1 Se S Si 0 n

What are Entrepreneurship

and Business ?
pearning
Ogectores

AWhat is Entrepreneurship ?
Business vs. Entrepreneurship

1.1 Introduction
varying trom negligible to small
In our day to day lives, we often encounter many problems,
encounter are personal in nature and
to large problems. Sometimes the problems we national in nature. Sometimes we
sometimes the problems are societal, environmental or
are created or such services
know that this problem can be solved if such and such products
it ? There is a quote by one
are provided. We know the solution, but how many of us develop
Naveen Jain that says,
of the most successful Indian born American entrepreneur

Aperson who sees a problem is a human being; a person who

finds a
something
solution is visionary; and the person who goes out and does
about it is an entrepreneur.
required
An entrepreneur is the one who identifies a problem, develops a solution by taking
actions and contributes to economy by creating a business out of it.

1.2 What is Entrepreneurship ?

Setting up abusiness, based upon some idea to cater to society, while taking some riskS and
working towards its growth to create profits is called entrepreneurship. The business set up
in the above process is called an enterprise, and a person who sets up a business to cater to the
needs of society and thereby make profits, is called an
entrepreneur. An entrepreneurial idea can either be a new DEF.
original idea providing solution to a problem or it may even Setting up a business, based :
be an adaptation of existing solutions. upon Some idea to cater to :
In contrast to the employment scenario, where an employee society, while taking some
risks and working towards its
gets compensated, for the value their work delivers to the growth to create protits IS
world, an entrepreneur focuses on identifying problems/ :called entrepreneurship and
challenges in the society/world, working on the solution for it a person who sets up a :
and then putting a system in a place that delivers value to the business this way is called an
World irrespective of their physical presence. entrepreneur.

A.170
Sessionl :WHAT ARE ENTREPRENEURSHIP AND BUSINESS? A.171
Entrepreneurs are not;ob seekers. Instead, they are job providers. They play an important role
inemployment generation in the country. Any country's GDP and economy depend on their
entrepreneurs. Growth in entrepreneurs leads to growth in development of the country. That
is why our government is highly promoting entrepreneurship. Our PM says that today's
youth wants to be job creators and not job seekers. They want someone to believe in them.
he government's initiatives and support, we see new startups
coming every
Ydav. (As per Times of India 's Sept. 2021 article, India is the 3rd largest startup ecosystemmonth,
in the
world after US and Clhina).

Developing a
business plan DEF.
The business set up by an
Discovery Entrepreneurial Resourcing entrepreneur is called
process : enterprise.

Harvesting Managing
company

Figure 1.1 Entrepreneurial process

An Example Startup: Mimyk

A
business or a company is called a startup when it is in its initial phase of development, ie.,
when the focus is on developing the product to make it fit for market. Over the last few
years, Indian science and technology institutions have become very conducive for startups
with some business idea in mind, with the founders working on the idea to develop the
technology.
wanted
APhD student from mechanical engineering department of ISc, Shantanu Chakrawarthy
Ananthasuresh had
to work on the science of touch. Simultaneously, a professor at the IISc, G K
develop a simulation
requests from the Asian Institute of Gastroenterology in Hyderabad to
met, and Chakrawarthy
platform for endoscopy and other medical procedures. The two objectives
He
started working under the guidance of Ananthasuresh. DEF,
raw the
understood how doctors perceive the sense of touch, and
help from
possibility of developing a simulation device. With develop a Abusiness or a company is
Computer Science and Automation department, they could
called a startup when it is in
touch (the its initial phase of develo
low-cost endoscopy training device with the advantage of tube, just pment, i.e., when the focus is
the
doctors could feel resistance in their hands as they push
Mimyk. Devices on developing the product to
as in areal endoscopy procedure)
called Endo make it fit for market.
and international
introduced are very important for surgeons
costly: therefore,
physicians all over the world but are usually very
birth to a startup Mimyk happened.

mentorship is being provided to the faculty and

An ecosystem of expertise, funds, space and for research. Moreover, this ecosystem is being
students to select commercially viable projects
companies who are willing to
provided by the institutions and the government and some
invest in startups.

