Entrepreneur Definition

The function an entrepreneur carries out has been expressed differently by different people; 1) By an economist: a) Brings resources, labour, materials and other assets into combination that make their value greater than before. b) Introduces changes, innovations and a new order

Factors effecting Entrepreneurship

Supply Side [Entrepreneurial environment] Demand Side [Entrepreneurial Oppurtunity]

Psychology Human Capital Life Course Stage Social networks( common) Ethnic resources(common)

Environment Social networks( common) Ethnic resources(common)

Entrepreneurial attributes
Resourceful Purposeful Focused Risk taking Problem Solving Salesmanship Oriented Visionary Optimistic Leadership Oriented Ambitious Innovative Integrity based Adaptive Communicative Self Motivated Strategic Team Oriented Determined Curious Balanced

Managerial vs Entrepreneurial Decision Making

Sl.No Business Orientation Managerial Domain Entrepreneurial Domain

Strategic Orientation

Driven by resources currenly controlled

Driven by perception of oppurtunity

Commitment to oppurtunity Evollutionary of long duration

Revolutionary with short duration

Commitment of Single-staged with complete Multi-staged with minimal exposure at each resources commitment upon decision stage Control of resources Management Structure Ownership or employment of required resources Episodic use or rent of required resources

Formalized hierarchy

Flat with multiple informal networks

Cont..
2) By a psychologist: a) Driven by need to achieve something b) One who experiments and accomplishes c) To escape the authority of others 3) By a businessman a) Appears as a threat or aggressive competitor b) An ally, source of supply, customer. c) Creates wealth for others d) Finds better ways to utilize resources, reduce waste. E) Generates Job etc

CHALLENGES FACED BY ENTREPRENEURS

Delays Collections Financial Commitments Maintaining Cash Flows Lack of guidance Implementing certain rules Marketing Competition Skilled Workers Training of Employees

Raw material price Political environment Currency fluctuations Dumping Male dominance incase the entrepreneur is woman. Relationship with partners and Directors

Cont
Challenges

from other Individuals - Discouragement - Lack of Consistency - Rivalry and Jealousy Challenges from Society - Tradition - View w.r.t education

Definition-Entrepreneurship
Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks and receiving the resulting rewards of monetary and personal satisfaction and independence.

Entrepreneurial Process
Identification and evaluation of oppurtunity Developing the business plan Determining the resources required Managing the resulting Enterprises

Entrepreneurial Decision Making

I. Change from the present Life-Style
The restraining forces are

1. Work Environment 2. Disruption in Work II Formation of new Enterprises 1 Desirable Factors 2 Possible Factors

Cont
Desirable Factors Cultural Sub Cultural Family Teachers Peers

Cont..
Possible Government Background Marketing Financing Role Models

Type of Start-ups Life Style Firm Foundation Company High Potential Venture Gazelles

Importance of Entrepreneurs
Generate Employment Brings better Life-Style Generates Wealth Meets unfulfilled needs of the Society Brings better products Helps economic growth Ensures a vigorous and vitalized economy Are change agents in the society Serve as Role Models

Entrepreneurship & Economic Development

Initiating change in the structure of business and society. Commercializes Innovations and brings new products to the market. Recognizes unfulfilled needs in the society and fulfills it. Ensures an economy with high productivity.

Cont..
Ensures a vibrant economy generating more wealth. Re-distribution of wealth among new participants

Entrepreneurial Feelings
Locus of Control Need for Independence Need for achievement Risk Taking

Entrepreneurial Background and Characteristics

Childhood family environment

Education Personal Values Age Work history

Entrepreneurial Process
I. Developing the Entrepreneurial Plan II. Initiating Entrepreneurial Ventures III. Growth and development of Ventures

I. Choosing a direction II. Opening a window III. Closing the window

Evolution of Entrepreneurship
Earliest Period, 12th & 13th century: Eg Marco Polo; He was called between taker or go-between. Was a merchant adventurer. -Risk was associated with him Middle Ages: He managed great architectural projects like castles, forts, cathedrals etc - Since resources were provided by the state, risk was not associated with him.

Cont..
17th Century: Individuals who got contractual work agreements from the government. Eg John Law established the royal bank later called the mississsippi company which later collapsed because he raised the stock price greater than the assets of the company. - Here since contract price was fixed, risk got associated with the entrepreneur.

Cont..
18th Century: During this time, the Capital users(entrepreneurs) and the Capital providers (venture capitalists) got differentiated. Eg. Thomas Alva Edison (Electric bulb) & Eli Whitney (Cotton gin) were capital providers. -Risk was associated with the Entrepreneurs. 19th & 20th century: Here entrepreneurs were viewed as managers who adopted and developed new technology, new products and achieved economic viability. Therefore risk not identified.

Cont..
Middle of 20th century: Innovation and newness becomes an integral part of the definition of entrepreneurship. [Though innovation present from long time in the past like Egyptian pyramids, Appollo lunar module, laser beams etc -Risk again gets identified with entrepreneurship.

Managerial vs Entrepreneurial Decision Making

Sl.No Business Orientation
1 Strategic Orientation

Managerial Domain
Driven by resources currenly controlled

Entrepreneurial Domain
Driven by perception of oppurtunity Revolutionary with short duration Multi-staged with minimal exposure at each stage Episodic use or rent of required resources Flat with multiple informal net works

2 Commitment to oppurtunity

Evollutionary of long duration Single-staged with complete commitment upon decision Ownership or employment of required resources

3 Commitment of resources

4 Control of resources

5 Management Structure

Formalized hierarchy