Unit 1

Fundamentals of Entrepreneurship

1.1 Introduction: The entrepreneur; Definition; Emergence of entrepreneurial class; Theories of entrepreneurship; Role of socio-economic environment; Characteristics of entrepreneur; Leadership; Risk taking; Decision - making and business planning.

Introduction:

An entrepreneur is someone who develops a company around innovation. They manage the business and take the risk of its success.

Entrepreneurship is defined by the personal risks it takes in pursuing a new business, innovation, or other form of business. In exchange for taking that risk, they often benefit most importantly from the success of their enterprise.

There is some debate about the exact definition of entrepreneurship. Some have a broad definition, including those who work for them. Others have a narrower perspective, suggesting that entrepreneurs not only need to work independently for their business, but their business also needs to include innovation and leadership.

Entrepreneurs are behavioural, motivated individuals who take risks to achieve their goals. Entrepreneurs are a new combination of innovators in the field of production.

An entrepreneur is the founder of a company that identifies opportunities, gathers the people and resources needed to run the company, attracts people and financial institutions, and has the psychological responsibility to make the company successful.

Definition:

Adam Smith (1776) considers an entrepreneur to be a proprietary capitalist who supplies capital and acts as a manager who acts as an intermediary between workers and consumers.

Francis A. Walker (1870) calls entrepreneurs the engineers of progress and the chief agent of production.

F. H. Knight (1921) claims that entrepreneurs are a group of professionals who take risks and deal with uncertainty.

J-A. Mill (1848) advocates the use of the term entrepreneur in the sense of an organizer who is paid for his non-manual type of work.

JB Say (1824) described entrepreneurs as "assembling factors of production, securing costs and profits, re-accumulating capital, and identifying product prices in such a way as to have management and production knowledge. It is defined as "an economic agent that does."

This definition emphasizes the economic activity of entrepreneurs.

This concept is also supported by Hagen Se Robinson (1942). The emphasis is on socio-economic contributions and entrepreneurial characteristics.

Innovations here are seen as new product introductions or new utilities for old products, new markets, new manufacturing methods, new sources of raw materials, and new organizations.

Herberton G. Evans (I957) defines an entrepreneur as an individual or group of individuals who is tasked with determining the type of business they run.

Evan entrepreneurs are only engaged in setting the nature of the business, the products or services offered, and the types of customers offered.

"An entrepreneur is an individual who initiates, maintains, or expands a profit-oriented business salt for the production or distribution of economical goods and services," says H. Cole (1959).

Cole believes that anyone engaged in economic activity to make a profit is an entrepreneur. Therefore, making a profit is the focus for identifying an entrepreneur.

This definition focuses on the concept of management, which means that entrepreneurs are also managers.

At a seminar on entrepreneurship in Delhi in 1981, entrepreneurs have been understood differently in today's context.

The consensus said, "Entrepreneurs embrace challenges, focus on production for development, be wary of successes and failures when taking standard risks, and be cautious and important stove conditions before reaching a decision. A person to consider. "

This concept has taken us to the ideas of efforts and adventures that contribute to the arrival of facial progress leading to human well-being. It is built on the physical activity associated with product production as well as the psychological aspects associated with entrepreneurial success.

Strong achievers of the goals to achieve the success of the venture and their entrepreneurs as risk takers of all desirable behaviours said: It takes on all or most of the risk. "

Birch entrepreneurs are not only ventures, but also risk takers and capital providers. Entrepreneurs bring talent; product and service venture ideas, know-how, and usually take the necessary risks to fund them.

Qualities

The top five qualities of a successful entrepreneur are:

1. Resolute motivation and passion

Passion is the most important quality of a successful entrepreneur.

No one can achieve anything without a passion for achieving that goal. As a result of this absolute passion, motivation begins to emerge in the entrepreneur's mind as entrepreneurs take on new tasks and learn new things to achieve their goals.

Motivation keeps you bleeding, helping entrepreneurs stay hopeful and overcome obstacles as they move toward their goals. That's why successful entrepreneurs are passionate and motivated by a whole new attitude.

2. Self-discipline

This is one of the most important characteristics of a successful entrepreneur.

If an entrepreneur can accomplish an important task (whether he is happy with it or not), he can achieve higher success.

Self-discipline basically means mastering your inner self and your inner emotions, creating a sense of responsibility to get the job done, and nurturing your own direction.

3. Risk-taking ability

Entrepreneurship is about taking risks. Entrepreneurs have the ability to take greater risks to achieve greater success, but not all risk takers are successful entrepreneurs.

Successful entrepreneurs know when to take risks and which risks are beneficial or harmful to the company or himself.

All entrepreneurs plan before taking risks, develop Plan B (in the event of an accident), and establish a good basis for the outcome of the risk.

4. Creative thinking

A successful entrepreneur is a creative thinker, and her mind is always filled with ideas. This radical ability to think of a wide range of new ideas helps entrepreneurs start different types of businesses in their own creative ways.

5. Persistence

Persistence is the most basic and essential quality of successful entrepreneurs, as even good entrepreneurs experience failures and hurdles. But with tenacity, you can regain yourself and keep moving towards your goals.

These five qualities will help you become the successful entrepreneur you are aiming for. Look for these qualities of your own and keep progressing daily for the benefit of yourself and your company.

6.  Confident

One quality of productive entrepreneurs that individuals in real time notice is their confidence. Entrepreneurs do not rise if they will or are definitely worth the success. They’re assured in their information of constructing their business productive. They’re assured in everything they are doing.

7. Open mind

Entrepreneurs acknowledge that each event or scenario may be a business chance. Ideas regarding advancement and potency, talent skills, and potential new businesses are perpetually being generated. They’re perpetually trying to find new ways that to enhance their current systems and processes. Entrepreneurs have the mysterious ability to imagine merchandise that solves issues, which can appear not possible currently. They need the power to visualize everything around them and focus it on their goals.

8. Aggressiveness

Many businesses were based to understand that entrepreneurs will do a higher job than others. They have to win within the sport they play and within the business they produce. Entrepreneurs emphasize their journal of success. To be sensible at business, entrepreneurs have the power to explore all their choices and stay willing to pursue their goals. They’re willing to just accept any challenges they will face so as to form them even higher.

