Concept and definition of entrepreneurship

The capacity and willingness to develop, organize and manage a business venture along with any of
its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses.
In economics, entrepreneurship combined with land, labor, natural resources and capital can produce profit.
Entrepreneurial spirit is characterized by innovation and risk-taking, and is an essential part of a nation's ability to
succeed in an ever changing and increasingly competitive global marketplace.
Entrepreneurship is the process of starting a business, typically a startup company offering an innovative product,
process or service.
Entrepreneurship is the development of a business from the ground up coming up with an idea and turning it into
a profitable business. But while the definition of entrepreneurship may be simple, its execution is much more difficult.
"Entrepreneurship is the journey of opportunity exploration and risk management to create value for profit and/or
social good.

DEFINITION of 'Entrepreneur'
An individual who, rather than working as an employee, runs a small business and assumes all the risk and reward of
a given business venture, idea, or good or service offered for sale. The entrepreneur is commonly seen as a business
leader and innovator of new ideas and business processes.

BREAKING DOWN 'Entrepreneur'

Entrepreneurs play a key role in any economy. These are the people who have the skills and initiative necessary to
take good new ideas to market and make the right decisions to make the idea profitable. The reward for the risks
taken is the potential economic profits the entrepreneur could earn.

1.
2.
3.
4.

Someone who exercises initiative by organizing a venture to take benefit of an opportunity and, as
the decision maker, decides what, how, and how much of a good or service will be produced.
An entrepreneur supplies risk capital as a risk taker, and monitors and controls the business activities. The
entrepreneur is usually a sole proprietor, a partner, or the one who owns the majority of shares in
an incorporated venture.
According to economist Joseph Alois Schumpeter (1883-1950), entrepreneurs are not necessarily motivated
by profit but regard it as a standard for measuring achievement or success. Schumpeter discovered that they
Greatly value self-reliance,
strive for distinction through excellence,
are highly optimistic (otherwise nothing would be undertaken), and
always favor challenges of medium risk(neither too easy, nor ruinous).
The basic concepts and characteristics of entrepreneurship are concerned with developing a vision of what a
company should be, and then executing that vision by translating it into concrete steps and following through.
Entrepreneurs tend to be personally involved in building and shaping their companies, but business success also
depends on understanding personal limits, and developing strategies and systems to transcend these limits. Although
many business magazines publish long lists of entrepreneurial traits, entrepreneurship is more a way of thinking and
behaving than a set of specific, sharply defined character traits.

Measured Risk
Entrepreneurs are risk takers, staking money, time, and personal reputations to manifest their visions. But, like heros,
entrepreneurs are rarely reckless. Rather, successful entrepreneurs take measured risks, weighing the stakes and
the potential consequences, and then stepping into unknown territory to generate results. As risk takers, successful

entrepreneurs understand that failure can be a vital part of success, and that learning from mistakes can be a way of
reaping benefits from situations that might otherwise feel like failures.

Fiscal Responsibility
Businesses run on money, so entrepreneurs must have a solid sense of how to raise and manage funds. Successful
entrepreneurs have an intuitive sense of how much money they will need to run their companies, but they
supplement this sense with concrete documentation and calculations to mitigate uncertainties. Entrepreneurs are
willing to risk money by making investments in building their businesses, but they keep a close eye on the numbers in
order to understand how much they are spending and whether their expenditures are bringing about the desired
results.

Creativity
Starting a business is a creative endeavor that starts with conceptualizing a product or service, and then building a
practical infrastructure that can sustain itself while delivering that product or service. Entrepreneurship requires
creative problem solving as well as creative product development, and entrepreneurs have the creative freedom to
think outside the box and develop unique strategies that balance personal values with practical constraints.

Management Skills
Successful entrepreneurs see the big picture. They have the skills and the humility to define their own role in
company operations, and the interpersonal skills to successfully delegate the tasks they can't complete themselves.
Successful entrepreneurs are successful managers, sharing the company's vision and clearly communicating the
ways that this vision is infused into mundane daily tasks. An entrepreneur's management skills come into play in the
process of carefully choosing employees, and these skills carry over into careful training, as well as the daily
challenges of motivating and organizing workers.

Interest and Vision

The first factor for entrepreneurial success is interest. Since entrepreneurship pays off according to performance
rather than time spent on a particular effort, an entrepreneur must work in an area that interests her. Otherwise, she
will not be able to maintain a high level of work ethic, and she will most likely fail. This interest must also translate into
a vision for the company's growth. Even if the day-to-day activities of a business are interesting to an entrepreneur,
this is not enough for success unless she can turn this interest into a vision of growth and expansion. This vision must
be strong enough that she can communicate it to investors and employees.
Ability to plan: Entrepreneurs must be able to develop business plans to meet goals in a variety of areas,
including finance, marketing, production, sales and personnel.
Communication skills: Entrepreneurs should be able to explain, discuss, sell and market their goods or
services.
Marketing skills: Good marketing skills, which result in people wanting to buy goods or services, are critical to
entrepreneurial success.