UNIT IV: ENTREPRENEURIAL SKILLS

 INFORMATION TECHNOLOGY-IK
A.172
Mmyk Mec ca Ston
www.mimykcom
) No: secure

wORK WwITH US
DISRUPTION THE TRIRE
MIMYK
THE FAMILY

The family
sttle o t s i i l .Bengalutu
Mimvk is a spin off ftom the tedhnolegis le
i1nersive nedical snulation
le n0rk on developung platforIms.
build next gen simulation
combine harduare and Software to
endoscopv simulation plattorm.
The cuTent focus at Minvk is an

a collaborative teseatch and

Mimvk'< technologv is developed through
the MD Lab, IISc and the
development activitt caried out at

A page from website mimyk.com

1.3 Business vs. Entrepreneurship

P Both business and entrepreneurship carry out some DEF.
A
commercial, industrial or social activity that generates some
human
R
revenue; both employ some intellectual, financial and Business refers the
similar, commercial activity which is
resource to carry out their activity. Despite being so based on an old concept,
however, there is a crucial difference between the term
whose path is relatively
A business and entrepreneurship. tested and there is a low risk
Business refers to the commercial activity which is based on involved.

an old concept, whose path is relatively tested and there is a

low risk involved. And, entrepreneurship refers to an activity
based on a new idea, execution or delivery, a unique concept
which the entrepreneur is trying to bring to reality. The path DEF.
of entrepreneurship is not tested, and a lot of risks and The entrepreneurship refers
uncertainties are involved with it. An entrepreneurship to an activity based on a new
venture initially is called a startup company, and when idea, a unique concept which
established it is termed as a business. the entrepreneur is trying to
:Dring to reality.
For example, your uncle decides to open a shop that sells the
branded clothes for youngsters then this venture will be termed
as a business. But if your uncle is trying to create a design
venture that willuse artificial intelligence to design and create DEF.
clothes for people while keeping in mind changing trends, a An entrepreneurship venture :
person's personal choice and requirements as per the occasion, initially is called a startup
when :
then this would be termed as an entrepreneurial venture. company, and
established it is termed as an :
While a businessman can be termed as a market player who
enterprise which may later
creates own place in existing market but an entrepreneur is a become a business.
market leader who creates his place in the market or in other
words,creates a new market for his venture. A business runs
 WHAT A4RE ENTREPRENEURSHIP AND BUSINESS 2 A. 173
conventional methods but for a new idea
on unconventional. A based venture, the methods may be entirely new
or totally business is created with an
aim of profit while an entrepreneurial
venture is created with an aim of solving a
problem
businesSs starts in a tested market where there are keeping in mind the people. Since a
many other players running the same
business, the competition is very high in business
contrary to
verv low or near nil competition. An entrepreneur handles the needs of
where there is
entrepreneurship
the ventureeintuitively
while a businessman handles
h it
competitively.
NOTE
Aim of entrepreneurship is to solve a problem with some innovative and
practical solution, convertible to an economic activity. An economic activity
is a process that leads to
manufacturing some physical, tangible
of
(goods) or providing some service, leading to a products
commercial activity.
Table 1.1 Business vs. Entrepreneurship
Criteria Businessman Entrepreneur
Meaning Commercial activity based on old, Commercial activity based on a new
tested concept idea or concept
Market Position Market Player Market Leader
Nature Calculative Intuitive
Less
Risk factors Comparatively high
Methods applied Tested and Conventional New methods or Unconventional

Orientation/emphasis Profit
Solving a people problem
Competition Very high Low
 S
n
2
Types and Fields
for Entrepreneurship
Oyectves
A Type of Fields where One
can be
Entrepreneur
A Product bosed A Service based
A Technology based
2.1 Introduction
So now vou know what is entrepreneurship ? How is it
similar or
How is an enterprise different troma startup and so on ? Let us takedifferent
from a business?
this journey further and
talk about what are different categories of fields/areas where one can start
his/her own
ventures; and how these are similar or different from one another.
22 Type of Fields where One can be Entrepreneur
You know that both a business and an enterprise are involved in some tvpe of commercial
activity. Both these can belong to different types of fields or categories.
Broadly an enterprise or a business can belong to one of the following categories :
() Product based (ii) Service based (üi) Technology based
2.2.1 Product based Enterprise/Business
A product based enterprise or business basically deals with a specific type of product that
carry out aspecific type of job. For example, Benzo has created a padlock that can be opened
with akey as well as biometrically using a finger print. DEF.
He has patented his design and now a company has
bought license from him so as to produce padlocks based Product based enterprises/
on his design, which would be available in the market. :businesses are based on actual
The company will be manufacturing the padlocks which goods/products, which are

later willbe sold by traders in the market. This is product tangible, i.e., they exist physically
can be touched and have a
based business. The products based businesses can be of
specific shape, design and weight.
tuo types : (i) Manufacturing based (ii) Trading based.
)Manufocturing of Products
DEF.
Manufacturing of goods means producing goods in a
raw materials,
Specific shape and design using specific Manufacturing of goods means
chemicals etc. by following a specific process using producing goods in a specific
machines or tools. Manufacturing process produces the shape and design using specific
for raw materials, chemicals etc. by
goods in bulk which are Jater available in market :following aspecific process using
selling. machines or tools.
A.175
 INFORMATION TECHNOLOGYLY
A.176
various types, such as :
Manufacturing can be done for products of
Industrial components
Polymers/Plastic goods Processed foods
Spare parts Cloth/garments and so forth.
Footwear

