UNIT I

MEANING OF ENTREPRENEUR
The entrepreneur is defined as someone who has the ability and desire to
establish, administer and succeed in a startup venture along with risk
entitled to it, to make profits. The best example of entrepreneurship is the
starting of a new business venture. The entrepreneurs are often known as
a source of new ideas or innovators, and bring new ideas in the market by
replacing old with a new invention.

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.

The term entrepreneurship denotes the process of setting up one’s own

business venture as distinct from pursuing any other economic activity or
any employment or practicing some profession. The person who
establishes business is termed as entrepreneur. The output of an
entrepreneurial process ends up in establishing an enterprise.

DEFINITION

According to J.A. Schumpeter Joseph A. Schumpeter,

“Entrepreneurship is essentially a creative activity. It consists of doing
such things as are generally not done in ordinary course of business. An
entrepreneur is one who innovates, i.e. carries out new combination or
enterprise.” In the words of
A.H. Cole, “The purposeful activity of an individual or group of associated
individuals, undertaken to initiate, maintain or earn profits by production
and distribution of economic goods and services.”

As per Mary Coulter, “Entrepreneurship is the process whereby an

individual or group of individuals use organised efforts to pursue
opportunities to create value and grow by fulfilling wants and needs
through innovation and uniqueness, no matter what resources the
entrepreneur currently has.

CHARACTERISTICS OF ENTREPRENEUR
1. Spirit of Enterprise

Entrepreneur should be bold enough to encounter risk arising from the

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venture undertaken. Entreprenuer should not get discouraged by setbacks

or frustrations emerging during the course of entrepreneurial journey.

2. Self Confidence

Entrepreneur should have a self confidence in order to achieve high goals

in the business. The negativities like inconvenience, discomfort,
disappointments, rejections, frustrations and so on should not weaken his
steely resolve to make the venture a grand success.

3. Flexibility

Entrepreneur should not doggedly stick to decisions in a rigid fashion.

Entrepreneur should change the decisions made already in the light of
ever-changing business environment.

4. Innovation

Entrepreneur should contribute something new or something unique to

meet the changing requirements of customers namely new product, new
method of production or distribution, adding new features to the existing
product, uncovering a new territory for business, innovating new raw
material etc.,

5. Resource Mobilisation

Entrepreneur should have the capability to mobilise both tangible inputs

like manpower, money materials, technology, market, method etc., which
are scattered over a wide area and certain intangible inputs like
motivation, morale and innovativeness cannot be purchased in the market
outright. Entrepreneur has to marshal all these tangible and intangible
inputs to produce a product successfully. Thus entrepreneurship is a
function of gap filling and input completion.

6. Hard work

Entrepreneur should put in strenuous efforts and constant endeavours to

accomplish the goals of the venture successfully. They have to
courageously face uncertainties, risks and constraints. They should not
blame the uncontrollable factors for the misfortunes experienced during
the course of their entrepreneurial venture. They should spend their
energy in addressing the issues to stay successful.

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7. Leadership

Entrepreneur should be able to influence team members by showing

sympathy and empathy so as to enable them to contribute positively
towards the goals of the venture. Entrepreneur should lead others from
the front and by personal example and should walk the talk and
effectively take all the followers to activate the goals of the venture.

8. Foresight

Entrepreneur should have a foresight to visualise future business

environment. In other words, Entrepreneur should foresee the likely
changes to take place in market, consumer attitude, technological
developments etc., and take timely actions accordingly.

9. Analytical Ability

Entrepreneurs should not make decisions on the basis of own prejudice or

personal likes and dislikes. Entrepreneur should be able to objectively
analyse the situation and act accordingly. They should abstain from taking
emotional or hasty decisions when they are overwhelmed by emotions. In
simple words Entrepreneur should take rational decisions after examining
the various aspects of a problem.

10. Decision Making

Entrepreneur has to take timely and correct decision with regard to nature
and type of product to be produced, type of technology to be adopted,
type of human assets to be employed, location of the enterprise, size of
the unit, volume of production and so on. The very success of any
enterprise hinges on prompt, correct and relevant decisions made by the
entrepreneur. Entrepreneur should rationally examine the various factors
influencing the decision and take appropriate decisions after giving due
weight to all the risks embedded in various factors.