 Interpersonal skills: The ability to establish and maintain positive relationships with customers and clients,
employees, financial lenders, investors, lawyers and accountants, among others, is crucial to the success of the
entrepreneur's business venture.
Leadership skills: The ability to develop a vision for the company and to inspire employees to pursue it is
imperative for success.

Entrepreneur And Economic Development

The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering economic
growth and development. Entrepreneurship is one of the most important input in the economic
development of a country. The entrepreneur acts as a trigger head to give spark to economic activities by
his entrepreneurial decisions. He plays a pivotal role not only in the development of industrial sector of a
country but also in the development of farm and service sector. The major roles played by an
entrepreneur in the economic development of an economy is discussed in a systematic and orderly
manner as follows.
(1) Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilising the idle savings of public. They employ their own
as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial activities lead
to value addition and creation of wealth, which is very essential for the industrial and economic
development of the country.
(2) Creates Large-Scale Employment Opportunities:
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic problem
of underdeveloped nations. With the setting up.of more and more units by entrepreneurs, both on small
and large-scale numerous job opportunities are created for others. As time passes, these enterprises
grow, providing direct and indirect employment opportunities to many more. In this way, entrepreneurs
play an effective role in reducing the problem of unemployment in the country which in turn clears the
path towards economic development of the nation.
(3) Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting up of industries in less developed and
backward areas. The growth of industries and business in these areas lead to a large number of public
benefits like road transport, health, education, entertainment, etc. Setting up of more industries lead to
more development of backward regions and thereby promotes balanced regional development.
(4) Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial and business activity. Industrial development
normally lead to concentration of economic power in the hands of a few individuals which results in the
growth of monopolies. In order to redress this problem a large number of entrepreneurs need to be
developed, which will help reduce the concentration of economic power amongst the population.
(5) Wealth Creation and Distribution:
It stimulates equitable redistribution of wealth and income in the interest of the country to more people
and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities also
generate more activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per Capita Income:
Entrepreneurs are always on the look out for opportunities. They explore and exploit opportunities,,
encourage effective resource mobilisation of capital and skill, bring in new products and services and
develops markets for growth of the economy. In this way, they help increasing gross national product as
well as per capita income of the people in a country. Increase in gross national product and per capita
income of the people in a country, is a sign of economic growth.
(6) Improvement in the Standard of Living:
Increase in the standard of living of the people is a characteristic feature of economic development of the
country. Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest
innovations in the production of wide variety of goods and services in large scale that too at a lower cost.
This enables the people to avail better quality goods at lower prices which results in the improvement of
their standard of living.
(7) Promotes Country's Export Trade:
Entrepreneurs help in promoting a country's export-trade, which is an important ingredient of economic
development. They produce goods and services in large scale for the purpose earning huge amount of
foreign exchange from export in order to combat the import dues requirement. Hence import substitution
and export promotion ensure economic independence and development.
(8) Induces Backward and Forward Linkages:
Entrepreneurs like to work in an environment of change and try to maximise profits by innovation. When
an enterprise is established in accordance with the changing technology, it induces backward and forward
linkages which stimulate the process of economic development in the country.
(9) Facilitates Overall Development:

Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an enterprise is
established, the process of industrialisation is set in motion. This unit will generate demand for various
types of units required by it and there will be so many other units which require the output of this unit. This
leads to overall development of an area due to increase in demand and setting up of more and more
units. In this way, the entrepreneurs multiply their entrepreneurial activities, thus creating an environment
of enthusiasm and conveying an impetus for overall development of the area.

