Entrepreneurship

CHAPTER-1 Introduction
1. Definition of Entrepreneur and Entrepreneurship
An entrepreneur is a person who organizes a venture to benefit from an opportunity,
rather than working as an employee. 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.
Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most
prominent example of entrepreneurship is the starting of new businesses.
2. Types of Entrepreneurs
There are four types of entrepreneurs, classified on the basis of their willingness to
create and accept the innovative ideas.
1. Innovative Entrepreneur: These are the ones who invent the new ideas, new
products, new production methods or processes, discover potential markets and
reorganize the company’s structure. These are the industry leaders and
contributes significantly towards the economic development of the country. The
innovative entrepreneurs have an unusual foresight to recognize the demand for
goods and services.
2. Imitating Entrepreneurs: The imitating entrepreneurs are those who
immediately copy the new inventions made by the innovative entrepreneurs.
These do not make any innovations by themselves; they just imitate the
technology, processes, methods pioneered by others.
3. Fabian Entrepreneurs: These types of entrepreneurs are skeptical about the
changes to be made in the organization. They do not initiate any inventions but
follow only after they are satisfied with its success rate. They wait for some
time before the innovation becomes well tested by others and do not result in a
huge loss due to its failure.
4. Drone Entrepreneurs: These entrepreneurs are reluctant to change since they
are very conservative and do not want to make any changes in the organization.
They are happy with their present mode of business and do not want to change
even if they are suffering the losses.
3. Role and Characteristics of Entrepreneurs
Role Of Entrepreneurs
1. Growth and opportunities: A society is prosperous only to the degree to which it
rewards and encourages entrepreneurial activity because it is the entrepreneurs and
their activities that are the critical determinant of the level of success, prosperity,
growth and opportunity in any economy.
2. Risk Assumption: It is the entrepreneur who undertakes the risk of the enterprise in
search of profit and who seeks opportunities to profit by satisfying as yet unsatisfied
needs. Entrepreneurs seek disequilibrium--a gap between the wants and needs of
customers and the products and services that are currently available.
3. Business Decision Making function: They invest and risk their money and other
people's money to produce a product or service that can be sold at a profit.
Entrepreneurs are optimistic and future oriented; they believe that success is possible
and are willing to risk their resources in the pursuit of profit.
4. Managerial Function: Entrepreneurs are skilled at selling against the competition
by creating perceptions of difference and uniqueness in their products and services.
5. Innovation: Entrepreneurs are a national treasure, and should be protected,
nourished, encouraged and rewarded as much as possible. They create all wealth, all
jobs, all opportunities, and all prosperity in the nation.
Characteristics of entrepreneurs are:
1. Self-motivation: The ability to self-motivate is very essential for entrepreneurs. It
plays a crucial role in pushing entrepreneurs towards success.
2. Curiosity: Being curious helps entrepreneurs to function differently that helps in
doing things outside their comfort zone.
3. Taking Risks: Entrepreneurs are risk takers because success can be achieved only
by taking risks in business.
4. Perseverance: Entrepreneurs should have the characteristics of perseverance.
Sticking to the goal in spite of delay in achieving success is one of the hallmarks of
entrepreneurs.
5. Having a clear purpose: Entrepreneurs should have a clear purpose on what they
want to achieve.
6. Good networking skills: Entrepreneurs must have good networking skills as it will
help them connect with like-minded people and potential business partners or clients.
7. Flexibility: Entrepreneurs should be flexible in their approach, if one of the
strategies or processes are not working as intended, then it should be changed as and
when required.
4. Qualities of Entrepreneurs
Successful business people have many traits in common with one another. They are
confident and optimistic. They are disciplined self-starters. They are open to any new
ideas which cross their path. Here are ten traits of the successful entrepreneur.