Emergence of entrepreneurial class

Ancient India was known all over the world for its richness and wealth. Traders from all over the world have travelled to India to participate in this affluence. For a variety of economic reasons, including the Mughal Empire, Portuguese, Turks, and British, they all set foot on the Indian border. For a long time there was a marked lack of entrepreneurship among Indians, but modern India has once again faced that challenge. Even those with little or no entrepreneurial experience choose to take an entrepreneurial management course to gain theoretical knowledge and hands-on experience before embarking on an entrepreneurial journey.

It is worth noting how India's entrepreneurship has grown in recent years. The country ranks third in the list of fastest growing countries on the list of start-ups. The first two countries are the United States and the United Kingdom. With the digitization of India, interest in the online market is increasing. The way Internet-based apps and products interact with people is booming in both urban and rural areas of India.

Factors that improve entrepreneurship

1. Encouragement plan by government authorities

The Government of India is also encouraging interest in entrepreneurship. We have launched a "Start up India" campaign to support entrepreneurial initiatives. Schemes have emerged to promote world-class innovation hubs and youth self-employed opportunities. The focus is especially high in technology-driven areas. The Government of India recognizes that entrepreneurship can boost the economy and improve the financial position of the people of the country. Such a belief in entrepreneurship from India's highest institutions leads to the development of interest in this area among the youth of the country.

2.     Rise of technology

Technology has made India a software powerhouse. It has the second largest number of Internet users in the world. In addition to this, work uncertainty fuels people's interest in having their own business. The industry is constantly in need of innovation to move forward, and start-ups are emerging to help companies solve their unique problems and increase efficiency in areas such as artificial intelligence and machine learning.

3.     Female entrepreneur

The wave of entrepreneurs is also being driven by female entrepreneurs who are opening up niches for themselves. Start-ups such as Zivame, Kaaryah, YourStory and POPxo have become successful ventures. Led by the female founders, they meet the market needs of their respective segments.

Challenges for Indian entrepreneurs

1. Financing for business

The challenge for start ups is to raise money for their business. To do this, you need a reliable business plan and a strategy for how to enter the market. When start-ups are convinced of the potential success of a venture, they raise money from venture capitalists.

2.     Knowledge of how to run a business

It may seem easy, but every venture needs to have a good plan in the first place. Various business schools have started entrepreneurship courses to meet the requirements of interested students who want to become entrepreneurs. These courses help students understand their expectations correctly and prepare for an entrepreneurial career.

3.     Keep up with technology

This is important for start-ups in the technology sector. It's important that they keep track of the latest technology and stay ahead of the curve. Innovations are happening every day these days, and technology is quickly becoming obsolete. They need to keep improving their products and bring new and innovative products to their customers. Innovation needs to be useful to customers. They need to do good research to support the launch of their product. If a product does not meet the needs gap of the market, even the most advanced technology cannot succeed in the market.

4.     Quality of human resources

Business success depends on the people who work for it. The right combination of people is important. These people should be trained for their work profile. For example, marketing managers need to understand the industry and its customers and plan marketing campaigns accordingly. You also need work experience to perform your job properly. In addition, they need to have the right attitude and a keen interest in working to the fullest.

Entrepreneurship thrives in a facilitating environment that drives business growth. Entrepreneurship is very important to a booming economy, as entrepreneurs are not looking for work, but are job creators for the rest. With the right support, India's entrepreneurship can lead to India's economic growth and people's prosperity.

Today, many Indians are on the cusp of start ups, which is driving economic growth and improving domestic employment. With such a thriving community and increasingly ambitious entrepreneurs coming in, we also need to learn from the existing ecosystem on how to succeed in this area. One of the great ways to do that is to take an entrepreneurship certificate program that will give you important knowledge to succeed in this area.

Meanwhile, here are some important tips from the Indian entrepreneurial community.

Ideas need to meet existing needs

Many ideas have been born and some are great, but the big question is whether they are filling existing gaps or the individual needs that form the target customer. Many entrepreneurs assume that all interesting and good ideas are not only viable as business proposals, but always viable. This is not the case.

Keep an eye on your goals

Sometimes you can't concentrate on what you want to achieve. The daily challenge of running a new business with a small team and a limited time frame is high. Still, it's important to remember the goals you're defining and working on. That's because it helps you readjust if you get out of orbit.

Making money is important

You may have started a venture as a passion or idea that needs to take a bigger form. But you need to make money to make your venture sustainable and emerging. It takes time, but it is necessary for a venture to grow without losing its commitment to be economically viable or profitable.

Maintain an agile business plan

Sometimes you get hooked on your business plan and can't revise it based on changing needs of the venture itself. Therefore, remember that your business plan is very important and provides a roadmap. However, if you need to change roads, we also change the roadmap, so it's a good idea to use a business plan to drive your strategy. However, maintaining flexibility is just as important so that the strategy is fed back into the plan and changed as needed.

People are important

Talent is very important whether you are hiring a small number of employees or a large number of employees. Appropriate personnel are needed at all levels of the organization.

These are some great tips to help new entrepreneurs embark on this exciting journey.

Theories of entrepreneurship;

The various theories of entrepreneurship may be broadly divided into three groups-

A)    Economic  Theory

B)    Psychological Theory

C)   Sociological Theory

A) ECONOMIC THEORIES

G.F. Papanek and J.R Harris are economists who encouraged financial theory.       According to them, financial incentives are the principle force for entrepreneurial activates. A few critical financial theories of entrepreneurship are mentioned below

1)  RISK BEARING THEORY OF KNIGHT

There are sure dangers which are measurable and the opportunity of such chance may be statistically anticipated and for this reason such dangers may be insured. Example of insurable dangers encompasses robbery of commodities, hearth place withinside the enterprise, unintentional loss of life etc. On the alternative hand, there are sure dangers which cannot be calculated.

The opportunity in their incidence cannot be statistically ascertained. Such dangers encompass dangers related to modifications in prices, call for and supply. These dangers are non-insurable. Prof. Knight opined that the earnings is the praise for bearing the non-insurable dangers and uncertainties. Uncertainty-bearing is one of the maximum critical capabilities in a dynamic economy. The entrepreneur bears the uncertainty concerned withinside the enterprise.

The salient factors of Knight’s concept include:

i. According to the concept, the entrepreneur earns natural income for bearing the uncertainty.

Ii. The chance of uncertainty or non-insurable dangers can't be statistically estimated.

Entrepreneurs adopt dangers of various levels in line with their cap potential advert inclination. The concept shows that the extra unstable the character of company, the better stage of earnings earned with the aid of using the marketers.

