Entrepreneurship: Characteristics,Importance, Types,

and Functions of Entrepreneurship

by Smriti Chand Entrepreneur

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Entrepreneurial development today has become very significant; in view of its being a key to economic development. The objectives
of industrial development, regional growth, and employment generation depend upon entrepreneurial development.
Entrepreneurs are, thus, the seeds of industrial development and the fruits of industrial development are greater employment
opportunities to unemployed youth, increase in per capita income, higher standard of living and increased individual saving, revenue
to the government in the form of income tax, sales tax, export duties, import duties, and balanced regional development.

Concept of Entrepreneurship:
The word entrepreneur is derived from the French verb enterprendre, which means to undertake. This refers to those who
undertake the risk of new enterprises. An enterprise is created by an entrepreneur. The process of creation is called
entrepreneurship.
Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of something new and exploits such
ideas into gainful opportunities by accepting the risk and uncertainty with the enterprise.

Characteristics of Entrepreneurship:
Entrepreneurship is characterized by the following features:

1. Economic and dynamic activity:

Entrepreneurship is an economic activity because it involves the creation and operation of an enterprise with a view to creating
value or wealth by ensuring optimum utilisation of scarce resources. Since this value creation activity is performed continuously in
the midst of uncertain business environment, therefore, entrepreneurship is regarded as a dynamic force.

2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship compels an individual to continuously evaluate the
existing modes of business operations so that more efficient and effective systems can be evolved and adopted. In other words,
entrepreneurship is a continuous effort for synergy (optimization of performance) in organizations.

3. Profit potential:
Profit potential is the likely level of return or compensation to the entrepreneur for taking on the risk of developing an idea into an
actual business venture. Without profit potential, the efforts of entrepreneurs would remain only an abstract and a theoretical leisure
activity.

4. Risk bearing:
The essence of entrepreneurship is the willingness to assume risk arising out of the creation and implementation of new ideas.
New ideas are always tentative and their results may not be instantaneous and positive.
An entrepreneur has to have patience to see his efforts bear fruit. In the intervening period (time gap between the conception and
implementation of an idea and its results), an entrepreneur has to assume risk. If an entrepreneur does not have the willingness to
assume risk, entrepreneurship would never succeed.

Entrepreneurial Process:
Entrepreneurship is a process, a journey, not the destination; a means, not an end. All the successful entrepreneurs like Bill Gates
(Microsoft), Warren Buffet (Hathaway), Gordon Moore (Intel) Steve Jobs (Apple Computers), Jack Welch (GE) GD Birla, Jamshedji
Tata and others all went through this process.
To establish and run an enterprise it is divided into three parts the entrepreneurial job, the promotion, and the operation.
Entrepreneurial job is restricted to two steps, i.e., generation of an idea and preparation of feasibility report. In this article, we shall
restrict ourselves to only these two aspects of entrepreneurial process.

Figure 4.1: The Entrepreneurial Process

1. Idea Generation:
To generate an idea, the entrepreneurial process has to pass through three stages:
a. Germination:
This is like seeding process, not like planting seed. It is more like the natural seeding. Most creative ideas can be linked to an
individuals interest or curiosity about a specific problem or area of study.
b. Preparation:
Once the seed of interest curiosity has taken the shape of a focused idea, creative people start a search for answers to the
problems. Inventors will go on for setting up laboratories; designers will think of engineering new product ideas and marketers will
study consumer buying habits.
c. Incubation:
This is a stage where the entrepreneurial process enters the subconscious intellectualization. The sub-conscious mind joins the
unrelated ideas so as to find a resolution.

2. Feasibility study:
Feasibility study is done to see if the idea can be commercially viable.
It passes through two steps:
a. Illumination:
After the generation of idea, this is the stage when the idea is thought of as a realistic creation. The stage of idea blossoming is
critical because ideas by themselves have no meaning.
b. Verification:
This is the last thing to verify the idea as realistic and useful for application. Verification is concerned about practicality to implement
an idea and explore its usefulness to the society and the entrepreneur.

Importance of Entrepreneurship:
Entrepreneurship offers the following benefits:
Benefits of Entrepreneurship to an Organisation:

1. Development of managerial capabilities:

The biggest significance of entrepreneurship lies in the fact that it helps in identifying and developing managerial capabilities of
entrepreneurs. An entrepreneur studies a problem, identifies its alternatives, compares the alternatives in terms of cost and benefits
implications, and finally chooses the best alternative.
This exercise helps in sharpening the decision making skills of an entrepreneur. Besides, these managerial capabilities are used by
entrepreneurs in creating new technologies and products in place of older technologies and products resulting in higher
performance.

