THE NATURE AND

IMPORTANCE OF
ENTERPRENEURS
FIRST LECTURE
• Entepreneur Entrepreneurship Enterprise

• Person Process or Action Outcome

• Business man having an idea to start a new business
• Knowledge skill, ability, hard work, through which he generate employment
,revenue for society and for himself
• Enterprise ids the resultant factor of his efforts
 Meaning
• The ability to bear risk of establishing a new enterprise ,its direction, controlling,
bring changes and innovation , creativity , taking corrective action , can be called
an entrepreneurship.
• Definitions
• Entrepreneurship is the combination of three basic elements
• Invention
• Innovation
• adaptation
• Entrepreneurship can be defined as creative and innovative response to the
environment
CHARACTERISTICS OF ENTERPRENEURSHIP
1. ABILITY TO INNOVATE
2. ECONOMIC ACTIVITY
3. RISK BEARING CAPACITY
4. IN SEARCH OF OPPURTUNITIES
5. ORGANIZATION CREATION
6. RESULTS OF HIGH ACHIVEMENTS
7. BASED ON PRINCIPLE NOT ON INTUITION
8. PROFESSIONAL ACTIVITY
9. RESULTS OF CHANGES
10. ENTREPRENEURSHIP IS THE BEHAVIOR NOT A PERSONLITY TRAIT
11. ESSENTIAL IN ALL TYPES OF BUSINESS
12. IT IS GLOBAL PHENOMENA
13. INDEPENDENT LIFE STYLE
IMPORTANCE OF ENTREPRENEURSHIP

1. BASIS OF ECONOMIC DEVELOPMENT

2. HELPS IN ESTABLISHING NEW ENTERPRISE
3. CONTRIBUTE AND DEVELOPING AND EXPANSION OF EXSISTING ENTERPRISES
4. HELPS IN DEVELOPING NEW PRODUCTS AND TECHNIQUES
5. OPPURTUNITY TO EXPLOIT FULL HUMAN POTENTIAL
6. CREATION OF EMPLOYMENT OPPURTUNITIES
7. PROMOTES CAPITAL FORMATION
8. BALANCED ECONOMIC DEVELOPMENT
9. HELPS IN EXECUTION OF GOVERNMENTAL POLICIES AND PLANS
10. HELPS IN SOCIAL CHANGE
11. ENCOURAGE RESEARCH AND INVESTIGATION
 INTRAPRENEURSHIP
• Definition: An Intrapreneurship is the system wherein the
principles of entrepreneurship are practiced within the
boundaries of the firm. An intrapreneur is a person who takes
on the responsibility to innovate new ideas, products and
processes or any new invention within the organization.
• An intrapreneur is the individual who thinks out of the box and
possesses the leadership skills and does not fear from risk.
Thus, an intrapreneur possesses the same traits as that of an
entrepreneur.
• The concept of an Intrapreneurship can be well understood in
contrast to the entrepreneurship. Following are the points of
distinction between these two terms:
• Intrapreneurship is restorative in nature, i.e. an organization
encourages the employees to practice the entrepreneurial principles
to counter stagnation within the firm or transform the slow growth of
the company into a high-growth. Whereas the entrepreneurship
is developmental in nature, i.e. an individual creates something that
has never existed before, such as a new product, process or a new
venture itself.
• In intrapreneurship, the major challenge that individual faces are from
the company’s culture itself. Sometimes, the corporate relationships
and the mindsets of employees acts as a hurdle in the path of an
intrapreneur. Whereas, in the case of entrepreneurship, the market is
the only enemy. An entrepreneur has to scrutinize the market
conditions thoroughly to cross the hurdles coming in his way.
• An intrapreneur has an access to firm’s resources such as
funds, manufacturing setups, marketing facilities, and
other supporting activities to give shape to his dreams.
Whereas an entrepreneur has to arrange his own
resources such as own funds or the borrowed funds,
manufacturing facilities, marketing facilities, etc.
• An intrapreneur does not have the ownership of a new
venture and is not even independent to take decisions,
whereas an entrepreneur is the whole sole owner of the
new venture established by him. Also, he is
independent to take any decisions with respect to his
setup.
 • Entrepreneurs • Managers
• Motive: To start a venture by • To render his services in an
setting up an enterprise enterprise already set by someone
else
• Status: Owner of the
enterprise • Servant in the enterpriseo risk
involve in the enterprise
• Risk Bearing Take on risk in
• No risk involve in the enterprise
the running enterprise
• Fixed salary
• Rewards Unpredictable profit
• Simply executing the plan
• Innovation Thinks over what prepared by entrepreneurs
to do i-e change agents
 • Entrepreneurial Process
• Definition: The Entrepreneur is a change agent that acts as an
industrialist and undertakes the risk associated with forming
the business for commercial use. An entrepreneur has an
unusual foresight to identify the potential demand for the
goods and services.
• The entrepreneurship is a continuous process that needs to be
followed by an entrepreneur to plan and launch the new
ventures more efficiently.
• Discovery: An entrepreneurial process begins with the idea generation,
wherein the entrepreneur identifies and evaluates the business
opportunities. The identification and the evaluation of opportunities is
a difficult task; an entrepreneur seeks inputs from all the persons
including employees, consumers, channel partners, technical people,
etc. to reach to an optimum business opportunity. Once the
opportunity has been decided upon, the next step is to evaluate it.
• An entrepreneur can evaluate the efficiency of an opportunity by
continuously asking certain questions to himself, such as, whether the
opportunity is worth investing in, is it sufficiently attractive, are the
proposed solutions feasible, is there any competitive advantage, what
are the risk associated with it. Above all, an entrepreneur must analyze
his personal skills and hobbies, whether these coincides with the
entrepreneurial goals or not.
• Developing a Business Plan: Once the opportunity is identified, an
entrepreneur needs to create a comprehensive business plan. A business
plan is critical to the success of any new venture since it acts as a
benchmark and the evaluation criteria to see if the organization is moving
towards its set goals.
• An entrepreneur must dedicate his sufficient time towards its creation,
the major components of a business plan are mission and vision
statement, goals and objectives, capital requirement, a description of
products and services, etc.
• Resourcing: The third step in the entrepreneurial process is resourcing,
wherein the entrepreneur identifies the sources from where the finance
and the human resource can be arranged. Here, the entrepreneur finds
the investors for its new venture and the personnel to carry out the
business activities.
•.
• Managing the company: Once the funds are raised and the employees
are hired, the next step is to initiate the business operations to achieve
the set goals. First of all, an entrepreneur must decide the
management structure or the hierarchy that is required to solve the
operational problems when they arise.
• Harvesting: The final step in the entrepreneurial process is harvesting
wherein, an entrepreneur decides on the future prospects of the
business, i.e. its growth and development. Here, the actual growth is
compared against the planned growth and then the decision regarding
the stability or the expansion of business operations is undertaken
accordingly, by an entrepreneur.
• The entrepreneurial process is to be followed, again and again,
whenever any new venture is taken up by an entrepreneur, therefore,
its an ever ending process
 Outline of a Business Plan
• I. Introductory Page
A. Name and address of business
B. Name(s) and address(es) of principal(s)
C. Nature of business
D. Statement of financing needed
E. Statement of confidentiality of report
II. Executive Summary—Two to three pages summarizing the complete business
plan
III. Industry Analysis
A. Future outlook and trends
B. Analysis of competitors
C. Market segmentation
D. Industry and market forecasts
• IV. Description of Venture
A. Product(s)
B. Service(s)
C. Size of business
D. Office equipment and personnel
E. Background of entrepreneur(s)
V. Production Plan
A. Manufacturing process (amount subcontracted)
B. Physical plant
C. Machinery and equipment
D. Names of suppliers of raw materials
VI. Operations Plan
A. Description of company’s operation
B. Flow of orders for goods and/or services
C. Technology utilization
• VII. Marketing Plan
A. Pricing
B. Distribution
C. Promotion
D. Product forecasts
E. Controls
VIII. Organizational Plan
A. Form of ownership
B. Identification of partners or principal shareholders
C. Authority of principals
D. Management team background
E. Roles and responsibilities of members of organization
• IX. Assessment of Risk
A. Evaluate weakness(es) of business
B. New technologies
C. Contingency plans
X. Financial Plan
A. Assumptions
B. Pro forma income statement
C. Cash flow projections
D. Pro forma balance sheet
E. Break-even analysis
F. Sources and applications of funds
XI. Appendix (contains backup material)
A. Letters
B. Market research data
C. Leases or contracts
D. Price lists from suppliers
Critical Issues for Environmental and Industry Analysis
• What are the major economic, technological, legal, and political trends on a
nationals
and an international level?
2. What are total industry sales over the past five years?
3. What is anticipated growth in this industry?
4. How many new firms have entered this industry in the past three years?
5. What new products have been recently introduced in this industry?
6. Who are the nearest competitors?
7. How will your business operation be better than this?
8. Are the sales of each of your major competitors growing, declining, or steady?
9. What are the strengths and weaknesses of each of your competitors?
10. What trends are occurring in your specific market area?
11. What is the profile of your customers?
12. How does your customer profile differ from that of your competition?
 Describing the Venture