Iv. Profit is the praise of the entrepreneur for bearing uncertainties and dangers. Hence, it needs to be part of the ordinary cost.

v. The praise of the entrepreneur is uncertain. Entrepreneur ensures hobby to lender of capital, wages to employees and hire to the landlord.

Vi. The stage of uncertainty in enterprise may be decreased with the aid of using making use of the method of consolidation. The overall stage of uncertainty may be decreased with the aid of using pooling man or woman instances.

F.H. Knight’s concept is one of the maximum state-of-the-art theories to provide an explanation for delivery of entrepreneurship primarily based totally on earnings. But, the concept suffers from positive drawbacks as pointed with the aid of using the critics.

i. The function of an entrepreneur has now no longer been elaborately supplied with the aid of using the concept. The entrepreneur’s pastime has been restrained to uncertainty bearing. Modern enterprise sports are one-of-a-kind. Often, there may be a dichotomy among possession and management. These elements have now no longer been taken into consideration.

Ii. The uncertainty-bearing concept mentioned the idea of earnings in a indistinct way. The actual estimation of earnings for the entrepreneur has now no longer been supplied withinside the concept

Iii. Profit as residual earnings of the entrepreneur has been criticized.

Iv. Critics sense that uncertainty-bearing need to know no longer be dealt with like different elements of manufacturing like land, labour and capital. It is a mental idea and need to be dealt with in a one-of-a-kind manner.

2) THEORY OF ADJUSTMENT OF PRICE- The adjustment of charges is the principle function of the entrepreneur. According to Kirzner, alertness to disequilibrium is the distinguishing traits of an entrepreneur. Alertness permits a few people to interfere withinside the marketplace with the aid of using converting the charge even as different people definitely reply to marketplace with the aid of using converting their shopping for and promoting plan in lieu of the brand new charge.

Kirzner in addition keeps that the number one function of financial concept is to provide an explanation for behaviour in phrases of functional human motion and take into account to that volume functional human moves can have interaction to supply surprising earnings.

3) HARVARD SCHOOL THEORY- According to this college concept, entrepreneurship takes a functional pastime which initiates, keep or increase an earnings incomes company in interplay with the inner scenario of the enterprise or with the financial, political and social occasions surrounding the enterprise. This concept emphasised styles of sports.

a) The organisation or co-ordination pastime and

b) The sensitivity to the environmental traits that have an effect on choice making.

4) INNOVATION THEORY OF SCHUMPETER- Joseph Schumpeter propounded the famous revolutionary concept of entrepreneurship. Schumpeter takes the case of a capitalist closed financial system that's in desk bound equilibrium. He believed that marketers disturb the desk bound round glide of the financial system with the aid of using introducing an innovation and takes the financial system to a brand new stage of development. The sports of the marketers constitute a scenario of disequilibrium as their sports ruin the recurring round glide.

Innovation may want to contain any of the subsequent:

i. Innovation of recent products.

Ii. Innovation in novel strategies or methods of manufacturing.

Iii. The beginning up of a brand new market.

Iv. Entrepreneurs would possibly locate new supply of deliver of uncooked materials

v. Innovation in control. This method reorganization of an industry

Criticisms:

Schumpeter’s concept has been subjected to the subsequent criticisms:

i. Critics sense that the concept over emphasised on progressive features of the entrepreneur. It omitted the organizing factors of entrepreneurship.

Ii. Schumpeter had absolutely omitted the chance-taking characteristic of the entrepreneur, which can't be omitted. Whenever an entrepreneur develops a brand new mixture of things of manufacturing, there's sufficient chance involved.

Iii. The concept is greater relevant in advanced nations only. In growing nations there's a paucity of progressive entrepreneurs.

Iv. The concept does now no longer offer the reason as to why few nations have greater entrepreneurship expertise than others.

Despite of the entire above criticisms Schumpeter’s concept is taken into consideration as a landmark withinside the enlargement of entrepreneurship theories.

5) LEIBENSTEIN’S X-EFFICIENCY THEORY- The idea of X-performance turned into brought through Harvey Leibenstein a referred to economist in1966 in his article titled “Allocative performance vs. X-performance”. This is likewise called X-inefficiency. In popular X-inefficiency refers back to the distinction among the premiere green behaviour of enterprise in concept and the located behaviour is exercise which happens as a result of distinct elements.

X-performance refers back to the effectiveness with which a given set of inputs are used to provide outputs. If a specific company is generating the most output it can, given the assets it employs with the nice to be had technology, it's miles stated to be technical-green. X-inefficiency happens whilst technical-performance isn't achieved. Whenever an enter isn't used correctly the distinction among the real output and the most output as a consequence of that enter is a degree of the diploma of X-performance.

Harvey Leibenstein had cited that for allocative performance the entire economic system turned into taken into consideration while in case of X-performance simply precise agencies and industries are to be taken into consideration.

X-performance arises both due to the fact the company’s assets are used withinside the incorrect manner or due to the fact they may be wasted, that is, now no longer used at all.

The entrepreneur has been entrusted roles; first the position of an opening filler and 2nd an enter completer. The manufacturing characteristic typically has positive deficiencies. These deficiencies and hole get up due to the fact all of the elements of manufacturing characteristic can't be marketed. The entrepreneur has been entrusted the task to fill the gaps withinside the market. The 2nd position of the entrepreneur is entering completion. The entrepreneur has to mobilize all of the to be had inputs in an effort to enhance the performance of current manufacturing strategies.

Leibenstein recommended sorts of entrepreneurship. First kind is the ‘Routine entrepreneurship’ which includes the essential features of control of enterprise. Second kind is that of the ‘New entrepreneurship’ which includes progressive entrepreneurship.

The concept has many novel contributions however has been criticized on following counts:

I. The specific have an effect on which the X-performance has on output of an corporation can't be determined.

II. The concept is much less predictable in comparison to ordinary theories.

(B) PSYCHOLOGICAL THEORIES

According to the psychologists, entrepreneurship is maximum possibly to emerge whilst a society has enough deliver of person owning precise mental traits. The theories proposed through McClelland and Hagen fall beneath essential mental theories. They are defined below-

1) DAVID MCCLELLAND THEORY OF HIGH ACHIEVEMENT   - This concept turned into advanced through David. McClelland. McClelland involved himself with monetary boom and the elements that have an effect on it. In this context, he attempts to locate the inner elements i.e. “human values and reasons that lead guy to make the most opportunities, to take gain of beneficial alternate conditions.” That is why he offers significance to the progressive traits of entrepreneurial position. The entrepreneur is involved with want for fulfilment (n-fulfilment).