2. Creation of organisations:
Entrepreneurship results into creation of organisations when entrepreneurs assemble and coordinate physical, human and financial
resources and direct them towards achievement of objectives through managerial skills.

3. Improving standards of living:

By creating productive organisations, entrepreneurship helps in making a wide variety of goods and services available to the society
which results into higher standards of living for the people.
Possession of luxury cars, computers, mobile phones, rapid growth of shopping malls, etc. are pointers to the rising living standards
of people, and all this is due to the efforts of entrepreneurs.

4. Means of economic development:

Entrepreneurship involves creation and use of innovative ideas, maximisation of output from given resources, development of
managerial skills, etc., and all these factors are so essential for the economic development of a country.

Factors affecting Entrepreneurship:

Entrepreneurship is a complex phenomenon influenced by the interplay of a wide variety of factors.
Some of the important factors are listed below:

1. Personality Factors:
Personal factors, becoming core competencies of entrepreneurs, include:
(a) Initiative (does things before being asked for)
(b) Proactive (identification and utilisation of opportunities)
(c) Perseverance (working against all odds to overcome obstacles and never complacent with success)

(d) Problem-solver (conceives new ideas and achieves innovative solutions)

(e) Persuasion (to customers and financiers for patronisation of his business and develops & maintains relationships)
(f) Self-confidence (takes and sticks to his decisions)
(g) Self-critical (learning from his mistakes and experiences of others)
(h) A Planner (collects information, prepares a plan, and monitors performance)
(i) Risk-taker (the basic quality).

2. Environmental factors:
These factors relate to the conditions in which an entrepreneur has to work. Environmental factors such as political climate, legal
system, economic and social conditions, market situations, etc. contribute significantly towards the growth of entrepreneurship. For
example, political stability in a country is absolutely essential for smooth economic activity.
Frequent political protests, bandhs, strikes, etc. hinder economic activity and entrepreneurship. Unfair trade practices, irrational
monetary and fiscal policies, etc. are a roadblock to the growth of entrepreneurship. Higher income levels of people, desire for new
products and sophisticated technology, need for faster means of transport and communication, etc. are the factors that stimulate
entrepreneurship.
Thus, it is a combination of both personal and environmental factors that influence entrepreneurship and brings in desired results for
the individual, the organisation and the society.

Types of Entrepreneurs:
Depending upon the level of willingness to create innovative ideas, there can be the following types of entrepreneurs:

1. Innovative entrepreneurs:
These entrepreneurs have the ability to think newer, better and more economical ideas of business organisation and management.
They are the business leaders and contributors to the economic development of a country.
Inventions like the introduction of a small car Nano by Ratan Tata, organised retailing by Kishore Biyani, making mobile phones
available to the common may by Anil Ambani are the works of innovative entrepreneurs.

2. Imitating entrepreneurs:
These entrepreneurs are people who follow the path shown by innovative entrepreneurs. They imitate innovative entrepreneurs
because the environment in which they operate is such that it does not permit them to have creative and innovative ideas on their
own.

Such entrepreneurs are found in countries and situations marked with weak industrial and institutional base which creates difficulties
in initiating innovative ideas.
In our country also, a large number of such entrepreneurs are found in every field of business activity and they fulfill their need for
achievement by imitating the ideas introduced by innovative entrepreneurs.
Development of small shopping complexes is the work of imitating entrepreneurs. All the small car manufacturers now are the
imitating entrepreneurs.

3. Fabian entrepreneurs:
The dictionary meaning of the term fabian is a person seeking victory by delay rather than by a decisive battle. Fabian
entrepreneurs are those individuals who do not show initiative in visualising and implementing new ideas and innovations wait for
some development which would motivate them to initiate unless there is an imminent threat to their very existence.

4. Drone entrepreneurs:
The dictionary meaning of the term drone is a person who lives on the labor of others. Drone entrepreneurs are those individuals
who are satisfied with the existing mode and speed of business activity and show no inclination in gaining market leadership. In
other words, drone entrepreneurs are die-hard conservatives and even ready to suffer the loss of business.

5. Social Entrepreneur:
Social entrepreneurs drive social innovation and transformation in various fields including education, health, human rights, workers
rights, environment and enterprise development.
They undertake poverty alleviation objectives with the zeal of an entrepreneur, business practices and dare to overcome traditional
practices and to innovate. Dr Mohammed Yunus of Bangladesh who started Gramin Bank is a case of social entrepreneur.