) Trading of Goods producers and then selling them in

distributors or from
Trading refers to buying goods from
margin to the price of goods
while selling and this proft
markets. Traders add their profit The main way that traders differ is that
not
they do
revenue. are
margin is their earning or their types of manufactured products are traded. In fact, there
take ownership of the goods. All
agricultural produce that are traded. DEF.
more products such as
So trading of goodscan take place for products like: Trading refers to buying
goods from distributors or
all manufactured products from producers and then
selling them in markets with a
agricultural products
software, games etC. and so forth. : profit margin.
- technical products like
Types of Traders retailer etc. Let us
as a distributor, a wholesaler, a
There are different types of traders such
quickly know what these types are :
P from the manufacturers, directly.
() Distributors. The traders who buy
A from distributors.
(ii) Wholesalers. The traders who buy
the wholesalers and sell the goods to the
I (iii) Retailers. The traders who buy from
Consumers.

Do YoU KNOW ?

(government of e-Mandi).It is a
Government of India has come up with e-platform called GEM
needs. This gives open offer for
public procurement platform for government department's big hassles of tendering process)."
small traders to enlist themselves and compete (without the

Toys from Trash-AProduct based Company

Case Study
which are
This is a product based startup pioneered by Arvind Gupta. It aims at creating toys
educational and which can be used by teachers to teach young children from municipal schools. Its
founder is Mr. Arvind Gupta who identified the problem that children are not learning science
through practical methods, but only through books. They are not testing each scientifictheory they
learn and understand the concepts behind them. For this
problem, he came up with a solution in the form of toys
created from trash and that teach science practically.
He created simple innovations to turn recycled waste
material into seriously entertaining, yet well-designed toys
that are based on basic concepts of physics. Using these toys
in the classrooms, children can practically learn and grasp
the basic principles of science. Cut stite in straw and insert birda
Btick buwt

Founder : Arvind Gupta

 ENTREPRENEURSHIP A.177
TYPES AND FIELDS FOR
2:
Session

Service based
Enterprise /Business
2.22 While a Manufacturing enterprise/business sells a tangible, actual product, a service based
enterprises/businesses sell the work based on some skills e.g., when you buy acurtain cloth,
product but when you get it stitched from atailor, then you are not buying a
youarebuying a
buyingthe tailor's services. So service based enterprises/businesses sell
product, you are
services-the work carried out using specialized skills. For example, acar workshop is not a
business, it is a service based business.
product based
Followingfigure showsthe difference between a product based enterprise and a service based
enterprise.
The outcome

Procedure Product i Skills + Required products + Procedure Service

Daw materials + Machines +
Manufacturing process Servicing process
Manufacturers or Product based Service based enterprises sell the
enterprises sell the products service-specialized skills based work

Fiqure 2.1 Product based enterprise vs. Service based enterprise

NOTE
You see a lot of service based business/enterprises The product business sells a
around you, e.g-. physical, tangible product,
- Mobile/watch/computer repair shops while the service business

- Grocery delivery (milk/veg., Big Basket/1local) owner sells his skills as the
Salons primary product.
- Restaurants
- Courier services
- Boutiques
- Financial services - Health services (Test labs, gyms)
- Dry cleaners etc.
are all service based businesses/enterprises.

Case Study Urban Clap - A Service based Startup

the right service professionals for day to

Urban Clap is a service based startup that helps you find
you are looking to decorate your home, get
day activities fromn menial to special ones. Whether birthday or get
repaired, plan your kid's
candid pictures of your wedding, get your doorbell
list a number of service providers who
healthier, they offer solutions for your service needs. Theyrequirements.
provide that service and you can choose one as per your
structure the highly unorganized services
Their vision is to use technology and smart processes to
market in India and emerging markets.
Co-founders : Varun Klhaitan, Raghav Chandra, Abhiraj Blhal