The n-fulfilment is referred to as “a preference to do well, now no longer a lot for the sake of social reputation or prestige, however for the sake of an internal feeling of private accomplishment.”

It is that this reason of n-fulfilment that courses the moves of entrepreneur. People with excessive n-fulfilment behave in an entrepreneurial way. So it's far higher to expand n-fulfilment amongst people to make sure excessive scale of monetary development. In exercise, n-fulfilment reason is inculcated via toddler rearing practices, which pressure requirements of excellence, cloth warmth, self-reliance, education and coffee father dominance.

McClelland recognized traits of entrepreneurship. First doing matters in a brand new and higher way. Secondly, choice making beneath uncertainty.

This reason is known as because the tendency to attempt for achievement in conditions regarding an assessment of one’s overall performance with regards to a few preferred of excellence. People having excessive want for fulfilment are much more likely to be successful as marketers.

According to McClelland, people with excessive want fulfilment will now no longer be inspired through financial incentives however that financial rewards will represent a image of fulfilment for them. Similarly, they're additionally now no longer fascinated a great deal for social popularity or status however their last purpose is non-public accomplishment. That is why McClelland shows that so that you can improve the extent of fulfilment motivation, dad and mom have to set excessive requirements for his or her children

Critical Evaluation:

Research at the mental roots of entrepreneurship monitor that excessive fulfillment orientation guarantees the achievement of marketers. But the empirical gear of idea utilized by McClelland are located to be pretty suspect and one wonders how some of the folks who are judged to have excessive n-fulfilment should achieve using it in exercise withinside the modern growing international locations except reinforced through different reinforcing circumstances.

2) E. E. HAGEN’S THEORY (EMPHASIS ON WITHDRAWAL OF STATUS RESPECT): E. Hagen tried to formulate a principle of social extrade. The principle of social extrade explains that once individuals of a few social agencies experience that their values and standing aren't reputable through the society, they flip to innovation to get the honour of the society. According to Hagen, entrepreneurship is a feature of repute withdrawal. This principle affords that a category which misplaced its preceding status or a minority organization has a tendency to expose competitive entrepreneurial drive.

Hagen postulates 4 sorts of activities which could produce repute withdrawal:

(i) Displacement of a conventional elite organization from its preceding repute through some other conventional organization through bodily force.

(ii) Denigration of values, symbols via a few extrade withinside the mindset of advanced organization.

(iii) Inconsistency of static image with a converting distribution of monetary strength and.

(iv) Non-attractiveness of predicted repute on migration to a brand new society.

Hagen in addition opined that innovative innovation or extrade is the fundamental characteristic of monetary boom. He describes an entrepreneur as a innovative trouble shooter inquisitive about matters withinside the sensible and technological realm. Such form of person feels a experience of extended satisfaction while dealing with a trouble and tolerates ailment without discomfort.

In conventional societies, positions of authority are granted on the idea of repute, in place of person ability. That is why, Hagen visualised an progressive personality.

There are 4 responses which determine the personality-

(i) Retreatist – One who combines to paintings withinside the society however stays detached to his paintings and position.

Ii) Ritualist – One who adopts a form of shielding behaviour and acts withinside the approaches everyday and authorized in his society however and not using a hopes of enhancing his position.

(iii) Reformist- One who foments a revolt and tries to set up a brand new society?

(iv) Innovator- A innovative person who's in all likelihood to be an entrepreneur.

Innovation calls for creativity and such innovative people purpose monetary boom. In exercise innovative personalities emerge while the individuals of a few social agencies revel in the withdrawal of repute respect. Whenever there may be any withdrawal of repute respect, it might supply upward push to innovation an  innovative person who's in all likelihood to be an entrepreneur.

Critical Evaluation:

The principle acts to differentiate among entrepreneurship and intra-preneurship. There are various factors withinside the corporation which encourage the executives and specialists to perform a little progressive behaviour main to new merchandise and services. Actually, they're now no longer ruled through repute withdrawal.

The principle most effective shows that the people, who had loved social status during their histories, fall right into a retreats segment and with an urge to regain that misplaced repute end up entrepreneurial personality. The principle additionally presupposes a long time angle for entrepreneurial boom approximately 3 to 5 generations for the emergence of entrepreneurship.

But surely it does now no longer happen. In India, first era marketers are pretty a hit of their entrepreneurial behaviour. J.P. Gour of Jai Prakash Industries and Sunil Mittal of Bharti organization etc. may be noted on this context.

(C) SOCIOLOGICAL THEORIES

The supporters of sociological theory say that the entrepreneurial activities is affected from social status hierarchy and values. Individuals’ position, tradition, cultural values, mobility and social status etc. are thoroughly effected to entrepreneurship development. The sociological theories depend on this concept.

Two important social and cultural theories are:

1) MAX WEBER THEORY OF SOCIAL CHANGE

According to Weber, “A person who lives in which community, religion and follows the conventions and religious values.”

All these things completely affect by their professional life, energy, livelihood and enthusiasm.

In other words, Max Weber is connected with the emergence and success of entrepreneurs with social ethical values systems. He also associated the entre-preneurship development with protestants and other non-convents.

According to him, non-convents groups are those groups who gives pressure on capitalism, money rationality and thinking. They were almost successful in creating entrepreneurs, wealth collection, technology, capital for¬mation and economic development.

“The modern economic development is explained to a greater extent, by the social factors as discussed in the foregoing lines. This becomes more prominently evident when we contrast the Indian culture with that of the western of particularly of the American culture. Even if we contrast the different sub cultures within the same larger society, the story of economic development is explained.”

Weber says that the religious beliefs and moral values are basically affected to people’s attitude, view trust and thinking pattern and people’s selected occupational pursuits as per earlier things.

Highlighted Points:

i. Entrepreneurship development is based on Protestants.

Ii. Selection of occupation pursuits is effected from religious and social values.

Iii. Religious and moral values are affected to people’s attitude, thinking power.

2)B. F. HOSELITZ’S CULTURE THEORY OF ENTREPRENEURSHIP

According to Hoselitz, “The development of industrial entrepreneur is based on only which type of society is there.”

a. Social process is not static.

b. Sufficient employment pattern is available.

c. Encourage to entrepreneurs for personality development.