Functions of an Entrepreneur:
The important functions performed by an entrepreneur are listed below:

1. Innovation:
An entrepreneur is basically an innovator who tries to develop new technology, products, markets, etc. Innovation may involve doing
new things or doing existing things differently. An entrepreneur uses his creative faculties to do new things and exploit opportunities
in the market. He does not believe in status quo and is always in search of change.

2. Assumption of Risk:
An entrepreneur, by definition, is risk taker and not risk shirker. He is always prepared for assuming losses that may arise on
account of new ideas and projects undertaken by him. This willingness to take risks allows an entrepreneur to take initiatives in
doing new things and marching ahead in his efforts.

3. Research:
An entrepreneur is a practical dreamer and does a lot of ground-work before taking a leap in his ventures. In other words, an
entrepreneur finalizes an idea only after considering a variety of options, analyzing their strengths and weaknesses by applying
analytical techniques, testing their applicability, supplementing them with empirical findings, and then choosing the best alternative.
It is then that he applies his ideas in practice. The selection of an idea, thus, involves the application of research methodology by an
entrepreneur.

4. Development of Management Skills:

The work of an entrepreneur involves the use of managerial skills which he develops while planning, organizing, staffing, directing,
controlling and coordinating the activities of business. His managerial skills get further strengthened when he engages himself in
establishing equilibrium between his organization and its environment.
However, when the size of business grows considerably, an entrepreneur can employ professional managers for the effective
management of business operations.

5. Overcoming Resistance to Change:

New innovations are generally opposed by people because it makes them change their existing behavior patterns. An entrepreneur
always first tries new ideas at his level.
It is only after the successful implementation of these ideas that an entrepreneur makes these ideas available to others for their
benefit. In this manner, an entrepreneur paves the way for the acceptance of his ideas by others. This is a reflection of his will
power, enthusiasm and energy which helps him in overcoming the societys resistance to change.

6. Catalyst of Economic Development:

An entrepreneur plays an important role in accelerating the pace of economic development of a country by discovering new uses of
available resources and maximizing their utilization.
To better appreciate the concept of an entrepreneur, it is desirable to distinguish him from an entrepreneur and promoter. Table 4.1
outlines the distinction between an entrepreneur and entrepreneurs, and Table 4.2 portrays basic points of distinction between an
entrepreneur and promoter.
Table 4.1: Distinction between Entrepreneur and Intrapreneur:
Basis

Entrepreneur

Intrapreneur

Capacity Status Owner Own boss

Decisions
Takes own decisions

An manager Salaried
employee Executes decisions
with the concurrence of owner

Reward

Fixed rewards and salary

Uncertain and unlimited

Table 4.2: Distinction between Entrepreneur and Promoter:

Basis

Entrepreneur

Stage of
From conception to
business Owning continuation Owns the
business Nature of enterprise Includes
job
everything

Promoter
To bring a business into
existence May or may not own
Highly specialised
A consultant or a chartered

Example

Any business

account and offering services

Some Myths about Entrepreneurship:

Over the years, a few myths about entrepreneurship have developed. These are as under:

(i) Entrepreneurs, like leaders, are born, not made:

The fact does not hold true for the simple reason that entrepreneurship is a discipline comprising of models, processes and case
studies.
One can learn about entrepreneurship by studying the discipline.

(ii) Entrepreneurs are academic and socially misfits:

Dhirubai Ambani had no formal education. Bill Gates has been a School drop-out. Therefore, this description does not apply to
everyone. Education makes an entrepreneur a true entrepreneur. Mr Anand Mahindra, Mr Kumar Mangalam Birla, for example, is
educated entrepreneurs and that is why they are heroes.

(iii) To be an entrepreneur, one needs money only:

Finance is the life-blood of an enterprise to survive and grow. But for a good idea whose time has come, money is not a problem.

(iv) To be an entrepreneur, a great idea is the only ingredient:

A good or great idea shall remain an idea unless there is proper combination of all the resources including management.

(v) One wants to be an entrepreneur as having no boss is great fun:

It is not only the boss who is demanding; even an entrepreneur faces demanding vendors, investors, bankers and above all
customers.
An entrepreneurs life will be much simpler, since he works for himself. The truth is working for others are simpler than working for
oneself. One thinks 24 hours a day to make his venture successful and thus, there would be a punishing schedule.

