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Entrepreneur Development Notes
Entrepreneur Development Notes
An entrepreneur is an individual who creates a new business, bearing most of the risks
and enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a
source of new ideas, goods, services, and business/or procedures.
Entrepreneurs play a key role in any economy. These are the people who have the skills
and initiative necessary to anticipate current and future needs and bring good new ideas to
market. Entrepreneurs who prove to be successful in taking on the risks of a startup are
rewarded with profits, fame and continued growth opportunities. Those who fail, suffer
losses and become less prevalent in the markets.
A similar new product is ‘Room for help.’ Where people can rent a room in return for
providing a service such as cleaning/babysitting It was created by Ms Rolando after
she came across an advert whilst looking for a room to rent. It is an example of
how entrepreneurs often set up a business in response to their individual need.
The entrepreneur can sell his new business for more than the costs of
inputs or continued to grow and develop the business.
3) classification of ent
4)Functions of an Entrepreneur
Function # 1. Decision Making:
The primary task of an entrepreneur is to decide the policy of
production. An entrepreneur is to determine what to produce, how
much to produce, how to produce, where to produce, how to sell
and’ so forth. Moreover, he is to decide the scale of production and
the proportion in which he combines the different factors he
employs. In brief, he is to make vital business decisions relating to
the purchase of productive factors and to the sale of the finished
goods or services.
Broadly, there are two kinds of risk which he has to face. Firstly,
there are some risks, such as risks of fire, loss of goods in transit,
theft, etc., which can be insured against. These are known as
measurable and insurable risks. Secondly, some risks, however,
cannot be insured against because their probability cannot be
calculated accurately. These constitute what is called uncertainty
(e.g., competitive risk, technical risk, etc.). The entrepreneur
undertakes both these risks in production.
Function # 5. Innovation:
Another distinguishing function of the entrepreneur, as
emphasised by Schumpeter, is to make frequent inventions —
invention of new products, new techniques and discovering new
markets — to improve his competitive position, and to increase
earnings.
1. Problem of Finance:
Finance is regarded as “life-blood” for any enterprise, be it big or small.
However, women entrepreneurs suffer from shortage of finance on two counts.
Firstly, women do not generally have property on their names to use them as
collateral for obtaining funds from external sources. Thus, their access to the
external sources of funds is limited.
Secondly, the banks also consider women less credit-worthy and discourage
women borrowers on the belief that they can at any time leave their business.
Given such situation, women entrepreneurs are bound to rely on their own
savings, if any and loans from friends and relatives who are expectedly meager
and negligible. Thus, women enterprises fail due to the shortage of finance.
3. Stiff Competition:
Women entrepreneurs do not have organizational set-up to pump in a lot of
money for canvassing and advertisement. Thus, they have to face a stiff
competition for marketing their products with both organized sector and their
male counterparts. Such a competition ultimately results in the liquidation of
women enterprises.
4. Limited Mobility:
Unlike men, women mobility in India is highly limited due to various reasons.
A single woman asking for room is still looked upon suspicion. Cumbersome
exercise involved in starting an enterprise coupled with the officials
humiliating attitude towards women compels them to give up idea of starting
an enterprise.
5. Family Ties:
In India, it is mainly a women’s duty to look after the children and other
members of the family. Man plays a secondary role only. In case of married
women, she has to strike a fine balance between her business and family. Her
total involvement in family leaves little or no energy and time to devote for
business.
Support and approval of husbands seem necessary condition for women’s
entry into business. Accordingly, the educational level and family background
of husbands positively influence women’s entry into business activities.
6. Lack of Education:
In India, around three-fifths (60%) of women are still illiterate. Illiteracy is the
root cause of socio-economic problems. Due to the lack of education and that
too qualitative education, women are not aware of business, technology and
market knowledge. Also, lack of education causes low achievement motivation
among women. Thus, lack of education creates one type or other problems for
women in the setting up and running of business enterprises.