2.2.3 Technology bosed Enterprise/Business

use technology in some form
Although alltypes of products based manufacturing enterprises
based, the technology mainly means
technology
for the manufacturing process, yet when we say Technology
the ICT i.e., Information and Communication based enterprises and businesses.
UNIT IV:ENTREPRENEURIAL SKILLS
 INFORMATION TECHNOLOGY_V

technology based enterprises. lech enterprises can

mrprigs that are based on ICT are are a product based tech
while Microsoft, Directl
based, e.g.,
mut hud as wellas service service based tech companies.
Manies Intss, Wipro, NIIT are
technologv based companies either create or sell NOTE
So the application software, utility The enterprises (both product
technical products such as applications etc. or based or service-based) that are
mobile
software, gaming software, like maintenance of bulk based on ICT, are technology
services
thev provide technical support or storage services etc. based enterprises.
data, customer technical
2.2.4 Hybrid Enterprise/Business
product-based and service-based is a hybrid company
is both company that manufactures its
Anenterprise or company that this arena. For example, a
Manv tech-based companies fallin service for the same. It has its
own service centers
also provides
own smartphones and tablet Such acompany would be known as
a hybrid company.
needs of the customers.
to cater to the

2.3 Entrepreneurship at Various Levels

Smalland
can happen at small scale, medium scale and large scale. The
Entrepreneurship known as
Enterprises are known as SME and Large Scale Enterprises are
Medium Scale Driven
enterprises are innovation driven, hence called as Innovation
LSE. Sometimes enterprises.
P Enterprises (IDE). Most IDEs are large scale
A IDE (Innovation Driven Enterprise)
SME (Small, Medium Enterprises) make
These are large business companies that might not
R
small.
These are usually small companies that stay it to success, but if they make it, they would grow very big.
global or
A local They look for broader markets, which may be
They focus on local markets and serve to the beyond their region.
needs.
These are usually service based businesses, e. q., These require big capital investments.
restaurants, drycleaners, salons, grOcery stores etc. that
can be started even with small capital amounts.
In terns of cash-flow, initially a linear growth is observed, The cash-flow mostly goes negative initially because of
later once the market is tapped, the growth stops. big capital investments, but later if the business
survives, growth is exponential.
The business is controlled by shareholders.
Usually an individual, or a family maintain control of the
business.
Not much of the risk is involved, in terms of market The risk factors are very high.
changes etc.
People here focus on : People here focus on :
" product/service creation as per demand " how to manage multiple stakeholders.
product/service delivery how to do underlying innovations.
These businesses mostly go steady: not much changes. These businesses are usually innovation based here
innovation means commercialization of invention .

NOTE
An invention is an idea/technology that may or may not create value.
An innovation is something that generates value for the world.
makes something faster, better, cheaper giving greater satisfaction.
Session 2: TYPES AND FIELDS FOR
ENTREPRENEURSHIP A.179
Real Life Case Study 1
AMUL
(started
at a small scale and grew to a
large SCale)
The founder of AMUL, erghese
she White Revolution in India',Kurien was a social entrepreneur and is
known as the
the ways of dairy farming, Fatherit a
as he of
celf-sustaining revolutionized
industry, thereby making the milk making
producers/villagers earn better incomes.
Problem ldentification
Before AMUL, Kurien was working for the
the farmers producing milk in that Government of India at Anand, Gujarat. He observed that
area were facing lot of problems like :
They were not getting good prices for
their milk
Being treated as mere suppliers, they had to dependproduce.
on the big companies like Nestle, to
take their products to the market.
There were no takers for the surplus milk, as
due to seasonal reasons. fluctuation in milk production happened
Solution Implementation
Kurien helped farmers by following solutions :
Form small cooperatives where villagers used to get their
milk produce. The
co-operatives gave these milk producers control of purchase, processing and marketing
of their
products. This way a direct link was established between the milk producers
and the consumers. And the middle men were out of the
model, ensuring higher
employment and longer incomes for the villagers.
The surplus milk was converted using the process of making milk
condensed milk
powder and
from buffalo milk, which was abundant in India. Moreover, only cow
milk was converted into milk powder.
Gradually Kurien got small cooperatives established in other villages, which started functioning by
themselves. Later all these got combined, and Amul came into being.
Later on, the government of Indiarequested Kurien to create such model nationwide, so that India
can produce enough milk and milk products,that, does not depend on imports which earlier it
used to. For this, the National Dairy Development Board (NDDB) was founded under Kurien's
leadership. The NDDB successfully replicated the AMUL model all over India, increasing
Country's milk production. And a milk-deficient India turned into World's largest milk producer.
This movement was called Operation Flood.
This distributed model worked wonders for the country. The model was further studied by many
other governments outside India.