Importance of Entrepreneurship

i. Basis of Economic Development of the Country- Development of

any country depends on entrepreneurship, it depends on the businessmen
of a country, how successful or not the country is. The more the
businessmen in a country understand these simple words, the more

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successful the business will be, the more the country will develop. That's
why a successful business shows how developed the country is.

ii. It Helps in Establishing New Enterprises- Entrepreneurship also

motivates others, so that others can start their own business or their new
enterprises. For example, if you are a successful businessman, then you
can also help others to become successful through your experience and
they are motivated to start a business.

iii. Contribution in Development and Expansion of Existing

Enterprises- Today's entrepreneurs help old businessmen to expand
their business. The old businessmen who do not know about today's
system, tell them to expand their business, because of which the
country's economic system is good.

iv. Helps in Developing New Products and Techniques- With the

help of businessmen, new products come in the market, new technology
will not come in the market until they invent by their production, and the
consumer will not get to use anything new. So it is only because of the
businessmen that we are able to use new products today.

v. Opportunity to Get Full Human Potential- Whenever a business

starts, whatever people work there, this businessman ensures that the
people who are working in his company give their hundred percent. He
wants his workers to give their hundred percent and they also have the
skills to get their work done completely by the workers as they also
motivate them.

vi. Creation of Employment Opportunity- The more businesses, and

enterprises will be successful, the more profitable companies will become,
and the more employment they can provide. The larger the company or
enterprises, the more will be the requirement of workers. In order to
produce resources, to handle staff, all these things will be fulfilled by
hiring employees. This, in turn, creates new employment opportunities.

vii. Promotes Capital Formation- When the business earns a good

profit, it earns a lot of money, then the money will go to the government
through tax. When the company will earn a good profit, then people will

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get a lot of money in the form of salary, then somewhere through the
income of the employers, the money will go to the government, in this
way the government is getting tax from the individual people also. Tax is
also being received from the company, due to which the economy of the
country will be good, in this way the benefit of everyone is through the
enterprises.

viii. Balances Economic Development- Both the urban sector and the
rural sector will be balanced economically due to entrepreneurship. It
means that enterprises help in reducing the gap between the rich and the
poor. Entrepreneurs start the business by going to the rural sectors, they
provide jobs to the people of the rural areas and help in the development
of that area.

ix. Helps in the Execution of Government Policies and Plans-

Entrepreneurship helps the government as well. The government creates
new rules and helps entrepreneurs in promoting those rules and
regulations. For example, businessmen follow the GST rules imposed, and
in a way, they are promoting it. Entrepreneurship helps in implementing
government planning and rules in this way.

x. Helps in Social Change- The more entrepreneurship will be

successful, the more it will help to develop the society, the more
donations will be made, the standard of living will improve and
employment opportunities will also increase when entrepreneurship is at a
good level.

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I. Promotional Functions

(1) Discovery of Idea

The first and foremost function of entrepreneur is idea generation. A

person may conceive his own ideas or develop the ideas contributed by
others. Ideas can be generated through several ways like own experience
and exposure of entrepreneur, keen observation of environment,
education, training, market survey, environmental scanning and so on.
After the ideas were collected, entrepreneur has to weigh objectively each
and every idea and finally select an idea which is worth pursuing
commercially.

(2) Determining the business objectives

Entrepreneur has to develop business objectives in the backdrop of nature

of business and type of business activity i.e. nature of business,
manufacturing or trading, type of business organisation chosen so that
he/she can organise the venture in accordance with the objectives

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determined by him/her.

(3) Detailed Investigation

Entrepreneur has to analyse in detail the product proposes to produce. In

other words, Entrepreneur should investigate commercial feasibility of the
product proposed to be produced and conduct market study to ascertain
the potential demand for the product. Besides, Entrepreneur has to probe
the sources of supply of various inputs required for manufacturing the
proposed product, their respective prices and other terms and conditions

(4) Choice of form of enterprise

Entrepreneur has to choose the appropriate form of organisation suited to

implement the venture. There are various forms of organisation namely
sole proprietor, partnership, company and co-operatives etc. which are in
existence. The selection of appropriate form of organisation is made after
considering the factors like nature of product to be produced, size of
investment, nature of activities, size of organisation, nature of liability of
owners, retention of control, degree of risk involved, scale of operations,
stability and so on.