Hoeslitz says, “Culturally marginal groups plays an important role in encouraging the economic development of any nation.”

He think that the marginal persons are more able in making creative adjustment in changed situations and during the adjustment process they make efforts in bringing real innovations in social behaviour. In addition to this, he emphasised on development of personal qualities for entrepreneurial develop¬ment.

According to Hoselitz, “Managerial skill and leadership qualities are important factors for entrepreneurship. Besides this, education, training, social values, behaviour and social behaviour/institutions play a crucial role in personality development.”

Highlighted Points:

i. Entrepreneurship development is based on social progress and employment patterns.

Ii. Personality development is an essential quality for entrepreneurship development.

Iii. Culturally marginal groups are important characters for development process.

Iv. Marginal groups are having the ability of innovation.

v. Managerial ability and leadership quality is must for entrepreneurship development.

Role of socio-economic environment

ROLE OF ENTREPRENEURSHIP IN SOCIO-ECONOMIC ENVIRONMENT         

The entrepreneurial pastime relies upon a complicated and ranging mixture of socio-monetary, political, mental and different elements. Entrepreneurship isn't always an inborn quality; it's far a made of surroundings. To be successful, an entrepreneur has to stay dynamic and accountable to the complete surroundings. Environment is a mixture of numerous dynamic, complicated and uncontrollable outside affects inside which an entrepreneur has to function. In case of favorable enterprise surroundings, entrepreneurship evolved hastily. Environment creates demanding situations, pressures, risks, opportunities, profits and threats for the entrepreneur. Entrepreneur desires a rational imaginative and prescient on his element to take benefits of those converting conditions.

The monetary surroundings sporting activities possibly the maximum direct and on the spot have an impact on of enterprise surroundings. They consist of capital, uncooked substances and markets etc. Further, sort of financial system whether or not evolved, growing, or underdeveloped, prices of financial savings and investment, increase fee of G.N.P in line with capita income, extent of exports and imports stability of bills position, charge degree, prices of inflation, deflation and mirrored image approach of shipping and verbal exchange additionally have an effect on the financial system of the united states.

The crucial factors of monetary surroundings and their affects can be mentioned as follows:

(1) Economic System: Economic System of a rustic can be capitalist, socialist, democratic or mixed. Economic machine determines the character and scope of entrepreneurship. It additionally influences mobilization of assets. In the capitalist machine, entrepreneur-deliver evolved hastily even as socialist financial system creates issue withinside the manner of entrepreneurship. Entrepreneurs can paintings independently withinside the capitalist financial system which isn't always so withinside the socialist financial system.

(2) Economic Conditions: Economic circumstance of a rustic can be of evolved, growing and underdeveloped. The nature of Entrepreneurship is decided through the extent of improvement of financial system. ‘In evolved financial system, marketers ought to adopt progressive sports for survival and increase however withinside the growing and underdeveloped countries, marketers do now no longer take a lot hobby withinside the progressive sports. In those countries, marketers ought to face many issues and demanding situations for his or her improvement,

(3) Structure of Economy: The elements like country wide income, fee of capital formation, improvement of capital market, fee of investment, saving and overseas alternate etc., is the shape of the financial system. The favorable increase of those elements might also additionally sell entrepreneurship.

(4) Trade Cycles: Cycle of inflation and deflation, create many demanding situations and issues withinside the improvement and enlargement of entrepreneurship. Changes in foremost monetary variables like cash income, fee of living, hobby prices, financial savings, credit score availability etc. have an instantaneous effect at the running an enterprise.

(5) Economic Policies and Laws: The authority enacts numerous legal guidelines to modify the enterprise surroundings. Industrial coverage, Licensing coverage, economic coverage, import-export coverage are taken into consideration monetary rules which produce a extraordinary impact at the entrepreneurship sports. Favorable monetary rules and legal guidelines sell the improvement of entrepreneurship.

(6) Financial Resources: Adequate Funds are required for bringing collectively different elements of production. It additionally encourages improvements and creation of latest things. Lack of required capital for commercial sports might also additionally hinder and discourage marketers.

Social outside environmental elements in a rustic additionally workout a huge effect at the emergence of entrepreneurship in a rustic. Social elements in a rustic decide the volume and degree of industrialization, as they have an impact on, the call for of a services or products at a given factor of time. Social elements are sure to have deep have an impact on on consumer’s taste, preference, existence and living.

They consist of -

(i) Customs and Religious Traditions: Customs, non secular religion and beliefs additionally have an effect on entrepreneurial increase. In a growing united states like India, there are such non secular traditions which aren't conductive to entrepreneurship. People are fatalists and that they do now no longer want to paintings difficult or do something new. They stay glad with old.

(ii) Family Background: The surroundings of own circle of relatives influences entrepreneurship. Joint own circle of relatives can offer own circle of relatives assets to make investments and make bigger own circle of relatives enterprise. If the daddy is a professional, entrepreneur or businessman, the son is much more likely to go into the identical line due to sure inherent benefits. Mobility of the entrepreneur is motivated through the occupational and social reputation of the own circle of relatives.

(iii) Desire for development and safety of reputation: The choice for development and safety of reputation forces humans to act responsibly. People paintings difficult to keep and enhance their reputation and it contribute to entrepreneurial increase.

(iv) Social Mobility and Social Marginality: There are a few people of the view factor that excessive diploma of mobility is conductive for the emergence of entrepreneurship. Social marginality additionally undoubtedly affects entrepreneurship.

(v) Values: Values are enduring ideals that humans keep approximately morals, equality, freedom, paintings ethic, and so on. When values change, the effect is felt withinside the methods wherein marketers, authorities and society operate.

(vi) Attitude closer to adjustments and Risk-taking: People’s mind-set closer to adjustments, ability and emotions of risk-taking etc. additionally influences the entrepreneurial surroundings. Positive mind-set to undertake adjustments and risk-taken, have an impact on the improvement of entrepreneurship.

(vii) Work Ethics: It is determination or preoccupation with paintings. It is a experience of responsibility and paintings which is wanted for entrepreneurial development. The Japanese have performed superb development due to their dedication of paintings.