Real Life Case Study 2 Flipkart

(Indian startup that grewup to be an e-commerce company)
In 2006, two young engineering graduates in computer science from IT Delhi working at
Amazon.com realized the potential of e-commerce based business. Indian consumer profile at that
time was changing. Home delivery concept for domestic consumers was the need. Back then, it
was tough for people to trust, paying on the Internet.
Initially the two young engineers, Sachin Bansal and Binny Bansal thought of creating asearch engine
dedicated to e-commerce websites. But soon they realized that there were very few websites
UNIT IV:ENTREPRENEURIAL SKILLS
A.180 INFORMATION TECHNOLOGY-JX

doing e-commerce. So they thought of launching an e-commerce platform called Flipkart in 2007
trom a small apartment in Bangalore. Initially they started with books. They used to deliver books
across the city on scooter. Soon they realized, they had a longer target audience, and they
expanded to offer a wide variety of goods.
Problem ldentification :
() There were not many India based online selling websites.
hands.
(i) People were not ready to pay until they have the product in their
(iii) Products must be delivered in agreed upon time.
Solution Implementation
online.
They started an online e-commerce website namely Flipkart selling goods
They started the concept of home delivery.
Delivery' and
K To tackle the problem of online payment, Flipkart introduced 'Cash on
time in India.
Payment by card on Delivery' in addition to others for the first
orders on time,
K Flipkart launched their own supply chain management system to deliver
and solved the problem.
investment
Flipkart became India's largest home-grown e-commerce platform started with a small
20 crore.
of R6500/- it grew exponentially to 4 crore in 2 years and in another year to
Started off as a platform for books only, Flipkart soon became a platform for anything from
tecnology to garments to stationary.
In 2018, Walmart acquired 77% stakes in Flipkart, worth $16 billion, which has made the young
entrepreneurs one of the most successful ones.
Flipkart opened the doors to an e-commerce friendly ndia. And this happened just because the
founders had a dream, an idea, the conviction to convert idea into action, and action into results.
3 S e s S0 O n

Entrepreneurship
vs. Employment

A Entrepreneurship vs. Ernployrnent

A Risks, Rewards and Challenges of
being an Entrepreneur

3.1 Introduction
seen your elders talking
So, now you know a lot about entrepreneurship. You must have a package of so many
about things like, "His son is working for that ABC company and is earning
marketing for the company XYZ"
lakhs per annum" or "She has been pronmoted as the country head, people ? Are thev
Whenever you hear such statements, what do you think ? Who are these
entrepreneurs ? Let us find out.

3.2 Entrepreneurship vs. Employment

a
Entrepreneurship, as you know, is creating and owing up an enterprise that works to solve
problem. The Entrepreneur takes the ownership of everything the enterprise is responsible
for. An entrepreneur will intuitively think how to take the enterprise on a growth path; how to
address its problems; how to contribute more for its upscaling and so on.
An emplovee on the other hand, works for some enterprise or company, s/he is not the owner
of the enterprise/company s/he is working for. Rather s/he works as per a defined role given to
her/him, works for a fixed set of time, works as instructed and thinks or contributes only as
much defined by his/her role. S/he does not think for the overall performance of the company,
s/he is just confined to the role assigned to her/him.

Following table lists the difference between an entrepreneur and an employee.

Table 3.1 Difference between an Entrepreneur and an Employee

Entrepreneur Employee
Roles

All roles s/he has to perform; from owner to lowest level An employee is assigned or given predefined/fixed roles.
of work.
An entrepreneur organises manages all resOurces (man, An employee manages only what is defined in assigned
machine, money) role.
An entrepreneur makes business decisions.
An entrepreneur takes risks related to business.

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 ENTREPRENEURSHIP VS. EMPLOYMENT
Session 3
A.183
Entrepreneur
Employee
Time
entrepreneur is involved in the work 24 x 7.
An An employee is involved in the work only for fixed timings.
Responsibilities
An entrepreneur takes decisions on his/her own or after
consulting the experts of the field working with him/her. Anemployee either waits for instructions or for decision
making position, decides only that much which is
defined in his/her role.
An entrepreneur takes ownership of his actions and
decisions. That is, s/he takes total responsibility of An employee is responsible only for
tasks on time. performing his/her
success/failure.
An entrepreneur takes care of all people working with An emplovee takes care of the team
bim from senior most position to support staff assigned or
reporting to him/her.
An entrepreneur is self-disciplined and self-motivated. An employee always looks for instructions.
An entrepreneur sets own targets as per the qoals set for An employee's
growth. target is set by higher ups.

Contribution
An entrepreneur makes larger contribution in the growth An employee contributes by doing his/her assigned role.
of economy: generates employment. His/her contribution is limited as compared to an
An entrepreneur impacts society in a positive way by entrepreneur.
offering solutions to existing problems in society, based
on which the business is built.

Case Study Two Successful Entrepreneurs and TwoSuccessful Employees

TWo SUCCESSFUL ENTREPRENEURS

Richo Kar
Richa Kar is a young woman entrepreneur of a successful venture Zivame. Richa, aged 30, has
taken her education from Narsee Monjee Institute of Management Studies and worked with
companies like SAP, Spencer's Retail Ltd. prior to founding her own venture Zivame, an online
innerwear store, which is derived from a Hebrew word 'Ziva' which means radiance and Zivame
stands for a'radiant me'. She has practically changed the way women used to think and buy their
innerwears. Zivame has been successful in educating Indian women across the country about
intimate wear.