(5) Fulfilment of the formalities

Having chosen the appropriate type of organisation, entrepreneur has to

take necessary steps to establish the form of organisation chosen. As
regards sole trader, the formalities are barest minimum. In the case of
partnership firm, entrepreneur has to arrange for partnership deed and he
has to get the deed registered. There are lot of formalities to be fulfilled in
the case of registration of company and co-operative form of organisation.
Promoter has to take all necessary steps for establishing the form of
organisation.

(6) Preparation of Business Plan

Entrepreneur has to prepare a business plan or project report of the

venture that he is proposing to take up. This plan helps entrepreneur to
achieve various objectives formulated within a specified period of time.

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(7) Mobilisation of funds

Entrepreneur has to take steps to mobilise capital needed to implement

the venture. Entrepreneur has to estimate the fixed capital and working
capital required for running the project. Then the entrepreneur has to
initiate steps to build funds from various channels like own funds,
borrowing from close circles, banks, financial institutions, venture
capitalists, issue of shares and debentures, term loans and so on to
finance his fixed capital requirement.

(8) Procurement of Machines and Materials

Entrepreneur has to locate the various sources of supply of machineries

and equipments and materials. Entrepreneur has to collect details from
the various sources of supply and screen them for selecting the best
source of supply.

II. Managerial Functions

(i) Planning

Under planning, entrepreneur has to lay down the objectives, goals,

vision, mission, policies, procedures, programmes, budget, schedules etc.,
for enabling the venture to proceed towards established destinations.

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(ii) Organising

Entrepreneur puts in place suitable organisational structure to perform

various managerial functions namely choosing the type of organisation,
creating department, fitting the human resources to appropriate
organisation slots, defining and delegating authority, distributing
responsibility and creating accountability for efficient performance of
activities.

(iii) Directing

In the realm of directing, entrepreneur has to motivate, lead, guide and

communicate with subordinates on an ongoing basis in order to
accomplish pre-set goals. The process of directing involves issuing orders
and instructions, guiding, counselling and mentoring of employees,
supervising employees, maintaining discipline, motivating employees and
providing leadership.

(iv) Controlling

Entrepreneur has to put in mechanism to evaluate the performance of

employees across the organisation. The various steps involved in control
function includes fixing performance standards, measuring the actual
performance, comparing actual performance with standards, finding out
causes for deviation if any, undertaking corrective measures to bring
actual performance to standards set. He/she may use various control
techniques like account, auditing, management information system,
network analysis, cost control, financial tools etc.,

(v) Coordination

Entrepreneur has to evolve mechanism to pull together the diverse

functions performed by various departments or teams and direct them
towards the established goals of the organisation for accomplishment.

III. Commercial Functions

(i) Production or Manufacturing

Under production function, entrepreneur has to take decision relating to

selection of factory site, design and layout, type of products to be

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manufactured, research and development, product design etc., The

efficient and effective performance of production function depends on the
proper production planning and control to a major extent.

(ii) Marketing

Entrepreneur has to carry out following functions pertaining to marketing

aspect namely consumer research, product planning and development,
standardisation, packaging, pricing, warehousing, distribution, promotion
etc., The very success of marketing function is very much linked with
selection of appropriate marketing mix. The term marketing mix denotes
the combination of four components namely product, price, promotion and
physical distribution in the case of physical products and three more
components are included in the case of service products namely people,
process and physical evidence.

(iii) Accounting

Entrepreneur has to arrange to prepare trading and profit and loss

account in order to know the profit or loss incurred out of operation of the
business and prepare balance sheet to know the financial status of
business at a particular day. Besides, cash flow and fund flow statements
are prepared to ensure the adequacy of funds and cash for meeting
various working capital needs of the business.

(iv) Finance

In the sphere of financial function, an entrepreneur has to take decisions

like choosing the right type of financing, framing the best dividend policy,
acquiring of funds, efficiently managing fixed and current assets,
maximising shareholders wealth and investing of funds efficiently and
effectively.

(v) Human Resource Management

Entrepreneur has to estimate the manpower needs of the enterprise and

accordingly decide the size of manpower required for various slots of
organisational structure. After determining the required man power the
entrepreneur has to organise the performance of following functions
pertaining to human resources namely arranging for recruitment,
selecting manpower, induction and training, determining compensation
structure and incentives, designing motivation programmes, structuring
well being measures for employees, putting in place safety mechanism at
work place, performance evaluation and career advancement and
structuring social security programmes.

