2. Basic definitions
• Entrepreneur – Person who creates an
enterprise. Derived from the French word –
enterprendre (to undertake)
– Earliest entrepreneurship theory by Richard
Cantillon
• Entrepreneurship – Process of action taken
by an entrepreneur to establish the
enterprise
3. Advantages of being an entrepreneur
• Own boss
• Put your ideas into practice
• Money for yourself
• Learn to run a business
• Work with your customers
• Personal satisfaction
• Work in an area that you enjoy
• Build retirement value
4. Advantages of being an
entrepreneur
Manager
• Salaried employee
• Executes decisions
• One of employees
• Mostly fixed rewards
and salary
Entrepreneur
• Own boss
• Takes own decisions
• Hires employees
• Uncertain rewards
5. The entrepreneurial decision process
• Entrepreneurial decision process –
Deciding to become an entrepreneur by
leaving present activity
• Stages
– Perceiving
– Preparing business plan
– Marshalling resources
– Creating the enterprise
– Consolidation and management
6. Characteristic of a successful entrepreneur
• Creativity – Germination, Preparation, Incubation,
Illumination, Verification
• Innovation
• Dynamism
• Leadership
• Teambuilding
• Achievement motivation
• Problem solving
• Goal orientation
• Risk taking and decision making ability
• Commitment
7. Core competencies of entrepreneurs
• Initiative
• Perceiving opportunities
• Persistence
• Information gathering
• Concern for quality
• Commitment to contractual
obligations
• Efficiency orientation
• Planning
• Problem solving
• Self-confidence
• Expertise
• Self-critical
• Persuasion
• Use of influence strategies
• Assertiveness
• Monitoring
• Credibility
• Concern for employee
welfare
• Impersonal relationship
• Expansion of capital base
• Building product image
8. Skills Required
of Entrepreneur
Technical Business
Management
Personal
Writing Planning Inner Control
Oral Communication Decision Making Risk Taking
Monitoring The
Environment
Human Relations Innovative
Use Technology Marketing
(Selling)
Change-Oriented
Visionary
9. Classification of entrepreneurs
• Based on functional characteristics
• Based on developmental angle
• Based on type of business
• Based on personality type
• Based on schools of thought
10. Classification of entrepreneurs
• Based on functional characteristics
– Innovative entrepreneur
– Imitative or adoptive entrepreneur
– Fabian entrepreneur
– Drone entrepreneur
• Based on developmental angle
– Prime mover
– Manager
– Minor innovator
– Satellite
– Local trading
11. Classification of entrepreneurs
• Based on type of business
– Manufacturing
– Wholesale
– Retailing
– Service
• Based on personality type
– Improver: Company as a means to improve the world.
High integrity and ethics. Perfectionists.
– Advisor: High level of assistance to customers and other
stakeholders.
– Superstar: Charisma and energy of the CEO. Personal
brand
– Artist: Reserved but highly creative person. Builds
business around personal talents. Highly sensitive to
feedback
12. Classification of entrepreneurs
• Visionary: Future vision and thoughts of the
founder. Formulation of plans to avoid problems.
High focus on dreams
• Analyst: Fixing problems in a systematic way.
Excel in problem solving
• Fireball: High levels of energy and optimism. May
overcommit on teams
• Hero: Tremendous will and ability to lead the world.
Can assemble great companies. Overpromising
and using forceful tactics
• Healer: Nurturing and harmony to the business.
Inner calm. Wishful thinking.
13. Classification of entrepreneurs
• Based on Schools of thought
– Assessing personal qualities
• ‘Great Person’
• Psychological characteristics
– Recognizing opportunities
• Classical school
– Acting and Managing
• Management school
– Leadership school
– Reassessing and adopting
• Intrapreneurship school
14. Myths about entrepreneurs
• Entrepreneurs are born, not made
• Entrepreneurs are academic and social misfits
• Entrepreneurs fit an ideal profile
• Money is what you need to become an
entrepreneur
• You need to be lucky
• Great idea is sufficient
• My best friend is my best business partner
• Having no boss is fun
• I’ll definitely become successful
• Life will be simpler if I work for myself
16. Entrepreneurial development models
• Psychological models:
– McClelland: Importance to achievement motives
– Latent need for achievement among adults
– Motivation-training programme to make
entrepreneurs willing and eager to exploit the
opportunities provided
– Creative Personality – status withdrawal (Everett
Hagen’s theory of social change)
– John Kunkel – entrepreneurial supply as a
function of the surrounding social structure. Can
be influenced by manipulating economic and
social incentives.
17. Entrepreneurial development models
• Sociological models
– Young’s theory: Change based upon Society’s
incorporation of relative subgroups
– Relativeness of a subgroup which has a low
status in a larger society will lead to
entrepreneurial behaviour if the group has better
institutional resources than others in the society
at the same level.
– Suggests the creation of supporting institutions
in society as the determinant of
entrepreneurship
18. Entrepreneurial development models
• Integrated models
– TV Rao – Entrepreneurial disposition
• Need for motive
• Long-term involvement either at thinking level or
activity level
• Personal, social and material resources
• Suitable socio-political system for establishment and
development of enterprise
19. Principles for
Successful New Venture
1) Define Market
2) Durable Products- 18
Month Customer Payback
3) Market Growth = 30-50%
in 5 Years
4) Patent Protection
5) No Product Substitutions
Available
6) Products Variants
7) No Strong Competition
Present
8) Quick Market Dominance
9) Gross Margin 30-50%
10)Staged Financing
11)ROI = 10X in 5 Years (25-
30%/Year)
12)Positive Cash Flow in 18
Months
13)Strong Management in
Industry