Ritesh Agarwal
India. He is
Ritesh Agarwal is in his mid-twenties and one of the most successful entrepreneurs of
founded OYO rooms at the
the Founder & CEO of the budget room provider service -OYO. He
age of 18.
Realizing that no
His basic idea was a budget hotel chain that provides B&B (Bed & Breakfast).
Oravel stays to start
from
other service offered a room for a budget traveler, Ritesh took the idea
This is one of the best successful
OYOrooms started OYO with 11 only rooms in a Gurgaon hotel.
5500 properties across 170
entrepreneurs stories in India. Today, OYO has 65000 rooms in about
expanded to China as well.
Cines in India. OYO Rooms have successfully
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A.184 INFORMATION TECHNOLOGY_Iy

TWo SUCCESSFUL EMPLOYEES

Sunder Pichai
Sunder Pichai is a computer engineer and the current CEO of Google Inc.
Earlier he worked in engineering and product management at Applied materials and management
consulting at Mckinsey and Company. He joinedGoogle in 2004 as product manager, led some
innovative efforts for survival products like Google Chrome, and went on to become Google's
head of Products and engineering and in 2015 was named the new CEOof Google.
Satya Nodella
Satya Nadella, an electrical engineer from India, went on to U.S. for his M.S. and MBA. He started
his career with SUN Microsystems, but very soon joined Microsoft in 1992. He was one of the few
employees who suggested the concept of cloud computing. Later he got responsibility control the
R&D department and later moved to systems and tools division. In 2014 Nadella was promoted to
CEO of Microsoft.
Even though both, Sunder Pichai and Satya Nadella, are CEOs/heads of their organization, they are
not owners. They have grown as employees within the organization. They take decisions after
consulting the board of directors.

3.3 Risks, Rewards and Challenges of Being an Entrepreneur

Like any venture, entrepreneurship also has own share of risks and rewards. While there are
some risks and pains which are there only in the initial stage and fade away in later stages.
Mostly rewards of entrepreneurship outweigh the risks. Let us discuss the risks and rewards
of being an entrepreneur.
3.3.1 Risks of Entrepreneurs
There are many risks involved with entrepreneurship. Some common risks are :
No guarantee of Paycheck: There is never a guarantee of paycheck. Initially, in fact, the
income is so low as even if there are small earnings, a maximum share of these is invested
back in the venture.
No regular income :Initially, startup cannot provide asteady paycheck. The income may
fluctuate from month to month and even from day to day.
No Personal Time
Entrepreneurs are so much involved in their venture in initial days that they have generally
no personal time left. They cannot enjoy personal moments, vacations or leisurely sleep etc. in
their initial days. Once set up, they can fix their working hours but initially this is not possible
generally.
Emotionally Taxing initially
While seting up an entrepreneurial venture, an entrepreneur is involved at every aspect or
the venture be it hiring right people, outsourcing the work, investments, taking up decisions.
Taking up so much may be emotionally taxing initially; it may give so many anxieties to the
entrepreneur about the success of the venture or possibility of failures. But once the startup
grows and a team is set, a growth path starts shaping up, all these anxieties start settin
down.
 ENTREPRENEURSHIP VS. EMPLOYMENT
A.185
Session 3:

3.3.2 Rewards of Entrepreneurs

The risks of becoming a full time entrepreneur are many, BUT the rewards outweigh them.
The rewards of being an entrepreneur are being listed here.
Passion
You lie your
If vOu are working on something you are passionate about., not a moment arises when you do
not enjoy. Enjoyment leads to a great satisfaction and you always feel happy. This is the
greatest reward an entrepreneur gets.
Great BoSs

Entrepreneurs are own boss - when your boss is yourself then you have the greatest bosS in
all forms: the greatest critic to greatest admirer to greatest motivator.
Own Time

An entrepreneur is not bound to work for fixed set of hours chosen by someone else. Rather an
entrepreneur can choose to work as per own time - day or night.
Location
Anentrepreneur gets to choose own work location. S/he can be anywhere in the world while
working and still be doing a meaningful contribution towards her/his venture.
Monetary Gains
A
venture, after initial financial problems, later starts earning abig revenue giving a big bo0st
to the financial health of the venture and of the entrepreneur.
Can make contribution at large scale
An entrepreneur can make larger contribution towards nation and society at a large scale as
her/his venture can make impact in multiple forms. Not only it generates employment, an
entreprerneurship can also make contributions socially, financially and so on. For example,
boasts of a
Mirchi and Mime is an innovative restaurant in the Powai area of Mumbai that
friendly staff of 27 servers, all of whom are hearing and speech impaired. This way Mirchi and
Mine is contributing socially so much to the society.