http://bbahome.blogspot.com/2013/02/entrepreneurship-development.html

Entrepreneurship Development

Meaning and Definition of entrepreneur

The word entrepreneur has come from the France word entreprendrawhich means to undertake, to pursue opportunities to fulfill needs and wants
through innovation to undertake business.
In the year 1725 the word entrepreneur was first brought into economics by a social scientist named Richard cantilion.the expert who invented the
theory of entrepreneurship was David mc cellion in 1961.
There was various definition of entrepreneur.
According to America heritage dictionary;
Entrepreneur is a person who organizes operates and assumes the risk for business venture
The dictionary of social sciencehas defined entrepreneur from functional viewpoint. According to it entrepreneur is a person 1) who exercise the
function or 2) initiating coordinating controlling or institute major change in a business enterprise and or 3) bearing those risk of operation which arise
from the dynamic nature of society and imperfect knowledge of the future which can cast through transfer calculation or elimination
According to encyclopedia Britannica
Entrepreneur as the individual who bears the risk of operating a business in the face of uncertainty about future condition and who is rewarded
accordingly by his profit or losses.
Richard cotillion says
Entrepreneur is the agent who purchased the means of production for combination into marketable product.
So we can say that entrepreneur a person who takes risk for establishing a new venture or business in order to create utility for the welfare of human
being as well as for him of herself. She or he is always a person who seeks out opportunities and takes on challenges.

Meaning and Definition of entrepreneurship:

Entrepreneurship is considered as of assuming the risk of an entrepreneur.
According to natheal h. leff:
Entrepreneurship is the capacity for innovation investment and expansion in new markets product and techniques.
Webster highlights entrepreneurship as economic venture organizing and risk taking capabilities.
Joshep a Schumpeter describe entrepreneurship is the force of creative destruction whereby established way of doing things are destroyed by the
creating of new and better ways to get things done.
According to S. S. kanaka:
Entrepreneurships is a process involving various actions to be taken to establish an enterprise.
From the functional view point entrepreneurship is defined as the combination of activities such as perception of market opportunities gaining
command over scarce resources purchasing input producing and marketing of product responding to competition and maintaining relation with
political administration and public bureaucracy for concession licenses and taxes etc.

Characteristics of an entrepreneur:
An entrepreneur is a person who initiates a business venture. there are some essential feature of an entrepreneur which are describe below.

Risk taking capability: every business has risk of time money etc .so an entrepreneur must have the risk taking capability.

Creativity and innovation: an entrepreneur has an initiator possesses creativity and innovative power.

Need for achievement: the entrepreneur has strong desire to achieve the goal of business. he is always driven by the needs for achievement.

Need for autonomy: an entrepreneur does not like to be under anybody. it is the need for autonomy which drives a person to be an
entrepreneur.

Internal locus of control: an entrepreneur believes in him his work.

External locus of control: he also believes in fate for ultimate result.

Self confident: an entrepreneur has confidence in him.

Leadership capability: an entrepreneur must have leadership capability to lead works under him

Industriousness: a successful entrepreneur must have leadership capability to lead workers working under him.

Decision making capability: the entrepreneur has capability to take quick decision

Adaptability: he has the capacity to adapt with any kind of situation that arise in the enterprise

Foresightness: The entrepreneurs have a good foresight to know about future business environment.

Others; the other feature are dynamism, ambition, education and training, long term involvement, future orientation.

Qualities of successful entrepreneur:

To become a successful as an entrepreneur in its business life, a businessman should possess a quite a number of essential qualities. Those are noted
below:
1.

Moderate risk taking: an entrepreneur always takes calculated risk to operate the organization

2.

Hard work: an entrepreneur is very much hard worker, he or she always busy with various types work.

3.

Accountability: a successful entrepreneur is accountable well as his associates always accountable to him.

4. Educated in real sense: successful entrepreneur is educated In real sense .he tries to implement his organizational objectives through his
education.
5.

Analytical mind: a successful entrepreneur is analytical minded. he scrutinizes every activity on the organization.

6.

Dynamic leadership: a successful entrepreneur is always dynamic to operate the organization

7. Presence of mind: a successful entrepreneur is always at present of mind he is always aware of activities that to happening in the organization
and around him
8.

Accommodative: a good entrepreneur has the capacity to make his own place at every sector

9.

