WHO IS AN ENTREPRENEUR?

An entrepreneur is a person with a dream, originality and daring, who acts as the boss, who decides as to how the commercial organization shall run, who coordinates all activities or other factors of production, who anticipates the future trend of demand and prices of products. An entrepreneur is one of the important segments of economic growth. Basically he is a person responsible for setting up a business or an enterprise. Infact, he is one who has the initiative, skill for innovation and who looks for high achievements. He is a catalytic agent of change and works for the good of people. He puts up new green-field projects that create wealth, open up many employment opportunities and leads to the growth of other sectors. The entrepreneur displays courage to take risk of putting his money into an idea, courage to face the competition and courage to take a leap into unknown future and create new enterprises/ business. This creative process is the life blood of the strong enterprise that leads to the growth and contributes to the national development. The entrepreneur will always work towards the creation and enhancement of entrepreneurial society. The best entrepreneur in any developing country is not the one who uses much capital but an individual who knows how to organize the employment and training of his employees. A classic example is that of Mr. Dhirubhai Ambani because he had all the dynamic qualities of a successful entrepreneur, as a result of which today, he was the owner of the largest private company in India. All decisions which he had taken to grow were instinct and no one had taught him to take decisions.

BASICS OF AN ENTREPRENEUR

We can define entrepreneur as one who innovates, raises money, assembles inputs, choose managers and sets the organization going with his ability to identify them. 1

As per Peter Drucker- An entrepreneur is one who always searches for change, responds to it as an opportunity. Entrepreneurs innovate. Innovation is a specific instrument of entrepreneurship. As per Joseph A. Schumpeter- Entrepreneur is one who innovates, raises money, and assembles inputs, chooses managers and sets the commercial organization going with his ability to identify them and opportunities which others are not able to identify and is able to fulfill such economic opportunities. The process undertaken by an entrepreneur to augment his business interests gave birth to ENTREPRENEURSHIP.

THE CONCEPT OF ENTREPRENEURSHIP

ENTREPRENEURSHIP DEFINED: Entrepreneurship is an elusive concept. Entrepreneurship is based on purposeful and systematic innovation. It included not only the independent businessman but also company directors and managers who actually carry out innovative functions. -Schumpeter In the above definition, entrepreneurship refers to the functions performed by an entrepreneur in establishing an enterprise. Just as management is regarded as what managers do, entrepreneurship may be regarded as what entrepreneurs do. In other words, entrepreneurship is the act of being an entrepreneur. Entrepreneurship is a process involving various actions to be undertaken to establish an enterprise. It is thus, process of giving birth to a new enterprise. Entrepreneurship is composite skill, the resultant of a mix of many qualities and traits- these include tangible factors as imagination, readiness to take risks, ability to bring together and put to use other factors of production, capital, labour, land, as also tangible factors such as the ability to mobilize scientific and technological advances. A practical approach is necessary to implement and mange a project by securing the required licenses, approvals and finance from governmental and financial agencies. The personal incentive is to make profits from the successful management of the project. A sense of cost consciousness is even more necessary for the long term success of the enterprise. However, both are different sides of the same coin. Entrepreneurship lies more in the ability to minimize the use of resources and put them to maximum advantage. Without any awareness of quality and desire for 2

