Entrepreneurial Skill

Harvard W. Johnson says entrepreneur is composite of three basic elements: 1. Invention, 2. Innovation and 3. Adaptation.
An entrepreneur has some personal qualities which influence has behaviour. No doubt he lives in a society and therefore
economic opportunities and games affect him. Entrepreneur creates organisations. They promote investment, increase
production and bring competitiveness in business, reduce costs of products and raise the standard of living in society. A
society’s attitude towards business and risk are important.
Qualities or characteristics of a successful Entrepreneur
1. Leadership 5. Decision Maker 9. Action Oriented
2. Risk – Taking 6. Highly Optimise 10. Dynamic Agent
3. Innovativeness 7. Motivator 11. High Achiever
4. Goal – Oriented 8. Self – Confident 12. Trust in Self

1. Leadership - An entrepreneur must have all universally accepted qualities of a leader that is initiative, high energy
level, self – confidence, human relations skills, motivational skills, creativity and Keen desire to solve problems.

2. Risk – Taking – Business risks are unpredictable but still an entrepreneur with rational planning and firm decisions
bears the risk. Because he recognises the fact that – higher the risk, greater is the profit.

3. Innovativeness – Customer’s requirements and testes keep on changing, therefore, production should meet the
customer’s requirements. Thus, innovativeness is another important characteristic of an entrepreneur. He always tries
to out strive others by taking initiative in doing new things that is exploring new products, new markets, new raw
materials, new methods of production etc.

4. Goal Oriented - Entrepreneur is goal oriented. First, he said a goal to achieve that is to earn profit by producing
goods and services and after reaching one goal he proceeds to another goal.

5. Decision Maker – Entrepreneur is regarded as decision maker. He has to take many decisions to put his business idea
into reality. He recognises an idea that is a product, service or market and out of various alternatives before time he
has to make a choice between them. This involves decision making to choose the best suitable and profitable
alternative.

6. Highly Optimistic – A successful entrepreneur is always optimistic and is not disturbed by the present problems
faced by him. He is always optimistic that the situation will become favourable for business in future.

7. Motivator – An entrepreneur has to get the work done through others. He has to create a spirit of team work and
motivate them so that he gets their wholehearted cooperation.

8. Self – Confident – An entrepreneur should have self-confidence in achieving his goals, otherwise he will not be able
to convince his fellow beings to achieve his goals.

9. Action Oriented – A real entrepreneur is always action oriented. In fact, enterprise always consists of action in
uncertainty. Entrepreneur is both planner and doer, dreamer and achiever. He implements what he visualises.

10.Dynamic Agent – He mobilises his resources. He destroys all things to create new. Hence, his real task is ‘creative
destruction’. He creates new needs and new means to satisfy them. He has ability to visualise new ventures and new
plans.

11. High Achiever – The most important characteristic of an entrepreneur is his achievement motivation. He had a
strong urge to achieve. He has a more aggressive level of entrepreneurial venturing and need achievement.

12.Trust in Self – An entrepreneur does not believe in luck or fate. He believes in his own firm decisions and actions.
He has trust in his perseverance and creations. He pulled his own strings.
Functions of an entrepreneur
The various functions of an entrepreneur may be classified and described as under
1. Innovation – It includes (a) Introducing new products (b) Opening new market (c) New sources of raw materials and
(d) New organisation structure.
2. Risk – Taking – Choosing one among various alternatives, the end results of which are unpredictable.
3. Decision Making – Includes: (a) Stabilizing organisation’s aims and objectives and changing them according to
changing conditions or to make them more profitable, (b) Division of work among subordinates, (c) Utilisation of
financial resources (d) Taking decisions on effective techniques (e) Selling the product as per demand of customers,
(f) Relationship with social functionaries.
4. Organisation and Management – To organise and manage various economic and human factors. Under this
category, following are his functions: (a) Planning the Enterprise (b) Coordination and control (c) Supervision and (d)
Direction.
5. Size and Scale of Business Unit – To decide about size of business unit that is he wants to establish one production
unit or more etc. which is dependent upon demand of the product. Similarly, he has to decide about scale of
production, that is small, scale middle scale or large scale.
6. Appointment of Managerial and other Work Force.
7. To arrange for factors of production and establishing coordination, that is, land, labour, capital etc. in
appropriate proportion and to maximise output by best utilisation of these factors after coordinating them.
8. Procuring raw material and machinery, so that production process is not affected.
9. Control and Direction – General policy formulation and exercising control over all departments and directing them.
10. Finding suitable market – He has to search for suitable market to sell the product, for which he performs following
functions (a) Advertisement and publicity (b) Appointment of selling agents, (c) Providing incentives to various
selling intermediaries to promote sales.
11. New Inventions – Encouraging new inventions and introducing innovations in production, production techniques,
sales, marketing, advertisement etc.
12. Establishing relations with government – To established relations with government and its functionaries. In this
regards his functions are (a) Obtaining licence, (b) Payment of taxes, (c) Selling the product to government, (d)
Provision for export import etc.
13. Establishing contacts with competitors.