Courageous and tactful: Corsages and techniques is very much essential for a successful entrepreneur

10. Maker of right decision: A successful entrepreneur makes right decision in right time in right place
11. Foresighted: a successful entrepreneur foresights the future and take decision accordingly
12. Right perception of things: A successful entrepreneur things in a right way
13. Enjoy simple life: A successful entrepreneur always deals a simple life a general people of the society
14. Strong desired to success: A successful entrepreneur have a strong desire to success. he is driven by the desire to success
15. Innovation: innovation is the process of making new something. A successful entrepreneur is innovative
16. Self confidence: A successful entrepreneur is self confidence. does not really on other for decision or fate
17. Goal setting: a successful entrepreneur set the goal
18. Keen observation: A successful entrepreneur always observes the origination
19. Sociable: A successful entrepreneur is sociable person
20. Loves to work; A successful entrepreneur is very much addicted to work
21. Loves new ideas: A successful entrepreneur loves new ides of the organization
22. Team builder: A successful entrepreneur builds a suitable team
23. Clean understanding: A successful entrepreneur clearly understands every things

24. Ability to conceptualize: A successful entrepreneur is able to conceptualize the reality

25. other: the other qualities are patience, optimistic ,strategist, etc

Relationship between entrepreneur and entrepreneurship:

The relationship between entrepreneur and entrepreneurship are discussed below:

Entrepreneur
vs
Entrepreneurship
1)

Entrepreneur is a person.

Entrepreneurship is a process.
2)

Entrepreneur is an organizer.

Entrepreneurship is an organization.
3)

Entrepreneur is an innovator.

Entrepreneurship is an innovation.
4)

Entrepreneur is a risk bearer.

Entrepreneur is a risk bearing.

5)

Entrepreneur is a motivator.

Entrepreneur is a motivation.
6)

Entrepreneur is a creator.

Entrepreneur is a creation.
Entrepreneur is a visualizer.
Entrepreneur is a vision.
Entrepreneur is a leader.
Entrepreneurship is a leadership.
Entrepreneur is an imitator.
Entrepreneurship is an imitation.

Distinction between an entrepreneur and a manager.

Sometimes the word entrepreneur and manager are used as synonyms. In fact there are some differences between them. They are described below

Subject matter

------------

Entrepreneur

------------

1. Motive
Thinking function. His main motive is to start a new venture by setting up an enterprise.
Doing function. His main motive is to render service to the organization already established.
2. Status
Entrepreneur is the owner of the enterprise.
Manager is the service holder or servant of the enterprise.
3. Risk bearing
Being owner of the enterprise assume all risk and uncertainty involved in the enterprise.
As the servant dont take or bear risk and uncertainty involved in the organization.
4. Reward

Manager

Reward is profit which is highly uncertain.

Get salary as a reward which is fixed and certain.
5. Innovation
An entrepreneur is an innovator.
A manager is not an innovator in that sense he implements the plan prepared by the entrepreneur.
6. Qualification
They are not highly qualified but have extraordinary experience forecasting.
They are highly qualified (institutional education).
After the above discussion we can say that at a time an entrepreneur can be a manager but a manager cannot be an entrepreneur.

Different types of entrepreneurs:

On the basis of nature Clarence Danhof classified entrepreneurs into four categories. These are
1. Innovative entrepreneurs: An innovative entrepreneur in one, who introduces new goods, inaugurates new method of production, discovers
new market and recognizes the enterprise. It is important to note that such entrepreneurs can work only when a certain level of development is already
achieved and people look forward to change and improvement.
2. Imitative entrepreneurs: These types of entrepreneurs creatively imitate the innovative technical achievement made by another firm.
Imitative entrepreneurs are suitable for underdeveloped countries as it is hard for them to bear the high cost of innovation.
3. Fabian entrepreneurs: Fabian entrepreneurs are characterized by very great caution and skepticism to experiment any change in their
enterprises. They usually do not take any new challenge. They imitate only when it becomes perfectly clear that failure to do not so would result in a loss
of the relative position in the enterprise.
4. Drone entrepreneurs: They are characterized by a refusal to adopt any change even at cost of severely reduction of profit.
Some other types of entrepreneurs:
(i) Solo operators: These are the entrepreneurs who essentially work alone and if needed at all employ a few employees. In the beginning most of the
entrepreneurs start their enterprises like them.
(ii) Active partners: Active partners are those entrepreneurs who start or carry on an enterprise as a joint venture. It is important that all of them
actively participate in the operations of the business.
(iii) Innovators: Such entrepreneurs with their competence and creativity innovate new products. Their basic interest lies in research and innovative
activities.
(iv) Buyers entrepreneurs: These are the entrepreneurs who do not like to bear much risk. They do not take the risk of production but take the risk
of marketing a product i.e. wholesaler and retailer.
(v) Life timers: These entrepreneurs believe business as an integral part of their life. These entrepreneurs actually inherit their family business i.e.
goldsmith, potter etc.
(vi) Challengers: These are the entrepreneurs who initiate business because of the challenges it presents. They believe that No risk, No gain. When
one challenge seems to be met, they begin to look for new challenges.
Beside these, there are Govt. and Non-govt. entrepreneurs.

Factors of Entrepreneurship development:

(A) Personal factors

1.