FACTORS AFFECTING ENTREPRENEURIAL GROWTH

Economic Factors:Capital, labour, raw materials and market are the main economic factors.
(a)

Capital:

Capital is one of the most important prerequisites to establish an enterprise. Availability of capital helps an
entrepreneur to bring together the land of one, machine of another and raw material of yet another to
combine them to produce goods. Therefore, capital is regarded as lubricant to the production process.
Basically, capital is the life blood of any activity. If capital is available, people who have innovative ideas
would like to put them into reality. Without having any obstacles, if capital is available, it will act as a
lifeline to entrepreneurs. So, if capital is available, entrepreneurial activities will increase.
(b)

Labour:

The quality and quantity of labour is another factor which influences the emergence of entrepreneurship.
Availability of labour makes entrepreneurship attractive. More than abundantly available labour, the
presence of skilled labour force is very important because such a workforce is generally less mobile than
other resources. If entrepreneurial activities are initiated near areas where labour is available, then it is
easy to carry out the business more comfortably and profitably at low cost. This is why one finds textile
units and machine tools manufacturing industries concentrated in certain cities like Coimbatore, Tiruppur,
Ludhiana, Rajkot, Baroda, etc. just because of availability of skilled labour force required for such units.
(c)

Raw Materials:

Raw materials are required for establishing any industrial activity and therefore has an influence in the
emergence of entrepreneurship. In the absence of raw materials, neither any enterprise can be
established nor an entrepreneur can emerge. In some cases technological innovations can compensate
for raw material inadequacies. The supply of raw materials is not influenced by themselves but becomes
influential depending upon other opportunity conditions. The more favourable these conditions are, the
more likely is the raw material to have its influence on entrepreneurial emergence.
(d)

Market :

It is not only the availability of capital, labour and raw materials but a readily available market that attracts
entrepreneurial activities. Ultimately, it is the market that fetches revenue for any business. If sufficient
market is not there, people will naturally hesitate to do business in a sector where there is no market. In

addition to market opportunities, it is equally important to ensure future market opportunities for the
emergence of entrepreneurial activities.
NON-ECONOMIC FACTORS:Social Factors:
Development of entrepreneurship in a society may take place not just because of better economic factors
but because of the presence of positive social factors. The following social factors influence the
development of entrepreneurship in a society.
(a)

Social norms and values:

A society sets certain norms and values for the behaviour of people who are part of that society. If people
violate or overstep these norms and values, certain restrictions are likely to be imposed on them. As a
result, many people are forced to accept certain types of jobs and tasks that reflect the social
environment. If the society has an open and flexible approach towards various types of jobs and works,
then people will feel free to do whatever they like and even go in for innovation and creativity. When there
is more openness and flexibility, entrepreneurship will not only emerge but also thrive.

(b) Social Mobility:

It means the people of society transfers from one place to another exchange
culture, attitude etc. If mobility is positive then growth is also positive.
(c)

Social pressure:

At times, entrepreneurship can emerge in a society due to social restriction too. If a society is orthodox,
close and imposes a lot of restrictions, then it is likely to backfire. People who are at the receiving end are
likely to react strongly and go in for change. In other words, because of negative pressure, more number
of people would like to become entrepreneurs as a means of improving their status. It has been noticed
that where people were marginalised, they became entrepreneurs just to prove their abilities and
establish an identity in the society.
(d)

Respect and Status:

If societies accord recognition and respect to people who dare to do something different and creative, it
proves to be an encouragement for others to do something enterprising. Therein lies the emergence of
entrepreneurship. In the traditional societies, people were looked down upon rather than encouraged for
deviating from the set norms or regular occupation. This means there was no respect for change. Thus,
societies where there is respect and recognition for people to do something different are more likely to
see the development of entrepreneurial activities.
(e)

Security:

The view regarding role of social security in encouraging entrepreneurship development is rather divided.
One school of thought is of the view that people are more prone to take entrepreneurial risks in secure
social environments. On the other hand, there are others who argue that entrepreneurship will more likely
emerge if there are turbulent conditions. In both cases, there is scope for entrepreneurship development.
3.

Psychological Factors

(a)

Need Achievement:

The most important psychological theories of entrepreneurship was put forward in

the early 1960s by David McClelland. According to McClelland need achievement is
social motive to excel that tends to characterize successful entrepreneurs,
especially when reinforced by cultural factors. He found that certain kinds of people,
especially those who became entrepreneurs, had this characteristic. Moreover,
some societies tend to reproduce a larger percentage of people with high need
achievement than other societies. McClelland attributed this to sociological factors.
Differences among societies and individuals accounted for need achievement
being greater in some societies and less in certain others. Analyzing this
phenomenon, Paul Wilken has said, entrepreneurship becomes the link between
need achievement and economic growth, the latter being a specifically social
factor.
The theory states that people with high need-achievement are distinctive in several
ways. They like to take risks and these risks stimulate them to greater effort. The
theory identifies the factors that produce such people. Initially McClelland attributed
the role of parents, specially the mother, in mustering her son or daughter to be
masterful and self-reliant. Later he put less emphasis on the parent-child
relationship and gave more importance to social and cultural factors. He concluded
that the need achievement is conditioned more by social and cultural
reinforcement rather than by parental influence and such related factors.

