3E$ 2usiness #ommuni#"tion s'ill9 n order to motivate others in the business entrepreneurs must possess good communication skill. "oth written and oral communication skills are necessary for the entrepreneurs for running enterprise efficiently. 5F$ Teles#opi# f"#ulty9 !uccessful entrepreneurs always tend to think ahead. (hey have got telescopic faculties which make them think for the future. ,uture

orientation makes them 0uite alert to the changing conditions of the time and they tend to produce goods and commodities as per the changing demands. 53$ 6e"dership9 Entrepreneurs should possess the 0uality of leadership. 5eadership is the ability to exert interpersonal influence by means of communication towards the achievement of goals. Entrepreneurs as the leaders should provide the necessary spark to motivation by guiding, inspiring, assisting and directing the members of the group for achievement of unity of action, efforts and purpose. Hence, entrepreneurs by their own leadership styles and behaviour reduce the problems by proper handling of situations. 6ood administrative work depends upon effective leadership of the entrepreneur. 55$ 2usiness pl"nnin 9 4lanning implies deciding in advance what, when and how to do a thing. Entrepreneurs should be e0uipped with skill and knowledge to prepare their business plan. + successful entrepreneur always follows the principles of management while planning for his business. (he planning can act as a bridge between the present position and expected future shape of the enterprise. t provides a sense of vision to the entrepreneurs to cope with risky and uncertain situation. 57$ (e#ision m"'in 9 Decision*making skill is a fundamental characteristic of an entrepreneur. (his implies the function of choosing a particular course of action at every stage of creation of an enterprise out of several alternative courses for the purpose of achieving specified goals. Hence, decision making is necessary at all times and mostly at conditions of uncertainty and risk. 58$ ,&ility to mo&ili.e resour#es9 Entrepreneurs must have the ability to marshal all the inputs to obtain the end product. (hey have to mobilize 7-s, i.e. -an, -oney, -aterial, -achinery, -arket and -ethod effectively to realize the final product as entrepreneurship is a function of gap filling and input completing. 5>$ Self;#onfiden#e9 Entrepreneurs must have self*confidence to accomplish the task effectively and efficiently. (hey must take decisions on their own in uncertain and risky situation and should stick to it confidently even if there occurs initial setbacks. 888888888888888888888888