(viii) Educational and Technical Know How: Education, entrepreneurship and improvement are very carefully related, as a substitute say they're interrelated. Education is the excellent approach of growing man’s resourcefulness, which embody distinct dimensions of entrepreneurship. It is similarly anticipated that the excessive degree of schooling might also additionally permit the marketers to work out their entrepreneurial expertise extra correctly and efficiently.

Characteristics of entrepreneur

Characteristics

1. Curiosity

Successful entrepreneurs have the curiosity that enables them to continually search for new opportunities. Curious entrepreneurs don't settle for what they suppose they recognize, however raise difficult queries and explore completely different ways.

In Entrepreneurship necessities, entrepreneurship is delineated because the "process of discovery."

Valuable discoveries will simply be unnoticed if you're not willing to raise queries and challenge the establishment.

2. Structured experiment

With curiosity, the requirement for structured experiments arises. As new opportunities arise, entrepreneurs have to be compelled to run tests to work out if they're value following.

For example, if you have got an inspiration for a replacement product or service that meets underserved demand, you would like to create certain that your customers are willing to acquire it. To do this, you would like to try to to an intensive marketing research, perform pregnant tests to validate your ideas, and verify if your ideas have potential.

3. Ability

The nature of business is continually ever-changing. Entrepreneurship is Associate in Nursing unvarying method, with new challenges and opportunities rising all over. It’s virtually not possible to arrange for all eventualities. Entrepreneurs have to be compelled to assess and adapt to things so they'll keep their business moving forward within the event of unforeseen changes.

4. Decisiveness

To achieve success, entrepreneurs should create tough selections and support them. As a frontrunner, you're answerable for guiding your business, from finance and strategy to resource allocation.

Being definitive doesn't essentially mean having all the answers. If you wish to be Associate in Nursing bourgeois, it suggests that creating difficult selections and having the arrogance to identify them. The choice to require corrective action is equally necessary if the results prove unfavourable.

5. Team building

Great entrepreneurs recognize their strengths and weaknesses. Build a balanced team that enhances your skills instead of limiting your shortcomings.

In several cases, it's the entrepreneurial team, not the individual; World Health Organization drives the venture for fulfilment. Once beginning your own business, it is important to be enclosed by teammates World Health Organization have complementary skills and contribute to common goals.

6. Risk tolerance

Entrepreneurship is usually related to risk. It's true that entrepreneurs have to be compelled to take risks to launch a venture, however we have a tendency to additionally have to be compelled to take steps to attenuate it.

When launching a replacement venture, several things will fail, however several things will go well. Consistent with Entrepreneurship necessities, it is important for entrepreneurs to actively manage the risk-reward relationship and position the corporate to "benefit upwards."

Successful entrepreneurs are happy to encounter some risk so as to relish the rewards of their efforts. However, risk tolerance is closely tied to efforts to mitigate risk.

7. Snug although you fail

In addition to managing risk and creating calculated selections, entrepreneurship needs some comfort against failure.

It is calculable that just about seventy fifth of recent start ups can fail. The explanations for failure are huge and canopy everything from defective business models to lack of focus and motivation. Several of those risks will be avoided, however some are ineluctable.

Successful entrepreneurs are acquainted with failure just in case of failure. Concern doesn't hold them back, however the possibilities of success move them forward.

8. Persistence

Many made entrepreneurs are proud of the possibilities of failure, however that does not mean they provide up simply. Rather, they see it as a chance to be told and grow in failure.

Throughout the entrepreneurial method, several hypotheses end up to be wrong, and a few ventures fail altogether. a part of the success issue for Associate in Nursing bourgeois is that the temperament to be told from mistakes, keep asking queries, and last till they reach their goals.

9. Innovation

Many attribute it to the concept that innovation is inextricably joined to entrepreneurship. Typically this can be often true. A number of the foremost made start ups have adopted existing merchandise and services and have considerably improved them to fulfil the ever-changing wants of the market.

Innovation could be a hallmark of some, however not all, entrepreneurs. Fortuitously, it is a reasonably strategic thinking which will be nurtured. By developing strategic thinking skills, you'll be able to notice innovative opportunities and be ready for a made venture.

10. Long focus

Finally, the majority contemplate entrepreneurship to be the method of entrepreneurship. The first stages of a venture's launch are vital to its success, however once the business is operational, the method doesn't finish.

Entrepreneurship Essentials states, "It's easy to start a business, but it's hard to grow a sustainable and substantive business." Some of the greatest opportunities in history were discovered long after the venture was launched. "

Entrepreneurship is a long-term endeavour, and entrepreneurs need to focus on the process from start to finish for long-term success.

Leadership

The role of a business depends on the qualities of leadership (entrepreneurship), as business aspirations and success can only be achieved through effective leadership. Entrepreneurs need to have a variety of qualities in effective leadership.

Effective leadership qualities in entrepreneurship

Entrepreneurs successfully adopt the process of change, carry out change to meet the requirements of the group, motivate employees and subordinates, make the following dynamic towards goals, and his Organizational environment based on leadership ability.

The role of a business depends on the qualities of leadership (entrepreneurship), as business aspirations and success can only be achieved through effective leadership. Entrepreneurs need to have a variety of qualities in effective leadership.

Entrepreneurs successfully adopt the process of change, carry out change to meet the requirements of the group, motivate employees and subordinates, make the following dynamic towards goals, and his Organizational environment based on leadership ability.

Therefore, the individuality of the leader must be impressive.

He needs to have enough intelligence, dedication, and skill. Without it, he would not be successful.

He must be honest, tell the truth, be fair, be a good companion, and enjoy the reputation of being a good person so that others can trust him.

He needs to be optimistic, cheerful, and ready to encourage and help others.

The following characteristics or qualities of effective leadership in entrepreneurship:

1. Courage

Courage is the primary quality of an entrepreneur's need to be a good leader.

Entrepreneurs need to have the moral courage to carry out these activities. This requires him to consider it appropriate and work hard on decision making and execution.

The entrepreneur does not deviate from the true path as a leader, and his followers cannot catch him with flattery.

Believers of such enterprising leaders also carry out their activities without fear by following their leaders.

2. Self-confidence

Entrepreneurs need to have the quality of self-confidence to be good leaders.

This self-confidence should be based on self-understanding and other relevant knowledge.

Entrepreneurs (leaders) who handle self-confidence also succeed in winning the trust of others.

Entrepreneurs (leaders) need to be confident to fully win the trust of their followers.

It is correctly stated that unconfident entrepreneurs may not be able to win the trust of others.

