UNIT I

NATURE AND CONCEPT OF

LESSON 1
ENTREPRENEURSHIP
CONCEPT OF ENTREPRENEURSHIP,
CHARACTERISTICS OF ENTREPRENEURS

Learning Outcome The Concept of Entrepreneurship

SMALL BUSINESS MANAGEMENT

Investigate the nature and concept of entrepreneurship enterprise
Dear students,
Welcome to the world of Entrepreneurship and Entrepre-
neurs!!!!!!!
Most of you must have planned what you’ll be doing after
finishing your studies, and I’m sure, few of you would have made Entrepreneurship is the propensity of mind to calculate risks
up your mind to start your own business or enterprise. with confidence to achieve a pre-determined business or indus-
trial objective. In substance, it is the risk-taking ability of the
We’ll study the concept of entrepreneurship so that it helps in
individual, broadly coupled with correct decision--making.
taking proper decisions, while starting a new project.
The Concept of Entrepreneurship Characteristics of Entrepreneurs
Entrepreneurship is a process undertaken by an entrepreneur to 1. Mental Ability - It consists of intelligence and creative
augment his business interests. It is an exercise involving thinking. An entrepreneur must be reasonably intelligent, and
innovation and creativity that leads towards establishing his/her should have creative thinking and must be able to engage in
enterprise. the analysis of various problems and situations in order to
deal with them. The entrepreneur should anticipate changes
One of the qualities of entrepreneurship is the ability to discover
and must be able to study the various situations under which
an investment opportunity and to organise an enterprise, thereby
decisions have to be made.
contributing to real economic growth. It involves taking of risks
and making the necessary investments under conditions of 2. Clear Objectives - An entrepreneur should have a clear
uncertainty and innovating, planning, and taking decisions so as objective as to the exact nature of the business, the nature of
to increase production in agriculture, business, industry etc. the goods to be produced and subsidiary activities to be
undertaken. A successful entrepreneur may have the objective
Entrepreneurship is a composite skill, the resultant of a mix of
to establish the product, to make profit or to render social
many qualities and traits - these. include tangible factors as
service.
imagination, readiness to take risks, ability to bring together and
put to use other factors of production capital, labour, land, as 3. Business Secrecy - An entrepreneur must be able to guard
also intangible factors such as the ability to mobilise scientific and business secrets. Leakage of business secrets to trade
technological advances. competitors is a serious matter, which should be carefully
guarded against by an entrepreneur. An entrepreneur should
A practical approach is necessary to implement and manage a
be able to make a proper selection of his assistants.
project by securing the required licences, approvals and finance
from governmental and financial agencies. The personal incentive 4. Human Relation Ability - The most important personality
is to make profits from the successful management of the factors contributing to the success of an entrepreneur are
project. A sense of cost consciousness is even more necessary for emotional stability, personal relations, consideration and
the long-term success of the enterprise. However, both are tactfulness. An entrepreneur must maintain good relation
different sides of the same coin. with his customers if he is to establish relations that will
encourage them to continue to patronize his business. He
Entrepreneurship lies more in the ability to minimise the use of
must also maintain good relations with his employees if he is
resources and to put them to_ maximum advantage. Without an
to motivate them to perform their jobs at a high level of
awareness of quality and desire for excellence, consumer
efficiency.
acceptance cannot be achieved and sustained. Above all, entrepre-
neurship today is the product of teamwork and the ability to An entrepreneur who maintains good human relation with
create, build and work as a team. customers, employees, suppliers, creditors and the community
is much more likely to succeed in his business that the
The entrepreneur is the maestro of the business orchestra,
individual who does not practice good human relations.
wielding his baton to which the band is played.
5. Communication Ability - It is the ability to communicate
effectively. Good communication 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
creditors will be more likely to succeed than the entrepreneur
who does not.

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 6. Technical Knowledge - An entrepreneur must have a
SMALL BUSINESS MANAGEMENT

reasonable level of technical knowledge. Technical knowledge

is the one ability that most people are able to acquire if they
try hard.

CLEAR OBJECTIVE

ADMINISTRATIVE ABILITY

ORGANISATIONS SKILLS

INTELLIGENCE

CREATIVITY

INNOVATION

BUSINESS SECRECY

ENTREPRENEUR

SOUND
KNOWLEDGE

EMOTIONAL ABILITY

PUBLIC RELATIONS

EFFECTIVE
COMMUNICATION

TECHNICAL KNOWLEDGE

CHARACTERISTICS OF AN ENTREPRENEUR

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