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Classification According to Function

1. Innovating Entrepreneur

Innovative entrepreneur is one who is always focussed on introducing a

new project or introducing something new in the venture already started.
They constantly observe the environment around them; collect
information and analyse them in order to contribute something a new in
the venture. Their innovation may take the form of brand new product,
upgraded product, discovering untapped market, new method of
production, reengineering of existing product, new method of distribution
of product, simplification of complex process, adoption of a distinct
process and so on.

2.Imitative Entrepreneur

Imitative entrepreneur is one who simply imitates existing skill, knowledge

or technology already in place in advanced countries. A simply reengineer
or redesign the products developed in advanced countries and produce a
version suited to their local conditions. For example, many electronic
products invented in advanced countries are simply reengineered in

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developing countries. Similarly expensive medicines developed in

advanced countries are simply reengineered by changing the composition
of elements or changing the process of production.

3. Fabian Entrepreneur

These entrepreneurs are said to be conservatives and sceptical about

plasticising any change in their organisation. They are of risk-averse type.
They do not simply change to the changes happening in the environment.
But they adapt themselves to the changes only as a last resort when they
fear that non adaptability to changes will inevitably lead to loss or
collapse of the enterprise. Their dealings are governed by customs,
religion, tradition and past practices handed down to them by their
ancestors. They would like to follow in the footsteps of predecessors.
Example; Nursus coffee

4. Drone Entrepreneur

Drone entrepreneurs are those who are totally opposed to changes

unfolding in the environment. They used to operate in the niche market.
They are similar to fabian entrepreneur in doggedly pursuing their
conventional practices. The main difference between fabianentrepreneur
and drone entrepreneur lies in the fact that while fabian entrepreneur
adapts to changes eventually as a last resort, drone entrepreneur never
adapts himself or herself to change, Example; Gopal Tooth powder

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Classification According to Type of Business

1. Business Entrepreneur

Business entrepreneur is called solo entrepreneur. He/she is the one who

conceives an idea for a new product/service and establishes a business
enterprise to translate his idea into reality. He/she may establish small or
large enterprise to commercially exploit his/he idea. He/she takes up
production, operations and pursues marketing activities.

2. Trading Entrepreneur

Trading entrepreneurs are those who restrict themselves to buying and

selling finished goods. They may be engaged in domestic and
international trade. Their core strength lies in distribution and marketing.
They get their income by way of commission and marketing.

3. Industrial Entrepreneur

These are entrepreneurs who manufacture products to cater to the needs

of consuming public after identifying the need left unfulfilled by the
manufacturer hitherto. They may be small, medium and large
entrepreneurs. Industrial entrepreneurs mobilise the resources of various
types and create an entity to manufacture the products or service. They
add utility to products rolled out by them which is termed as value
addition.

4. Corporate Entrepreneur

Corporate entrepreneur is called promoter. He/she takes initiative

necessary to start an entity under corporate format. He/she arranges to
fulfil the formalities to start a corporate entity under Company law.
Corporate entrepreneur assembles all the resources and put in place
organisation to run the business on a day-to-day basis. In corporate form
of organisation, ownership and management are separated. Corporate
entities are registered under the Companies Act or under the Trust Act.
Corporate entrepreneurs install a team of experts to manage the entity on
a day to day basis.

5. Agricultural Entrepreneur

Agricultural entrepreneurs are those entrepreneurs who raise farm

products and market them. They use the various inputs like labour,
fertilizer, insecticide, water technology etc. to raise the products and

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market their products either directly or through co-operative entities or

through brokers or through tie up with large retailers. Those who raise
allied products like poultry, meat, fish, honey, skin, agricultural
implements, flower, silk, fruits, prawn etc., are called agricultural
entrepreneur. In short these entrepreneurs pursue their venture in
agriculture and allied sector.

6. Retail Entrepreneurs

Retail entrepreneurs are those who enter into venture of distributing the
end-product to final consumer while wholesale entrepreneurs take up the
venture of distributing the product to retailer. They used to buy the goods
in small quantities from numerous wholesalers and make it available
different products of different brands under one roof to end consumer.