1What is the mission of the new venture?

2. What are your reasons for going into business?
3. Why will you be successful in this venture?
4. What development work has been completed to date?
5. What is your product(s) and/or service(s)?
6. Describe the product(s) and/or service(s), including patent, copyright, or trademark status.
7. Where will the business be located?
8. Is your building new? old? in need of renovations? (If renovation is needed, state costs.)
9. Is the building leased or owned? (State the terms.)
10. Why is this building and location right for your business?
11. What office equipment will be needed?
12. Will equipment be purchased or leased?
13. What experience do you have and/or will you need to successfully implement the business
plan
• Production Plan
Will you be responsible for all or part of the manufacturing operation?
2. If some manufacturing is subcontracted, who will be the subcontractors? (Give
names
and addresses.)
3. Why were these subcontractors selected?
4. What are the costs of the subcontracted manufacturing? (Include copies of any
written
contracts.)
5. What will be the layout of the production process? (Illustrate steps if possible.)
6. What equipment will be needed immediately for manufacturing?
7. What raw materials will be needed for manufacturing?
8. Who are the suppliers of new materials and what are the appropriate costs?
9. What are the costs of manufacturing the product?
10. What are the future capital equipment needs of the venture?
• If a Retail Operation or Service:
1. From whom will merchandise be purchased?
2. How will the inventory control system operate?
3. What are the storage needs of the venture and
how will they be promoted?
4. How will the goods flow to the customer?
5. Chronologically, what are the steps involved in a
business transaction?
6. What are the technology utilization requirements
to service customers effectively?
• Organization Structure
What is the form of ownership of the organization?
2. If a partnership, who are the partners and what are the terms of agreement?
3. If incorporated, who are the principal shareholders and how much stock do
they own?
4. How many shares of voting or nonvoting stock have been issued and what
type?
5. Who are the members of the board of directors? (Give names, addresses, and
resumes.)
6. Who has check-signing authority or control?
7. Who are the members of the management team and what are their
backgrounds?
8. What are the roles and responsibilities of each member of the management
team?
9. What are the salaries, bonuses, or other forms of payment for each member of
the management team?