INTRODUCTION TO ENTREPRENEUR & ENTREPRENEURSHIP

Entrepreneurship process consists of the following steps-

- IDENTIFY AN OPPORTUNITY

- ESTABLISH VISION / AIM

- PERSUADE OTHERS

- GATHER RESOURCES

Cont………

1. FINANCIAL – The usual options would be-

- PERSONAL SAVINGS - FAMILY FRIENDS - PARTNERSHIPS - BANKS - FLOATING PUBLIC ISSUES.

2. OPERATING RESOURCES – Two Types – Tangible & Intangible

Tangible Operating Resources consists- - PREMISES - TRANSPORT - PRODUCTION EQUIPMENTS - RAW MATERIALS - OFFICE EQUIPMENTS. etc

- Intangible Operating resources would include-

- LINKAGE WITH SUPPLIERS

- OPERATING PROCEDURES (Total Quality

Mgt. approaches)

- MANAGEMENT

- COMPANY’S IMAGE.

3. HUMAN RESOURCES – - What staff are required ? - Will they be full time, part time or contracted. - How will they be recruited ? - How the staff will be retained ? - How the staff will be rewarded ? - What are the legal issues for employing people ? - Will we need to develop their knowledge & skills

through training or education?

Cont………

• CREATE NEW VENTURE - CHANGE/ADAPT WITH TIME

IMPORTANCE & SCOPE OF ENTREPRENEURSHIP

- IMPORTANT FOR A COUNTRY LIKE INDIA WITH PROBLEMS OF POPULATION, UNEMPLOYMENT & UNDEREMPLOYMENT.

- NUMEROUS OPPORTUNITIES FOR GROWTH & SELF DEVELOPMENT.

- REMOVES MONOPOLY & BALANCE REGIONAL DEVELOPMENT.

- MONETRAY REWARDS ARE GREATER.- ENTREPRENEUR ENJOYS POWER OF DECISION

MAKING.

Cont……….

• OPPORTUNITIES FOR SELF EXPRESSION & REALIZATION OF ONE’S PASSION FOR DOING SOMETHING NEW & DIFFERENT.

CHARACTERISTICS/TRAITS OF AN ENTREPRENEUR

• SELF CONFIDENCE & OPTIMISTIC• HARD WORKING -• RISK TAKING- Able to take calculated risk –

Financial Risk - Career Risk – Psychological Risk• INNOVATIVE• COMMUNICATION SKILLS• GOOD ORGANIZER• FORESIGHT• DYNAMIC LEADER

cont……

• FLEXIBLE & ABLE TO ADAPT• RESPONSIVE TO SUGGESTIONS• ENERGETIC & EFFICIENT• VERSATILE KNOWLEDGE• ABLE TO GET ALONG WITH OTHERS.• RESPONDS POSITIVELY TO

CHALLENGE• CLARITY OF OBJECTIVES.

Cont……….

• Knowledgeable of Markets.• Dynamic Leader.• Total commitment towards work.• Technical Knowledge.• Initiative approach.• Perceptive with foresight.

CLASSIFICATION OF ENTREPRENEURS

• BASED ON OWNERSHIP- - FOUNDER OR PURE ENTREPRENEURS. - SECOND GENERATION OPERATORS OF FAMILY OWNDE BUSINESSES - OWNER-MANAGERS.

• BASED ON PERSONALITY TRAITS & THE STYLE OF RUNNING THEIR BUSINESS-

- PERSONAL ACHIEVER - INDUCED ENTREPRENEUR - EXPERT IDEA GENERATOR BASED ON TYPE OF BUSINESS – - BUSINESS ENTREPRENEURS - TRADING ENTREPRENEURS

- INDUSTRIAL ENTREPRENEUR AGRICULTURAL ENTREPRENEURBASED ON USE OF TECHNOLOGY- - TECHNICAL ENTREPRENEUR. - NON-TECHNICAL ENTREPRENEUR.BASED ON MOTIVATION- - PURE ENTREPRENEUR - INDUCED ENTREPRENEUR

- SPONTANEOUS ENTREPRENEUR.OTHER KINDS OF ENTREPRENEUR- - MODERN ENTREPRENEUR - CLASSICAL ENTREPRENEUR - INNOVATIVE ENTREPRENEUR - IMITATIVE ENTREPRENEUR - FABIAN ENTREPRENEUR

BARRIERS TO ENTREPRENEURSHIP

• NON-AVAILABILITY OF RAW MATERIALS• NON-AVAILABILITY OF REQUIRED HUMAN

RESOURCES.• MACHINERY.• LAND & BUILDING.• OTHER INFRASTRUCTURE REQUIRED• FINANCIAL BARRIERS• PERSONAL BARRIERS – - LACK OF CONFIDENCE

- LACK OF DEPENDABILITY ON OTHERS. - LACK OF MOTIVATION. - LACK OF PATIENCE. - INABILITY TO DREAM/SET AIM/TARGET. - SENSE OF PRIDE OR EMBARRASSMENT.