7. Service Entrepreneurs

Service entrepreneurs enter into the venture of supplying service products

to end consumers. Hoteliers, airlines, banking, insurance and financial
service providers, repair service organisation, bus operators, train service,
advisory organisation, advertising firms, manpower supplier etc., come
under service entrepreneur’s category.

Classification Based on Motivation

1. Pure Entrepreneur

Pure entrepreneurs are individuals who are propelled to enter into venture
by psychological and economic motives. Their egos do not permit them to
work for somebody else. They nurture desire of starting a particular
venture and earning high profit there from and thus attaining a social
status. They apply their knowledge, skill and insight in making the venture
a great success in order to earn maximum profit out of the venture.
Example Dhirubai Ambani, Jamshadji Tata, T.V. Sundaram Iyengar,
Seshadriji, Birla, Narayanamurthi, Aziz Premji and so on.

2. Induced Entrepreneur

An induced entrepreneur is one who is inspired to take up entrepreneurial

activity thanks to entrepreneurship friendly policies put in place by the
Government. In other words, concessions, incentives and soaps provided
by the government drive them to enter into venture. Government
provides a great deal of support in the form of loans, subsidies, nominal
rate of interest, tax breaks, tax holidays, training, import of technology

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from abroad, concessions for export oriented item, allotment of sheds,

and lands at subsidised price etc. impel the potential entrepreneurs to
start the venture.

3. Motivated Entrepreneur

Motivated entrepreneurs are those motivated to take up venture by the

desire for self fulfilment. They are motivated to produce and market
product or service by sheer prospect of making huge profit. They are
further motivated to develop the venture to a saleable stage so that
he/she can sell the venture at a super profit to certain
entrepreneurs(buyers) who do not like to take risks in setting up a new
venture but desire to buy well developed venture promising great profit
prospects.

4. Spontaneous Entrepreneur

These entrepreneurs have natural inclination to start venture. They are

supposed to be bold, optimistic and enterprising persons. They have
passion for meeting the challenges. Their inner urge and inborn traits
drive them to commence their ventures.

Classification Based on Development Stage

1. First Generation Entrepreneur

First generation entrepreneur is one who starts venture by virtue of his

knowledge, skill, talent and competence. He/she innovates a
product/service by technical expertise possessed by him/her. These
entrepreneurs do not have any family background or prior exposure to the
venture initiated by them. They are self made entrepreneurs.

2. Modern Entrepreneur

Modern entrepreneur is one who keenly observes the dynamics of the

market with eagle eye and identify the unfilled gaps, if any in
product/service marketed. He/she takes initiative in starting the venture
to cater to the unmet needs of the market.

3. Classical Entrepreneur

Classical entrepreneur is one who starts his own venture as a family

business. They are called life timers. They engage in business as a matter
of routine. Their prior exposure to business environment impels them to

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commence venture of their own. Entrepreneurs from the business families

are called classical entrepreneurs. For instance where son of provision
merchant start his own provision shops, the former is called classical
entrepreneur.

Classification According to Area

1. Urban Entrepreneur

Entrepreneur who commences his entrepreneurial activity in urban areas

like State Capital, District Headquarters, Towns, Municipalities etc., They
may be industrial entrepreneur or corporate entrepreneur or retail
entrepreneur.

2. Rural Entrepreneur

These are people who start venture in rural locations. They are provided a
lot of economic and fiscal incentives to start their venture in rural and
semi urban areas in order to check the exodus of rural people to urban
centres in pursuit of employment opportunity. Thanks to their immediate
access to material, labour or other facilities at low cost. As a result the
cost of operation of rural ventures tends to be low. Agricultural and
trading entrepreneurs prefer to set up their venture in rural areas.

Classification According to Ownership

1. Private Entrepreneur

Ventures started by individual either singly or collectively at their own risk

after mobilising various resources in order to earn profit are called private
entrepreneurship.

2. State Entrepreneurship

Trading/industrial ventures started by Government under various formats

like company, corporation, departments, board denotes state
entrepreneurship.

3. Joint Entrepreneurship

Ventures started and owned by both private individuals and government

denote joint ownership.