3. Intelligence and technical capabilities

Entrepreneurs (leaders) need to have more intelligence and technical knowledge than their followers.

An intelligent entrepreneur may, on the one hand, offer a good solution to a problem by understanding the problem well, and on the other hand, may provide good guidance below.

He also needs to be familiar with working well in areas such as planning, organization, direction, communication, motivation, and enforcement of controls.

Entrepreneurs also need to have sufficient technical competence and sufficient knowledge of technical, economic, legal and financial issues.

4. Communication skills

An important role of an entrepreneur (leader) is also to convey information, orders, ideas, etc. to others under his subordinates.

He should have the ability to direct his followers and provide the general public with the information they need.

It is imperative for an entrepreneur to ensure that the instructions he provides to his subordinates should be fully adhered to.

Therefore, entrepreneurial communication skills include both giving instructions and ensuring compliance.

5. Viva and endurance

Entrepreneurship and patience are important leadership qualities.

Listening to vitality means awakening and vigilance, while endurance means working with a patient in an emergency.

Therefore, entrepreneurs should always pay attention to the future situation and not lose patience in the event of difficulties or problems.

Only patience and vigilant entrepreneurs can give consistent and collaborative thinking about a problem, solve the problem, and provide appropriate guidance to their followers.

6. Psychic

Entrepreneurs need to have mental abilities in nature.

Today, economic and social change is happening rapidly in every country in the world.

Therefore, entrepreneurs need to be flexible and capable enough to adapt to change.

Only mentally developed entrepreneurs with open ideas can make generally accepted decisions in response to changing circumstances, without jealousy.

7. Ability to stimulate

The entrepreneur (leader) must also have the ability to inspire his followers towards doing the job.

A competent and experienced entrepreneur can inspire his followers to do hard work by studying their interests, ideas, feelings, requirements, and appropriate guidance.

Therefore, only that entrepreneur can effectively control followers who have the ability to inspire them.

8. Ability to deal with human aspects

An entrepreneur with leadership skills must have the ability to act well with the human element, in addition to other qualities.

He must have a complete knowledge of his followers' tastes, feelings, goals, possibilities, and weaknesses. Only then can he establish a good relationship with them.

9. A sense of responsibility

Successful entrepreneurs (leaders) also need to have a sense of fulfilling their responsibilities.

Otherwise he will abuse his power. He must always feel responsible so that his followers are given the necessary commands and instructions in a timely manner.

10. Decision-making ability

Entrepreneurs need to have the ability to make solid decisions, like effective leaders.

However, this ability is only acquired through self-confidence and self-control.

Entrepreneurs need to choose the best solution for their problem from a number of solutions.

The choice (decision) is to be made by him, looking at both current and future situations.

An entrepreneur makes decisions only by his own foresight and decision-making ability.

11. Environmental knowledge

Entrepreneurs also need to have a complete knowledge of the environment by taking into account the internal and external environment of the organization, just as leaders give orders and instructions to followers and members of the organization.

Only then will he succeed in establishing and operating the business.

12 Constructive is creative thinking

Leaders can perform two types of tasks: constructive and destructive. Destructive work should be avoided altogether.

Thinking must always be constructive and creative.

In this respect, it can be said that mental strength should always be used only for creative and productive activities.

Risk taking

Whether you are all-in all through a pleasant poker sport or quitting a protracted profession to pursue one in every of your promising commercial enterprise ideas, it is horrifying to take dangers. Most humans have a tendency to keep away from dangers as plenty as viable due to the fact it's far regularly more secure to take no movement than to do, however maximum a success humans take dangers to everybody else. He stated he become inclined to get to in which he become. Otherwise, I could both make investments the cash that everybody else idea become crazy, or idea it might work.

Still, taking dangers is horrifying, specifically for brand new marketers. But it is greater complex than simply "doing what may have horrific effects." Keep those 5 concerns in thoughts to make you sense greater snug taking dangers and to make greater knowledgeable danger-primarily based totally decisions.

1. Risk taking is inherent in entrepreneurship.

If you are now no longer equipped to take dangers, you do not have a commercial enterprise to turn out to be an entrepreneur. Entrepreneurship is essentially related to danger taking. In maximum cases, you'll want to make investments a number of your non-public capital in a developing commercial enterprise. Bet your recognition on unproven ideas. Sacrifice a strong profits for the primary few months to a year. The equal is proper in maximum cases.

And from there, each choice you're making includes a small danger-your new lease may also cease in a month, your lead technology method may also fail, your new method May offend one in every of your quality clients. Accepting danger as a part of a deal, and whilst you input the entrepreneurial world, you want to be equipped for it.

2. There are exceptional styles of dangers.

Here, we aren't simply referring to "huge dangers" and "small dangers", additionally they exist. There is a computable danger. This consists of a fixed of acknowledged dangers which could fairly are expecting the opportunity of achievement. For example, ancient statistics may also infer that there's a 30 longer that attendance will decline till a alternate truthful attendee turns into unprofitable.

There are ambiguous dangers, along with a few acknowledged and a few unknown, complicating the choice-making process. Most commercial enterprise dangers fall into this class due to the fact it's far hard to quantify or are expecting such a lot of elements, which includes customer conduct and financial changes. Second, there's a very unknown danger. This occurs whilst you carry some thing certainly specific to the market. Knowing the distinction among those dangers will assist you higher recognize how "dangerous" a choice at a specific factor in time is actually.

3. Some of the dangers aren't rewarded.

Optimistic danger takers constantly don't forget matters to be half-filled, with a 50 achievement charge of "quite correct odds" and a 75 achievement charge of "certain." This is similarly complex via way of means of the cultural perception that danger-taking is normally a profitable method. However, do now no longer anticipate that every one dangers are correct dangers, or that you'll constantly gain from deciding on a volatile option.

Some dangers (even cautiously calculated ones) fail. Accept it in preference to ignoring this reality to conquer your tension approximately danger. Accept the opportunity of failure. If you're making a mistake, please do now no longer take it personally. Learn from revel in and pass on.

4. We are inherently biased toward catastrophe prediction.

The human thoughts has  inherent biases that distort the notion of danger. First, it has a tendency to magnify the opportunity of failure. With uncooked estimates (restrained numerical statistics), humans have a tendency to are expecting failure greater pessimistically than the real state of affairs justifies. Second, it significantly exaggerates the effects of those failures. We anticipate the worst state of affairs in which truth is plenty simpler to manage.