INTRAPRENEURSHIP

The term Intrapreneur emerged in 70s. THE IDEA & IMPLEMENTATION OF NEW PRODUCTS &

SERVICES BY EXECUTIVES INTO THE ORGANIZATION FOR ITS GROWTH & DEVELOPMENT IS INTRAPRENEURSHIP.

- COMPANIES PROVIDE ENOUGH OPPORTUNITIES,

FINANCIAL & TECHNICAL ASSISTANCE TO INTRAPRENEURS NECESSARY FOR DEVELOPMENT & APPLICATION OF THEIR IDEAS.

THE IDEA & IMPLEMENTATION OF NEW PRODUCTS & SERVICES BY EXECUTIVES INTO THE ORGANIZATION FOR ITS GROWTH & DEVELOPMENT IS INTRAPRENEURSHIP.

- COMPANIES PROVIDE ENOUGH OPPORTUNITIES, FINANCIAL & TECHNICAL ASSISTANCE TO INTRAPRENEURS NECESSARY FOR DEVELOPMENT & APPLICATION OF THEIR IDEAS.

CHARACTERISTICS OF INTRAPRENEURS

• TAKE NEW IDEAS & TURN THEM INTO PROFITABLE Realities.

• HAVE VISION & COURAGE TO REALIZE .• ABILITY TO IMAGINE BUSINESS REALITIES &

FOLLOW FROM THE WAY COUSTOMERS RESPOND TO THEIR INNOVATIONS.

• ABILITY TO PLAN NECESSARY STEPS FOR ACTUALIZATION OF IDEAS.

Characteristics of Intrapreneurs

• ABILITY TO TAKE CALCULATED RISKS & HIGH NEED FOR ACHIEVEMENT.

• DEDICATED TO WORK & SHUT OUT OTHER CONCERNS INCLUDING FAMILY LIFE.

DISTINCTION B/W ENTREPRENEUR & INTRAPRENEUR

ENTREPRENEURENTREPRENEUR INTRAPRENEURINTRAPRENEUR

IS THE OWNER OF IS THE OWNER OF THE BUSINESSTHE BUSINESS

WORKS FOR THE WORKS FOR THE BUSINESSBUSINESS

IS INDEPENDENTIS INDEPENDENT SEMI-INDEPENDENTSEMI-INDEPENDENT

RAISES THE RAISES THE REQUISITE CAPITAL REQUISITE CAPITAL HIMSELFHIMSELF

DOES NOT RAISE ANY DOES NOT RAISE ANY CAPITALCAPITAL

BEARS THE FULL BEARS THE FULL RISKS OF BUSINESSRISKS OF BUSINESS

DOES NOT BEAR ANY DOES NOT BEAR ANY RISKS OF BUSINESS.RISKS OF BUSINESS.

CONVERTS THE CONVERTS THE IDEAS OF IDEAS OF INTRAPRENEUR INTO INTRAPRENEUR INTO REALITY.REALITY.

CREATES IDEASCREATES IDEAS

Differentiation contd…

ENTREPRENEURS ENTREPRENEURS GUARANTEES THE GUARANTEES THE MONEY TO SUPPLIERS MONEY TO SUPPLIERS IN A TIME PERIOD.IN A TIME PERIOD.

NO SUCH NO SUCH GUARANTEE CAN BE GUARANTEE CAN BE GIVEN BY GIVEN BY INTRAPRENEURS.INTRAPRENEURS.

ENTREPRENEURS ENTREPRENEURS OPERATE FROM OPERATE FROM OUTSIDE AN OUTSIDE AN ORGANIZATION ORGANIZATION UNLESS UNLESS TECHNICALLY TECHNICALLY QUALIFIED.QUALIFIED.

INTRAPRENEUR INTRAPRENEUR OPERATES FROM OPERATES FROM WITHIN THE WITHIN THE ORGANIZATION.ORGANIZATION.

ENTREPRENEURIAL MOTIVATION

• MOTIVATING FACTORS –A) FACTORS INTERNAL TO THE ENTREPRENEUR

– 1) STRONG DESIRE TO DO SOMETHING INDEPENDENT IN LIFE. 2) TECHNICAL

KNOWLEDGE/MANUFACTURING EXPERIENCE.

3) BUSINESS EXPERIENCE IN THE SAME/RELATED LINE.

B) FACTORS EXTERNAL TO THE ENTREPRENEUR –

1) FINANCIAL ASSISTANCE FROM INSTITUTIONAL SOURCES.