1. Disciplined: These individuals are focused on making their businesses work, and
eliminate any hindrances or distractions to their goals. They have overarching
strategies and outline the tactics to accomplish them. Successful entrepreneurs are
disciplined enough to take steps every day toward the achievement of their objectives.
2. Confidence: The entrepreneur does not ask questions about whether they can
succeed or whether they are worthy of success. They are confident with the knowledge
that they will make their businesses succeed. They exude that confidence in everything
they do.
3. Open Minded: Entrepreneurs realize that every event and situation is a business
opportunity. Ideas are constantly being generated about workflows and efficiency,
people skills and potential new businesses. They have the ability to look at everything
around them and focus it toward their goals.
4. Self-Starter: Entrepreneurs know that if something needs to be done, they should
start it themselves. They set the parameters and make sure that projects follow that
path. They are proactive, not waiting for someone to give them permission.
5. Competitive: Many companies are formed because an entrepreneur knows that they
can do a job better than another. They need to win at the sports they play and need to
win at the businesses that they create. An entrepreneur will highlight their own
company’s track record of success.
6. Creativity: One facet of creativity is being able to make connections between
seemingly unrelated events or situations. Entrepreneurs often come up with solutions
which are the synthesis of other items. They will repurpose products to market them to
new industries.
7. Determination: Entrepreneurs are not thwarted by their defeats. They look at defeat
as an opportunity for success. They are determined to make all of their endeavors
succeed, so will try and try again until it does. Successful entrepreneurs do not believe
that something cannot be done.
8. Strong people skills: The entrepreneur has strong communication skills to sell the
product and motivate employees. Most successful entrepreneurs know how to
motivate their employees so the business grows overall.
9. Strong work ethic: The successful entrepreneur will often be the first person to
arrive at the office and the last one to leave. They will come in on their days off to
make sure that an outcome meets their expectations. Their mind is constantly on their
work, whether they are in or out of the workplace.
10. Passion: Passion is the most important trait of the successful entrepreneur. They
genuinely love their work. They are willing to put in those extra hours to make the
business succeed because there is a joy their business gives which goes beyond the
money.
5. Importance of Entrepreneurship in the Economic Development of a
Country
Entrepreneurship show higher levels of output and productivity, while those lacking
entrepreneurship have a tendency to generate lower levels of output and productivity.
The impact of entrepreneurship is stronger than that of knowledge capital. Evidence
indicates that entrepreneurial plays a very important role in the economic growth.
There are Five reasons why entrepreneurship is important to the economy:
1. Entrepreneurs Create New Businesses: Path-breaking offerings by entrepreneurs,
in the form of new goods and services, result in new employment, which can produce
a cascading effect or virtuous circle in the economy.
2. Entrepreneurs Add to National Income: Entrepreneurial ventures literally
generate new wealth. Existing businesses may remain confined to the scope of existing
markets and may hit the glass ceiling in terms of income.
3. Entrepreneurs Create Social Change: Through their unique offerings of new
goods and services, entrepreneurs break away from tradition and indirectly support
freedom by reducing dependence on obsolete systems and technologies.
4. Community Development: Entrepreneurs regularly nurture entrepreneurial
ventures by other like-minded individuals. They also invest in community projects and
provide financial support to local charities.
5. The Role of States: Regulations play a crucial role in nurturing entrepreneurship,
but regulation requires a fine balancing act on the part of the regulating authority.
6. Intrapreneurs
An intrapreneur is an employee who is tasked with developing an innovative idea or
project within a company. The intrapreneur may not face the outsized risks or reap the
outsized rewards of an entrepreneur; however, the intrapreneur has access to the
resources and capabilities of an established company.