Role and significance and importance of entrepreneurs

The role and significance of an entrepreneur are given under the following headings: -
1. Enterprising man – A business does not get started by itself. It is the Entrepreneur who takes the risk and is
willing to face devastating failure. He braves uncertainty strikes out on his own and through native wit, and
devotion to duty.
2. Great achievers – Entrepreneurs are high achievers. They are challenged by opportunity. They are willing to
work hard to achieve something. They set challenges for themselves. They choose tasks to make them ‘stretch’
themselves a little. They prefer not to gamble at all.
3. Reinventing organisation – An entrepreneur continuously works to reinvent his organisation. He knows that
change is a constant in and around his organisation.
4. Job creation – Entrepreneur creates organisation, integrate resources and technologies and creates job
opportunities for the youths.
5. First mover – Entrepreneurs are first movers. They move in the various areas earlier than their competitors.
Entrepreneurs can see opportunities to rise and move quickly to take advantage of them. They also excel at
discovering whole new market.
6. Higher productivity – Entrepreneur have the ability to produce more goods and services with less inputs. They
play an important role in raising productivity.
7. Visionary leader – An entrepreneur has a good vision and sense of mission. He is able to recognise potentially
profitable opportunities, successfully moving the idea from the laboratory to the market place and has the sense of
accomplishment.
8. Economic prosperity – Entrepreneur can bring about drastic changes in the very structure of the economy. They
stand beyond challenges and make huge profits in every economic system. They create jobs, wealth and capital in
the country. They promote investment, increase production and bring competitiveness in business, reduce cost of
products and raise the standard of living in society.
9. Backbone of the capitalist system – A capitalist economy is one in which there is a freedom to save and invest to
compete and to operate any business. Entrepreneur plays a vital and prominent role in the enterprise because they
control market by assuming the role of a competitor and a leader.
 10. Protector of society’s interests – Entrepreneurs are criticised as self-interested exploiters.
11. Catalytic agent – As Joseph Schumpeter says, “entrepreneur’s task is ‘creative destruction’. He destroys to create
new things. He changes and transmute new values. He is a change creator.”
12. Ingredient of modern production system – Entrepreneur has become the ‘balancing wheel’ of modern global
economy. They seek the unique product, the marketing breakthrough, change technical frontiers, reshape public
desire, create wealth and employement.

Myths of Entrepreneurship
1. It is easy to start a business.
2. Lot of money is needed to start a new business.
3. A start-up cannot borrow from banks.
4. Talent is more important than industry.
5. Most start-ups are successful.
Entrepreneurship as a career option
Advantages of entrepreneurship as a career: -
1. Independence – An entrepreneur is his own boss. He can take all decision himself. He need not obey someone.
2. Ambition – Fulfilment – Some people want to convert their original idea into a new product or service. For example,
smart phone, electric vehicle, driver less train, etc.
3. Excitement – Entrepreneurship involves adventure. Some people resign their well-paid jobs and launch their own
venture due excitement.
4. Freedom – Entrepreneurship allows the freedom to try out one’s ideas. Freedom seeking people choose
entrepreneurship as a career.
5. Wealth Creation –Successful entrepreneurs create enormous wealth for themselves and their staff.
6. Status – Success in entrepreneurship brings considerable fame and prestige.

Disadvantages of entrepreneurship as a career: -

1. Risk – Entrepreneurship involves considerable risk of loss. Failure can wipe away all the personal savings and lead to
considerable debt – burden.
2. Hard Work – An entrepreneur has to work very hard to make the new business successful. His work schedule is
unpredictable and he has to work late hours.
3. Uncertain income – No fixed and regular income is available to an entrepreneur. During the startup stage it may be
difficult even to meet household expenses.
4. Problem of finance – Raising the necessary fund is very difficult for the first generation entrepreneur.
5. Incompetent staff – A new entrepreneur may not be able to hire and retain qualified and experienced employees.
Administrative burden is heavy and faulty decisions can be very harmful for the business.