Role of Entrepreneurship in Economic Development

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The role of entrepreneurship in economic development has nine salient

takeaways:

1. Raises Standard of Living

A significant role of entrepreneurship in economic development is that it

can greatly enhance the standard of living for individuals and
communities by setting up industries and creating wealth and new
positions. Entrepreneurship not only provides large-scale employment and
ways to generate income, it also has the potential to improve the quality
of individual life by developing products and services that are affordable,
safe to use, and add value to their lives. Entrepreneurship also introduces
new products and services that remove the scarcity of essential
commodities.

2. Economic Independence

Entrepreneurship can be a path to economic independence for both the

country and the entrepreneur. It reduces the nation’s dependence on
imported goods and services and promotes self-reliance. The
manufactured goods and services can also be exported to foreign
markets, leading to expansion, self-reliance, currency inflow, and
economic independence. Similarly, entrepreneurs get complete control
over their financial future. Through their hard work and innovation, they
generate income and create wealth, allowing them to achieve economic
independence and financial security.

3. Benefits of New Firms and Businesses

Entrepreneurs identify market needs and develop solutions through their

products and services to begin their business venture. By starting new
firms and businesses, entrepreneurs play a key role in shaping the
economy and creating a more dynamic and diverse business landscape.
Entrepreneurship also promotes innovation and competition, leading to
new and improved products and services that contribute to economic
growth and development.

4. Creation of Jobs

Entrepreneurship is a pivotal driver of job creation. Running the

operations of new businesses and meeting the requirements of customers
results in new work opportunities. Entrepreneurship also drives innovation
and competition that encourages other entrepreneurs and investments,

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creating new jobs in a wide range of industries, from manufacturing and

construction to service and technology sectors.

5. Encourages Capital Formation

Capital formation is the process of accumulating resources, such as

savings and investments, to fund new business ventures and support
economic growth. Entrepreneurship can encourage capital formation by
attracting investment. In addition, the creation of new businesses and the
growth of existing firms can also contribute to the development of a more
diverse and dynamic economy that encourages capital formation and
opens the door to a wide range of investment opportunities.

6. Elimination of Poverty

Entrepreneurship has the potential to lift people out of poverty by

generating employment and stimulating economic activity.
Entrepreneurship also contributes to the development of local economies
and helps improve the overall standard of living.

7. Community Development

Entrepreneurship promotes economic growth, provides access to goods

and services, and improves the overall standard of living. Many
entrepreneurs also make a positive impact on their communities and
improve their well-being by catering to underserved areas and developing
environment-friendly products. Their work can help build stronger, more
vibrant communities and promote social and economic development.

8. Optimal Use of Resources

Entrepreneurship can help identify market opportunities and allocate

resources in the most effective way possible. Entrepreneurs also play a
key role in developing innovative products and services that meet the
needs of customers while optimizing the use of available resources.

9. Increases Gross National Product and Per Capita Income

Entrepreneurship can play a significant role in increasing economic growth

and prosperity by increasing Gross National Product (GNP) and Per Capita
Income (PCI). GNP measures the total economic output of a country while
PCI calculates the average income per person. The increase in GNP can
lead to a rise in PCI. Entrepreneurship can contribute to GNP by creating

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new businesses and industries, which can lead to job creation, increased
consumer spending, and higher tax revenue.

Women Entrepreneurs - Opportunities and Challenges

Women entrepreneurship is gaining importance in India in the wake of

economic liberalisation and globalisation. The policy and institutional
framework for nurturing entrepreneurial skills, imparting vocation
education and training has widened the horizon for economic
empowerment of the women. However, women constitute one third of the
economic enterprise. There are scores of successful women entrepreneurs
both in economic and social fields in India.

Thus, a stage has been already set for social take-off of women from a low
development path to an accelerated pace in achieving higher level of self
sustaining economic growth in the wake of new economic policy 1991.

Definition

According to Schumpeter’s concept, “Women who innovate, imitate or

adopt a business activity are known as women entrepreneurs”.

Government of India based on women participation in equity and

employment of business enterprise has defined women entrepreneurs as
“An enterprise owned and controlled by a women having a minimum
financial interest of 51% of the capital and giving at least 51% of the
employment generated in the enterprise to women.”