3.3.3 Challenges in Entrepreneurship

what these are :
There are many challenges associated with entrepreneurship. Let us see
along with your job
(i) Giving up a career. Building a growing business can't be done and careers for the
side. Entrepreneurs have to give up their promising jobs
unpredictable journey of entrepreneurship.
considering their cost to the
(i) Team building. Choosing the right candidates and
business is another big challenge for an entrepreneur.
business to survive. Delays in
(i) Cash-flow management. Cash-flow is crucial for any paying employees,
payment from customers on one side, and on the other side survival.
small business'
vendors, debt repayment and office bills can affect
multiple roles and wear many hats. It's
(iv) Time management. Owners have to playbetween different roles.
challenging to plan and balance the time
(U) Proper people Skills. Delegating tasks and getting output involves people skills.
successof the venture.
These people skills are very crucial for the
 INFORMATION TECHNOLOGY-IY

every day. It can be

( hinion making, Entrepreneurs make hundreds of decisions
xINul o take the right decision at the right time.
and planning in
some foresightedness advantages
() Taking risks and mitigation. This takes
taken and later and for the
of the
Atanve, so that calculated risks are
business.

heck Point
experts.
takes decision on their own or after consulting (d) all of these
1. A(n) (c) worker
(a) employee (b) entrepreneur
goals.
or works as per set
2. A(n) either waits for instructions (d) all of these
(c) worker
(a) employee (b) entrepreneur

3. A(n) sets own targets. (d) all of these

(c) worker
(a) employee (b) entrepreneur
breaks at will.
fixed time for working. They can work 24 x 7 or take
4. A(n) has no (d) all of these
(c) worker
(a) employee (b) entrepreneur

5. A(n) works for fixed set of hours. (d) all of these

(c) worker
(a) employee (b) entrepreneur

Aosignment
different from employment ?
1. How is entrepreneurship which make entrepre
After carefully reading the above topics, can you list some parameters
2.
neurship a risky process ?
entrepreneurship and employmnent ?
3. How is decision-making different in
entrepreneurs and employees different ?
4. How are the contributions made by
How is entrepreneurship and
employment different in terms of roles ?
5.
entrepreneurship ?
6. What are the risks involved with the
7. What are the rewards of entrepreneurship ?
8. What are the challenges of entrepreneurship ?

ACTIVITY
grandparents, try to find people who have started their
In the social circle of your parents and decided to be entrepreneurs.
entrepreneurial journeys. Meet them in person and discuss how they entrepreneurs?
What challenges they faced? What rewards do they feel about being
 S e SSI 0 n 4
Entrepreneurship
Development Process
Oyuctoes
A Entrepreneurship Development Process

41 Introduction
Modern age is media age and at all stages we are influenced by media. Modern age media
depicts entrepreneurship as a glamourous world with lots of financial success. But it is not
that easy as it appears. You must have read the success stories of many entrepreneurs but you
do not know how much Sweat has gone into it. All businesses, all entrepreneurial ventures
require some planning, some right decisions taken at the right time in the smartest possible
way. In this session, we are talking about basic entrepreneur development process that is
common for all types of ventures.

42 Entrepreneurship Development Process

The entrepreneurship development process is a systematic process that aims at developing
so as to set up an
and taking the right mix of actions and decisions in a specific order
entrepreneurial venture. Basically there are four steps in an entrepreneurial development
process being discussed below.

Step 1.1 Business Idea : Finding the Right Business Idea

towards entrepre
Identifying and evaluating the right opportunity is the first step around us and to
problems
neurship. It requires a proper market research to identify the
match the inner passion and
know what people really need. It also requires that it must entrepreneur of
talents of theentrepreneur, e.g., a lazy person cannot become asuccessful
a sports based startup.
solve a specific problem because
Another important thing is that your business idea mustproducts.
flashy
people only pay for solution and not for somne
Step 1.2 Developing the Business Plan
entrepreneur clearly lists his/her vision,
This is the part of first steps only. In this step, the
strategy towards the fulfillment
goals, plans to achieve goals, basic requirements, basic and amends initially as
and so on. A business plan requires multiple corrections multiple drafts.
developing a business plan is an ongoing process initially because of can be
ready on which an action
Once most points are taken care of, a business plarn is
taken to set up a venture.
A.187
 A.188 INFORMATION TECHNOLOGY_IV
Title page Marketing plan
Title of your plan should be included here. Business How to attract customers
and improve market communication.
Examples: Marketing plan, financial plan, Plan
production plan, growth plan, etc. Content
Operational plan
How product will be manufactured and
Executive summary services delivered. Day to day processes
A
short descriptionof why the plan is needed.
Make it compelling. Show competitive edge.
Write it last.
Management
Company structure, organization and
Company description systems to improve overall company
Describe your company vision and goals. management.