(b)

Withdrawal of Status Respect:

There are several other researchers who have tried to understand the psychological roots of
entrepreneurship. One such individual is Everett Hagen who stresses the-psychological consequences of
social change. Hagen says, at some point many social groups experience a radical loss of status. Hagen
attributed the withdrawal of status respect of a group to the genesis of entrepreneurship. Giving a brief
sketch of history of Japan, he concludes that it developed sooner than any non-western society except
Russia due to two historical differences. First, Japan had been free from colonial disruption and secondly,
the repeated long continued withdrawal of expected status from important groups (samurai) in its society
drove them to retreatism which caused them to emerge alienated from traditional values with increased
creativity. This very fact led them to the technological progress through entrepreneurial roles.
Hagen believes that the initial condition leading to eventual entrepreneurial behaviour is the loss Of status
by a group. He postulates four types of events can produce status withdrawal
(a)

The group may be displaced by force;

(b)

It may have its value symbols integrated;

(c)

It may drift into a situation of status inconsistency; and

(d)

It may not be accepted the expected status on migration in a new society.

He further postulates that withdrawal of status respect would give rise to four possible reactions and
create four different personality types
(a)

Retreatist: He who continues to work in a society but remains different to his work and position.

(b) Ritualist: He who adopts a kind of defensive behaviour and acts in the way accepted and approved
in his society but no hopes of improving his position.
(c)

Reformist: He is a person who forements a rebellion and attempts to establish a new society; and

(d)

Innovator: He is a creative individual and is likely to be an entrepreneur.

Hagen maintains that once status withdrawal has occured, the sequence of change in personality
formation is set in motion. He refers that status withdrawal takes a long period of time as much as five
or more generations to result in the emergence of entrepreneurship.
4.

Government Actions

The government by its actions or failure to act also does influence both the economic and non-economic
factors for entrepreneurship. Any interested Government in economic development can help, through its
clearly expressed industrial policy, promote entrepreneurship in one way or other. By creating basic
facilities, services and utilities and by providing incentives and concessions, the Government can provide
the prospective entrepreneurs a facilitative socio-economic setting. Such conducive setting minimises the
risks which the entrepreneurs are to face. Thus, the supportive actions of the Government appear as the
most conducive to the entrepreneurial growth. This is true of the Indian entrepreneurs also.

Entrepreneurship Development Programmes: Meaning, Need and Objectives of

EDP!
Meaning:
As the term itself denotes, EDP is a programme meant to develop entrepreneurial abilities among the
people. In other words, it refers to inculcation, development, and polishing of entrepreneurial skills into a
person needed to establish and successfully run his / her enterprise. Thus, the concept of
entrepreneurship development programme involves equipping a person with the required skills and
knowledge needed for starting and running the enterprise.
Let us also consider a few important definitions of EDPs given by institutions and experts:
Small Industries Extension and Training Institute (SIET 1974), now National Institute of Small Industry
Extension Training (NISIET), Hyderabad defined EDP as an attempt to develop a person as entrepreneur
through structural training.
The main purpose of such entrepreneurship development programme is to widen the base of
entrepreneurship by development achievement motivation and entrepreneurial skills among the less
privileged sections of the society.
According to N. P. Singh (1985), Entrepreneurship Development Programme is designed to help an
individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for
playing his entrepreneurial role effectively. It is necessary to promote this understanding of motives and
their impact on entrepreneurial values and behaviour for this purpose. Now, we can easily define EDP as

a planned effort to identify, inculcate, develop, and polish the capabilities and skills as the prerequisites of
a person to become and behave as an entrepreneur.
Need for EDPs:
That, entrepreneurs possess certain competencies or traits. These competencies or traits are the
underlying characteristics of the entrepreneurs which result in superior performance and which distinguish
successful entrepreneurs from the unsuccessful ones.
The need for EDP can be visualized from the following explanations:
i. EDP facilitates in removal of industrial slums because it leads for decentralization of industries.
ii. It facilitates in harnessing of locally available resources which are abundant by providing training and
education to entrepreneurs.
iii. In defuses social tension by diverting unemployed youths for self employment. Young youths feel
frustrated in the absence of employment.
iv. Entrepreneur mobilizes idle savings of the people into productive investment and thereby helps in the
state of capital formation.
v. EDP helps in improving standard of living of the people because innovation leads to production of
goods and services in a wide sphere.
vi. It facilitates balanced regional development as it enables development of entrepreneurs in different
areas of the state or county.