Opportunities for Women Entrepreneurs

(i) Opportunities Based on Business

Women entrepreneurs are bestowed with numerous business

opportunities depending upon their area, choice of industry, capacity to
invest, technical and non-technical skills etc.,

When a woman decides to become an entrepreneur she has extensive

opportunities to tap into. The following are the opportunities unfolding in
different spheres of commerce.

i. In the sphere of manufacturing women can start ventures like Agarbathi

manufacturing, papad making, bedspread making, embroidery, export of
handicrafts, apparel manufacturing, sweet stalls, manufacturing soft
drinks, pickle making , manufacturing garments, handicrafts, printing
press etc.

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ii. In the sphere of service industries, women entrepreneurs may try their
hand in ventures like catering service, computer centres, tutorial centres,
Typewriting institutes, beauty parlours, dry cleaning, small restaurants,
tailoring, crèche, florist shops, event management etc.,

iii. In the realm of trading ventures, women can enter the ventures like
fancy stores, diagnostic centres, milk distribution, sweet stalls, drug
stores, grocery stores, textile retailing, cool drinks parlour, coffee parlour,
cell phone repairs, photo studios, photocopier firms, working women’s
hostel etc.,

iv. Highly educated, experienced and broadly exposed women technocrats

can start larger venture like running hospitals, coaching centres,
diagnostic laboratories, manufacturing activities, suited to their field of
specialisation, advertisement and media firms, call centres, hotels etc.,

(ii) Financial Opportunities

All Banks in India provide financial support to the women Entrepreneur, in

the form of micro small loans to buy Raw Materials and Equipments.

(iii) Non-Financial support

Women entrepreneurs are provided with the following non-financial

support in the form of :

i. Putting in Policies, regulations and legal structures suitable to women

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entrepreneurs

ii. Financial counselling and training

iii. Business advisory service

iv. Handling legal barriers

v. Establishing Commercial linkages

vi. Client research

vii. Profitability and Efficiency analysis

viii. Offering and designing the products based on their needs

ix. Lower rate of interest

x. Collateral free loans

xi. Simplified processing system

xii. Flexible repayment system based on business nature.

(iv) Opportunities Created by Associations

There are various associations like Self Help Groups (SHG), Federation of
Indian Women Entrepreneurs (FIWE), Women’s India Trust (WIT), Small
Industries Development organisation (SIDO), National Bank for
AgricultureandRuralDevelopment(NABARD), Self Employed Women’s
Association (SEWA), Association of Women Entrepreneurs of Karnataka
(AWAKE), The International Centre for Entrepreneurship and Career
Development, TiEStree Shakti (TSS), Tamilnadu Corporation for
Development of Women Ltd. (TNCDW), Marketing Organisation of Women
Enterprises (MOOWES), Women Entrepreneurs Promotion Association
(WEPA), Women Entrepreneurs Association of Tamil Nadu
(WEAT)andWeoW by Google are aggressively promoting women
entrepreneurship in India.

Similarly, MSE cluster development programme bear a substantial portion

of the project cost in respect of ventures owned and managed by women
entrepreneurs. The percentage of guarantee given by Credit Guarantee
Fund Scheme for Micro and Small Enterprises extend upto 80% for MSEs
owned and operated by women.

(v) Opportunities Created by Government

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Government both Union and Central have put in a number of schemes

exclusively for promotion of women entrepreneurship namely:

i. Stand-Up India Scheme for Women Entrepreneurs

ii. Trade related Entrepreneruship Assistance and Development (TREAD)

Scheme for Women

iii. Mahila Coir Yojana

iv. Mahila E-haat

v. Magalir Udavi Scheme

vi. Prime Minister’s RozgarYojana (PMRY)

vii. Development of Women and Children in Rural India (DWCRA)

viii. Mudra Yojana Scheme for Women

ix. Udyogini Scheme

x. TRYCEM

(vi) Opportunities Created through Training Programme

Government of India has introduced National Skill Development Policy and

National Skill Development Mission in 2009 in order to provide skill
training, vocational education and entrepreneurship development to the
emerging work force. This has been catalysing the emergence of women
entrepreneurs in India. The following training schemes are being
implemented for promoting self employment of women by Government of
India.