Ability to cope with the situation

2.

Age

3.

Education

4.

Personality

5.

Intrapersonal communication ability

6.

Achievement motivation

7.

Self-confidence

8.

Competence

9.

Emotion

10.

Understanding capacity

(B) Environmental factors

1. Socio-cultural factors

Religion

Values

Rural-urban orientation

Marginality

Education

Tradition

2. Political and legal factors

Govt. legal bindings

Govt. policies

Rules and laws related to the industry and business

(C) Institutional factors:

1.

Financial institution

2.

Training and development institution

3.

Consulting firms

4.

Incubators organization (old & pioneer)

5.

Research organization

(D) Micro factors

1.

Enterprise itself

2.

Suppliers

3.

Intermediaries

4.

Customers

5.

Competitors

6.

Public

(E) Macro factors:

1.

Demographic factors

2.

Economic factors

3.

Physical factors

4.

Technological factors

5.

Cultural/social factors

(F) Others:
1.

Venture capital

2.

Experience entrepreneurs

3.

Technically skilled labor force

4.

Suppliers accessibility

5.

Proximity to universities

6.

Availability of land facilities

7.

Accessibility of transportation

8.

Favorable loan and financial policies

9.

Decepted population

10.

Availability of supportive

11.

Attractive living condition

12.

Capital intensiveness

13.

Research and development activities

14.

Capital incentive ness

15.

Proximity to corporate head quarters

16.

Competitive situation

Causes of success and failure of entrepreneur:

An entrepreneur may sometime become successful and sometime becomes failure. There are some causes of such success and failure. They are noted
below:

1.

Selection of business: It is an important aspect. That means an entrepreneur has to determine what type business he is going to start. Form

various points of view the feasibility of the business should be tested.

2.

Proper planning: Proper planning me s also important. For planning, planning premises like political, economic, social premised should be

considered first. The steps of planning should be followed properly.

3.

Initial capital: if the initial capitals are not an optimal level the organization would fall. So whether the enterprise is big or small the initial

capital should be sufficient enough.

4.

Determination o0f market demand: Through research the demand in the market should be identified. Both for long term and short term it

should be considered.

5.

Marketing of product: If the promotion policy, channel of destitution, transportation is not good the enterprise would fall.

6.

Education and experience: One of the important tasks of the entrepreneurs is to select right person for the right post because the success of an

enterprise depends on the right selection of employees.

7.

Joint initiative: One may have much money and another may have more merit. Through joint initiative it can be balanced. But sometime for

joint initiative misunderstanding arise, or sometimes corruption occur which may result in fall of enterprise.

8.

Employment: Recruitment and appointment should be properly done. Those who have specialized skill should be appointed to that specialized

job. Inefficient, corrupted employees may be responsible for fall of business.

9.

Location of business: Site selection is an important factor. While starting a new business, an entrepreneur should think about the location of

the business. In this case, many factors should be considered such as availability of raw materials, proper communication system, availability of labor,
marketing facilities and so on.

10. Qualities of management: The management must have a minimum quality to success otherwise it would fall.

These are the common causes for which one enterprise may become successful and another may fall.

The opportunities or prospects of entrepreneurship development

in Bangladesh:
As a third world country a considerable number of entrepreneurs has not been developed.

Nevertheless, there is a great possibility of developing entrepreneurship in Bangladesh. Following are the prospects and opportunity of
entrepreneurship development in
Bangladesh.

1.

Availability of human resources: Bangladesh has its vast population of about 150 million. So there is a great possibility of developing

entrepreneurship and entrepreneurs in Bangladesh. HR is the fundamental factors of production that is available in vast amount. So production that is
available in vast amount. Therefore, entrepreneurs can easily use them with l on payment that may encourage them to be entrepreneur. Therefore,
abundance of HR is the great opportunity in creating entrepreneurs in Bangladesh.

2.

Industrial innovative sensation: People of Bangladesh have industrial innovative sensation. They may get involved largely in industrial

initiative if they get favorable opportunity. Already they established many small and collage industries with the help of NGOs and other financing
institution.

3.

Mobility of profession: A considerable number of villagers now replaced their agriculture-based profession into petty businesses and many

other small and cottage industry. Many of them transferred into city area. Thus, way here creates a mobility of profession. That is another prospect of
developing entrepreneurship in Bangladesh.

4.

No religious hindrances on mobility of profession: In Bangladesh, there are any religious and cultural hindrances on mobility of

profession. Most of the people are changing their work, profession day by day. In past, certain religious people belong to certain profession. But now
people get engaged in their desired profession without religious and cultural hindrance. That is another prospect of creating entrepreneurs.