excellence, consumer acceptance cannot be achieved and sustained. Above all, entrepreneurship today is the product of teamwork and the ability to create, build and work as a team. The entrepreneur is the maestro of the business orchestra, wielding his baton to which the band is played. The basic two elements involved in entrepreneurship are as follows;INNOVATION Innovation, i.e. doing something new or something different is a necessary condition to be called a person as an entrepreneur. The entrepreneurs are constantly on the look out to do something different and unique to meet the requirements of the customers. They may or may not be inventors of new products or new methods f production but they possess the ability to foresee the possibility of making use of the inventions for their enterprises. In order to satisfy the changing preference of customers nowadays many enterprises have adopted the technique of innovation. For instance, pidilite industries innovated the new 5.rs pack of fevi quick which was accepted by the customers as it was easy to use when it was needed. Other example would be of the mobile enterprise which came up with the scheme for the customers of refill pack of 999.rs which says Zindagi bhar mobile raho which was accepted bye the customers. Since customers taste and preferences always keep on changing, hence the entrepreneur needs to apply invention on a continuous basis to meet the customers changing demand for products. RISK- BEARING Entrepreneurship is the propensity of mind to take calculated risks with confidence to achieve a predetermined business or Industrial objective. The capacity to take risk independently and individually with a view to making profits and seizing the opportunity to make more earnings in the market-oriented economy is the dominant characteristic of modern entrepreneurship. In fact he needs to be a risk taker, not risk avoider. His risk bearing ability enables him even if he fails in one succeed. The Japanese proverb says Fall seven times, stand up eight. Though the term entrepreneur is often used interchangeably with entrepreneurship, yet they are conceptually different. The relationship between the two is just like the two sides of the same coin. Thus, entrepreneurship is concerned with the performance and co-ordination of the entrepreneurial functions. This also means that entrepreneur precedes entrepreneurship.

QUALITIES OF ENTREPRENEURSHIP
The qualities that contribute to the success of an entrepreneur are as follows: 1. Risk Taking: - Entrepreneurs are moderate risk takers. They enjoy he excitement of a challenge, but they do not gamble. Entrepreneurs avoid low- risk situations because there is a lack of challenge. They avoid high risk situations because they want to succeed. They like achievable challenges. They do not tend 3

to like situations where the outcome of a quest depends upon a chance and not on their efforts. They like to influence the outcome of their quest by putting in more efforts and then experiencing a sense of accomplishment. A risk situation occurs when an entrepreneur is required to make a choice between two or more alternatives whose potential outcomes are not known and must be evaluated in advance, with limited information. A risk situation involves potential gain and potential loss. As the size of the business expands the problems and opportunities become more numerous and complex. Business growth and development require an entrepreneur not to be afraid of taking decisions and certain risks. Most people are afraid to take risks because they want to be safe and avoid failure. An entrepreneur always takes a calculated risk and is not afraid of failure. 2. Self- Confidence: - A man with self confidence has clear thoughts and welldefined goals to achieve in his life. An entrepreneur gets into business or industry with a high level of self- confidence. He is able to evaluate his competencies and capabilities in a realistic manner. He can set realistic and challenging goals. He is confident of achieving these goals. He possesses a sense of effectiveness, which ultimately contributes to success of his venture. He puts forward his case confidently and gets needed help from concerned agencies/ authorities. 3. Optimist: - An entrepreneur is able to visualize the hidden opportunities in the environment and translate them into business realities. An entrepreneur exhibits a positive and optimistic attitude towards such opportunities. The entrepreneur approaches his task with the hope of success and not with a fear of failure. In the process of accomplishing his task he may also fail but the failure experience does not change his thinking. He is always an optimist in his outlook. The positive outlook develops a drive in the entrepreneur to attempt new things and innovate. 4. Need for achievement: - The need to excel known as achievement is a critical factor in the personality of an entrepreneur. People with high need for achievement have desire for success in competition with others or with a selfimposed standard of excellence. They try to accomplish something new and try to innovate themselves in long term goals. They try to accomplish challenging tasks. They know their own strengths and weaknesses, the facilitating factors and constraints in the environment and the resources needed to accomplish their tasks. If the objectives are accomplished they feel elated. 5. Need for independence: - The need for independence is the prime characteristic that has driven the entrepreneurs to start their own business. These entrepreneurs do not like to be controlled by others. They do not wait for direction from others and choose their own course of action. They set their own challenging goals and put efforts to achieve this goal. The independence provides opportunity for trying out new ideas and helps them achieve their goals. 6. Creativity: - Entrepreneurs are highly creative people. They always try to develop new products, processes or markets. They are innovative, flexible and are willing to adopt changes. They are not satisfied with conventional and routine 4