1. Support for Training and Employment Programme of Women (STEP)

2. Development of Women and Children in Rural Areas (DWCRA)

3. Small Industry Service Institutes

4. State Financial Corporations

5. National Small Industries Corporations

6. District Industrial Centres

(vii) Consortium of Women Entrepreneurs of India (CWEI)

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Consortium of Women Entrepreneurs of India (CWEI) was registered as a

civil society in the year 1996 which is a non-profit organisation in New
Delhi. It is accredited by Government of India. It is a member of National
Board, Ministry of MSME and is working closely with Ministry of Rural
Development in the Public Private Partnership to support below poverty
line families in India. They are rendering the following functions:

i. They are acting as a springboard for enterprises started by the women.

ii. It is helping women achieve high economic empowerment.

iii. It is acting as a catalyst to improve the access of womenfolk to natural

resources.

iv. It is providing technological support in the sphere of product design

and development in the case of women owned enterprises.

v. It is providing quality control, marketing and technological supports to

women owned enterprises.

vi. It is spreading knowledge to women entrepreneurs about various

government schemes.

In sum, it can be stated that women consortium is an agency providing a

comprehensive service of various types to women owned enterprises.

Challenges of Women Entrepreneurs

Though there is a tremendous growth in the women entrepreneurship in

India, a number of research studies conducted in India have brought out
the following problems and challenges encountered by women
entrepreneurs during the course of their entrepreneurial journey.

1. Problem of Finance

The access of women to external sources of funds is limited as they do not

generally own properties in their own name. Financial institutions too do
not consider women in general creditworthy as they are sceptical of their
entrepreneurial capabilities of women. They impose stringent condition
which discourages women to avail themselves of loan assistance from
banks. In this context, they are pushed to rely on their own savings and
small loans from friends and relatives. Because of the limited funds,
women entrepreneurs are not able to effectively and efficiently run and
expand their business.

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2. Limited Mobility

Indian women cannot afford to shed their household responsibilities

towards their family even after they plunge into the venture started by
them. This restricts the mobility of women entrepreneur significantly. The
domestic responsibilities do not allow women entrepreneurs to freely
move out of business enterprises in connection with business activities.

3. Lack of Education

Illiterate and semi -literate women entrepreneurs encounter a lot of

challenges in their entrepreneurial journey with respect to maintaining
accounts, understanding money matters, day-to-day operations of the
company, marketing the products, applying technology etc., This reduces
the efficiency of operating the business successfully.

4. Lack of Network Support

The successful operation of any venture irrespective of the size depends

upon the network of support extended by various constituencies like
family members, friends, relatives, acquaintances, neighbours, institutions
and so on. Women entrepreneurs need much needed psychological
support and wiser counselling especially during the time they actually
encounter challenges. But it is reported that women entrepreneurs get
very limited support in times of crisis from most of these constituencies.

5. Stiff Competition

Women entrepreneurs have to face acute competition for their goods from
organised sector and from their male counterparts. Since they are not
able to spend liberally due to financial constraints, they are not able to
compete effectively and efficiently in the market.

6. Sensitivity

Women are more prone to a variety of emotions. Being mother, women

are vulnerable to many emotions. They tend to have sympathy and
empathy for others. This trait does not allow women entrepreneurs to take
objective decisions in many contexts during the course of running the
entrepreneurial venture. Besides, the weak emotions do not allow them to
tolerate failures and disappointments arising during the normal course of
their entrepreneurial journey. This inherently tone downs the
effectiveness of their functioning.

7. Lack of Information

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Women entrepreneurs are reported not to be generally aware of subsidies

and incentives available for them due to their poor literacy levels or due
to their pre occupation with household responsibilities. This lack of
knowledge or limited knowledge about subsidies prevents them from
availing themselves of special concessions, benefits and incentives
awarded by Government and other agencies.

8. Dependent culture

In India, women however educated and talented are groomed to be

dependent on their parents, life partners and children during the various
phases of their life cycle. They could not take decisions on their own in
many contexts due to this dependency factor. They have to take
permission from their support groups to engage in any purposeful and
gainful activity. They are not treated as equals unlike women in western
countries. This cultural barrier does not allow them to start and manage
their ventures according to their free will and pleasure.

IMPORTANT QUESTIONS

1. Types of entrepreneurs / entrepreneurship

2. Women Entrepreneurship {full}

3. Functions of entrepreneurship

4. Role of entrepreneurship in economic developement

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