Chapter -1 Entrepreneurship Topics Covered: Introduction to Enterprise, Entrepreneur, Entrepreneurship, Qualities or Characteristics of successful entrepreneur/ Competency requirement for Entrepreneurs, Types of entrepreneur, Importance or Pros and Cons of being an Entrepreneur, Factors influencing Entrepreneurship (OR) Barriers to Entrepreneurship. Women Entrepreneurs – Push and Pull Factors effecting entrepreneurs, Role of women as an Entrepreneur’s, Problems of Women Entrepreneurs, Steps taken by Government, Institutions support for Women Entrepreneurship. The word ‘entrepreneur’ is derived from the French word ‘entreprendre’. It means ‗to undertake‘. Thus, entrepreneur is the person who undertakes the risk of new enterprise. Its evolution is as follows: EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is Marco Polo. He tried to establish trade route to the far East. He used to sign a contract with a venture capitalist to sell his goods. The capitalist was the risk bearer. The merchant adventurer took the role of trading. After his successful selling of goods and completing his trips, the profits were shared by the capitalist and the merchant. MIDDLE AGES: The term entrepreneur was referred to a person who was managing large projects. He was not taking any risk but was managing the projects using the resources provided. An example is the cleric who is in charge of great architectural works such as castles, public buildings, cathedrals etc. 17th CENTURY: An entrepreneur was a person who entered into a contractual arrangement with the Govt. to perform a service or to supply some goods. The profit was taken (or loss was borne) by the entrepreneur. 18th CENTURY: It was Richard Cantillon, French Economist, who applied the term entrepreneur to business for the first time. He is regarded by some as the founder of the term. He defined an entrepreneur as a person who buys factor services at certain prices with a view to sell them at uncertain prices in the future 19th CENTURY: The entrepreneurs were not distinguished from managers. They were viewed mostly from the economic perspective. He takes risk, contributes his own initiative and skills. He plans, organizes and leads his enterprise. 20th CENTURY: During the early 20th century Dewing equated the entrepreneur with business promoter and viewed the promoter as one who transformed ideas into a profitable business. It was Joseph Schumpeter who described an entrepreneur as an innovator. According to him an entrepreneur is an innovator who develops untried technology. 21th CENTURY: Research Scientists live De Bone pointed out that it is not always important that an individual comes up with an entirely new idea to be called an entrepreneur, but if he is adding incremental value to the current product or service, he can rightly be called an entrepreneur. Enterprise Enterprise is defined here as the application of creative ideas and innovations to practical situations. This is a generic concept that can be applied across all areas of education. It combines creativity, ideas development and problem solving with expression, communication and practical action. Entrepreneur An entrepreneur is ordinarily called a businessman. He is a person who combines capital and labour for the purpose of production. He organizes and manages a business unit assuming the risk for profit. He is the artist of the business world. In the words of J.B. Say, ―An entrepreneur is one who brings together the factors of production and combines them into a product‖. He made a clear distinction between a capitalist and an entrepreneur. Capitalist is only a financier. Entrepreneur is the coordinator and organizer of a business enterprise. Joseph A Schumpeter defines an entrepreneur as ― one who innovates, raises money, assembles inputs and sets the organization going with the ability to identify them and opportunities, which others are not able to fulfill such economic opportunities‖. Entrepreneurship Entrepreneurship is the act and art of being an entrepreneur or one who undertakes innovations or introducing new things, finance and business acumen, in an effort to transform innovations into economic goods. According to A.H. Cole, ―Entrepreneurship is the purposeful activities of an individual or a group of associated individuals undertaken to initiate, maintain or organize a profit oriented business unit for the production or distribution of economic goods and services‖ Some facts about entrepreneurs and entrepreneurship: E:xamine needs, wants, and problems to see how they can improve the way needs and wants are met and problems overcome. N: arrow the possible opportunities to one specific "best" opportunity. T:hink of innovative ideas and narrow them to the "best" idea. R:esearch the opportunity and idea thoroughly. E:nlist the best sources of advice and assistance that they can find. P:lan their ventures and look for possible problems that might arise. R:ank the risks and the possible rewards. E:valuate the risks and possible rewards and make their decision to act or not to act. N:ever hang on to an idea, no matter how much they may love it, if research shows it won't work. E:mploy the resources necessary for the venture to succeed. U:nderstand that they will have to work long and hard to make their venture succeed. R:ealize a sense of accomplishment from their successful ventures and learn from their failures to help them achieve success in the future. Qualities of an Entrepreneur The characteristics of an entrepreneur that contribute to success are the result of his achievement motivation. The characteristics of achievement motivated persons as identified by McClelland have been discussed in, the chapter on ―Future of Entrepreneurship in India.‖ A successful entrepreneur must be a person with technical competence, initiative, good judgement, intelligence, leadership qualities, self-confidence, energy, attitude, creativeness, fairness, honesty, tactfulness and emotional stability. 1. Willingness to Make Sacrifices and Assume Risks: -A new venture is full of difficulties and unanticipated problems. In such an inhospitable environment entrepreneur has to be prepared to sacrifice his time, energy and resources in order to carry out the venture and make it success. 2. Mental ability: Mental ability consists of intelligence and creative thinking. An entrepreneur must be reasonably intelligent, and should have creative thinking and must be able to engage in the analysis of various problems and situations in order to deal with them. The entrepreneur should anticipate changes and must be able to study the various situations under which decisions have to be made. 3. Clear objectives: An entrepreneur should-have a clear objective as to the exact nature of the goods to be produced and subsidiary activities to be undertaken. A successful entrepreneur may also have the objective to establish the product, to make profit or to render social service. 4. Human Relations Ability: The most important, personality traits contributing to the success of an entrepreneur is emotional stability, personal relations, consideration and tactfulness. An entrepreneur must maintain good relations with his customers if he is to establish relations that will encourage them to continue to patronize his business. He must also maintain good relations with his employees if he is to motivate them to perform their jobs at a high level of efficiency. An entrepreneur who maintains good human relations with customers, employees., suppliers, creditors and the community is much more likely to succeed in his business than the individual who does not practice good human relations. Human relations ability can also be referred to as tactfulness. 5. Communication ability: Communication ability 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. 6. Technical knowledge: An entrepreneur must have a reasonable level of technical knowledge. Technical knowledge is the one ability that most people are able to acquire if they try hard enough. An entrepreneur who has a high level of administrative ability, mental ability, human relations ability, communication ability, and technical knowledge stands a much better chance of success than his counterpart who possesses low levels of these basic qualities. Brilliant men with first class degrees from universities shy away from becoming entrepreneurs because the one thing they cannot be taught is coping with human emotions. 7. Motivator: An entrepreneur must build a team, keep it motivated and provide an environment for individual growth and career development. 8. Business secrecy: An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade competitors is a serious matter, which should be carefully guarded against by an entrepreneur. An entrepreneur-should be able to make a proper selection of his assistants. 9. Self-confidence: Entrepreneurs must have belief in themselves and the ability to achieve their goals. This is the greatest asset of a successful entrepreneur. He must have the confidence to make choices alone and bounce back when he fails. 10. Long-term involvement. An entrepreneur must be committed to the project with a time horizon of five to seven years. No ninety-day wonders are allowed.Success