way of doing things. They involve themselves in finding new ways of doing the things for the better. 7. Imaginative: - Successful entrepreneurs possess a high degree of imagination and foresightedness. Entrepreneurs have a great vision. Knowing the present and the past the entrepreneur is able to predict the future events the business more accurately than others. It is because of their visionary nature and power of imagination that helps them in anticipating problems and evolving actions strategies for such problems. 8. Administrative ability: - A successful entrepreneur is always a good administrator. He knows the art of getting things done by other people without hurting their feelings of self- respect. He has strong motivation towards the achievement of a task and puts in necessary efforts in getting things done by others. 9. Communication ability: - Communication ability is the ability to communicate effectively. Good communications also means that both the sender and the receiver understand each other and are being understood. An entrepreneur who can effectively communicate with customers, employees, suppliers and bankers will always succeed in their business. 10. Clear objectives: - An entrepreneur has clear objectives as to the exact nature of the business, the nature of the goods to be produced and the subsidiary activities to be undertaken. A successful entrepreneur has the objective to establish the product to make profit or to render social service. 11. Business Secrecy: - An entrepreneur who is successful always guards his business secrets. Leakage of business secrets to trade competitors is a serious matter; therefore an entrepreneur should carefully guard it. An entrepreneur must be able to make a proper selection of his assistant since most of the time it is the assistant who leaks the trade secret. 12. Emotional stability: - The most important personality factors contributing to the success of an entrepreneur are emotional stability, personal relations, consideration and tactfulness. An entrepreneur must maintain good relations with the customers if he wishes to enjoy their continued patronage. He must also maintain good relation with his employees, whom he shall motivate to perform their jobs at a high level of efficiency. An entrepreneur who maintains good human relations with customers, employees, suppliers and the community has a better chance to succeed in his/ her business. 13. Open-mindedness: - Open- mindedness means a free and frank approach in accepting ones own errors and change for the better. An entrepreneur must be willing to learn from his past experience, mistakes and moulds himself for better. 14. Technical knowledge: - Technical knowledge implies knowledge about the product, process or technology used in manufacturing. An entrepreneur who has 5

reasonable level of technical knowledge will always be successful. Technical knowledge is easy to acquire if the entrepreneur tries hard to acquire it. 15. Patience: - Patience means ability to wait. Patience also means doing the work and waiting for the result. A certain amount of patience is necessary in any type of vocation. An entrepreneur should not wait for actions but can certainly wait for result for his efforts. 16. Hard working and energetic: - Ability and willingness to work hard is an important quality of an entrepreneur. A person having physical and mental stamina to cope with the hard work and human relation is fit to become a successful entrepreneur. By carrying out well- planned and systematic work, success is always the end result. 17. Good organizer: - Entrepreneurs are good organizers of resources like men, machines, materials and money needed to start and run the business smoothly. They can convince the employees, investors, customers and co- ordinate the activities of individuals and groups in the accomplishment of business objectives. An entrepreneur works like a coordinating force among the resources, mould and manages them effectively.

ENTREPRENEURIAL FUNCTIONS
An entrepreneur is said to perform the following functions: 1. Assumption of risk: - Risk bearing or uncertainty bearing is the most important function of an entrepreneur which he tries to reduce by his initiative, skill and good judgment. 2. Business decisions: - The entrepreneur has to decide a. To enter the industry this offers him the best prospects b. To produce goods that he thinks will pay him the most c. To employ those methods of production which seem to him the most profitable. d. To effect suitable changes in the size of the business, its location that are needed for the development of his business. 3. Managerial Functions: - The entrepreneur performs the managerial functions such as a. Formulating production plans b. Overseeing finances c. Dealing with the purchases of raw materials d. Providing production facilities e. Organizing sales In large establishments these management functions are delegated to professional managers an entrepreneur performs many useful functions such as Undertakes a venture Assumes risk and 6

Earns profits Identifies opportunities to start business either as a manufacturer or a distributor. The entrepreneurship exists in every field of economic endeavor. Entrepreneurship has also been developed in the trading sector. A manufacturing entrepreneur demonstrates his entrepreneurial talents by bringing out new products while a trading entrepreneur performs his entrepreneurial functions in creating demand for the business he deals.