7. Male-Dominated Society:
Male chauvinism is still the order of the day in India. The Constitution of India
speaks of equality between sexes. But, in practice, women are looked upon as
abla, i.e. weak in all respects. Women suffer from male reservations about a
women’s role, ability and capacity and are treated accordingly. In nutshell, in
the male-dominated Indian society, women are not treated equal to men. This,
in turn, serves as a barrier to women entry into business.
New businesses need to hire employees. They create jobs and these economic
opportunities uplift and support communities through increasing the quality of
life and overall standard of living.
3. Commerce and regional economic integration.
The ability to turn ideas into new products and services that people need is the
fount of prosperity for any developed country. Economic growth, generally
speaking, is driven by new technologies and their creative applications. Periods
of rapid innovation historically have been accompanied by periods of strong
economic growth. The impetus of innovation is the greatest natural resource of
all: the human mind. Creating innovative products and solutions requires an
educated population and an environment where collaborative work can take
place. In addition to being good for business, education increases workforce
creativity and quality of life.
Innovation is (and will continue to be) crucial when it comes to addressing the
enormous environmental challenges we face today: combating climate change,
lowering global greenhouse gas emissions, and preserving biodiversity in the
environment. Without power for extended periods of time, commerce comes to a
halt. Without water, we cannot live. Reliable access to these innovations (such
as irrigation technology, electricity, and urban infrastructure) increases
productivity and enhances economic development.
2) Integrity
Perhaps the most valued and respected quality you can develop is a
reputation for absolute integrity. Be perfectly honest in everything you
do and in every transaction and activity. Never compromise your
integrity. Remember that your word is your bond and your honor is
everything when it comes to your business. All successful business is
based on trust.
Your success in becoming an entrepreneur will be determined solely by
the number of people who trust you, are willing to work for you, give
you credit, lend you money, buy your products and services, and help
you during difficult times. Your character is the most important asset
that you develop in your entire life, and your character is based on the
amount of integrity you practice.
3) Persistence
Resolve in advance that you will never give up, no matter what
happens. The courage to persist in the face of adversity and
disappointment is the one quality that, more than anything, will
guarantee your success.
They are totally preoccupied with short-term problems and the need to
get short-term sales and profits. They intend to spend more time
thinking and planning for the future, but they don’t ever seem to get
around to it.
This is not for successful business owners. You need to set clear
targets for yourself and for every part of your business. In fact, perhaps
your most important responsibility to your people is to give them a clear
sense of direction in their work.
Financial constraints:
Most of the rural entrepreneurs face financial crunch in setting up rural industries
because of the non-supportive attitude of financial institutions and banks which
work more on papers. The procedures and conditions to avail a loan is so time
consuming that its delay often disappoints the entrepreneur. Due to this, the
entrepreneurs are forced to take credit from village money lenders who charges
exorbitant rate of interest.
Raw materials:
Rural industries face a tough task in procuring and storing raw materials. Since
rural industries are small they procure raw materials from middlemen at higher
prices. Lack of warehousing facilities in the rural sector also costs more towards
storing of raw materials.
Legal problems:
Rural industries need compliance of various legal formalities in obtaining the
government’s approval and license for carrying out industrial activities. But rural
entrepreneurs find it extremely difficult to comply with various legal formalities
due to sometimes complex legal provisions or illiteracy and ignorance.
Besides the above problems, lack of awareness and knowledge about the
importance of rural industries stand as a major problem before rural entrepreneurs.
Added to this another problem crops up relates to the disinterest shown by rural
people to assume rural entrepreneurship as career. The ninth plan has also sorted
out the problems of rural industries as follows:
(iv) Nature and speed of social change is affected by and related to time
factor:
The speed of social change is not uniform in each age or period in the same
society. In modern times the speed of social change is faster today than before
1947. Thus, the speed of social change differs from age to age.
The reason is that the factors which cause social change do not remain uniform
with the change in times. Before 1947 there was less industrialization in India,
after 1947 India has become more industrialized. Therefore, the speed of social
change after 1947 is faster than before 1947.