Objectives of EDP:
The major objectives of the Entrepreneurship Development Programmes (EDPs) are to:
a. Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.
b. Analyse environmental set up relating to small industry and small business.
c. Select the product.
d. Formulate proposal for the product.
e. Understand the process and procedure involved in setting up a small enterprise.
f. Know the sources of help and support available for starting a small scale industry.
g. Acquire the necessary managerial skills required to run a small-scale industry.
h. Know the pros and cons in becoming an entrepreneur.
i. Appreciate the needed entrepreneurial discipline.
j. Besides, some of the other important objectives of the EDPs are to:

k. Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive for their
realization.
l. Prepare him / her to accept the uncertainty in running a business.
m. Enable him / her to take decisions.
n. Enable to communicate clearly and effectively.
o. Develop a broad vision about the business.
p. Make him subscribe to the industrial democracy.
q. Develop passion for integrity and honesty.
r. Make him learn compliance with law.

Importance of entrepreneurship development programme (EDP) is to enable entrepreneurs initiating

and sustaining the process of economic development in the following ways1. Creation of Employment Opportunities : Unemployment is one of the most important problems
confronting developing and underdevelopment countries, EDPs enable prospective entrepreneurs in the
setting up of their own units, thus enabling them to get self employment. With the setting up of more and
more units by entrepreneurs, both on small and large scale, numerous job opportunities are created for
the others.
Entrepreneur in this way get an opportunity to lead an independent and honorable life and at the same
time they enable others in getting gainful employment. Several schemes like Nehru Rozgar Yojna,
National Rural Employment Programme (NREP), Integrated Rural Development Programme (IRDP) etc.
have been initiated by the government, of India in this direction. The thrust of all these schemes is to
eliminate poverty and generate gainful employment opportunities for the unemployed. Thus entrepreneur
can play an effective role in reducing the problem of unemployment.
2. Capital Formation : It is not possible to set up an enterprise without adequate funds. Entrepreneur as
an organizer of factors of production employs his own as well as borrowed resources for the setting up of
his enterprise. Entrepreneur mobilizes idle savings of the public and put them to productive use. In this
way he helps in capital formation which is so essential for the industrial and economic development of a
country. Various development banks like ICICI, IFCI, IDBI; SFCs, SIDCs take initiative in promoting
entrepreneurship through assistance to various agencies involved in EDP and by providing financial
assistance to new entrepreneurs.
3. Balanced Regional Development : Small scale units can be set up in industrially backward and
remote areas with limited financial resources. Successful EDPs assist in accelerating the pace of
industrialization in the backward areas and reduce the concentration of economic power in the hands of a
few, Entrepreneurs feel like taking advantage of the various concessions and subsidies offered by the
state and central government. Success story of entrepreneurs set right example for others to follow and
this accelerates the pace of industrialization in the backward areas. Setting up of more units leads to
more development of backward areas and balanced regional development.

4. Use of Local Resources : In the absence of any initiative local resources are likely to remain
unutilized. Proper use of these resources can result in the progress or development of the area and that
too at lower cost. Alert entrepreneurs seize the opportunity and exploit it in the best interests of the area
and industry. Effective EDPs can help in the proper use of local resources by providing guidance,
assistance, education and training to the prospective entrepreneurs.
5. Improvement in per Capital Income : Entrepreneurs are always on the look out for opportunities.
They explore and exploit the opportunities. Entrepreneurs take lead in organising various factors of
production by putting them into productive use through the setting up of enterprises. More enterprises will
lead to more production, employment and generation of wealth in the form of goods and services. It will
result in the increase in the overall productivity and per capita income in the country. EDPs play a positive
role in the setting of more units and thus help in generation of more employment and income.
6. Improvement in the Standard of Living : Entrepreneurs by adopting latest innovations help in the
production of wide variety of goods & services. By making efficient use of the resources, they start
producing more of better quality and that too at lower costs. This enable them to ensure easy availability
of better quality products at lower prices to the consumers which result in the improvement in the
standard of living of the people. EDPs provide the necessary support to entrepreneurs by educating them
about the latest innovations and market trends.
7. Economic Independence : Entrepreneurs enable a country to produce wide variety of better quality
goods & services and that too at competitive prices. They develop substitutes of the goods being
imported and thus prevent over-dependence on foreign countries and at the same time help in the saving
of precious foreign exchange. Through sale of their surplus products in foreign market entrepreneurs
enable a country to earn foreign exchange, which is so essential for meeting developmental needs of the
economy. Export promotion and import substitution thus help in promoting economic independence of the
economy.
8. Preventing Industrial Slums : Industrially developed areas are faced with problem of industrial slums,
which result in over burdening of civic amenities and adverse impact on the health of people. Dispersal of
industries can help in the overcoming of this grave problem. EDPs can help in preventing spread of
industrial slums by providing various incentives, subsidies and infrastructural support to entrepreneurs for
setting up their enterprises in industrially backward areas. This will also help in reducing pollution and
overtaxing of civic amenities.
9. Reducing Social Tension : Unemployment amongst the young and educated people is emerging as
the major cause of social unrest. People are bound to feel frustrated if they fail to get gainful employment
after completion of their education. EDPs can help in channelizing the talent of this section of society in
the right direction by providing proper guidance, training and assistance for setting up their enterprises.
This results in generation of self employment and prevention of social tension, unrest etc.
10. Facilitating Overall Development : An entrepreneur acts as a catalytic agent for change which
results in chain reaction. With the setting up of an enterprise the process of industrialization is set in
motion. This unit will generate demand for various types of inputs required by it and there will be so many
other units which will require the output of this unit. This leads to overall development of an area due to
increase in demand and setting up of more and more units there. Moreover success of one entrepreneur
sets the right type of example for others to follow. Entrepreneurs, thus, create an environment of
enthusiasm and convey a sense of purpose. This gives future impetus to the overall development of that
area.