5.

Large number of educated unemployed: In our country, there are many educated unemployed people, but there is a limited scope of

employment. For this reason, educated unemployed people will take new initiative to do something new themselves. As there is a close connection of
education and entrepreneurship there is a possibility of developing entrepreneurship.

6.

Tendency toward industries work: Industrials work bears more salary, status, facilities for living in city area and so on. For this reason

people tending towards industrial work. Thus, industrial sector will be developed in future. Such mentality and tendency is helpful in developing
entrepreneurs. Therefore, it is another prospect of developing entrepreneurs.

7.

Preference in establishing agro-based industry in Government planning: As our country in agro-based, there is a greater possibility of

establishing agro-based industry. Besides, most of the raw materials of industry come from agricultural sector. So our resourceful agriculture sector is
helpful in developing entrepreneurship. Nowadays, Govt. announces preference in agro-based industry that is also greater opportunity to develop
entrepreneurs.

8.

Liberalization of Govt. industrial policy: With the aim of rapid industrialization, govt. adopted liberalization in industrial policy and

encourages entrepreneurs to come ahead in industrial sector with their large capital. For this reason, investors are investing their capital in industrial
sector. That is another prospect of developing entrepreneurs in Bangladesh.

9.

Disbursement of micro-credit by different NGOs: In our country there are large numbers of NGOs providing micro-credit to the village

poor people. That is helpful in forming small and cottage industry. NGOs also provide training facilities, advice, investment consultancy, raw materials
etc to its loaner. That is another prospect of developing entrepreneurs in Bangladesh.

From above mentioned discussion, we observed that there is a greater possibility of developing entrepreneurs in Bangladesh.

Problems of entrepreneurship development in Bangladesh:

As a third world country, in Bangladesh there is no abundant facilities for developing entrepreneurship rather exist a large number of obstacles, which
are liable for not developing entrepreneurs in Bangladesh described in below:

1.

Improper publicity of Govt. facilities: For developing entrepreneurs in limited basis. Those have not informed properly to the remote

villagers. Therefore, these facilities cannot work well. Some urban centered people accept the facilities that are not enough fo0r developing
entrepreneurs ass over the country. So this is one of the fundamental obstacles.

2.

Insufficient arrangement of pre-investment advice: For this reason most of entrepreneur cant study market feasibility for the product and

business demand for the product in market, possibility of gaining profit etc. For the lack of this study most of the entrepreneur cant operate their
activities successfully. Many of them fail in their initial activities.

3.

Lack of required financing: This is the fundamental problem of developing entrepreneurship in Bangladesh. Here, entrepreneurs faces

problem in collecting required working capital and fixed capital, most of the financing organization demand for supporting papers and apply rigid
condition. As a result most of the entrepreneurs cannot get rise capital to operate their activities smoothly. Working capital, fixed capital and capital for
expansion of business of business.

4.

Scarcity of raw materials and other factors of production: In our country, there is an immense shortage of basic raw materials to operate

industrial activities smoothly such as skilled manpower, technology, capital and so on. For this reason the y has to import basic raw materials and
supplementary factors of production that increase the cost of production. As a result, entrepreneur cant take initiatives to establish industrial
organization smoothly.

5.

Problem in marketing produced product: Now-a-days marketing of the product has become an important task in business. In open market

economy, product of the home and foreign countries compete with each other in same market. Usually quality products capture the market. Because of
different problem and lack of factors of production, our entrepreneur cant produce or hardly produce quality product as developed country. For this
reason, now a day, they face marketing problem greatly for every product.

6.

Lack of training: Training is essential to work efficiently and effectively in any field. Training is a practical experience regarding job that is

necessary to increase efficiency and productivity. In our country, there is no available training centre to provide training in developing entrepreneurs.
As a result, people cannot come ahead to take initiative that is an obstacle to develop entrepreneurship.

7.

Lack of package help: In developed country, Govt. and non-govt. sector provide package help for developing industrial sector. In includes,

technical help, raw materials, and working capital and so on. These are helpful in creating entrepreneurship as well as industry. But in our country
there is no abundance package help that is very essential for developing entrepreneurship in our country. So it is another problem of developing
entrepreneurs and entrepreneurship in Bangladesh.

8.

Lack of knowledge regarding technology and management: In developed country most of the business and industries are technology

oriented and they follow modern management technique. Those are helpful in developing dynamic entrepreneurs. Nevertheless, in our country there is
little scope of technology and modern management. Besides, we also have no proper knowledge regarding those matters.

These are the obstacles or problem in developing entrepreneurs and entrepreneurship in Bangladesh.