5. Risk is a differentiator.

Some dangers provide better fee promises. Some dangers have much less capability effects than others. Some dangers may also accomplish or wreck your commercial enterprise. However, there's one crucial element that every one dangers have in common. It's a differentiator. The world's danger takers evidently stand out withinside the crowd, as maximum humans do not take dangers, and as all of us know, most effective outstanding marketers and groups purpose for a success breakout. I am.

Even if it fails, you are, so that you could speak, "failing in style". And it can monitor greater possibilities for itself, simply as it become inclined to interrupt the norm prominently.

Hopefully, those facts, even the slightest, have modified the notion of "danger" as a popular concept. It takes time to recognize the complexity and nature of the dangers, and it takes greater time to recognize them comfortably, however ultimately it turns into the second one nature for you. Focus on acknowledged elements while viable, take delivery of ambiguity, and recognize that failure isn't always the give up of the road.

Decision - making and business planning

Entrepreneurs must follow the steps of the entrepreneurial spirit determination process.

Identifying problems or opportunities.

Generate an alternative solution.

Analyze alternative solutions.

Choosing the best option.

Implementation of alternatives.

Check the performance.

1. Identifying problems or opportunities (entrepreneurial decision process)

In entrepreneurship, the first process of identifying opportunities and problems. Both entrepreneurial decision-making processes are equal to the opportunities and problems that arise. Identify a particular problem and opportunity as the same if you are solid under a variety of problems.

Creating a decision question step by step and finding the next opportunity are the steps to follow.

2. Generate an alternative solution

Identify opportunities and problems. These first processes are completed, then the second decision process produces an alternative solution. To choose an alternative, you have to be innovative. Therefore, we call this step an innovative step and make entrepreneurial decisions for specific decisions.

How to find innovative ideas for a particular problem or opportunity. Here we are considering the categories for choosing alternative solutions.

Take the solution from the same decision you made earlier. It may be a good idea to use the work you have done in the past to make existing decisions. Note-especially if your decision does not require many changes.

3. Analyze alternative solutions

The second step is to generate ideas and analyze those ideas. Alternatively, select for a specific purpose. To be beneficial to your organization, you need to analyze all areas of these ideas.

4. Choosing the best option

The fourth step in entrepreneurship to determine the best alternative decision when generating alternative solutions and analyses.

There are definitely benefits to choosing the best alternative for your requirements.

5. Implementation of alternatives (entrepreneurial decision process)

Select the best options in the entrepreneurial decision process, then implement these options in the fifth process for more profit.

6. Check the performance.

In a review of the final process of entrepreneurship decision, performance means that all your reviews have selected these options. Looking at the actual performance and the previous performance, what is the difference between them?

Arther H. Cole described entrepreneurs as decision makers. The entrepreneur himself must make the decision about what to produce, how to produce it, and for whom. In this regard, he needs to implement an innovative process.

Professor Cole describes the functioning of entrepreneurs as follows:

(i) Determining these objectives of the enterprise and changing those objectives as necessary or favourable conditions.

(ii) Development of the organization, including efficient relationships with subordinates and all employees.

(iii) Securing sufficient financial resources, relationships with existing and potential investors.

(iv) Demand for efficient technical equipment and its revision with the advent of new machines.

(v) Developing product markets and devising new products to meet or forecast consumer demand.

(vi) Maintaining good relationships with public institutions and society as a whole.

In this way, the entrepreneur himself is an institution and performs various functions related to organizational development and business management. He is supposed to take risks, manage, innovate, organize and make decisions about his business empire.

Key takeaways:

1. An entrepreneur is someone who develops a company around innovation. They manage the business and take the risk of its success.
2. Innovations here are seen as new product introductions or new utilities for old products, new markets, new manufacturing methods, new sources of raw materials, and new organizations.
3. Birch entrepreneurs are not only ventures, but also risk takers and capital providers. Entrepreneurs bring talent; product and service venture ideas, know-how, and usually take the necessary risks to fund them.
4. Motivation keeps you bleeding, helping entrepreneurs stay hopeful and overcome obstacles as they move toward their goals.
5. Successful entrepreneurs know when to take risks and which risks are beneficial or harmful to the company or himself.
6. Persistence is the most basic and essential quality of successful entrepreneurs, as even good entrepreneurs experience failures and hurdles.
7. The Government of India is also encouraging interest in entrepreneurship.
8. The challenge for start ups is to raise money for their business.
9. Business success depends on the people who work for it.
10. The daily challenge of running a new business with a small team and a limited time frame is high.
11. G.F. Papanek and J.R Harris are economists who encouraged financial theory.       According to them, financial incentives are the principle force for entrepreneurial activates.
12. Critics sense that uncertainty-bearing need to know no longer be dealt with like different elements of manufacturing like land, labour and capital.
13. The idea of X-performance turned into brought through Harvey Leibenstein a referred to economist in1966 in his article titled “Allocative performance vs. X-performance”.
14. Research at the mental roots of entrepreneurship monitor that excessive fulfillment orientation guarantees the achievement of marketers.
15. The principle acts to differentiate among entrepreneurship and intra-preneurship.
16. The supporters of sociological theory say that the entrepreneurial activities is affected from social status hierarchy and values.
17. The entrepreneurial pastime relies upon a complicated and ranging mixture of socio-monetary, political, mental and different elements.
18. Economic System of a rustic can be capitalist, socialist, democratic or mixed.
19. People’s mind-set closer to adjustments, ability and emotions of risk-taking etc. additionally influences the entrepreneurial surroundings.
20. Entrepreneurship is usually related to risk.
21. The role of a business depends on the qualities of leadership (entrepreneurship), as business aspirations and success can only be achieved through effective leadership.
22. Entrepreneurs (leaders) need to have more intelligence and technical knowledge than their followers.
23. Entrepreneurship and patience are important leadership qualities.
24. Entrepreneurs need to have the ability to make solid decisions, like effective leaders.
25. Entrepreneurship is essentially related to danger taking.
26. In entrepreneurship, the first process of identifying opportunities and problems.
27. The fourth step in entrepreneurship to determine the best alternative decision when generating alternative solutions and analyses.

References:

1. Tandon B.C.: Environment and Entrepreneur; Chugh Publications, Allahabad.
2. Siner A David: Entrepreneurial Megabucks; John Wiley and Sons, New York