2) ATTITUDE OF GOVT.TO HELP NEW UNITS.

Entrepreneurial Motivation contd.3) FINANCIAL ASSISTANCE FROM NON-

GOVT.SOURCES.4) HEAVY DEMAND.5) PROFIT MARGIN.6) Encouragement from big business houses.According to B.Murthy,studied and classified

motivating factors for entrepreneurs into three types:

C) ENTREPRENEURIAL AMBITIONS –1)TO MAKE MONEY.

Entrepreneurial Motivation contd.

2) TO CONTINUE FAMILY BUSINESS.3) TO SECURE SELF EMPLOYMENT/INDEPENDENT

LIVING.4) TO FULFIL DESIRE OF SELF/WIFE/PARENTS.5) TO GAIN SOCIAL PRESTIGE.6) OTHER AMBITIONS – TO MAKE DECENT LIVING,

SELF-EMPLOYMENT OF CHILDREN, DESIRE TO DO SOMETHING CREATIVE, PROVIDE EMPLOYMENT TO OTHERS.

2nd Type:

D) COMPLELLING REASONS – 1) UNEMPLOYMENT. 2) DISSATISFACTION WITH THE JOB SO FAR HELD. 3) MAKE USE OF IDLE FUNDS. 4) MAKE USE OF TECHNICAL/PROFESSIONAL SKILLS. 5) OTHERS- MAINTENANCE OF LARGE FAMILIES,

REVIVAL OF SICK UNIT STARTED BY FAMILY,ETC.

3rd Type

E) FACILITATING FACTORS – A) SUCCESS STORIES OF ENTREPRENEURS B) PREVIOUS EXPERIENCE (Experience in the

same or other line of activity)C) PROPERTY INHERITED/SELF ACQUIRED.D) ADVICE OR INFLUENCE (Encouragement) OF

FAMILY MEMBERS/RELATIVES/FRIENDS.

- To develop & strengthen entrepreneurial quality & motivation.

- To select the right project & product.- To formulate the effective & profitable project.- To understand process, procedure , rules &

regulation for setting-up the project.- To know the sources of help , incentives & subsidies

available from govt. to set-up the project.

FUNCTIONS OF AN ENTREPRENEUR-

1) PERCEIVING MARKET OPPORTUNITIES.2) PURCHASING INPUTS & RESOURCES.3) MARKETING OF PRODUCTS & RESPONDING

COMPETITION.4) DEALING WITH THE PUBLIC BUREAUCRACY

(Concessions, licences, Taxes, etc.)5) MANAGING HUMAN RELATIONS WITHIN

THE FIRM.

6) MANAGING CUSTOMER & SUPPLIER RELATIONS.

7) MANAGING FINANCE.8) MANAGING PRODUCTION (Control by written

records, Supervision, coordinating input flows with orders, maintenance )

9) UPGRADING PROCESS & PRODUCT QUALITY.

10) INTRODUCING NEW PRODUCTION TECHNIQUES & PRODUCTS.

11) SECURING ADEQUATE FINANCIAL RESOURCE, RELATIONS WITH EXISTING & POTENTIAL INVESTORS.

12) DEVISING OF NEW PRODUCTS TO MEET OR ANTICIPATE CONSUMER DEMAND.

13) MAINTENANCE OF GOOD RELATIONS WITH PUBLIC AUTHORITIES .

14) DETERMINATION OF OBJECTIVES/PROCEDURES & CHANGE OF THESE PROCEDURES OR OBJECTIVES AS CONDITIONS REQUIRED OR MADE ADVANTAGEOUS.

15) REQUISITION OF EFFICIENT TECHNOLOGICAL EQUIPMENT & REVISION OF IT AS NEW MACHNERY REQUIRED.

16) DEVELOPMENT OF ORGANIZATION INCLUDING EFFICIENT RELATIONS WITH SUBORDINATES & ALL EMPLOYEES.

ENTREPRENEURSHIP DEVELOPMENT PROGRAMME

- A Programme designed to help a person in strengthening his entrepreneurial skills

, enhancing the motivation, knowledge & skills of potential entrepreneurs & assisting them in developing their own ventures.

NEED FOR EDPs-- Eliminates Poverty & Unemployment.- Balanced Regional Development.- Prevents Industrial Slums.

- Harnessing Locally Available Resources.- Defuses Social Tension.OBJECTIVES OF EDPs-- To identify & train potential entrepreneurs.- To impart basic managerial understanding.- To develop develop necessary knowledge &

skills among participants.

- To acquire basic managerial skills to run the project effectively.

- To know the pros & cons of being an entrepreneur.

WHO REQUIRES EDP ??

1. Business executives2. Technical and other qualified group3. Women entrepreneurs4. Ex-servicemen5. Weaker sections of the society