Suggestions for removing the problems of entrepreneurship

development in Bangladesh.
1.

Making specific policy: To perform any activities some policies should be maintained. We all shall recognize that some effective policies should

be made to develop entrepreneurship in Bangladesh. Relating organization and officials should make some specific policies for developing it.

2.

Involving entrepreneurial knowledge in text book: As our education system is theoretical based so entrepreneurial knowledge should be

included in textbook. So that students can achieve entrepreneurial knowledge that will be beneficiary for developing entrepreneurship in future. In text
book following matters should be involved or suggested to be included.

3.

Offering package help: After providing training, trainee should be provided necessary help for developing industrial sector. Necessary help

including fixed capital, working capital, technical men, technology, and raw material and so on. This is helpful in creating entrepreneurship.

4.

Formal arrangement of training: people who are engaged in entrepreneurial work or people who are willing to take new initiative have

suggested providing training in the respective field that will be helpful for them to take initiative and operates industry smoothly. Govt. and non-govt.
organization can arrange this program.

5.

Increasing govt. facilities and its extensive publicity: Govt. facilities for developing entrepreneurship are not sufficient. So govt. should

provide abundant facilities for developing entrepreneurship. Govt. should also arrange extensive publicity of its given facilities. So that rural centered
people can get these facilities. That will be very helpful in developing entrepreneurship in Bangladesh.

6.

Encouragement in industrialization: Govt. and non govt. organization may encourages people towards industrialization by providing

different facilities including tax redemption or tax holiday, EPZ facility, BSCIC industrial state, providing raw material, capital, technical assistance etc.
with unqualified condition.

7.

Establishment of supplementary industry: Entrepreneurship may be developed be establishing supplementary industry extensively. Some

of them produce industrial product that are reproduced large industry and some of them use by product of large industry. They are also essential to
develop large-scale industry.

8.

Increasing loan facilities: Most of the people establish small or large-scale industry with loan facility. Financing institution should provide

sufficient loan to the entrepreneur with flexible condition and supporting paper. This program will be helpful in establishing and operating new
industries and businesses.

9.

Exhibition of industrial product: To increase demand for industrial product govt. and non-govt. organization may arrange exhibition.

Industrial fair in domestic country will be helpful in creating demand for industrial product. Industrial product may introduce in abroad. It is an
important recommendation to develop entrepreneurs and entrepreneurship.

10. Reduction of tax and duty: Govt. may encourage industrialization by lessening duty rate of industrial product. That will also lessen cost of
industrial product, which is helpful in capturing market. Thus, way industrialization or entrepreneurship will be developed duty on importing bank raw
materials have suggested to reduce.

11. Favorable import and export policy: Most of the basic raw materials used in industry have been imported from foreign countries. Some
industrial products have produced to export as a whole. So for developing industrialization and entrepreneurship proper authority should make
obvious and flexible export-import policy.

Institutional or organizational sources of assistance for

entrepreneurship development:

There are two types of organizational source of assistance for Entrepreneurs Development in Bangladesh. They are as follows:

1.

Government agencies

2.

Non-Government or private agencies

1.

Government agencies:

v Board of I Investment

v Bangladesh Development Bank Limited (BDBL)

v Investment Corporation Of Bangladesh (ICB)

v Nationalized Commercial Bank Of Bangladesh

v Bangladesh Krishi Bank (BKB)

v Rajshahi Krishi Unnoyon Bank (RKUB)

v Bangladesh small and cottage industries corporation (BSCIC)

v Export promotion bureau (E.P.B)

v Trading Corporation of Bangladesh (TCB)

v Bangladesh industrial and technical assistance center

v Bangladesh standard testing institute (BSTI)

v Bangladesh institute of management (BIM)

v Bangladesh institute of bank management (BIBM)

v Institute of cost and management accounting of Bangladesh (ICMAB)

v Support, supply agencies for water, gas, electricity

v Small and cottage industry training institute

v Bangladesh Sadharon Bima corporation

v Public universities of Bangladesh

v Bangladesh council for scientific and industrial research

2.

Non- government agencies:

v Grammeen Bank

v Micro industrial development assistance and service (MIDAS)

v Private commercial Bank

v Private insurance companies

v Leasing companies

v Federation of Bangladesh chamber of commerce and industries (FBCCI)

v Bangladesh rural advancement committee (BRAC)

v Private Universities

v Proshika

v Association for social advancement (ASA)

v Thangamara Mohila somoby songstha (TMSS)

v Rangpur Kinajpur Rural Sangstha (RDRS)

v Other NGOs