CHAPTER-2 Identification of Opportunities and Institutional Support System

for Entrepreneurs
1. Identifying a business opportunity
An entrepreneur is said to be an opportunity seeker. For the potential entrepreneur
his/her first task is to identify, explore and then select an attractive business
opportunity.
In simple terms, opportunity may be defined as an attractive project idea which
an entrepreneur accepts as a basis for his investment decision.
A mere “possibility” is to be distinguished from business “opportunity”. Good
business ideas must be capable of being converted into feasible projects.
Therefore, two major ingredients of a business opportunity need to be
highlighted: (1) good market scope, i.e., gap between present or likely demand
and supply; (2) an attractive/ acceptable return on investment.
Apart from these two criteria, a business opportunity needs to be analyzed from
other view points for its viability such as technical, production, commercial and
managerial. these criteria are interlinked and a decision about one, affects others.

2. Preliminary Evaluation
The entrepreneur has to prepare a list of investment opportunities identified from
various sources. These project ideas are analyzed by taking into account government
regulations for finalizing a set of feasible investment opportunities. As such a project
idea cannot be appraised in detail, the investment opportunities are evaluated against a
set of specific criteria to select those project ideas which are commercially feasible.
(1) compatible with the promoter: The entrepreneur must ensure that the project
undertaken should be compatible with the financial and human resources available at
his disposal.
(2) Compatible with Government Regulations and Priorities: The project
undertaken by the entrepreneur should not violate government regulations and
priorities.
(3) Availability of Raw Materials: The availability of raw materials and the cost of
obtaining raw materials are also important factors to be taken into account in selecting
the project.
(4) Potential Market: existing and potential demand in the domestic and export
markets, consumption trends, nature of competition, competitors market shares,
availability of substitutes, barriers and the possibility of entry of substitutes and
technological developments taking place in the industry.
(5) Cost of the project: the cost of the project should be reasonable in the sense that a
desired profit margin can be realized from a competitive price.
(6) Risk inherent in the project: Every project is subject to risks such as changes in
demand, technological developments, entry of substitutes, competition and cyclical/
seasonal variations.
“Business Entrepreneurs”, special supplement to “The Week”, has given the following
tips regarding selection and marketing of a product or service.

3. Institutional support system for Entrepreneurship Development in

Bangladesh
Entrepreneurship is a key factor in the economic development process of a country. Its
role is particularly important for industrialization of an economy. Study of economic
development history of developed countries shows that present status of their
development lies in the active role of the entrepreneurs. The role of entrepreneurs in
perceiving business opportunities, bringing together inputs of production to produce
the desired product/service, taking risk, decision making, technology transfer and
adaptation, overcoming obstacles, response to change and transforming innovative
activities in to reality is indeed great. Entrepreneurship and self-employed are often
misunderstood.
4. Preliminary Screening:
Preliminary screening involves the elimination of the screening ideas that are not so
promising. Preliminary screening for project management involves a few steps that are
listed below:
1. Compatibility with promoter: Screening ideas must have consistency with
personal interest as well as the stakeholders and entrepreneurs.
Finance Assignment Editing services determine that resources must be used well to
better project management.
2. Inputs availability: Input availability affects the decision-making process. Inputs
are needed to implement a feasible project management plan. Finance Assignment
editing services ensure that screening ideas must be aligned with government rules and
national goals.
3. Market Adequacy: Finance Assignment editing services make sure that the market
is adequate to implement the idea. The market must have adequate sale opportunity as
a capital return possibility.
4. Cost Reasonableness: Finance Assignment editing services determine that the cost
that is being invested in the project returns with at least a minimum profit margin.
5. Risk Acceptability: This last screening idea ensures that the object of the project
has been considered after accessing all the risks involved in the same.
Preliminary Screening
The following aspects may be considered for preliminary screening.
• Compatibility with the promoter: The idea must be compatible with the interest,
personality, and resources of the entrepreneur.
• Consistency with governmental priorities: The project idea must be feasible to
the national goals and governmental regulatory framework
• Availability of inputs: The resources and inputs required for the project must be
reasonably assured.
• Adequacy of market: To judge the adequacy of the market the following factors
have to be examined.
o Total present domestic market
o Competitors and their market shares
o Export markets
o Quality price profile of the product vis-à-vis competitive products
o Sales and distribution system
o Projected increase in consumption
o Barriers to the entry of new units
o Economic, social, and demographic trends favorable to increased
consumption
o Patent protection
• Reasonableness of cost
The cost structure of the proposed project must enable it to realize an
 acceptable profit with a competitive price. The following should be examined in
this regard.
o Costs of material inputs
o Labor costs
o Factory overheads
o General administration expense
o Selling and distribution cost
o Service costs
o Economies of scale
• Acceptability of risk level
The desirability of a project is critically dependent on the risk characterizing it and the
following factors should be considered:
o Vulnerability to business cycles
o Technological changes
o Competition from substitutes
o Competition from imports
o Government control over price and distribution