Financial plan
Products and services
What kind of product or service is included Financial projections, funding requirements,
profitability, cash flow.
in your plan.

Fiqure 4.1 Business Plan Content

Step 2 Get Finances/Money : Raising Your Seed Funding

This phase of your entrepreneurial process is very important. Once you have charted out
the business plan, you have understood the full financial implications of the project and
venture
know the execution plans, you are ready to seek investment to raise money for your
an
P
You can get finances for your startup idea from many sources such as getting
A investment from angel investors, government grants, a bank loan etc.
R
Getting funding for your business will be one of the hardest steps. People and firms
convinced about your business idea and
won't invest in you unless and until they are
about your abilities and passion.
The best way to raise working capital for any NOTE
business idea is usually from family and friends.
Customers only pay for the solutions
These individuals already trust you and would either and not for flashy products.
invest-in or loan you the money not because they
believe in your idea, but because they believe in you.
Step 3 Understand Customer Needs to get Paying Customers
won't
Aim of any entrepreneurship venture is to solve a specific problem. Any customer
products
pay for funny advertisements, big celebrities endorsing your products, flashy products, but
etc. A customer pays for sonmething that solves his/her problem. It is not the customers
of
the solutions that sell. So, in this step, you must carefully examine the needs
sellable.
so that your idea/product must fulfill these in order to becomne
while solving a
Here an important thing to consider is the costs involved because
the
problem, you must keep in mind the buying capacities and buying habits of highly
customers too. A product or idea intended for middle class customers must not be
their
priced and a product/idea intended for high class customers must cater to
expectations like five star amenities etc.
The goal of this step is to acquire as many customers as NOTE
possible, at the lowest cost possible, and do everything to No business or venture 1s
retain them in the most efficient way possible. Happy successful without paying
customers are the key to success of any venture and this customers.
step lays the foundation of the same.
 ENTREPRENEURSHIp DEVELOPMENT PROCESS A.189

Launh our Product /Servioe

Afer al! above steps, the tinal step is to launech your product or idea in
the market.
Sometimes, despite being anamazing product or idea, it may not succeed because the timing
he target customer segment is not right, eg, something which is used in the swimming
pols as a game if launched during winters will not succeed.
Even ie everything is all right, still you may tace failures, But failures should act as stepping
stones and lesSons rather than a block. In this step, you should learn from your failures by :
taking feedback from the customers about the products
- inding out the shortcomings of your product/idea
- finding out how customers expect more from your product
Carefully analyse above things and then make Step 4 Step 1

changes in your idea/product's execution as per Launch your

produc/sorvico
(a) Business idea
(h) Busiriess plan
the learning from the above analysis. In short, if and keop improving

vOur business model didn't work, it is not a failure Step 3 Step 2

rather the identification of one way that doesn't Get paying customer by Raise FinancesMoney

work. Try finding out the working alternatives.

fulfilling customer ngeds

And if you succeeded, great! Still the focus should

be on how to make more customers happy, how Figure 4.2 Steps of Entrepreneurship
to flush out the losses completely and so on. development process

non-financial objectives.
A business must meet its financial and
sales and profit, proper market share and
Financial objectives of a business are : its survival, enough
financial security of the business.
social objectives, personal satisfaction of
Non-financial objectives of a business are : serving the
understanding and control of business etc.
entrepreneur, customer satisfaction, having proper

(Check Point below.

business are randomly listed below. Pick the correct order of steps given
1. The steps to set up a (iii) Understand the customer needs
() Get Finances (i) Prepare a business plan
ideas (v) Launch business
(iv) Find the right business
(b) (iv) -(i) - (0) - (üi) - (v)
(a) () - (i) -(iv) - (i) -(v) (d) (v) - (i) - (1) - (ii) - (iv)
(c) () - (ii) - (v) - (i) - (iv)
not the part of a business plan ?
2. Which of the following is (b) Financial plan
(a) Marketing strategy Number of employees required
(c) Products and Services
(d)

Asignrment entrepreneurship development process?

1. What are the four steps of
2. Why is a business plan so important ? venture ?
possible different ways of raising money for your
J. What are the improving his/her product service?
entrepreneur always keep
* why should an important for abusiness ?
5. Why are customers so

UNIT IV: ENTREPRENEURIAL SIKILLS