successful entrepreneurs all possess the following 10 traits.

1. Full of determination
When you set out to become an entrepreneur it will require you to set very clear goals along the way.
Growing your business, increasing sales and hiring new employees require several micro-goals within
them to be executed successfully.
This type of workload and challenge is enough to stop many people from pursuing the entrepreneurial
career path. You have to be determined from the beginning to be successful -- before you even start. If
you arent fully determined to make it there is a good chance you will crumble under the pressure.
2. Not afraid to take risks
Some of the most successful entrepreneurs took major risks, and they paid off in a big way. Shark
Tanks Barbara Corcoran turned a $1,000 loan into a $5 billion-dollar real estate business that she sold for
$66 million back in 2001.
When most people hear the word risk they relate it to a financial risk, but in the case of Corcoran, the
initial financial investment wasnt very risky. The risk came into play when she went all in, devoting 100
percent to making her business work with such a small amount of seed capital. Many would assume it
isnt possible to start a business with very little money, but those who arent afraid to take risks dont see
things such as limited funding as a handicap.
3. High level of confidence
Entrepreneurs that have a high level of confidence are able to get the job done even under the most
stressful conditions. They understand that big challenges breed big rewards. This is the same mentality
that allows successful entrepreneurs to spot an opportunity when most just see a possible challenge.
When most focus on the challenge, a successful entrepreneur focuses on the finish line and the end
reward.
4. Craves learning
You have to stay sharp, and that requires that you are constantly learning. Industries constantly change
and evolve -- only those that are also growing through constant learning will stay ahead. You will always
have competitors breathing down your neck trying to surpass you. There will always be someone claiming
to be the next greatest thing.
Staying sharp, through constant learning, will enable you to stay ahead and avoid getting passed. Read
books and wake up earlier in the morning to read industry news -- do everything you can to constantly
learn and absorb new information.
5. Understands failure is part of the game
Richard Branson said it best: Few first ventures work out. It is how a beginning entrepreneur deals with
failure that sets that person apart. In fact, failure is one of the secrets to success, since some of the best
ideas arise from the ashes of a shuttered business.
If you understand that failure is part of being an entrepreneur, you will take those failures and use them as
learning experiences. Real world experience, even failing, will teach you more than you would ever learn
in a classroom.

6. Passionate about his or her business

Passion fuels the drive and determination required to be successful, whether you are building a company
from the ground up or buying an Internet business that already has a proven track record.
You have to thoroughly enjoy what you are doing -- there will be long days and nights and at some points
along the way your business will consume you. If you arent fully passionate about what you are doing the
added stress and obstacles will build up on your shoulders and eventually be responsible for your
collapse.
7. Highly adaptable
If entrepreneurs had the ability to see what was hiding around each turn it would make it much easier -but unfortunately that is not the case. There can be surprises around every corner, even with a well
thought out plan and strategy.
If you are extremely adaptable it gives you the ability to respond quickly in any situation. This allows you
to make decisions that will navigate you out of trouble and allow you to thrive in environments that would
sink those that arent adaptable.
8. Good understanding of money management
It doesnt matter if you are bootstrapping your business, using personal credit cards or have millions of
dollars from investors -- you must have excellent money management skills. Poor financial decisions,
such as overspending or allocating funds to less important tasks can quickly ruin a business.
Have a clear financial map drawn out -- what are your essential monthly expenses and obligations? How
much can you allocate monthly for items that fall outside of the essential category? Stick to your plan
and make sure all founders and shareholders are on the same page. Money problems can destroy a
business the same way they can ruin a marriage.
9. Expert at networking
A large collection of business cards and a huge contact list doesnt make you an expert at networking.
Building value-based relationships that are truly meaningful is what networking is all about -- these are the
relationships that lead to business opportunities and long-term relationships that are mutually beneficial.
I am constantly networking with people that can not only help my business currently, but also have the
potential to help me in the future as well. Dont be selfish when networking. You should always know how
you can help someone and provide value to them before even thinking about how the relationship will be
potentially beneficial to you.
10. Ability to sell and promote
If you watch the TV show Shark Tank then you have certainly heard Mark Cuban tell entrepreneurs on
several occasions that knowing how to sell is an absolutely essential part of being a successful business
owner.
If you cant express what it is that makes your product or service a solution to a problem, you will be in for
a rough ride. If you, the creator, cant explain it, then who will?

OR

1. Strong leadership qualities

Leaders are born, not made. Do you find yourself being the go-to person most of the time? Do you find
people asking your opinion or to help guide or make decisions for them? Have you been in management
roles throughout your career? A leader is someone who values the goal over any unpleasantness the
work it takes to get there may bring. But a leader is more than just tenacious. A leader has strong
communication skills and the ability to amass a team of people toward a common goal in a way that the
entire team is motivated and works effectively to get there as a team. A leader earns the trust and respect
of his team by demonstrating postive work qualities and confidence, then fostering an environment that
proliferates these values throught the team. A leader who nobody will follow is not a leader of anything at
all.
2. Highly self-motivated
You probably know from knowing even a little bit about some of the most famous business entrepreneurs
in history that leaders are typically pretty intense personalities. Nobody makes progress by sitting back
and waiting for it to find them. Successful people go out into the world and invoke change throught their
actions. Typically, leaders enjoy challenges and will work tirelessly to solve problems that confront them.
They adapt well to changing situations without unraveling and are typically expert of helping their teams
change with them by motivating them toward new goals and opportunities. Often you will learn that
successful entrepreneurs are driven by a more complete vision or goal than simply the task at hand and
able to think on a more universal level in that regard. They are also often very passionate about their
ideas that drive toward these ultimate goals and are notoriously difficult to steer off the course.
3. Strong sense of basic ethics and integrity
Business is sustainable because there is a common, understood code of ethics universally that underpins
the very fabric upon which commerce is conducted. While cheaters and thieves may win in the short term,
they invariably lose out in the long run. You will find that successful, sustainable business people maintain
the highest standards of integrity becauase, at the end of the day, if you cannot prove yourself a credible
business person and nobody will do business with you, you are out of business. With importance in
working with clients or leading a team, effective leaders admit to any error made and offer solutions to
correct rather than lie about, blame others for, or dwell on the problem itself.
4. Willingness to fail
Successful entrepreneurs are risk takers who have all gotten over one very significant hurdle: they are
not afraid of failure. That's not to say that they rush in with reckless abandon. In fact, entrepreneurs are
often successful because they are calculating and able to make the best decisions in even the worst of
cases. However, they also accept that, even if they make the best decision possible, things don't always
go according to plan and may fail anyhow. If you've heard the old adage, "nothing ventured, nothing
gained," that's exactly what it's saying: do not be afraid to fail, put it out there and give it your best shot.
Again, there's not one successful entrepreneur out there sitting on his couch asking, "what if?"
5. Serial innovators
Entrepreneurs are almost defined by their drive to constantly develop new ideas and improve on existing
processes. In fact, that's how most of them got into business in the first place. Successful people
welcome change and often depend on it to improve their effectiveness as leaders and ultimately the
success of their businesses as many business concepts rely on improving products, services and
processes in order to win business.
6. Know what you don't know
While successful entrepreneurs are typically strong personalities overall, the best have learned that
there's always a lesson to be learned. They are rarely afraid to ask questions when it means the answers
will provide them insight they can then leverage to effect. Successful entrepreneurs are confident, but not

egotistical to the point that their bull-headedness is a weakness that continually prohibits them from
seeing a bigger picture and ultimately making the best decisions for the business.
7. Competitive spirit
Entrepreneurs enjoy a challenge and they like to win. They would have to since starting a business is
pretty much one of the biggest challenges a person can take on in their lifetime. In business it's a
constant war with competition to win business and grow market share. It's also a personal challenge to
use all of this to focus inward and grow a business from nothing into a powerhouse that either makes a lot
of money or is so effective that it is sold or acquired for a profit as well.
8. Understand the value of a strong peer network
In almost every case, entrepreneurs never get to success alone. The best understand it takes a network
of contacts, business partners, financial partners, peers and resources to succeed. Effective people
nurture these relationships and surround themselves with people who can help make them more
effective. Any good leader is only as good as those who support him.

THE SIGNIFICANT DIFFERENCES BETWEEN THE ENTREPRENEUR AND THE

MANAGER:
1.

Behavioral Differences
The typical entrepreneur wants to "be in control" of his life (which is often the reason why he started the
business), of his business and especially of his employees.
The professional manager, on the other hand, enters a company which needs to delegate authority, since
it has reached the stage in its development where the entrepreneur can no longer "do it all himself".

2.

Management Style
The entrepreneurial management style is very demanding, leaving very little room for error, and none at
all for actual failures, since in most cases the business is a "one man show", even if there are other
employees.
The professional manager, however, must be tolerant of failure (and see it as a basis for learning) and
develop an administrative team, since a basic assumption is that responsibility in the organization must
pass from the "all-knowing" entrepreneur to people who still have to learn about the business.

3.

The Moving Force

Entrepreneurial management is characterized by concepts such as "entrepreneurship", "creativity",
"innovation", and so on, indicators of the desire to create "something from nothing".
Professional management is characterized by concepts such as "order", "organization", "procedures", and
so on, indicating the desire to organize and maintain what exists.

4.

Growth
Entrepreneurial management is noted for its ability to react quickly and effectively to new business
opportunities. This ability is the foundation for rapid growth of the company in its entrepreneurial stage.
Professional management is noted for medium and long term strategic planning, which leads to controlled
growth of the company during the process of establishment.

5.

Organizational Structure

The entrepreneurial organization is characterized by its informal, flexible structure, which allows it to
adapt to changes required by its rapid growth.
Professional management, on the other hand, requires a formal and fairly rigid organizational structure,
which leaves no room for rapid reactions to business opportunities, but protects the organization from
sudden collapse.
6.

Decision-Making
The entrepreneur usually makes decisions, even those of critical importance for his business, on the
basis of his own personal intuition and "gut feelings".
The professional manager makes decisions after collecting detailed information and reaching operative
conclusions, while relying on experts both from within and outside the organization.

7.

Definition of Aims
The entrepreneur describes his organization in terms of "vision", "dream" and "mission" and manages to
give his employees the feeling that they are working for a higher aim than just marketing a product and/or
service.
The professional manager describes the company aims in terms of market segments, yield per worker
and profitability.

8.

Attitude toward Money

Although the accepted myth is that entrepreneurs are driven by the desire for power and money, both
theoretical and empirical studies have shown that typical entrepreneurs are in fact driven by the desire for
success rather than power. This means that, in the eyes of most entrepreneurs, while money is a
welcome by-product of their efforts, it is not the reason for their efforts.

The professional business manager, on the other hand, looks at the business he manages through
"financial eyes" and defines its aims (usually in the short term only) purely in financial terms.
9.
Attitude toward Risk
The myths describe entrepreneurs as "wild risk-takers", although many studies have shown that in fact
the typical entrepreneur is very good at assessing risks.
On the other hand, the professional manager, who sees his task as strengthening and maintaining the
company, is naturally afraid of risks and tries to maintain the status quo.

10.

Company Culture
The typical entrepreneur does not usually try to define a "culture" for the organization he sets up, since in
most cases he himself is the organization. The literature defines this situation as "the entrepreneurial
organizational culture", characterized by large doses of charisma and "manipulativeness".
The professional manager does try to establish a well-defined company culture, based on company
values on one hand and commercial aims on the other.
Conclusions
In the light of the foregoing, we can conclude that there is a world of difference between the
"entrepreneurial manager" and the professional manager, and indeed this was true until the last decade.
But, it has become clear in recent years that the ideal manager will be one who knows how to combine

certain traits of the professional manager, such as order and discipline, with entrepreneurial
characteristics such as quick reaction to business opportunities, creativity and the ability to fill employees
with a sense of vision and challenge.

Characteristic
Behavior Characterized by
Management Style

Entrepreneur
Desire for Control
One-Man Show

Driving Force

Creativity - Innovation

Organizational Growth
Organization Structure

Rapid Reaction
Informal, Flexible

Decision-Making

Intuitive

Definition of Aims
Attitude to Money
Attitude to Risk
Organizational Culture

In terms of "Vision"
A By-Product
Calculated Risks
"Entrepreneurial Culture"

Manager
Delegation of Authority
Management Team
Establish and Preserve the
Status Quo
Strategic Planning
Organized
Collect Information and Seek
Advice
In Commercial Terms
Measure of Success
Avoidance of Risks
"Management Culture"